Wells Fargo CEO to forfeit tens of millions of dollars in pay

FILE - In this Tuesday, Sept. 20, 2016, file photo, Wells Fargo CEO John Stumpf testifies on Capitol Hill in Washington, before the Senate Banking Committee. Stumpf was called before the committee for betraying customers' trust in a scandal over allegations that employees opened millions of unauthorized accounts to meet aggressive sales targets. The employees said they were trying to sell enough bank products just to keep their jobs. (AP Photo/Susan Walsh, File)
FILE - In this Tuesday, Sept. 20, 2016, file photo, Wells Fargo CEO John Stumpf testifies on Capitol Hill in Washington, before the Senate Banking Committee. Stumpf was called before the committee for betraying customers' trust in a scandal over allegations that employees opened millions of unauthorized accounts to meet aggressive sales targets. The employees said they were trying to sell enough bank products just to keep their jobs. (AP Photo/Susan Walsh, File)

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

The independent directors at the nation's second-largest bank said 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, and Tolstedt will not receive any severance or any other compensation in connection with her retirement, the bank's directors said.

The announcement comes ahead of Stump's planned appearance before the House Financial Services Committee on Thursday, where he is expected to face a bipartisan grilling similar to what he experienced last week from the Senate Banking Committee.

The San Francisco-based bank's independent directors are also beginning their own investigation, hiring the law firm Shearman & Sterling to assist them.

In their announcement, the independent directors said the moves did not preclude the board from pursuing more salary clawbacks from Stumpf or Tolstedt, depending on the results of the investigation. Stumpf, as a member of Wells Fargo's board of directors and chairman of the board, has recused himself from any decisions that may come from that investigation, the board said.

Wells Fargo had been under pressure from lawmakers and others to implement its executive compensation clawback provisions after the bank agreed to pay $185 million to settle allegations its employees opened millions of accounts without customers' permission to reach aggressive sales targets.

Read Thursday's Arkansas Democrat-Gazette for full details.

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