Thursday, September 15, 2016

Wells Fargo & The Golden Parachute

Following up on my post last week "Big Bank, Big Criminal," comes another eye-popping coda to the story: the executive in charge of the division where the massive, 5,000+ employee fraud and looting of Wells Fargo's customers (this blog author among them) occurred, will receive more than $125 million in early retirement benefits. For realz.

In connection with the “widespread illegal practices,” Wells Fargo has also fired 5,300 employees and managers, with one notable exception: the executive in charge.

Instead of bearing any responsibility for this scandal, Carrie Tolstedt, the divisional senior vice president for community banking who supervised the 6,000 retail branches where the wrongdoing took place, is retiring, taking with her millions in stock and options.

Wells Fargo was aware of the problems in the division when Ms. Tolstedt announced her retirement on July 12. The bank’s sales practices have been under regulatory scrutiny since at least November. 
Further, the bank itself has been working to identify the affected customers and complicit employees.

Despite knowing about the widespread misconduct on her watch, Wells Fargo gave Ms. Tolstedt a glowing farewell. John Stumpf, the chief executive, called her a “role model for responsible leadership” and “a standard-bearer of our culture.”
Stop laughing...they're both "standard-bearers" of a Wells Fargo culture that willingly endorses fraud, identity theft, and the looting its own customers. And check the golden parachute she'll receive:
Her compensation — more than $27 million over the last three years — has never been dinged as a result of these problems. Further, Ms. Tolstedt continues to be employed at the bank through the end of the year. She stepped down only from her division role — getting out of the hot seat just weeks before the regulatory settlement was announced.

So, as in most banking scandals, lower- and midlevel employees face repercussions, but senior executives are whisked out of harm’s way, with their reputations and full stock awards intact. For Ms. Tolstedt, that could be as much as $125 million.
::crickets chirping::

Isn't that just like the mob? The underboss starts drawing too much scrutiny, so you just make her Capo di Capi Re and allow her to retire emeritus? I wonder how the 5,300 picciottos (or street guys) who got whacked feel about this? 

Until these golden parachutes turn into golden leg irons and handcuffs, and we start seeing senior execs frog-marched out the front doors of Wells Fargo HQ, these kinds of massive, Big Bank, white-collar ripoffs will continue. 

Paging Cesare Beccaria...come in Cesare...

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