CEO: Wells Fargo has hired back 1000 employees since scandal

Posted April 20, 2017

"Tolstedt effectively challenged and resisted scrutiny both from within and outside the community bank".

Altogether, Stumpf lost $69 million in compensation and Tolstedt $67 million, which includes $41 million from Stumpf and $19 million from Tolstedt in forfeited unvested equity awards. All this in order to meet sales goals at individual branches and improve the bank's stock price.

Many current and former employees have talked of intense and constant pressure from managers to sell and open accounts, and some said it pushed them into unethical behavior.

The independent investigation report into the Wells Fargo fraudulent account scandal, released early Monday, already is being described as "scathing", and properly so.

These harsh disciplinary steps stem from a 110-page, six-month investigation by Wells Fargo's independent directors into the overly aggressive sales culture that spawned the creation of as many as 2 million fake accounts.

In February 2013, the consulting firm McKinsey was hired to examine the bank's risk management.

It's the deepest autopsy yet as Wells Fargo's leaders seek to rebuild customer and investor trust after the bank agreed to pay $US185 million in fines in September, triggering a national scandal. But other investigations - including criminal inquiries by the Justice Department and several state attorneys general - remain in progress.

Wells Fargo is seeking a total of $75 million from former chief executive John G. Stumpf and its former head of community banking, Carrie L. Tolstedt.

Former CEO John Stumpf, who resigned in October, will lose an additional $28 million in incentive compensation.

Activists begin an overnight encampment at a Wells Fargo bank in New York City.

In response to a question about whether Mr. Sanger should resign or take more responsibility for the sales-practices scandal, Mr. Sanger said the board "took appropriate actions with the information it had".

Stumpf - who had a long and warm professional relationship with Tolstedt - was warned as early as 2012 about numerous customer and employee complaints about sales tactics, but ignored growing evidence the problem was pervasive, the board said in its report.

"Throughout 2015 and 2016, the board was regularly engaged on the issue", according to the report. The lawyer said that a full and fair examination of the facts would produce a different conclusion.

Stumpf was grilled by the U.S. Senate Banking committee on September 28, drawing criticism from the committee for "failing to answer many questions".

"I can't promise perfection", Sloan said. In 2015, Wells Fargo donated $281.3 million to 16,300 nonprofits, ranking No. 3 on the Chronicle of Philanthropy's rankings of the top corporate cash philanthropists. Wells Fargo & Company was ranked No. 27 on Fortune's 2016 rankings of America's largest corporations.

The internal report commissioned by Wells Fargo's board and prepared by law firm Shearman & Sterling said on Monday that there was no systematic retaliation against employees who spoke out about the sales practices.

The company also split the roles of chairman and CEO.

Wells Fargo Chairman Stephen Sanger said the board does not "anticipate any further employment or compensation actions" stemming from this investigation.

The board said it did not learn that 5,300 employees had been fired as part of the scandal until they were told as part of the regulatory settlements. It also cut bonuses to other major executives, including Sloan.

As the problems with Wells' sales culture ballooned, management still remained callous to the problems or even actively worked to hide it.

The report paints the bank's board as being out of the loop on the scope of the sales problems. However, Sloan said that the bank was still reviewing records and some management has been fired in recent months.

Sloan said the company will continue to review the report to incorporate its key findings into ongoing efforts to build a better and stronger Wells Fargo.

But, like other warnings, this 2004 report fell on deaf ears inside Wells Fargo.

Institutional Shareholder Services, which advises big investment firms on corporate governance issues, recommended Friday that shareholders vote against the election of 12 of the bank's 15 board members, including Sanger, at the bank's upcoming annual meeting.

Better Markets, a left-leaning group that wants stricter regulations on banks, called the report "grossly deficient" and said it was "too little, too late".