Wells Fargo CEO Forfeits $41 Million of Incentive Pay Amid Bogus Account Furor
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Version 0 of 1. This article, originally published at 7:53 a.m. on Tuesday, Sept. 27, 2016, has been updated with market data and comments from analysts and lawmakers. Wells Fargo's (WFC) board is canceling a total of $60 million in stock awards to CEO John Stumpf and retiring consumer banking chief Carrie Tolstedt and will conduct an independent review into sales practices including the targets that spurred workers to create up to 2 million unauthorized customer accounts. The investigation, prompted by a $185 million settlement with federal and state governments over the bogus accounts, follows heightened political and regulatory scrutiny as well as lawsuits from consumers, employees and investors. It will be led by a special committee of independent directors, working with the board's human resources committee and independent counsel Shearman & Sterling, the San Francisco-based bank said in a statement. Stumpf will forfeit $41 million in unvested stock awards as well as any bonus for this year and forego his salary for the duration of the investigation, Wells Fargo said. Tolstedt, who has left the company, will forefeit $19 million in unpaid equity awards. She won't be paid a bonus this year, nor will she receive severance pay or any pay enhancements related to retiring, the company said. The action follows criticism of Stump by the U.S. Senate's banking committee for failing to discipline any senior executives ultimately responsible for a strategy of selling as many as eight products to each customer even as he fired 5,300 lower-level employees. Some made as little as $12 an hour. "We are deeply concerned by these matters, and we are committed to ensuring that all aspects of the Company's business are conducted with integrity, transparency, and oversight," Stephen Sanger, the company's lead independent director, said in the statement. "We will conduct this investigation with the diligence it deserves -- and will follow the facts wherever they lead. Our thousands of outstanding team members and millions of loyal customers and shareholders deserve no less. According to regulatory filings, Tolstedt has been paid at least $53 million since Wells Fargo started disclosing her annual compensation in 2010. Stumpf made $19.3 million last year. EXCLUSIVE LOOK INSIDE: Wells Fargo is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells the stock? Learn more now. Wells Fargo shares have fallen 9.4% to $45.09 since its settlement with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the City and County of Los Angeles, was announced in early September. That's a steeper decline than either the KBW Bank Index or the S&P 500. |