Maxine Waters asks CEO Tim Sloan is Wells Fargo too big to manage?
Wells Fargo CEO Tim Sloan’s compensation is increasing more than 5 percent to $18.4 million for his work last year, the San Francisco-based bank disclosed Wednesday.
His total compensation is up because of a $2 million cash bonus, which the board did not award him for his performance in 2017 as the bank continued to struggle to move past a series of scandals.
Sloan has pushed to turn the bank around, including by eliminating product sales goals for retail bankers in branches and call centers. But Wells has become mired in newer revelations of customer harm that has led to ongoing probes from federal authorities and regulators.
In Wednesday’s filing, the bank listed accomplishments under Sloan, including continued efforts “to create a simpler, more collaborative Wells Fargo and efficiently serve our customers.” Also last year, Wells Fargo customer loyalty and satisfaction scores reached a two-year high, the filing said.
Under Sloan, the bank has also made steady progress against key goals, including risk management, according to the filing. But the board noted that more progress is needed to meet regulatory expectations for managing risk.
The disclosure comes one day after members of the House Committee on Financial Services questioned Sloan during a roughly four-hour hearing into the bank’s consumer abuses.
Some lawmakers praised him for changes he’s made to repair the bank. But others blasted him for revelations of additional customer harm that Wells has disclosed since he became CEO.
“This hearing has revealed Wells Fargo has failed to clean up its act,” U.S. Rep. Maxine Waters, the Democrat who chairs the committee, said at the conclusion of the hearing. “It’s too big to manage.”
Adding to the bank’s woes, on Tuesday a spokesman for the Office of the Comptroller of the Currency said that the regulator continues to be disappointed with Wells’ performance under the OCC’s consent orders.
The bank has shown an “inability to execute effective corporate governance and a successful risk management program,” the spokesman said.
Wells Fargo has its largest base of employees is in the Charlotte metro area, where it employs approximately 25,700.
New problems in 2018
Sloan’s compensation is rising following a year in which Wells continued to stumble and disclosed more problems.
In August, Wells announced that about 545 of its customers lost their homes to foreclosure because of an error by the bank as it calculated their eligibility for modifications to make their mortgages more affordable.
And in March of last year, the bank disclosed that federal authorities were looking into its wealth and investment management business.
Among the biggest setbacks for Wells last year, the Federal Reserve in February took the unprecedented step of restricting the bank’s growth until it can fix its problems.
The Fed cited “widespread consumer abuses and compliance breakdowns” at Wells in issuing the restriction, which remains in effect.
What other banks pay
Wells Fargo becomes the latest bank to disclose new compensation figures for their CEOs and other top executives.
Those disclosures show Sloan’s compensation remains below that of his peers.
Wells noted Wednesday that Sloan has not received a base salary increase since March 2016 and that his last increase was awarded before he became CEO.
In January, New York-based JPMorgan Chase reported that it increased CEO Jamie Dimon’s total compensation by more than 5 percent to $31 million. The figure includes a base salary of $1.5 million.
Last month, Charlotte-based Bank of America reported that CEO Brian Moynihan’s compensation is increasing by 15 percent to $26.5 million for his performance in 2018. The figure is made of $25 million in stock and an unchanged base salary of $1.5 million.
Bank of America, which also released its proxy filing on Wednesday, disclosed in the document how much more Moynihan earned last year than the bank’s rank-and-file workers.
Publicly traded companies must report such median compensation for employees — meaning half the pay is above and half is below that amount — to comply with a federal rule that started last year.
Moynihan earned 247 times the median pay figure of $92,040 based on his total 2018 compensation of $22.7 million, according to the filing.
Wells Fargo said Wednesday that Sloan’s total compensation is roughly 283 times that of the median pay figure of $65,191.
In another disclosure Wednesday, Wells Fargo announced that Dallas, Texas, will be the location of its April 23 annual shareholders meeting.
Wells Fargo says it has about 5,800 workers across various lines of business in the Dallas area.