Wells Fargo Said Likely to Withhold Bonuses for Top ExecutivesBy
Board said to near final decision after talks in January
Move would reflect bank’s performance in year hit by scandal
Wells Fargo & Co. will probably withhold 2016 bonuses for senior leaders including Chief Executive Officer Tim Sloan after the bank’s business and stock were slammed by a bogus-account scandal, according to a person briefed on the talks.
The company’s board discussed the move in late January and is likely to make a decision by the end of this month, potentially eliminating annual incentive awards paid in cash or equity, the person said, asking not to be identified because the talks are confidential. The measure, which also could affect finance chief John Shrewsberry and other top executives, is meant to hold management accountable but doesn’t reflect findings of specific wrongdoing.
Wells Fargo was last year’s second-worst performer in the KBW Bank Index tracking 24 of the largest U.S. lenders after the scandal rattled investors and customers. Annual net income slipped about 4 percent, the biggest drop since the financial crisis.
Sloan’s predecessor, John Stumpf, resigned in October after the bank was fined $185 million for opening legions of accounts for customers without permission. Politicians and labor groups said the company put undue pressure on workers to meet sales goals, then blamed them for misconduct without holding senior leaders accountable. Sloan and Shrewsberry haven’t been accused of wrongdoing.
The Wall Street Journal reported the board’s discussions earlier Wednesday. Oscar Suris, a spokesman for the San Francisco-based lender, declined to comment.
The company usually discloses pay packages for its top executives in March. Last year, the board awarded Stumpf $19.3 million for 2015. It included $2.8 million in salary, a $4 million bonus and $12.5 million of long-term equity incentive awards.
The board has publicly promised to investigate how fake accounts proliferated, potentially punishing executives as warranted. It may release initial findings from its review within two months, the person said.
For pay decisions, some executives promoted into senior positions in late 2016 probably will be treated differently than those who already occupied top spots, the person said.