Wells Fargo’s top executives are likely facing some rough news from the firm’s board. According to news reports out this morning, the board is strongly leaning toward eliminating 2016 bonuses for the firm’s top brass entirely as part of its remediation attempt in the wake of the fake account scandal.
Citing anonymous sources familiar with the matter, the Wall Street Journal is reporting that as of a late January board meeting, the board is seriously considering withholding bonuses for senior executives, up to and including CEO Timothy Sloan and CFO John Shrewsberry.
A final decision is expected soon — and a determination that bonuses are off the table for 2016 could affect annual incentive awards that are scheduled to be paid out in cash over the next several weeks. As of yet, Wells Fargo has no official comment on the matter.
This latest headline is just one in a saga that began in September when it came to light that Wells had been ordered to pay out a $185 million settlement with the CFPB, Comptroller and LA district attorney’s office. That fine was levied in response to accusations that Wells Fargo’s staff had opened as many as 2 million accounts without customers’ knowledge. Though the actual misconduct was carried out at the teller level, senior management is accused of creating internal sales targets that more or less required their lower-level employees commit fraud or risk the loss of their job. John Stumpf — CEO at the time the scandal broke — has already resigned.
Sloan was chief operating officer at San Francisco-based Wells Fargo, the third-largest U.S. bank by assets, before he replaced Stumpf.
The scandal has already taken a pronounced toll on the bank’s bottom line — Q4 saw profit fall for the fifth consecutive time, and account openings have slowed precipitously.