Page 22 - Wells Fargo Bank (C) Case Study

Remuneration

During the three years, prior to 2016 Carrie L. Tolstedt, the
former senior executive vice president of community

banking, who ran the unit where the fake accounts were

created received compensation worth over $27 million and

retired with a pay package valued at $124.6 million
according to Wells Fargo’s proxy statement. She stepped

down in July 2016. She was scheduled to retire at the end of

the year.

Stumpf however, when questioned during his Senate

testimony over whether the bank would claw back any of

the compensation paid to Tolstedt side-stepped his role in
the bank’s compensation determination stating:

“I’m not part of that process,” he said. Claiming that the

Wells Fargo board and its human resources committee
would make that decision independently.

“I want to make sure that’s a very independent process and

nothing that I would say would prejudice their deliberative
process.” (7, 12)

Stumpf was accused of showed zero leadership. “Stumpf is
saying, “I have no involvement in assessing the situation,’

but he’s been doing it year in, year out, I’m not taking a

bonus this year, and I’m going to urge the board to be very

careful about paying bonuses to any executive officer who
knew about the activities or should have known.” (6, 12)

Since the financial crisis of 2008, it has become clear that a

bank’s compensation practices can pose enormous risks if