Carrie Tolstedt announced in July that
she was deciding t
o "retire at year's end after a long and
successful career. "
Her timing is somewhat curious, given
that on Thursday, Wells Fargo received
the largest penalties imposed by the
Consumer Financial Protection Bureau
(CFPB) for unethical behavior that
stemmed from the department
It is even more curious now that she
is walking away with nearly $125 million
in salary, stocks, options and Wells Fargo
shares, because she retired.
Had she been fired, she would have
had to forfeit at least $45 million,
according to Fortune.
In a settlement with the Los Angeles City Attorney,
Office of the Comptroller of the
Currency and CFPD, Wells Fargo
was ordered to pay $185 million to
settle charges that resulted from
employees fraudulently opening up
unauthorized fee-generating accounts
in customers’ names, in order to reach
sales targets and receive bonuses,
Where Tolstedt fits into all this is murky.
Her department was the one found responsible
for opening up over 2,000 unauthorized
customer accounts that were so commonplace
that employees internally referred to the
practice as “sandbagging. ”
It is also unclear how her nine-figure paycheck
factors into this, if at all. She is receiving
$124.6 million in back pay, which
is about 75 percent of the
GDP of the Falkland Islands.
Neither the lawsuit from the
CFPD, nor from the LA City
Attorney mention Tolstedt by
name, and she managed parts
of the five-year long purge of
employees who participated
in sandbagging, Fortune reported.
On the other hand, the charges from the CFPB
allege that Wells Fargo was aware of the
behaviors of its employees long before it
began purging guilty parties from its ranks.
In addition, the proxy statement from
Wells Fargo often cited “cross-selling ratios ”
as a reason for her $9 million annual pay.
In a class action lawsuit from former employees,
failing to meet cross-selling goals could result
in termination.
In addition, three-quarters of the fraudulent
accounts came from the community banking
department, along with 565,000 unauthorized
credit card applications, according to Fortune.
Wells Fargo does have a claw back policy,
meaning that they can take back any bonus pay
from former executives if it’s found that their
conduct harmed the bank or its reputation or
if they failed to “identify or manage ” risks in
their departments.
from July that refers to her as
“a 30-plus year veteran of financial
services with 27 years at Wells Fargo, ”
and “a leader in building and deepening
customer loyalty and team member
engagement across the business ”
has not been amended to suggest
any wrongdoings.
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