Wells Fargo Chairman & CEO John Stumpf Provides an Update on Actions to Address Wrongful Sales Practices in the Company’s R...
September 29 2016 - 2:17PM
Business Wire
Accelerates Elimination of Retail Banking
Product Sales Goals to October 1, 2016
In testimony today before the U.S. House Financial Services
Committee, Wells Fargo & Company Chairman and Chief Executive
Officer John Stumpf reiterated the company’s commitment to
addressing improper sales practices within its retail bank,
including actions the Independent members of the Board of Directors
have taken to ensure executive accountability. Stumpf also reviewed
changes and improvements made by the bank to date, and provided an
update on its customer remediation program.
On Tuesday, September 27, the Independent members of the Board
of Directors of Wells Fargo announced steps to promote
accountability for unethical sales practices in the company’s
retail bank, including conducting an independent investigation. As
part of these actions, Stumpf will forfeit all of his outstanding
unvested equity awards, valued at approximately $41 million based
on the closing share price on September 27th. He will also not
receive a bonus for 2016, and forego his salary while the
Independent Directors conduct their investigation. Former head of
the community bank Carrie Tolstedt has left the company, and she
will receive no severance or bonus for 2016. She has forfeited all
outstanding unvested equity awards valued at approximately $19
million based on the closing share price on September 27th and has
agreed not to exercise any of her outstanding stock options while
the Independent Directors’ investigation is ongoing.
During his opening remarks, Stumpf said “I respect and accept
the Board’s decisions.” He also highlighted that “we have new
leadership in our retail banking business focused on ensuring that
our team members provide the best service to our customers.”
Stumpf also provided an update on key actions the company is
taking to reinforce that its culture is wholly aligned with the
interests of customers. This included announcing that the company
is accelerating the process for the elimination of product sales
goals for retail banking team members from January 1, 2017 to
October 1, 2016. He said the reason for the action is that, “We
want to make sure nothing gets in the way of doing what is right
for customers.”
Another change Stumpf emphasized was that the company now sends
customers a confirmation email approximately one hour after opening
any retail deposit account and an acknowledgement letter after
submitting a credit card application.
Stumpf reported that as part of its effort to ensure that
customers have only products they want and need, the company has
begun contacting those with open credit card accounts identified by
PricewaterhouseCoopers as possibly being unauthorized. For retail
deposit account customers, the company has refunded fees and is
contacting every single one of them across the country in order to
ensure a full understanding of every customer affected by this
problem. Stumpf emphasized that “We should have done more sooner,
but we will not stop working until we get this right.”
“I am fully accountable for all unethical sales practices in our
retail banking business, and I am fully committed to fixing this
issue, strengthening our culture, and taking the necessary steps
and actions to restore our customers’ trust,” Stumpf said.
For more information, please go to
www.wellsfargo.com/commitment.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.9 trillion
in assets. Founded in 1852 and headquartered in San Francisco,
Wells Fargo provides banking, insurance, investments, mortgage, and
consumer and commercial finance through more than 8,600 locations,
13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and
has offices in 36 countries and territories to support customers
who conduct business in the global economy. With approximately
268,000 team members, Wells Fargo serves one in three households in
the United States. Wells Fargo & Company was ranked No. 27 on
Fortune’s 2016 rankings of America’s largest corporations. Wells
Fargo’s vision is to satisfy our customers’ financial needs and
help them succeed financially.
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