Wells Fargo made national headlines Tuesday when it announced plans to eliminate sales goals at the start of next year. But the bank says it hasn’t fully figured out how it will compensate bankers in its branches and call centers once it makes the change.
The decision to drop the goals for retail bankers comes after the San Francisco-based giant agreed Thursday to $185 million in fines to settle claims of wrongdoing in its sales practices. Tuesday’s move marks a departure from a common industry practice of paying bankers bonuses based on how many products, like checking accounts, they sell.
Wells Fargo spokeswoman Richele Messick told the Observer on Tuesday the company is “working through the details” of how bankers will be paid once the bank abandons sales goals.
“We will ensure our team members receive fair compensation, as we do today,” she said.
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The decision is expected to affect about 78,000 employees, or roughly 30 percent of the company’s 268,000 workforce.
Affected employees work in the bank’s call centers in the U.S. and elsewhere, including some at Wells Fargo’s Customer Information Center on W.T. Harris Boulevard. It also affects some employees who work in the bank’s roughly 6,000 U.S. branches in 39 states and Washington, D.C.
Across Charlotte, Wells Fargo’s largest employment hub, the company has about 23,000 employees in branches and across various lines of business. It was not immediately clear how many of those are affected by Tuesday’s announcement.
According to Federal Deposit Insurance Corp. data, Wells Fargo has roughly 91 branches in the Charlotte, Gastonia and Concord region, compared with Bank of America’s approximately 61.
Messick said the bank is not eliminating sales goals for all personnel who sit in branches, such as mortgage bankers and financial advisers.
Bonuses can represent an important slice of compensation for bankers in branches, who can make far less than executives. Wells Fargo has said the primary driver of compensation of a banker in a branch is their salary, with variable pay ranging from 3 to 15 percent of compensation for most branch employees.
Messick said Wells Fargo plans to consult with employees and an independent consultant to determine how compensation should be structured.
“We will be thoughtfully working through the details over the next several months,” she said.
Chief Financial Officer John Shrewsberry said Tuesday’s move is intended to make certain Wells Fargo’s customers have “the full confidence” that the bank is acting in their best interests.
The decision comes after the bank agreed to the fine to resolve allegations including its employees took part in a “widespread illegal practice” by secretly opening more than 2 million deposit and credit card accounts that may not have been authorized by customers.
Wells Fargo paid the fine to the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the city and county of Los Angeles, without admitting or denying allegations.