Wells Fargo last week publicly disclosed some features of its new compensation plans for branch bankers, but the bank still hasn’t finalized key performance measures it will use to award the incentive pay, according to more detailed versions of the plans obtained by the Observer.
The more detailed plans, which haven’t been previously reported, show the San Francisco-based bank has yet to determine what employees must accomplish in certain areas, such as customer and household growth, to receive incentive pay. Wells Fargo released the detailed plans internally Tuesday to branch employees a week after unveiling the new strategy to higher-ranking employees such as district managers in its community banking unit.
Tuesday’s communications illustrate the third-largest U.S. bank continues to wrestle with how to compensate frontline bankers months after authorities fined it $185 million last summer for a scandal involving unauthorized accounts. Wells has picked dollar amounts for teller and personal banker incentive pay, but hasn’t settled on the precise performance requirements needed to receive some of those payments, the documents show.
The new plans affect 70,000 employees nationwide, including more than 1,000 branch employees in Charlotte.
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Wells Fargo spokeswoman Mary Eshet told the Observer “that the design of the plan is in place and squarely focused on delivering excellent customer service.” The bank plans to determine performance ranges after the first quarter of this year, so they can be based on actual results during the period, she said.
That way, Wells Fargo “can reward team members for performance based on improvement and customer outcomes and not on a fixed target set in advance, as these plans are new,” Eshet said.
Some employees say they would like more clarity now on the objectives in the plans, which include measures such as “branch primary customer growth.”
“They didn’t give us a goal,” said a teller in Texas who asked that her name not be published out of fear of reprisals. “Are the goals going to be unachievable? Are they going to be too high is what the question is really.”
“I don’t like uncertainty,” she said. “A lot of my coworkers don’t like uncertainty. We want to know exactly what it is they want us to do.”
The bank’s new compensation plan is a critical piece of CEO Tim Sloan’s strategy to move the bank past the scandal and repair its image.
Starting in October, Wells had to scramble to determine how to compensate branch bankers after it got rid of product sales goals in response to the scandal. According to authorities, Wells employees opened more than 2 million accounts potentially without customer permission as bankers pushed to meet high-pressure targets.
Last week, Wells said the new compensation plans will base a larger share of incentive pay on customer feedback and product usage. The bank also said more measures will be based on branch performance, rather than individual goals, and that Wells will begin using a new scorecard to assess risks at the branch level.
Tuesday’s internal communications reveal the specific dollar amounts employees can earn for hitting such objectives per quarter.
A lead teller, for instance, can earn up to $95 for retention and growth in consumer and business-checking customers using Wells Fargo as their main financial institution.
That same lead teller can also earn $20 to $380 based on their branch’s performance on customer surveys, documents show. The surveys, conducted online by Gallup, allow customers to respond on a scale of 1 to 5 to a range of questions. A branch must have an average score of 4.55 to 4.9 for a lead teller to receive incentive pay.
A personal banker can also earn up to $250 for reaching household relationship balance growth goals and up to $250 for hitting branch primary customer growth goals. Up to $400 can be earned based on a “qualitative assessment” of the banker by a branch manager, but the plans from Tuesday say the specific outcomes on which those incentives will be awarded are still being determined.
Last week, Charlotte-based executive Mary Mack, who since July has headed the community banking unit, told the Observer the new compensation plan was developed from various sources including employees and New York-based Mercer Consulting.
Mack, a former Wachovia executive who previously led Wells’ brokerage arm, was tapped to lead community banking to replace Carrie Tolstedt, who left the bank in the wake of the scandal. Some employees have said the changes remind them of the focus on customer service at Charlotte-based Wachovia, which Wells bought in 2008.
The plans out Tuesday say a banker is expected to give customers enough information about products and services, like costs and terms, to make an informed decision – and to always obtain customer consent.