Published: Sun, September 25, 2016
Global Media | By Abel Hampton

Scandal-ridden Wells Fargo completely revamps compensation plan

Its shares dropped more than 2 percent in morning trading Tuesday.

Wells Fargo was also ordered to pay $35 million to the Office of the Comptroller of the Currency and another $50 million to the City and County of Los Angeles. Wells Fargo fired 5,300 workers over the matter and said it would eliminate sales goals regulators linked to its practice of cross-selling products.

Politicians are calling for an investigation, and Wells Fargo and regulators are expected to testify in the Senate next week.

As a parting gift, Tolstedt will earn a purported $125 million payday, the lion's share of which stems from the exercise of stock awards that she received from the bank along the way.

Another top Wells Fargo executive said Tuesday that the workers involved in the aggressive sales were lower-level employees and the practices were not created to increase the bank's revenues.

Last year, as executive vice president of the division, Tolstedt made $9 million in total pay, a reward for "continued growth in primary checking customers" and other metrics. Tolstedt's has earned a base salary of $1.7 million for at least the last four years, according to Securities and Exchange Commission filings.

Separately, Wells Fargo said Tuesday that it would eliminate all product sales goals in its retail banking operations starting in January. About 2 percent of the accounts may not have been authorized, including 1.5 million deposit accounts and 565,000 credit-card accounts. Customers were then sometimes hit with assorted fees for accounts they didn't know they had, the regulators charged.

Wells Fargo CEO John Stumpf is "sorry" for the fake-account scandal at his bank, but he's got no plans to exit despite a growing firestorm.

The sales goals were part of Wells Fargo's aggressive push into "cross selling", persuading customers to sign up for multiple products.

They also issued and activated debit cards and created PIN numbers and fake email addresses to enroll unaware consumers in online banking services.

Following criticisms that US authorities had failed to hold bankers to account in the aftermath of the financial crisis, the Justice Department last September issued a policy requiring all civil and criminal cases begin and end with a focus on individual accountability.

This is just another example of the Wall Street corruption that has gone unchecked for too many years.

Critics have been weighing in to signal disapproval of the malpractice from Wells, with Treasury secretary Jack Lew the latest to condemn the bank.

"I wish it would be zero but if they're not going to do the thing that we ask them to do - put customers first, honor our vision and values - I don't want them here", he said.

Torrie Matous, a spokeswoman for the committee's chairman, Richard Shelby, a Republican from Alabama, said staff has "been arranging briefings and collecting information from both Wells Fargo and the regulators" to prepare for a hearing on September 20. The lawmakers, including Sen.

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