A team from Shearman & Sterling led by Robert Mundheim has been appointed to advise Wells Fargo’s board on the possibility of clawing back compensation paid to the company’s top executives, including chief executive John Stumpf, chief operating officer Timothy Sloan and now resigned retail banking head Carrie Tolstedt. Calls for clawbacks have been repeatedly leveled against Wells Fargo’s top execs ever since it emerged that the company’s intense sales targets had pushed employees to open as many as 2 million accounts in customers’ names without their permission.
Pushing for accountability
Wells Fargo has already fired around 5,300 employees over five years in relation to the practice of opening unauthorised accounts, but so far has not fired any members of its senior management or imposed any financial penalties against its executives. Ms Tolstedt, who oversaw the department responsible for Wells Fargo’s sales tactics throughout the time that the controversy took place, has stepped down from her role but is set to retire at the end of this year with tens of millions of dollars’ worth of compensation. The bank has, however, entered into an enforcement action this month and paid a $185m settlement to two regulatory agencies and the Los Angeles city attorney’s office.
Sources: Wall Street Journal; Reuters
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