Wells Fargo CEO gets raise to $18.4 million the day after being scolded by Congress
Lawmakers scolded Wells Fargo & Co. Chief Executive Tim Sloan for hours Tuesday, telling him the bank had not done enough to rehabilitate itself after years of scandals about its allegedly abusive practices toward customers. Some called for Sloan to be fired.
The next day, the bank’s board of directors gave Sloan a 5% raise, increasing his total compensation to $18.4 million. Of that, $2 million is an “annual incentive award” — that is, a bonus.
Sloan’s pay is now 283 times the median pay of the bank’s more than 200,000 employees.
The bonus was based on Wells Fargo’s “financial performance” and Sloan’s “continued leadership on the company’s top priority of rebuilding trust,” Wells Fargo said in its annual letter to shareholders. The company’s stock price fell 27% last year in a tough market, but its yearly profit rose to $22.4 billion, up from $22.2 billion in 2017, and the company’s board noted that Sloan had led a massive stock buyback program.
“Would have loved to ask questions about this,” Rep. Katie Porter (D-Irvine) said on Twitter of Sloan’s pay raise. Porter had questioned the sincerity of Wells Fargo’s efforts to reform itself during Tuesday’s hearing.
Despite his raise, Sloan still earns less than many of his competitors. JPMorgan Chase & Co. CEO Jamie Dimon earned $31 million last year after the bank reported record profits. Bank of America Corp.’s Brian Moynihan received a 15% raise to $26.5 million. Michael Corbat of Citigroup Inc. earned $24 million last year.
The industry has been enjoying what Dimon has called a golden age. Regulators have begun loosening tough rules put in place after the global crisis, and the corporate tax cut has helped boost profits to record levels.
Wells Fargo has weathered sustained backlash from its admission two years ago that it had opened millions of accounts in customers’ names without those customers’ knowledge or consent, and from more recently saying it had mistakenly foreclosed on hundreds of customers and improperly repossessed thousands of cars.
Sloan, who has been at Wells Fargo for more than 30 years, has spent years apologizing for the bank’s bad behavior and attempting to rebuild its reputation with customers, regulators and lawmakers. But the company still faces a lot of skeptics.
The Federal Reserve has banned the bank, which has nearly $2 trillion in assets, from growing any bigger until it reforms itself. The Office of Comptroller of the Currency, another big regulator, has said it was “disappointed” by Wells Fargo’s rehabilitation efforts. Sen. Elizabeth Warren (D-Mass.), a presidential hopeful, has led an effort calling for Sloan to be fired.
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