NEW YORK – Wells Fargo’s board of directors slashed the bonuses and other compensation of its CEO and seven other top executives on Wednesday, a little more than a week after the board publicly fired four senior managers amid an investigation into the bank’s sales practices.
The cuts in pay for CEO Tim Sloan, Chief Financial Officer John Shrewsberry and others were widely expected. Wells’ board had already clawed back some $59 million in compensation from former CEO John Stumpf and Carrie Tolstedt, who was the head of the community banking business that was at the center of the sales scandal.
The executives who saw pay cuts were Sloan, Shrewsberry, David Carroll, the head of wealth and investment management; Avid Modjtabai, head of payments and virtual solutions; Hope Hardison, chief administrative officer; Davis Julian, chief auditor; Michael Loughlin, chief risk officer; and James Strother, general counsel. None of the eight executives will receive cash bonuses for 2016 and had their stock bonuses cut by 50 percent. In total, Wells’ slashed executive pay by $32 million, the board said.
None of the executives were implicated in wrongdoing in the scandal, however they are the heads of several divisions that were affected.
“These compensation actions … are part of the board’s ongoing efforts to promote accountability and ensure Wells Fargo puts customer interests first,” Chairman Stephen Sanger said in a statement.
Wells Fargo acknowledged in September that its employees opened up to 2 million bank and credit card accounts without customer authorization in order to meet lofty sales goals. Numerous employees have said that intense pressure from management to sell and open accounts was why they were pushed into unethical behavior. Federal and California regulators fined Wells Fargo $185 million for the practices.
The board is conducting its own investigation into the sales practices scandal. The results of that investigation are expected to be announced before Wells Fargo’s annual shareholder meeting in April.
Local journalism is essential.
Give directly to The Spokesman-Review's Northwest Passages community forums series -- which helps to offset the costs of several reporter and editor positions at the newspaper -- by using the easy options below. Gifts processed in this system are not tax deductible, but are predominately used to help meet the local financial requirements needed to receive national matching-grant funds.
Subscribe to the Coronavirus newsletter
Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.