For a while, it looked like the CEO of Wells Fargo, John Stumpf, and head of community banking, Carrie Tolstedt, would escape the ramifications of the pressure tactics allegedly used on the bank’s employees to meet unreasonable sales targets. Tactics that saw the submission of over half a million unauthorized bank and credit card accounts.
The Senate Banking Committee was shocked last week to hear that Wells Fargo had fired 5,300 employees, while none of the executives involved in the scandal were facing repercussions for creating a toxic environment. At that time, however, the board had already initiated plans to claw back compensation from Stumpf and Tolstedt. Stumpf’s clawback is the largest ever claimed.
The recent events have also ignited calls for a provision requiring clawbacks from big bank executives whose misconduct results in significant financial or reputational harm or any fraud. The proposal requires banks to take back pay for wrongdoing for at least seven years after the executive receives the payment. Bankers have resisted the proposals, claiming that compensation standards are already tightened and voluntary clawback policies are in place.
Here is the data:
$60 million | The total amount to be collected in clawbacks from Stumpf and Tolstedt
$41 million | The amount that Stumpf will forfeit from unvested equity awards
$19 million | The amount that Tolstedt will lose in unvested equity awards
$5 million | The amount of unauthorized fees that the CFPB has ordered Wells Fargo to refund
565,443 | The number of unauthorized credit card accounts submitted by Wells Fargo employees