Wells Fargo board slams former CEO Stumpf and Tolstedt, claws back $75 million

by Dramelin 9:30 AM 0 comments

Wells Fargo`s independent directors have decided to initiate corporate pay clawbacks that total some of the largest in history, after concluding a six-month investigation into the beleaguered institution`s retail banking sales practices, it was revealed Monday.
A board review, a copy of which was obtained by CNBC, indicated that former Wells Fargo Chairman and CEO John Stumpf acknowledged that he made significant mistakes and helped create a culture at the bank that resulted in abuses, including the creation of fake consumer accounts.
That review was overseen by a special board committee, chaired by Stephen Sanger, and also includes three other independent directors: Elizabeth Duke, Enrique Hernandez and Donald James.
The special committee retained law firm Shearman & Sterling to assist the investigation.
On Monday the board is announcing that it has decided it is necessary to claw back an additional $28 million of pay from Stumpf, adding onto $41 million he already gave up when he resigned in October 2016.
Stumpf`s total pay from 2011-2016 was $286 million, according to executive compensation firm Equilar, meaning he will have forfeited 24 percent of his pay for that period since the scandal first emerged.
Stumpf was made aware of the systemic nature of the bank`s sales practice problems starting in 2012, but was first aware of specific cases as early as 2002, according to the board.
He did not initiate any follow-up investigation or inquiry into the problem until 2015.
One of the main accusations leveled at him was an unwillingness to criticize former community bank unit head Carrie Tolstedt, whom he once praised as being "the best banker in America.
""Stumpf was hesitant to criticize Tolstedt and, ultimately, hesitant to terminate her, even after the lead independent director and the Chair of the Risk Committee suggested that he do so in December 2015," according to details disclosed in the report.