Wells Fargo to claw back tens of millions in pay from CEO, former consumer executive

Wells Fargo says CEO John Stumpf and the executive who ran the bank’s consumer banking division will forfeit tens of millions of dollars in bonuses as the bank tries to stem a scandal over its sales practices.

The board of directors at the nation’s second-largest bank said late Tuesday that Stumpf will forfeit $41 million in stock awards, while former retail banking executive Carrie Tolstedt will forfeit $19 million of her stock awards, effective immediately. Both are also giving up any bonuses for 2016.

Wells Fargo’s independent directors are also launching their own investigation.

“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,“ Stephen Sanger, the board’s lead independent director, said in a statement. “We will proceed with a sense of urgency but will take the time we need to conduct a thorough investigation. ”

The San Francisco-based bank, which maintains its largest employee base in Charlotte, has agreed to pay $185 million to settle allegations its employees opened millions of accounts without customers’ permission to reach aggressive sales targets. Stumpf has faced bipartisan outrage for his handling of the scandal.

In another development, U.S. Labor Secretary Thomas Perez told Massachusetts Sen. Elizabeth Warren in a letter Monday that his office will conduct a “top-to-bottom” review of cases, complaints or violations concerned Wells Fargo over the last several years.

That announcement came after Warren and other lawmakers on Thursday asked the Labor Department to investigate whether Wells violated federal law, including by failing to pay overtime to tellers and other bankers who worked late or on weekends to meet aggressive sales quotas.

On Tuesday, Warren commended the Labor Department for its decision, saying other federal agencies should promptly determine whether the bank and its senior executives should be prosecuted or otherwise sanctioned.

Charlotte Observer staff writer Deon Roberts, Bloomberg News and the Associated Press contributed.

This story was originally published September 27, 2016 at 5:06 PM with the headline "Wells Fargo to claw back tens of millions in pay from CEO, former consumer executive."