Despite Woes, Wells Fargo Gives CEO $4.6 Million Raise
NEW YORK (AP) — Well Fargo's board of directors gave CEO Tim Sloan a $4.6 million raise last year, despite the bank continuing to face the fallout of its sales-practices scandal and a multitude of other issues.
In its annual proxy to shareholders, Wells Fargo said Wednesday that Sloan made $17.6 million last year, up from $13 million in 2016. While Sloan did not get a cash bonus in 2017, the amount of the Wells Fargo stock awarded to him last year rose to $15 million from $10.5 million. His base salary also rose marginally.
Sloan's pay increase was about 35 percent, roughly equal to the pay increase that Bank of America CEO Brian Moynihan received, who made $21.78 million in 2017. JPMorgan Chase has not filed its proxy statement for this year yet. Its CEO, Jamie Dimon, received a pay package of $28 million in 2016.
San Francisco-based Wells Fargo is facing several investigations into its business, most notably its opening of millions of fake accounts without getting customers' authorization. The Federal Reserve took unprecedented action on Wells Fargo's business in February, forcing the bank to replace four of its directors and capping its growth until the bank develops better risk-management practices.
Along with the sales-practices issue, Wells Fargo is under investigation for forcing auto insurance policies onto roughly 800,000 auto loan customers who may have already had insurance elsewhere. In several thousands of cases, the additional cost of the insurance made the car loan payment unaffordable and those vehicles were eventually repossessed.
Last year, Wells Fargo had to offer refunds to customers after acknowledging that its mortgage bankers unfairly charged them fees to lock in interest rates on mortgages. The bank is also under investigation for possibly overcharging corporate customers foreign transaction fees.
Wells Fargo justified Sloan's overall pay package in its proxy by saying that it reflected "solid financial performance." But the bank did not substantially grow profits last year which would typically be a reason for such a pay increase.
Net income at the bank last year was $22.2 billion, up from $21.9 billion in 2016, an increase of little more than 1 percent. Revenues at the bank were flat at $88.4 billion compared with $88.3 billion a year earlier. Wells Fargo's return on equity, which is a measure of how profitable a bank is with its underlying assets, fell to 11.35 percent from 11.49 percent in 2016.
Wells Fargo's stock price increased moderately last year, from $56.00 to $60.67, but Wells' stock underperformed both the overall stock market and its peers.
John Shrewsberry, the bank's chief financial officer, saw his total compensation increase to $11.9 million in 2017 from $9.3 million in 2016.