Ovunc Kutlu
September 28, 2016•Update: September 29, 2016
NEW YORK
Wells Fargo CEO John Stumpf has agreed to forfeit his equity awards valued at around $41 million amid internal investigation into illegal banking practices, the bank said Tuesday.
Also, Stumpf will not receive a bonus for 2016, after it was revealed bank employees opened unauthorized deposit and credit card accounts, and funded them through transfers from consumers’ authorized accounts without their knowledge or consent.
Carrie Tolstedt, the former head of community banking, will also forfeit all of her equity awards valued around $19 million based on the closing share price Tuesday. She will not receive a bonus for 2016 and will not be paid severance or receive any retirement enhancements.
The board at the world's biggest bank said Tuesday that it has launched an independent investigation into its retail banking practices.
Wells Fargo said three weeks ago it fired 5,300 employees involved in the scandal and the announcement marks the first time top-level executives have been penalized since news of the scandal broke in 2013.
“We are deeply concerned by these matters, and we are committed to ensuring that all aspects of the company’s business are conducted with integrity, transparency, and oversight," Stephen Sanger, Lead Independent Director at Wells Fargo said in a statement.
"We will proceed with a sense of urgency but will take the time we need to conduct a thorough investigation," he added.
Stumpf will not receive a salary during the bank's investigation and, is expected to testify Thursday before the House Financial Services Committee.
Wells Fargo employees opened roughly 1.5 million deposit accounts and applied for roughly 565,000 credit card accounts that may not have been authorized by consumers, in order to boost sales figures, meet sales targets and receive compensation incentives, according to Consumer Financial Protection Bureau.
During congressional testimony last week, Stumpf apologized but refused to admit the practices were an "orchestrated effort".
High-raking Democratic lawmaker Elizabeth Warren accused Stumpf of "gutless leadership" and blasted the CEO by saying, “You haven’t resigned, you haven’t returned a single nickel of personal earnings, haven’t fired a single senior executive."
