Two executives who were publicly excoriated over Wells Fargo's opening of millions of bogus accounts must give back millions more dollars in pay, the bank's board announced Monday. The board is clawing back an additional $47 million from Carrie Tolstedt, who headed the troubled sales division, and $28 million from former CEO John Stumpf.
Stumpf "was too slow" to see problems in sales practices that brought an $185 million punishment from the Consumer Financial Protection Bureau, the board says. It added that he also failed to protect the bank's reputation from what the CFPB has called "the widespread illegal practice of secretly opening unauthorized deposit and credit card accounts."
Some 5,300 Wells Fargo employees lost their jobs over the fake-accounts scandal — a number far higher than the bank's board said it was initially led to believe. The board's report said Stumpf "did not appreciate the scope and severity of the problem" and that he "continued to publicly support the appropriateness of Wells Fargo's sales goals and to highlight that the vast majority of Wells Fargo employees 'got it right.' "
Both Stumpf and Tolsedt had previously been forced to return tens of millions of dollars. With the new clawbacks, Wells Fargo's board says, the bank has now recovered more than $180 million in executive compensation over the scandal.
Of that total, $69 million has come from Stumpf and $67 million from Tolstedt, the bank says. Stumpf resigned in October of 2016.Here's the original report from the Wells Fargo board on improper sales practices:
The new clawbacks came as Wells Fargo's board released a 110-page report that cites "distortion" of the sales culture and management system in the unit at the heart of the scandal, as well as other organizational issues that kept the essential problems from being addressed.
As we've previously reported:
- When accusations of fraud were circulating last fall, it emerged that Tolstedt was set to leave Wells Fargo with $124.6 million in stock and options;
- Stumpf made $19.3 million in annual compensation (including a performance bonus of $12.5 million) in 2015;
- On Capitol Hill, Sen. Elizabeth Warren, D- Mass., accused Stumpf of netting more than $200 million after the sales practices boosted the bank's stock.
- In February, two cities pulled more than $3 billion in annual cash flow from Wells Fargo over its role in the Dakota Access Pipeline project;