Wells Fargo pulls bonuses, claws back top executives' awards
(Bloomberg) -- Wells Fargo will withhold 2016 cash bonuses from eight senior executives and claw back compensation received in 2014 as the board holds managers accountable for the company’s bogus-account scandal.
The actions cut a total of about $32 million in pay and equity awards from managers including Chief Executive Officer Tim Sloan and Chief Financial Officer John Shrewsberry, the San Francisco-based bank said Wednesday in a statement. Wells Fargo reduced some equity awards by as much as 50%, according to the statement.
The actions, “though not related to any findings of improper behavior, are part of the board’s ongoing efforts to promote accountability and ensure Wells Fargo puts customer interests first,” Chairman Stephen Sanger said in the statement. “We will continue to work to make right what went wrong and remain focused on providing the accountability and oversight that our customers, employees, and investors expect and deserve.”
Regulators fined Wells Fargo a record $185 million for opening legions of accounts for customers without permission. Authorities said the company’s pressure on workers to meet sales goals encouraged them to create fake accounts. The bank’s board has been discussing withholding cash bonuses for top executives since at least late January, a person familiar with the matter said last month.
Sloan’s SupportThe board’s investigation into the scandal is continuing, Wells Fargo said Wednesday. Sloan, who took over as CEO after John Stumpf stepped down last year, said he supports the board’s action.
The regulator is concerned that Wells Fargo did not follow proper procedures in notifying former reps of their U5 filings and that the information contained in them was not correct.
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The firm also asked for the suits filed in federal court to be thrown out.
The decision affects business heads David Carroll, who leads wealth and investment management, and Avid Modjtabai, who oversees the bank’s new group linking payments, technology and innovations, as well as Chief Risk Officer Michael Loughlin, Chief Administrative Officer Hope Hardison, Chief Auditor David Julian and General Counsel James Strother.
Arati Randolph, a Wells Fargo spokeswoman, declined to provide a breakdown of how much each executive will forgo in equity awards.
Wells Fargo said in September that it forced Stumpf to forfeit $41 million of stock, plus some salary. His former deputy, Carrie Tolstedt, who oversaw the community bank while employees opened the bogus accounts, gave up unvested stock valued at about $19 million and agreed not to cash in outstanding options while the board’s review is under way. Neither will receive a bonus for 2016.