Wells Fargo CEO Gives Up $41 Million After Fiasco

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Wells Fargo CEO John Stumpf has agreed to give up $41 million in unvested stock awards following the board of directors’ investigation into the bank’s sales practices, the company said Tuesday.

Additionally, Carrie Tolstedt, Wells Fargo’s former head of community banking, will forego all her unvested equity stock awards valued at $19 million and will not receive retirement benefits worth millions more. Tolstedt was responsible for the division during the time employees allegedly created sham accounts to meet sales targets. She has announced she will retire at the end of year.

Neither Tolstedt nor Stumpf will receive 2016 bonuses, the company said.

The penalties are the result of an investigation by the bank into retail banking matters, which is wrapping up just before Stumpf Thursday is expected to testify before the House Financial Services Committee. Stumpf will not receive a salary during Wells Fargo’s investigation.

Both Stumpf and Tolstedt were responsible at a time when allegedly hundreds of thousands of accounts were secretly opened for customers by employees. Wells Fargo says more than 5,000 were fired for opening the accounts, allegedly done to meet sales targets set by management and to earn bonuses. So far, only lower level employees have been punished for the alleged fraud. No top-level executives had been penalized up until Tuesday, according to Stumpf’s testimony to a Senate Banking Committee last week.

The U.S. Department of Labor plans to investigate the bank’s workplace practices, Labor Secretary Tom Perez said in a letter Monday to Sen. Elizabeth Warren, D-Mass. Wells Fargo had no comment on the letter.

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Source: USA Today |  Matt Krantz