Wells Fargo Cancels Ex-CEO's $15M Stock Award
The bank’s fortunes in the wake of its fake-accounts scandal. Wells Fargo disclosed in a regulatory filing that it had clawed back the February 2019 award, saying it was conditional on Sloan’s “role and responsibility for the company’s progress in resolving outstanding regulatory matters.”
The filing said Wells Fargo did not award Sloan an annual incentive for 2019 after tak- ing into account the timing of his March 2019 resignation, the bank’s performance, and the status of its risk management objec- tives and outstanding regulatory matters. The moves left Sloan, who also did not receive any severance pay, with only his operations once the economy reopens,” they added.
Regulators have been encouraging financial institutions to work with customers to soften the financial toll of the coronavirus. Among other moves, Ally Financial is allowing auto loan holders to defer payments for up to 120 days with no late fees. Fifth Third Bank is waiving payments on mortgages and car loans for 90 days.
Fitch noted that the $2 trillion emergency relief package signed by President Trump allows lenders to defer loan payments without having to categorize the loans as troubled debt restructurings, which would trigger special regulatory reporting, tracking, and accounting requirements that can be burdensome for lenders.
“Still, the increase in forbearance will temporarily sup- press charge-offs that will be recognized in future quarters, creating a distortion in asset quality metrics beginning in the second quarter of 2020,” Fitch said.
$1.5 million in base salary from 2019. When Sloan stepped down in March 2019, the board chair said he had the “full support of the board.” But as the Char- lotte Observer reports, “Many had questioned whether an insider like Sloan could fix a bank with the systemic cultural issues Wells had. It appears Wells Fargo’s board now believes that the skepticism was likely well-founded.”
Sloan tried to move the bank past the scandal by, among other things, investing millions of dollars in media campaigns that touted its “re-establishment.” But in a report released in February, House Republicans said Wells Fargo seemed more focused on making it seem like it was making progress on handling the scandal than actually making the changes that regulators asked for.
“Tim Sloan made a series of incomplete and overly optimistic public statements about the bank’s progress,” the report found. When Sloan said in 2018 that he expected the Federal Reserve to lift its cap on the bank’s growth in the first part of the next year, “there was no basis for such an optimistic prediction.”
Sloan resigned after providing testimony about compliance at a Congressional hearing. His testimony was contradicted by the Office of the Comptroller of the Currency.