Wells Fargo to Face Tighter Regulations on Hiring New Executives, Shielding Pay of Former Executives
The move voids certain prior allowances and places the bank under tougher oversight standards
A leading bank regulator known as the Office of the Comptroller of the Currency has revoked Wells Fargo's right to protect the pay of former executives from being clawed back due to a fake-accounts scandal.
The New York Times (NYT) reports that the regulator is also now requiring Wells to obtain advance approval before naming new executive leadership.
The Office of the Comptroller of the Currency (OCC) is the main regulator for federal banks. In the original settlement with Wells, the bank had been exempted from certain regulations on "golden parachutes," defined by ConsumerAffairs as the industry term for "senior executive severance packages."
These allowances, writes NYT, have now been voided.
Wells was informed on Friday that the OCC had revoked the bank's previous "relief from specific requirements and limitations regarding rules, policies, and procedures for corporate activities," according to a statement issued by the OCC.
An OCC official said that this act places the bank under more stringent oversight standards from which it had been exempted by the agency under the terms of the September settlement.
Fortune writes that the OCC's move might "target executive pay at Wells Fargo at a time when some lawmakers complain bank bosses have not paid a fair price for their part in financial scandals."
NYT reports that former Wells CEO John Stumpf and the former head of retail banking, Carrie Tolstedt, have given up approximately $60 million in stock according to a review of securities filings conducted by Reuters.
However, filings additionally showed that the pair were also poised to bring in more than $350 million in compensation.