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- SEC Order Rejecting Acquisition of Chicago Stock Exchange (CSX) by Chinese-Baesd Company
- Kyle Moffatt Named Chief Accountant in SEC CorpFinance
- SEC Suspends Trading in 3 Issuers Claiming Involvement in Cryptocurrency and Blockchain Technology
- Karen Garnett, Assoc. Director of SEC CorpFinance, to Leave After 23 Years of Service
- Louisiana Adviser Barred for Hiding Losses from Investors
- Connecticut HF Manager Illegally Diverted Investor Money - Now Owes Nearly $13Mn
- White House Cleaning House of Advisors Without Full Security Clearance
- Goldman Projects 30% Growth in Wealth Management Advisor Force
- Whistleblower Alleges Manipulation of CBOE Volatility Index
- FINRA Looking Into VIX (CBOE Volatility Index) Manipulation: WSJ
- Atlanta-Area Resident Charged with Misusing Investor Funds - SEC
- FINRA Announces 2018 West Region Networking Seminar
- Alberto Arevalo, Associate Director in Office of International Affairs, to Retire From SEC
- A Culprit for Financial Site Glitches: You and Your Apps
- Investor Protection, Capital Formation and Market Integrity Are Top Priorities in SEC Budget Request
- We Must Stop Out-Of-Control Trading or U.S. Capitalist System Will Break Down - Dick Bove
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NEWSLETTERS & ALERTS
Wells Fargo CEO, CFO, Wealth Mgmt Head Get Pay Raises - That's OK
[Photo: CEO Tim Sloan / eastbaytimes.com]
Wells Fargo Board of Directors awarded CEO Tim Sloan $12.8 million for his work in 2016. Sloan, 56, was the bank President and COO when he replaced John Stumpf as CEO on 10/12/16. Pay raises also went to CFO John Shrewsberry and David Carroll, who heads wealth and investment management. In all cases, compensation was devoid of any bonuses.
The numbers, which were included in a Wells Fargo proxy filing, took some observers by surprise.
SUPPORT FOR SLOAN’S PAY BOOST. Tim Sloan has been with Wells Fargo for nearly 30 years, and he’s now been the CEO for 5 months, after taking over for the beleaguered John Stumpf. Going from the ‘frying pan to the fire’ was a risky career move for Mr. Sloan, but he seems to have weathered the storm so far - at least there’s been nothing to report to the contrary, so ‘no news is good news’. Of course, it remains to be seen whether Mr. Sloan had any role in the sales scandal - direct or indirect. We expect to learn more later in 2017.
When considering Sloan’s proper level of compensation, it’s probably best to first compare it to compensation received by his predecessor, John Stumpf. For 2012, 2013, 2014 and 2015, Stumpf received the identifcal amount each year - $19.3 million. For 2015, that consisted of $6Mn in cash and $13.3Mn in stock. For 2015, Stumpf was the 4th highest paid CEO among the big banks:
- Jamie Dimon: $27Mn
- Lloyd Blanfein: $23Mn
- James Gorman: $21Mn
- John Stumpf; $19.3Mn
- Michael Corbat $16.5Mn
- Brian Moynihan $16Mn
So, by comparison, Sloan’s compensation of $12.8Mn would seem to be reasonable.
Next, let's consider what credit, if any, Mr. Sloan as CEO should get for the ebbs and flows of his company’s stock since October. When Sloan took over as CEO on 10/12/16, Wells Fargo shares were trading at $45.32. Yesterday, 3/15/17, WFC shares closed at $58.71. That’s an increase of $13.39, or nearly 30%. Even with the ‘Trump Bump’, that’s an impressive upswing.
Concluding Thoughts. Wells Fargo is expected to announce the results of its internal review into the bank’s sales scandal prior to its annual meeting, scheduled around 4/20/17. Various government agencies, including the Justice Department, are similarly conducting investigations and probes. It's therefore likely that some time in 2017 the facts and circumstances underlying the sales scandal will be disclosed.
At that point, we should have a pretty good idea as the size and scope of the misconduct, as well as any direct or indirect role that Mr. Sloan and other senior management may have had. That will give plenty of time for the bank to clawback undue compensation to Mr. Sloan and others, should that be necessary.
In the meantime, let’s grant these top executives their due rewards.