Wells Fargo said this week that it was slashing stock awards for top executives in the wake of its sales scandal, but those leaders will still take home millions from their remaining shares, according to new securities filings.
Even after forfeiting a portion of shares granted in 2014, the eight executives, including some in Charlotte, will still receive $1.7 million to $5.6 million apiece from the performance-based stock they were allowed to keep, according to filings on Thursday.
In total, the eight executives will still receive shares worth about $27 million, based on Tuesday’s closing price of $57.88. The shares vest – or become accessible to the executives – on March 15.
In September, regulators fined the San Francisco-based bank $185 million to settle allegations that its employees opened as many as two million fake accounts in order to meet high-pressure sales goals. The bank’s board is now investigating the matter and rolling out punishments for top executives.
In addition to cutting executive stock awards, the board said Wednesday that it was scrapping 2016 cash bonuses for the eight leaders.
Wells Fargo said the decisions weren’t related to findings of improper behavior by the leaders, saying the reductions were based on “the accountability” of all those in senior management for Wells’ overall operational and reputation risk.
The eight executives had all been in top leadership since 2013, when questions about the bank’s sales practices first became public. Wells has its biggest employee hub in Charlotte and remains one of the city’s biggest banks following its 2008 purchase of Wachovia.
Thursday’s filing reveals the precise number of stock awards the executives will still receive this month, a detail the bank had not previously released. Here’s the breakdown of the awards’ value:
▪ Tim Sloan, CEO: $5.63 million.
▪ John Shrewsberry, chief financial officer: $2.86 million.
▪ David Carroll, wealth and investment management head: $5.63 million.
▪ Avid Modjtabai, head of payments, virtual solutions and innovation: $5.63 million.
▪ Hope Hardison, chief administrative officer: $1.74 million.
▪ Michael Loughlin, chief risk officer: $2.55 million.
▪ James Strother, general counsel: $2.55 million.
Chief auditor David Julian was the eighth executive stripped of his 2016 bonus, but the bank did not include him in Thursday’s filings. Wells Fargo told the Observer Julian was not part of the filings because he is not an “executive officer.”
All eight are based in San Francisco, except for Julian and Carroll, who are in Charlotte.
A bank spokesman would not comment on the details in Thursday’s filings. The bank’s news release on Wednesday said the eight executives lost a total of $32 million in bonuses and stock awards.
Additional filings on Thursday also showed how Wells Fargo’s financial performance will affect compensation of some other executives in 2016, when profits fell 4 percent to $21.9 billion.
According to the filings, a board committee approved a reduction in 2014 performance-based shares for community banking head Mary Mack and controller Richard Levy, both based in Charlotte, and San Francisco-based commercial banking head Perry Pelos.
Although the filings did not specify how much stock the executives lost, they did disclose how many shares they received. Mack’s shares were worth $1.8 million, Pelos’ $2.5 million and Levy’s $3 million.
“Leaders who received performance share awards in 2014 that vested following 2016 received an amount that was reflective of the overall performance of the company in 2016,” Wells Fargo spokesman Mark Folk said.
More details on compensation for top executives for their work in 2016 will be disclosed in the bank’s proxy statement scheduled for release later this month.