Wells Fargo CEO receives pay bump despite sales scandal

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By Tina Bellon | NEW YORK

NEW YORK Wells Fargo & Co’s board of
directors awarded Chief Executive Timothy Sloan $12.8 million
for his work last year, a 17 percent increase, despite scrapping
executive bonuses in light of an accounts scandal that rocked
the bank last year, according to a proxy filing on Wednesday.

Sloan was CEO for only a few months in 2016. He took over
after his predecessor, John Stumpf, resigned in light of
revelations that thousands of Wells Fargo employees had opened
perhaps millions of unauthorized customer accounts.

Sloan, 56, had been president and chief operating officer
until October. Though his promotion came with a higher base
salary and more long-term stock awards, his total package was
less than the $19.3 million Stumpf received for 2015.

Finance chief John Shrewsberry and David Carroll, who heads
wealth and investment management, also received bigger pay
packages for 2016 despite the absence of bonuses.

Wells Fargo reached a $185 million settlement with
regulators in September over creating what it then said could be
as many as 2.1 million accounts in customers’ names without
their permission. The third-largest U.S. bank has since
encountered more government probes and lawsuits, and its board
recently said an internal review may uncover more problematic

The board plans to release its findings ahead of Wells
Fargo’s annual meeting on April 26, where shareholders will vote
on matters in the proxy, including the election of directors,
executive pay and shareholder proposals.

This year’s proxy includes a proposal submitted by a group
of mostly religious-affiliated activist investors who want the
board to produce a report into the root causes of the sales
scandal. Employees have said they were pressured by supervisors
to hit aggressive sales targets that were ultimately put in
place by top management.

Shareholders also submitted proposals urging the bank to
consider divesting businesses, prepare a report on the gap
between what it pays men and women and adopt a policy on the
rights of indigenous people in light of its involvement in
financing the controversial Dakota Access Pipeline.

Wells Fargo’s board urged shareholders to reject the
shareholder proposals. Responding to the call for the root cause
report, the proxy stated that the Wells Fargo board believes the
topics that would be covered are already being addressed by
other reviews underway.

A representative of the lead filer of the proposal, Nora
Nash of the Sisters of St. Francis of Philadelphia, said via
e-mail the group was “disappointed” by the bank’s opposition
since the resolution seeks information that would “set the
course for real systemic change in culture, ethics, values and
financial sustainability” at the bank.

“We believe that we will get a strong YES vote from
shareholders,” Nash wrote.

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