Wells Fargo took back another $75 million (71 million euros) in pay from two former executives who played key roles in the bank's fake accounts scandal, the bank announced Monday.
The San Francisco-based bank disclosed the steep financial penalties for its former chief executive and former head of its community banking arm in a lengthy report from independent directors on Wells Fargo's board.
Stephen Sanger, chairman of Wells Fargo, had served on the bank's board since 2012, and has clawed back millions of dollars involving stock awards and compensation from employees that worked under Stumpf and Tolstedt's leadership. These amounts include a total of approximately $60 million in previously forfeited unvested equity awards ($41 million from Stumpf and $19 million from Tolstedt) and additional clawbacks from Tolstedt of vested options now valued at approximately $47 million and from Stumpf of about $28 million in previous equity awards.
The board has now taken back about $180 million in compensation from senior executives and terminated Tolstedt and four other community bank leaders over the scandal.
But still, not everyone is convinced this is enough.
The bank's board of directors also faces a shareholders' vote that will decide which members remain, as Wells Fargo meets April 25 for its annual shareholders meeting in Ponte Vedra Beach, Florida.
Wells Fargo & Company (WFC) belongs to the "Financial" sector with an industry focus on "Money Center Banks", with Mr. Timothy J. Sloan as Chief Exec. Officer, Pres and Director.
The report said department heads such as Tolstedt were given power to run their divisions with little oversight.
The result of its dithering was the nuclear explosion of a $185-million settlement with Feuer and federal regulators last September, followed by multiple Congressional investigations, Stumpf's resignation, and continuing doubts about Well Fargo's integrity by banking customers.
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Sanger said Monday that the board will not fire management who may have been previously linked to the scandal amid the report's release. The law firm conducted 100 interviews of current and former employees and other parties and searched more than 35 million documents.
John Stumpf, the CEO who retired under pressure from the scandal in October, was criticized for failing to grasp the gravity of the sales practice abuses and their impact on the bank.
"Tolstedt reinforced a culture of tight control over information about the Community Bank, including sales practice issues". Wells Fargo's report indicates that over 1,800 customers in Minnesota had more than two deposit accounts that were tampered with, while over 250 people had more than two unauthorized credit accounts opened in their names.
"After decades of success, Stumpf was Wells Fargo's principal proponent and champion of the decentralized business model and of cross-sell and the sales culture", the report stated.
On the advice of her lawyers, Tolstedt declined to be interviewed for the investigation.
"While we have already made significant progress in making things right with customers and addressing issues, including several issues identified in the investigation, the Board's comprehensive findings provide another important opportunity to learn from our mistakes".
In a separate statement, Wells Fargo CEO Tim Sloan called the board's findings a "critical part of our journey to rebuild trust" and acknowledged management "took too long to understand the seriousness and scope of the problem". In May 2011, Wells Fargo convened a task force aimed at addressing the sales issues to discuss the mass firings and "reputational risk" of the sales goals. After the Los Angeles City Attorney filed a suit over the bank's sales practices in May 2015, he sent an email to Sloan vowing to fight. "Because of her passion for serving our customers, wherever and however they chose to receive their banking services - online, in branches, or via mobile phones - Carrie leaves Wells Fargo uniquely positioned to continue to be a leader in retail banking, no matter how the future of banking evolves".
Shareholder advisory groups Institutional Shareholders Services and Glass Lewis have recommended the ousting of several board members.
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