Poor John Stumpf. The preening, silver-haired CEO of Wells Fargo sat self-assuredly atop the pecking order of the financial establishment, and he was hailed as a paragon of big-banker virtue… until he suddenly fell off his lofty perch.
It turns out that being “a paragon of big-banker virtue” is not at all the same as being a virtuous human being. Banker elites don’t get paid the big bucks by “doing what’s right,” but by doing what’s most profitable – and that means cutting corners on ethics, common decency, and the golden rule. Stumpf didn’t just cut corners, he crashed through them, devising a business plan that effectively encouraged Wells Fargo branches to steal from millions of their poorest and most easily deceived customers.
The courtly chief executive coldly fostered a high-pressure sales culture, pushing elderly pensioners, non-English-speaking workers, and other vulnerable depositors into accounts they didn’t understand or need, extracting high fees for the bank. One shameful (and illegal) profit-boosting ploy was having bank employees secretly set up fake, high-fee accounts for some two million customers without their knowledge, much less their consent.
Running such rackets for more than a decade, Wells Fargo prospered and the chief amassed a fabulous personal fortune. Then, as the scandal went public last year, the “paragon of virtue” tried to save himself by firing 5,300 lower-level employees. But, it wasn’t enough – Stumpf was shoved out and forced to surrender $41 million in stock awards he had stashed away.
But don’t weep for Poor John – he grabbed $83 million in stock payments on his way out last year, and he still holds another $147 million in Wells Fargo stock he was awarded by the board. It’s said that virtue is its own reward, but big banker virtue is rewarded in cash.
“Top Leaders Got Big Pay As Crisis Hit Wells Fargo,” The New York Times, March 17, 2017.