Wells Fargo CEO Faces $40M Forfeiture Scandal; Special Committees to Review
John Stumpf , Chief Executive Officer of Wells Fargo & Co., is on the storm to fight for not just for his job amid a national political furor, but also for the sake of his morality. Amounting to $41 million of stock and salary, the the bank's board investigates on employees opened legions of numbers of bogus accounts for it clientele.
Remarkably this forfeiture holds to be the biggest of compensation ever made in the U.S. bank industry since at least the 2008 financial crisis and economic sufferings. Moreso, it may not be that enough for Stumpf to be lax for there is yet another inquiry in Capitol Hill this coming Thursday. Senator Elizabeth Warren demanded suggested ferociously for him to just resign for "gutless leadership" sake. This is after he blamed abuses on low-wage employees and other labor compliance offenses.
"Giving up pay is a smack on the head, but it doesn't end the question of whether Mr. Stumpf should be allowed to head a bank. He is responsible for the culture and he knew or should have known about a practice that was so wide-spread and well-known in the bank." told Erik Gordon, University of Michigan Professor in Ann Arbor.
Wells Fargo's shares climbed 1 percent notch to $45.55 at 8:29 a.m. in the early trading in New York. However, the stock tumbled at 17 percent this year through Tuesday's close, the worst ever-recorded performance in the 24-company KWB Bank Index. Stumpf announced to the employees through a memorandum that he already offered to give up $41 million in unvested stock. A figure of which is reflected his performance way back to 2013 which the board accepted. On the other side, Carrie Tolstedt, former community banking chief will waive about $19 million in unvested stock. Likewise, she also agreed not to cash in outstanding options during the review, the lender said Tuesday in a statement. Tolstedt has left the firm, after previously planning to retire at year-end. Understandably, no bonus for this year is intended for Neither Stumpf nor Tolstedt.