The FINANCIAL — Wells Fargo & Company on March 1 announced executive compensation actions to reinforce accountability of the company’s leadership for the issues arising from the Community Bank’s sales practices.
The Board has taken actions affecting the Operating Committee, Wells Fargo’s 11 highest-ranking executives, based on the accountability of all those in senior management for the overall operational and reputation risk of the company, and not on any findings of improper behavior in the Board’s ongoing independent investigation. The compensation actions will affect the eight members of the Committee who were in place before it was reconstituted in November 2016, according to Wells Fargo.
These executives are:
Tim Sloan, President and Chief Executive Officer
John Shrewsberry, Chief Financial Officer
David Carroll, Head of Wealth and Investment Management
Avid Modjtabai, Head of Payments, Virtual Solutions and Innovation
Hope Hardison, Chief Administrative Officer
David Julian, Chief Auditor
Michael Loughlin, Chief Risk Officer
James Strother, General Counsel
These eight executives will not receive cash bonuses for 2016. In addition, the performance share equity awards they received in 2014 that vested following 2016 will be reduced by up to 50% from the amounts that would have been paid based on previously established financial performance targets. The result is an aggregate reduction in compensation totaling approximately $32 million, based on 2016 target bonuses and the current price of Wells Fargo shares.
These compensation actions are in addition to previously announced forfeitures of unvested equity awards totaling $41 million by retired Chairman and CEO John Stumpf and $19 million by departed head of Community Banking Carrie Tolstedt.
Chairman Stephen Sanger said, “These compensation actions for the Operating Committee, though not related to any findings of improper behavior, are part of the Board’s ongoing efforts to promote accountability and ensure Wells Fargo puts customer interests first. As we seek to regain trust, the Board is taking decisive actions. We will continue to work to make right what went wrong and remain focused on providing the accountability and oversight that our customers, employees, and investors expect and deserve.”
Tim Sloan said, “I fully support the Board’s actions and believe they are critical to Wells Fargo’s commitment to our customers. It is my personal mission to foster a culture of accountability at all levels of the company and to ensure we are second to none in customer service and advice, ethics, and integrity. Today’s action is another step in that direction.”
The Board’s independent investigation is ongoing. As previously announced, the investigation is expected to be completed before the company’s April 2017 annual meeting of stockholders and its findings and any additional actions will be made public by that time.