Clawing Back Bankers’ Pay at Wells Fargo Is Harder Than It Looks
- Policies to recoup awards are prevalent but rarely used
- ‘Once it’s out the door, it’s hard to get back,’ Elson says
Warren: This Is Gutless Leadership
Members of the U.S. Senate Banking Committee are demanding that Wells Fargo & Co. claw back pay from Carrie Tolstedt, the executive whose community banking unit created 2 million unauthorized customer accounts. They’re not likely to get as much as they want.
At a hearing in Washington on Tuesday, senators cited figures eclipsing $100 million. During her three-decade career at Wells Fargo and its predecessors, Tolstedt received about $44 million in shares, $34 million in vested options and still more from cash bonuses and stock sales. But the bank’s clawback policy, like that of most U.S. companies, doesn’t allow Wells Fargo to go after those assets unless there’s a financial restatement. When the damage is reputational harm, only unvested stock awards can be recouped -- in the case of Tolstedt, 56, whose retirement was announced in July, that’s about $19 million.