Page 25 - Wells Fargo Bank (C) Teaching Note

2. Increase ‘switching cost’ for customers – the more
products the customers have, the less likely they are

to change to another bank.

Compensation model resulted in making the
company’s core values redundant

High pay disparity between top executives and Governments have
Violations at
employees abrogated
banks have
Should Stumpf operate as both CEO and responsibility to
become Chairman?
the banks. Change
common as
will take time.
people
involved in
them rarely

face criminal
charges.

Industry operated Due diligence

in oligopolistic within WF had
fashion in effect
collapsed

Managers actively
Employees regularly coached workers on

expected to force Banking environment how to inflate sales
“unneeded and Senior management lacked checks & numbers. - Managers

unwanted” products set aggressive sales controls whilst WF’s were highly
on customers to satisfy target. compensation model compensated for
sales goals. - If Received huge served as driving force hitting performance

employees didn't meet performance bonuses for unethical targets
the quotas, they lost and increase in bank’s behaviour
their jobs profits.