It’s unusual that I write about the same topic two weeks in a row, but this week is going to be an exception, and the topic is Wells Fargo Bank. There are two reasons for this.
First and foremost, I need to apologize to our many friends Firm-wide who work for Wells. Each week, I get many emails about that week’s topic; the more controversial the topic, the more emails. Most of the emails are from people I don’t actually know personally and are generally at least 75% or more favorable. But last week was different. Not only did I get the expected amount of email, but many of them were from people my partners and I have done business with for decades. And not only did I get emails, but also, for the first time since I started writing this column, I got phone calls. And the theme running through all of those calls and emails was you know us, we’re good people, we work for a great institution, and considering the size and scope of Wells and the more than 265,000 people employed by us, what happened was not an accurate reflection of the whole institution. So I thought about what they wrote and said, and came to the conclusion that they were right.
In last week’s column, I took a very hard line to basically indict an entire institution based on the wrong-doing of a very small portion of its workforce, including its CEO, and didn’t take a step back to recognize that the bad actors were a relatively few rotten apples, not the entire company. So, to all of the rest of you at Wells Fargo who have historically demonstrated the highest ethical treatment of your customers and your institution, my sincerest apologies.
Secondly, I need to commend Wells Fargo’s Board of Directors, who this week, albeit probably later than they should have, took decisive, punitive action against the bank’s CEO, John Stumpf, and the (former) head of its retail banking operation, Carrie Tolstedt. The board agreed to claw back $41 million of Mr. Stumpf’s unvested stock awards, deny him a bonus for 2016 and cut a portion of his $2.8 million base salary. Ms. Tolstedt lost her job, $19 million in compensation and is now most likely unemployable by a reputable organization. It should be only a matter of time before Mr. Stumpf joins her at their local unemployment office.
So I learned something by all of this. Perhaps I reacted too quickly in my indictment of Wells as an institution. Had I waited a week, I would have been writing something completely different, complimenting the Wells board, rather than trashing an entire company. Lesson learned.