Months ago, CEO John Stumpf praised the executive in hot water as “a standard-bearer” for the bank.
Wells Fargo & Co’s WFC -3.28% “sandbagger”-in-chief is leaving the giant bank with an enormous pay day—$124.6 million.
In fact, despite beefed-up “clawback” provisions instituted by the bank shortly after the financial crisis, and the recent revelations of massive misconduct, it does not appear thatWells Fargo is requiring Carrie Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts—a seemingly routine practice that employees internally referred to as “sandbagging”—to give back any of her nine-figure pay.
On Thursday, Wells Fargo WFC -3.28% agreed to pay $185 million, including the largest penalty ever imposed by the Consumer Financial Protection Bureau, to settle claims that that it defrauded its customers. The bank’s shareholders will ultimately have to swallow the cost of that settlement. The bank also said it had fired 5,300 employees over five years related to the bad behavior.
Tolstedt, however, is walking away from Wells Fargo with a very full bank account—and praise. In the July announcement of her exit, which made no mention of the soon-to-be-settled case, Wells Fargo’s CEO John Stumpf said Tolstedt had been one of the bank’s most important leaders and “a standard-bearer of our culture” and “a champion for our customers.”
On Thursday, Richard Cordray, the head of the CFPB, had a different take, “It is quite clear that [the actions of Tolstedt’s unit] are unfair and abusive practices under federal law,” said Cordray. “They are a violation of trust and an abuse of trust.”
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