Accelerates Elimination of Retail Banking Product Sales Goals to October 1, 2016
In testimony today before the U.S. House Financial Services Committee,
Wells Fargo & Company Chairman and Chief Executive Officer John Stumpf
reiterated the company’s commitment to addressing improper sales
practices within its retail bank, including actions the Independent
members of the Board of Directors have taken to ensure executive
accountability. Stumpf also reviewed changes and improvements made by
the bank to date, and provided an update on its customer remediation
program.
On Tuesday, September 27, the Independent members of the Board of
Directors of Wells Fargo announced steps to promote accountability for
unethical sales practices in the company’s retail bank, including
conducting an independent investigation. As part of these actions,
Stumpf will forfeit all of his outstanding unvested equity awards,
valued at approximately $41 million based on the closing share price on
September 27th. He will also not receive a bonus for 2016, and forego
his salary while the Independent Directors conduct their investigation.
Former head of the community bank Carrie Tolstedt has left the company,
and she will receive no severance or bonus for 2016. She has forfeited
all outstanding unvested equity awards valued at approximately $19
million based on the closing share price on September 27th and has
agreed not to exercise any of her outstanding stock options while the
Independent Directors’ investigation is ongoing.
During his opening remarks, Stumpf said “I respect and accept the
Board’s decisions.” He also highlighted that “we have new leadership in
our retail banking business focused on ensuring that our team members
provide the best service to our customers.”
Stumpf also provided an update on key actions the company is taking to
reinforce that its culture is wholly aligned with the interests of
customers. This included announcing that the company is accelerating the
process for the elimination of product sales goals for retail banking
team members from January 1, 2017 to October 1, 2016. He said the reason
for the action is that, “We want to make sure nothing gets in the way of
doing what is right for customers.”
Another change Stumpf emphasized was that the company now sends
customers a confirmation email approximately one hour after opening any
retail deposit account and an acknowledgement letter after submitting a
credit card application.
Stumpf reported that as part of its effort to ensure that customers have
only products they want and need, the company has begun contacting those
with open credit card accounts identified by PricewaterhouseCoopers as
possibly being unauthorized. For retail deposit account customers, the
company has refunded fees and is contacting every single one of them
across the country in order to ensure a full understanding of every
customer affected by this problem. Stumpf emphasized that “We should
have done more sooner, but we will not stop working until we get this
right.”
“I am fully accountable for all unethical sales practices in our retail
banking business, and I am fully committed to fixing this issue,
strengthening our culture, and taking the necessary steps and actions to
restore our customers’ trust,” Stumpf said.
For more information, please go to www.wellsfargo.com/commitment.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based
financial services company with $1.9 trillion in assets. Founded in 1852
and headquartered in San Francisco, Wells Fargo provides banking,
insurance, investments, mortgage, and consumer and commercial finance
through more than 8,600 locations, 13,000 ATMs, the internet
(wellsfargo.com) and mobile banking, and has offices in 36 countries and
territories to support customers who conduct business in the global
economy. With approximately 268,000 team members, Wells Fargo serves one
in three households in the United States. Wells Fargo & Company was
ranked No. 27 on Fortune’s 2016 rankings of America’s largest
corporations. Wells Fargo’s vision is to satisfy our customers’
financial needs and help them succeed financially.
