“And where the offense is, let the great axe fall.” – Shakespeare
Finally, after weeks of trying to defend the indefensible, and blaming low level employees for the culture he was responsible for creating, John Stumpf, CEO at Wells Fargo, decided to “retire early.”
Stumpf’s decision comes after a brutal grilling by two congressional panels over the bank’s response to the revelations that more than 2 million accounts were created by employees without the knowledge of customers. The accounts were allegedly opened so thousands of employees could meet aggressive sales goals set by management. During the congressional inquiry, Stumpf continued to blame the lower-level employees for the situation, taking no responsibility himself and holding no upper-level executives responsible.
During his nearly four-hour testimony before the House Financial Services Committee, Stumpf was called upon several times to resign by representatives. Stumpf said at the hearing he wasn’t planning to resign, and that remaining at the bank and seeing through the reforms was part of taking responsibility. He also indicated such decisions are up to the board. Well, it looks like the board finally made the right decision – to hold him accountable
Don’t feel badly for Strumpf, he is walking away with $134.1 million retirement package. This figure, however, does not include the $41 million Wells Fargo clawback following the Senate Banking Committee reprimanding him for not taking responsibility. At that time, he agreed to give up unvested stock prior to his “early retirement.”
When you compare this to what happened at AIG, the insurance giant that received a $173 Billion (with a B) federal bailout, the executives who created the mess were rewarded with hundreds of millions of dollars in bonuses so they could stay around long enough to clean up the mess they created. From a historical perspective, it would appear Wells Fargo is moving in the right direction.
Wells Fargo has already paid $185 million in settlements. My hope for the banking industry and for our culture writ large, would be that a settlement of that amount, as well as the humiliation experienced by Strumpf since this story broke, will have other CEOs taking a closer look at the culture that they are responsible for creating….
Keep cultivating your culture!