Wells Fargo CEO To Lose $41 Million

Robert Donachie | Capitol Hill and Health Care Reporter

Wells Fargo CEO John Stumpf will cough up $41 million for the bank’s recent sales scandal at the request of the board, in hopes to squelch outrage in Congress and from the American people.

In case you were under a rock, the bank issued hundreds of thousands of credit cards to customers without their knowledge and opened more than a million bank accounts without their consent. Wells Fargo got slapped with a $185 million dollar fine by the Consumer Financial Protection Bureau, and the CEO faced a pummeling by the Senate Comittee on Banking, Housing and Urban Development Sept. 20. (RELATED: Wells Fargo Just Got Hit With The Biggest Fine In CFPB History)

Mr. Stumpf faced criticism from the Senate committee for firing 5,300 employees over the last decade, but taking no action against executives at the company. Stumpf is on record blaming branch-level employees for the mess in which the firm finds itself. It was the sales quotas, Stumpf argues, that incentivized employees to engage in fraudulent behavior. (RELATED: Wells Fargo CEO Explains His Company’s $185 Million Dollar Fraud)

Senator Elizabeth Warren described Strumpf’s leadership as “gutless,” and called for him to be personally “criminally investigated,” for the scandal in the Senate hearing.

The $41 million that Stumpf is forfeiting amounts to one quarter of his total earnings from Wells Fargo over the past four decades. Mr. Stumpf became chief executive of the bank in 2007, and became chairman of Wells Fargo & Company in 2010.

The bank not only denied CEO Stumpf pay, but also moved to rescind the pay for community-banking head Carrie Tolstedt. Tolstedt, who planned to retire Dec. 31, left the bank, the Journal reports.
“The Company fully supports the decision of the independent directors of the board regarding executive accountability and the initiation of an independent investigation of our retail banking sales practices. Our management team will cooperate fully and is dedicated to strengthening our culture and taking strong actions to ensure this conduct does not happen again,” Mark Folk, a spokesperson for Wells Fargo, told the Daily Caller News Foundation.
In addition to Folk’s comments stressing the dediciation of Wells Fargo to preventing future abuse, the firm Shearman & Sterling launched an internal investigation into the company’s retail banking sales practices, and even hired an independent firm to assist in the process.

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