Wells Fargo scandal may cost top execs their 2016 bonuses
Wells Fargo's board is considering whether to eliminate 2016 bonuses for CEO Tim Sloan and Chief Financial Officer John Shrewsberry, according to a source familiar with the matter.
The source said the company’s board of directors will make its decision in the coming weeks, in advance of the release of the bank’s annual proxy statement in mid-March.
The Wall Street Journal was first to report Wednesday on the board’s discussions. Mary Eshet, a Wells Fargo spokeswoman, declined to comment when contacted by American Banker.
Wells Fargo’s board is chaired by Stephen Sanger, a former General Mills CEO. He succeeded John Stumpf, who resigned as Wells Fargo’s chairman and CEO shortly after the sales-abuse scandal surfaced last fall.
The board has retained a New York-based law firm, Shearman & Sterling LLP, to conduct an investigation into what went wrong inside Wells’ retail banking division. Wells employees created as many as 2 million phony customer accounts between 2012 and 2016. Some 5,300 employees were fired in connection with the scandal.
The decision about whether to award 2016 bonuses to top executives is not meant to reflect culpability for the scandal, according to the source. Instead, the process is intended to provide accountability for the bank’s performance.
Wells Fargo’s board may eventually make additional compensation decisions based on the findings of its investigation, the source said. But that process will be separate from the current deliberations over whether to award 2016 bonuses.
Sloan became CEO following Stumpf’s resignation in October. He previously served as Wells Fargo’s chief operating officer, and was widely seen as the CEO-in-waiting.
Shrewsberry has been Wells Fargo’s CFO since 2014.