Independent Directors of Wells Fargo Conducting Investigation of Retail Banking Sales Practices and Related Matters
September 27 2016 - 5:57PM
Business Wire
Independent Directors Have Retained Shearman
& Sterling to Assist in the Investigation
John Stumpf to Forfeit Unvested Equity Awards
Valued at Approximately $41 Million; Will Forgo Salary During
Investigation
Carrie Tolstedt Has Left the Company; Will
Receive No Severance; Has Forfeited Unvested Equity Awards Valued
at Approximately $19 Million; Will Not Exercise Outstanding Options
During Investigation
Neither Executive Will Receive a Bonus for
2016
The Independent Directors of the Board of Directors of Wells
Fargo & Company (NYSE: WFC) today announced that they have
launched an independent investigation into the Company’s retail
banking sales practices and related matters. A Special Committee of
Independent Directors will lead the investigation, working with the
Board’s Human Resources Committee and independent counsel Shearman
& Sterling LLP. Chairman and CEO John Stumpf, a member of the
Board, has recused himself from all matters related to the
Independent Directors’ investigation and deliberations.
The Independent Directors have taken a number of initial steps
they believe are appropriate to promote accountability at the
Company. They have agreed with Mr. Stumpf that he will forfeit all
of his outstanding unvested equity awards, valued at approximately
$41 million based on today’s closing share price, and that he will
forgo his salary during the pendency of the investigation. In
addition, he will not receive a bonus for 2016. Carrie Tolstedt,
until recently Head of Community Banking, has left the Company, and
the Independent Directors have determined that she will forfeit all
of her outstanding unvested equity awards, valued at approximately
$19 million based on today’s closing share price. Ms. Tolstedt will
not receive a bonus for 2016 and will not be paid severance or
receive any retirement enhancements in connection with her
separation from the Company. She has also agreed that she will not
exercise her outstanding options during the pendency of the
investigation. These initial actions will not preclude additional
steps being taken with respect to Mr. Stumpf, Ms. Tolstedt or other
executives as a consequence of the information developed in the
investigation.
Stephen Sanger, Lead Independent Director, said, “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. We will conduct this investigation
with the diligence it deserves -- and will follow the facts
wherever they lead. Our thousands of outstanding team members and
millions of loyal customers and shareholders deserve no less. Based
on the results of the investigation, the Independent Members of the
Board will take such other actions as they collectively deem
appropriate, which may include further compensation actions before
any additional equity awards vest or bonus decisions are made early
next year, clawbacks of compensation already paid out, and other
employment-related actions. We will proceed with a sense of urgency
but will take the time we need to conduct a thorough investigation.
We will then take all appropriate actions to reinforce the right
culture and ensure that lessons are learned, misconduct is
addressed, and systems and processes are improved so there can be
no repetition of similar conduct.”
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.9 trillion
in assets. Founded in 1852 and headquartered in San Francisco,
Wells Fargo provides banking, insurance, investments, mortgage, and
consumer and commercial finance through more than 8,600 locations,
13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and
has offices in 36 countries and territories to support customers
who conduct business in the global economy. With approximately
268,000 team members, Wells Fargo serves one in three households in
the United States. Wells Fargo & Company was ranked No. 27 on
Fortune’s 2016 rankings of America’s largest corporations. Wells
Fargo’s vision is to satisfy our customers’ financial needs and
help them succeed financially. Wells Fargo perspectives are also
available at Wells Fargo Blogs and Wells Fargo Stories.
Cautionary Statement About Forward-Looking Statements
This news release contains forward-looking statements about our
future financial performance and business. Because forward-looking
statements are based on our current expectations and assumptions
regarding the future, they are subject to inherent risks and
uncertainties. Do not unduly rely on forward-looking statements as
actual results could differ materially from expectations.
Forward-looking statements speak only as of the date made, and we
do not undertake to update them to reflect changes or events that
occur after that date. For information about factors that could
cause actual results to differ materially from our expectations,
refer to our reports filed with the Securities and Exchange
Commission, including the discussion under “Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2015, as
filed with the Securities and Exchange Commission and available on
its website at www.sec.gov.
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Sard Verbinnen & Co.George Sard/Paul Scarpetta/Chris
Kittredge, 212-687-8080WellsFargo-svc@sardverb.com
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