Political Pressure Forces Wells Fargo Executives to Give Back $60 Million As Punishment

In this Monday, Dec. 3, 2012, photo, John Stumpf, Chairman, President and CEO of Wells Fargo, talks during an interview, in New York. Stumph, one of the few CEOs who kept his job as peers fell after the 2008 financial crisis, is a strategist who expanded his company while others shrank theirs. Stumph says Wells Fargo's vanilla business model of making loans and taking deposits has kept it above the fray while exotic derivatives and other risky practices have bludgeoned rivals. (AP Photo/Mark Lennihan)

In a first-of-its kind banking scandal punishment, Wells Fargo CEO John Stumpf and banking unit executive Carrie Tolstedt will have to give back a total of $60 million.

Although Stumpf initially tried to blame the scandal on his low-level employees, recent political pressure is forcing him to take additional steps.

Wells Fargo is facing enormous scrutiny over routinely opening unauthorized accounts for clients in order to make sales goals. The have already been fined $185 million. In response, the bank fired 5,300 employees, all at lower levels. The executive in charge of the branch that was responsible for pushing for and implementing the fraudulent accounts, Carrie Tolstedt, was set to retire later this year with a payout of $124.6 million.

But now, after pressure from senators such as Elizabeth Warren, Wells Fargo’s board is forcing the top executives to pay up out of their own pocket.

John Stumpf will have to forfeit $41 million in past compensation and Carrie Tolstedt, who has already resigned, will have to give back $19 million of her own.

This is a first. Clawbacks have never been applied to banking executives before now. The lower level, junior employees the Stumpf originally blamed the scandal on were originally affected by the fine, but forcing these top executives to pay up has never been seen before.

Clawbacks are an important concept for banking regulation. Normally banking executives aren’t affected if their company gets caught bending, or breaking, finance rules to help company stock rise. But clawbacks, the recovery of money already disbursed, can affect anyone, including top level CEOs.

Now to speed up the process of justice. Wells Fargo was first exposed three years ago by journalists and it has taken this long to finally see some repercussions.

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Alexandra Jacobo is a dedicated progressive writer, activist, and mother with a deep-rooted passion for social justice and political engagement. Her journey into political activism began in 2011 at Zuccotti Park, where she supported the Occupy movement by distributing blankets to occupiers, marking the start of her earnest commitment to progressive causes. Driven by a desire to educate and inspire, Alexandra focuses her writing on a range of progressive issues, aiming to foster positive change both domestically and internationally. Her work is characterized by a strong commitment to community empowerment and a belief in the power of informed public action. As a mother, Alexandra brings a unique and personal perspective to her activism, understanding the importance of shaping a better world for future generations. Her writing not only highlights the challenges we face but also champions the potential for collective action to create a more equitable and sustainable world.