Reprinted from The New York Times by Stacy Cowley on September 27, 2016.
Wells Fargo announced on Tuesday that it would claw back compensation valued at $41 million from its embattled chairman and chief executive, John Stumpf, as the financial consequences of the scandal over illegally created sham accounts at the bank reached the executive suite.
The action represented one of the first times since the 2008 financial crisis that a chief executive has been forced to give up compensation. Many large companies have adopted clawback provisions at the urging of regulators and shareholder advocates, but boards have been hesitant to invoke them.
And it came one week after a blistering Senate hearing in which lawmakers criticized the company and its board for not holding its leaders financially accountable for the scandal.
Carrie Tolstedt, who led the Wells Fargo community banking division now engulfed in scandal, will surrender stock grants valued at about $19 million, the board said as it announced an investigation into the company’s practices.
The two executives will also forgo any bonus payments for the year. …