Banking

‘It is outrageous.’ Wells Fargo draws criticism for $2 million bonus to its CEO

Wells Fargo’s awarding of a $2 million cash bonus to its CEO is not going over so well with the bank’s critics.

Wells, which has a large presence in Charlotte, disclosed on Wednesday that CEO Tim Sloan’s new annual compensation package has been increased by more than 5 percent, a jump attributable to the bonus.

The bank’s board gave Sloan the bonus based on Wells’ 2018 financial performance and other accomplishments, the San Francisco-based bank said. The total package to Sloan for his work last year is worth $18.4 million, including an unchanged base salary of $2.4 million and $14 million in stock.

Critics are calling the bonus incomprehensible at a time when Wells continues to face probes from authorities and regulators, and after a year in which Wells revealed more instances of harming its customers. The bank also remains under a cap the Federal Reserve imposed on its growth last year.

“Mr. Sloan shouldn’t be getting a bonus, he should be shown the door,” U.S. Rep. Maxine Waters, the Democrat who chairs the House Committee on Financial Services, said in a statement Thursday. Waters was among committee members who attacked Sloan during a Tuesday hearing on the bank’s consumer abuses.

“Given Wells Fargo’s continuing failures, it is outrageous and wholly inappropriate that the bank has rewarded Mr. Sloan with a $2 million bonus for 2018,” Waters said.

U.S. Sen. Sherrod Brown of Ohio said in a tweet Thursday that Sloan “should be getting a pink slip, not a $18.4 million payday.” Brown is the ranking Democrat on the Senate Committee on Banking, Housing and Urban Affairs.

“5300 front line workers lost their jobs because of the Wells Fargo scandal, but senior executives responsible for the fraud are walking away scot-free with millions in hand,” he tweeted.

Consumer advocacy group Allied Progress ridiculed the bank for announcing Sloan’s new compensation details the day after the House hearing.

“It’s understandable why Wells Fargo would keep a lid on Tim Sloan’s latest near-million dollar raise until after he testified before Congress,” Jeremy Funk, spokesman for the Washington, D.C., group, said in a statement.

“Sloan already had enough inexcusable behavior to answer for without also having to explain why he’s getting a massive raise ... or what exactly he’s being rewarded for as the bank has continued to rack up billions of dollars in fines and penalties for misconduct against consumers,” Funk said.

A spokesman for Wells Fargo declined to comment but directed a reporter to the bank’s proxy filing in which it disclosed Sloan’s new pay.

In the filing, the bank said Sloan, 58, deserved the cash bonus because of his continued leadership on the company’s top priority of rebuilding trust.

Last year, customer loyalty and satisfaction scores hit a two-year high at Wells Fargo, the filing said. Sloan has also continued to prioritize improving risk management at the company, though more progress is required in that area, the filing said.

The filing also noted that Sloan did not receive a cash bonus in 2017 or 2016. That was the year he took over as CEO after revelations that employees had opened as many as 3.5 million accounts without customer permission.

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Deon Roberts has covered Charlotte’s financial services industry for The Charlotte Observer since 2013. His beat includes Bank of America and Wells Fargo. He attended Loyola University in New Orleans and is a native of Lafitte, La.
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