Chill runs through Wall Street after Wells Fargo hits its CEO where it hurts
NEW YORK — Wells Fargo’s unprecedented move to strip CEO John Stumpf of $41m in stock awards has sent a chill through Wall Street, with bankers fearful that a hardening political climate against corporate wrongdoing will encourage boards to be more aggressive about making them forfeit pay.A sales practice scandal at Wells Fargo, where some of its employees opened as many as 2-million accounts, without customers’ knowledge, in order to hit sales targets, could not have come at a worse time for the wider industry, with politicians in Washington reviewing new rules on bank executive remuneration.Bankers fear not only that the new rules on pay will be tightened as a result of the furore at Wells Fargo but also that boards will go beyond them to avoid a political backlash.READ THIS: Wells Fargo CEO apologises in congress for ‘unethical’ bogus accounts"The Wells Fargo board made a mistake by not recouping some of the CEO’s pay until after the firestorm developed," said Harvard Law School...
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