Wells Fargo CEO John Stumpf will forfeit about $41 million in unvested equity and temporarily forgo his salary, as the company’s independent directors launch an investigation into the company’s retail banking practices.
The bank also said on Tuesday that Carrie Tolstedt, the former head of the community banking division, had left the company and would not receive a severance payment. She forfeited about $19 million in outstanding unvested equity awards and would not exercise her outstanding options during the investigation, Wells Fargo said.
Neither Stump or Tolstedt would receive a bonus for 2016, the bank said in a statement. Wells Fargo said that the actions announced on Tuesday “will not preclude additional steps being taken with respect” to Stumpf and Tolstedt.
The announcement comes after Wells Fargo was hit with $185 million in penalties for opening fee-generating accounts without authorization. Over a five-year period, 5,300 Wells Fargo employees were fired over the practice cited by the Consumer Financial Protection Bureau, CNBC confirmed with Wells Fargo. The activity occurred in the company’s community banking division.
The bank told CNBC,”While we continue to determine the details for 2017 goals and incentive plans for the retail bank, we are taking steps to accelerate the removal of product sales goals effective October 1, 2016, and put greater emphasis on delivering the best customer experience. We are also making adjustments to ensure that as we make changes, we maintain fair and consistent compensation for retail bank team members and leaders.”
Last week, Stumpf appeared before the Senate banking committee, where he said he was “deeply sorry” for what authorities have called illegal cross-selling. Sen. Elizabeth Warren grilled the CEO and said Stumpf should resign and accused him of “gutless leadership.”
“This is about accountability,” she said. “You should resign, you should give back the money you took while this scam was going on and you should be criminally investigated by both the Department of Justice and the Securities and Exchange Commission.”
In July, the bank announced that former community banking exec Tolstedt would retire by year’s end. The former community banking executive came under fire after Fortune originally reported that she would leave the company with millions in accumulated stock and options.
— CNBC’s Ryan Ruggiero contributed to this report.