April 10 (UPI) — Wells Fargo and Co. will initiate recovery of more than $75 million in pay given to two former executives, the bank announced Monday.
The recovery of the disbursed funds, known as a claw back, comes after a six-month investigation of the bank’s sales tactics. A 110-page report by independent bank directors indicated high-pressure sales tactics, the establishment of accounts without customers’ approval and the firings of some, but all, of those responsible occurred at Wells Fargo since “at least 2002” and did not change.
Senior bank executives are returning $180 million in pay, and Monday the bank said and additional $28 million will be clawed back from former CEO John Stumpf. Additionally, former Community Bank unit chief Carrie Tolstedt will be retroactively fired and must surrender an additional $47.3 million in pay.
The report indicates Stumpf acknowledged he made significant mistakes and helped form a corporate culture that resulted in abuses, including the creation of fake consumer accounts, CNBC reported Monday. He was also “hesitant to criticize Tolstedt and, ultimately, hesitant to terminate her, even after the lead independent director and the chair of the risk committee suggested that he do so in December 2015,” the report said.
It added that Tolstedt “resisted change to the Community Bank’s sales model even when confronted with evidence that it led to low-quality sales and improper sales practices. Instead, she reinforced the high-pressure sales culture. Further, Tolstedt was ‘obsessed’ with control, especially over negative information about the Community Bank, and extremely reluctant to make changes.”
Tolstedt gave up $19 million in September 2016.
