SAN FRANCISCO–The Wells Fargo executive who oversaw the unit that led to $185 million in fines could personally see a payout of more than $125 million herself.
Carrie Tolstedt, who was responsible for the Wells Fargo department that was responsible for creating more than two-million unauthorized customer accounts, is planning to retire at the end of the year after 27 years with the bank, according to MSNBC.com. When Tolstedt’s retirement was announced in July, Wells Fargo’s CEO, John Stumpf, said Tolstedt was a “standard-bearer of our culture” and a “champion for our customers,” according to MSNBC.
The $185 million in total fines being paid by Wells Fargo, which includes restitution to victims, includes a $100-million fine to the CFPB’s Civil Penalty Fund, a $35-million penalty to the Office of the Comptroller of the Currency, and another $50 million to the City and County of Los Angeles.
The bank has also fired more than 5,000 employees who were involved in the scheme. CUToday.info has coverage here.
“Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses,” said CFPB Director Richard Cordray. “Because of the severity of these violations, Wells Fargo is paying the largest penalty the CFPB has ever imposed. Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences.”
According to proxy statements from Wells Fargo, Tolstedt has been earning approximately $9 million annually. In 2015, that included $7.3 million in stock and a cash bonus, with the bank noting that “under her leadership, Community Banking achieved a number of strategic objectives, including continued strong cross-sell ratios, record deposit levels, and continued success of mobile banking initiatives.”
Wells Fargo disclosed that Tolstedt will leave the bank with $124.5 million in stock, options and restricted Wells Fargo shares, some of which has yet to vest. MSNBC reported that had Tolstedt been fired she would have had to forfeit $45 million of the total amount.
The big question now, noted MSBNC, is whether the bank will execute on the “strong recoupment and clawback polices it said it has in place for executives who harm the bank.