While Wells Fargo has spent the last few years apologizing for deceiving customers with fake bank accounts, unwarranted fees and unwanted products, many employees say the cultural issues that led to those problems have not changed, even though leadership contends they have. These employees say the company continues to pressure them to hit aggressive sales targets and do whatever it takes to get results, according to a front-page story in today’s New York Times.
Update March 15, 2019: Wells Fargo Chief Executive Tim Sloan yesterday was granted a 5 percent raise, increasing his total compensation to $18.4 million. Of that, $2 million is an “annual incentive award, or in other words, a bonus. Sloan’s pay is now 283 times the median pay of the bank’s more than 200,000 employees, according to the Star Tribune.
[Verbatim] “The bonus was based on Wells Fargo’s “financial performance” and Sloan’s “continued leadership on the Company’s top priority of rebuilding trust,” the company said in its annual letter to shareholders. The company’s stock price fell 27 percent last year in a tough market, but its yearly profit rose to $22.4 billion compared with $22.2 billion in 2017, and the company’s board noted that Sloan had led a massive stock-buyback program.”
What ever happened to a CEO needing to do something that deserved not only continuing to be paid, but a bonus as well? As the New York Times story above indicates, Sloan has yet to fix the issues that led to Wells Fargo’s recent ethically blunders. He’s only spent a lot of money on PR, charitable giving and stock buybacks. If Wells Fargo truly wants to regain public trust, it needs to base CEO compensation not only on profitability, but also measured, provable change with its sales culture. Maybe that’s coming next year?