CEO John Stumpf will forfeit $41 million in compensation. As Fred Katayama reports, it's one of the biggest sanctions ever against a bank CEO.
Huge sanctions over the sales scandal at Wells Fargo. The bank says CEO John Stumpf will forfeit $41 million in unvested equity awards, and it'll also claw back $19 million from the former head of the retail division at the forefront of the scandal, Carrie Tolstedt. She will also get no severance. This all comes one week after Stumpf was excoriated before the Senate Banking Committee. Senator Elizabeth Warren demanded he resign, pointing out that 5300 low-ranking employees were sacked over the fake accounts scandal while no senior executives were fired. Senator Warren told Reuters Wednesday, "This is a small step in the right direction, but nowhere near real accountability ... Mr. Stumpf should resign, return every nickel he made while this scam was ongoing, and face SEC and DOJ investigations. That is real accountability." The penalties mark a sharp reversal. No CEO has had to give back bonuses despite the huge scandals at big banks a few years ago. The closest thing to a clawback was JPMorgan Chase's move to chop CEO Jamie Dimon's 2012 bonus in half. Stumpf will draw no salary while the board investigates the sales practices, and the bank says the probe may lead to more changes in compensation.