What scandals? Wells Fargo CEO Tim Sloan gets $4.6M raise
NEW YORK - Well Fargo's (WFC) board of directors has given CEO Tim Sloan a $4.6 million raise, despite the bank continuing to face the fallout of its sales-practices scandal and other issues.
In its annual proxy to shareholders, Wells Fargo said Wednesday that Sloan made $17.6 million last year, up from $13 million in 2016. While Sloan didn't get a cash bonus in 2017, the value of the Wells Fargo stock awarded him rose to $15 million from $10.5 million. His base salary also rose marginally.
John Shrewsberry, the bank's chief financial officer, saw his total compensation increase to $11.9 million in 2017 from $9.3 million in 2016.
Sloan's salary increase was about 35 percent, roughly equal to the pay increase that Bank of America (BAC) CEO Brian Moynihan received. JPMorgan Chase (JPM) has not filed its proxy statement for this year yet. Its CEO, Jamie Dimon, received a pay package of $28 million in 2016.
San Francisco-based Wells Fargo is facing several investigations into its business, most notably its opening of millions of fake accounts without getting customers' authorization.
In another account scandal, in July 2017 the bank announced that it will pay $80 million to customers who the bank signed up and charged for auto insurance that they did not want or need. Wells Fargo said that roughly 570,000 customers were affected and will be getting refunds.
The bank has been subject to penalties resulting from the fake accounts scandals. In September 2016, the Consumer Financial Protection Bureau required that Wells pay full restitution to all victims and a $100 million fine to the CFPB's Civil Penalty Fund. The bank also had to pay an additional $35 million penalty to the Office of the Comptroller of the Currency and another $50 million to the City and County of Los Angeles.
Even though President Donald Trump has revamped the CFPB so that it's now more industry-friendly, he stood by those fines. In December 2017 he tweeted: "Fines and penalties against Wells Fargo Bank for their bad acts against their customers and others will not be dropped, as has incorrectly been reported, but will be pursued and, if anything, substantially increased."
And on Feb. 2, Federal Reserve Chair Janet Yellen's last day, the Fed said it's imposing a freeze on the bank's growth until it can prove it has improved its internal controls.
"Until the firm makes sufficient improvements, it will be restricted from growing any larger than its total asset size as of the end of 2017," the Fed announced in a statement. "The Board's consent cease and desist order with Wells Fargo requires the firm to improve its governance and risk management processes, including strengthening the effectiveness of oversight by its board of directors."
The Fed chair's decision "demonstrates that we have the tools to rein in Wall Street -- if our regulators have the guts to use them," Sen. Elizabeth Warren, D-Massachusetts, said in a statement. "The massive fraud at Wells Fargo showed the whole country that we need more accountability on Wall Street."