Wells Fargo said it is putting the final touches on a new compensation plan, as it continues to rebuild its reputation and win back customers in the new year, post-scandal. The Wall Street Journal reported that the plan will replace the old sales goals that put the bank in trouble recently and concentrate on both customer service and usage, as well as adding more process oversight and growing primary balances.
Recently, the bank has been gearing much of its focus toward customers, even trying to win them back on a one-on-one, case-by-case basis. This new plan is an additional method in response to the former plan that, according to current and previous employees, pushed Wells Fargo staff to open all those accounts without consent from customers.
It’s the next step in the bank’s recovery after its scandal involving opening consumer bank accounts without their consent or knowledge, all in the name of sales figures. The Consumer Financial Protection Bureau fined Wells Fargo $185 million, the largest fine levied from the government agency. It also ordered Wells Fargo to refund $5 million in fees that the bank wrongly charged customers.
The new plan involves more than 50,000 employees, who currently are awaiting the methods on how they will get paid and rewarded for their work performance. Many of these employees include retail bankers who are connected to more than 40 million customers and make up a large part of Wells Fargo’s client list. Other details of the plan, according to the bank’s spokeswoman, Mary Eshet, include eliminating sales goals, measuring performance in connection to customer experience, as well as more oversight within those processes. Separately, but clearly related, the bank has recently said that its minimum wage is bumping up to $13.50 (from the current $12 per hour) to compete with other large banks.
After the scandal broke in September, Wells Fargo has been releasing monthly data related to the number of new accounts opened and has seen a significant drop. Back in December, the retail banking customer activity data for November showed total branch interactions were down 5 percent when compared to October and down 3 percent year over year. According to WSJ, both credit card applications and new checking account openings dropped nearly 40 percent. That said, the bank stands by other data suggesting that surveyed customers are saying that the experience of banking with Wells Fargo has improved since September.
Coming the week, Wells Fargo will release its 2016 fourth quarter results, which will allow for better insight for investors on how the scandal truly affected the bank and the effect the bank’s new CEO, Timothy Sloan, has made to date.