Wells Fargo Board Actively Considering Executive Clawbacks -- Source
September 27 2016 - 10:41AM
Dow Jones News
By Emily Glazer
Wells Fargo & Co.'s board is actively considering whether to
claw back pay from former retail-banking head Carrie Tolstedt as
well as from Chief Executive John Stumpf and is likely to make a
decision before a Thursday congressional hearing, according to a
person familiar with the matter.
The board is deliberating in the wake of the bank's
sales-tactics scandal and could make a decision as soon as Tuesday,
the person said. The board wants to take action before Mr. Stumpf
returns to Capitol Hill; he is scheduled to testify Thursday before
the House Financial Services Committee.
A Wells Fargo spokeswoman declined to comment.
Clawbacks, or a lack of them, became a big part of a Senate
Banking Committee hearing last week. Mr. Stumpf and the bank were
roundly criticized for firing 5,300 employees over five years yet
taking no action against top executives.
Wells Fargo has been on the hot seat since news spread that up
to 2 million unwanted or fictitious customer accounts were opened
by its employees in an effort to meet sales goals. The bank this
month entered into an enforcement action and paid a $185 million
settlement to two regulatory agencies and the Los Angeles City
Attorney's office.
Ms. Tolstedt became a point of focus at the Senate hearing
because she oversaw the bank's retail banking operations during the
time in which regulators allege "widespread illegal" practices took
place. She stepped down from her role in July and is set to retire
at the end of the year. Her total compensation, including
accumulated stock and options earned over her 27 years at the bank,
could run about $90 million, according to a letter Wells Fargo sent
senators last week.
Mr. Stumpf's total pay package for his 35 years at the bank adds
up to about $160 million, according to an independent analysis by
human resources consultancy Overture Group LLC. That includes stock
awards, stock options and performance shares, among other aspects
of his pay package, based on the bank's Sept. 26 share price of
$45, according to Mark Reilly, managing director of Overture.
In response to heated questions about Ms. Tolstedt's
compensation during the Senate hearing, Mr. Stumpf said that is a
matter for the board's human-resources committee. The board last
week tapped Shearman & Sterling LLP to advise it on whether it
should claw back pay from top executives, The Wall Street Journal
reported.
While Mr. Stumpf is chairman, he isn't a member of that
committee, which is led by Lloyd H. Dean, president and chief
executive of Dignity Health, a San Francisco-based not-for-profit
health-care system.
Write to Emily Glazer at emily.glazer@wsj.com
(END) Dow Jones Newswires
September 27, 2016 10:26 ET (14:26 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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