Wells Fargo CEO Forgoes $41M Compensation Amid Accounts Scandal
Two days before Wells Fargo CEO John Stumpf was set to testify at a House hearing over an accounts scandal that has gripped the company, the bank's independent directors have announced that he will forgo $41 million worth of promised compensation as well as his usual salary as it launches an investigation.
The directors also announced that Carrie Tolstedt, who until July was the head of Wells Fargo's community banking division -- where workers opened bank and credit accounts using customer information without permission -- has left the company.
She was slated to leave at "year's end," according to a retirement announcement.
Tolstedt, who has been the subject of scrutiny in recent weeks, will not receive a bonus for the year and will not receive severance pay, the directors said in a statement. Similar to Stumpf, she will forgo promised share compensation worth about $19 million.
Stumpf, who has been CEO since 2007, will also not receive a bonus, the statement said.
Separately, in remarks prepared for Stumpf's appearance before the House Financial Services Committee on Thursday, which were obtained and reviewed by ABC, the CEO is expected to say that the bank is moving up the date it will end its controversial sales program from Jan. 1, 2017 to Oct. 1, 2016.
The compensation and investigation announcement comes as Wells Fargo attempts to recover from a scandal that kicked off on Sept. 8, when regulators alleged that employees opened or applied for accounts without customers' knowledge or permission.
A portion of the accounts generated more than $2 million in fees, according to Consumer Financial Protection Bureau documents, and some 5,300 employees were fired, authorities said.
The company was fined $185 million and a federal investigation has been launched. The Los Angeles city attorney said that bank workers were opening the accounts to receive monetary rewards by meeting sales goals.
On Sept. 8, the company issued a statement which said, "we regret and take responsibility for any instances where customers may have received a product that they did not request."
The directors did not rule out that previous compensation could be clawed back, as some have called for.
"Based on the results of the investigation, the Independent Members of the Board will take such other actions as they collectively deem appropriate, which may include further compensation actions," Lead Independent Director Stephen Sanger said in the statement, where he noted that "clawbacks" were on the table.
