Wells Fargo Executive Linked To Scam Gets $124.6 Million Payday

Image: Getty
Image: Getty

Wells Fargo executive Carrie Tolstedt will receive a $124.6 million payday when she retires at the end of this year, despite overseeing the department accused of scamming millions of customers and incurring hundreds of millions in fines.


On Thursday, Federal regulators slapped Wells Fargo with $185 million in fines after discovering that employees were guilty of regularly inflating sales figures by opening new accounts and transferring money from customer accounts without their expressed permission.

The scam—known internally as “sandbagging”—was part of standard operating procedure since at least 2011 and was regularly used by employees to boost sales figures. Employees opened unauthorized accounts and transferred money from customer accounts without expressed permission. Victims of the scam were forced to pay ghost charges of about $50 in fees they were not responsible for creating. Wells Fargo collected an estimated $2.6 million in fees from customers through the scam.

The Consumer Financial Protection Bureau (CFPB) discovered more than 5,300 employees had been fired since 2011 for “improper sales practices” that included transferring customers’ money into new unauthorized accounts. The CFPB also discovered that Wells Fargo employees regularly signed customers up for credit cards, online banking, and activated debit cards without their permission. The CFPB slapped the bank with a $100 million fine (in addition to fines from other federal regulators).

“This widespread practice gave the employees credit for opening the new accounts, allowing them to earn additional compensation and to meet the bank’s sales goals,” said the CFPB in a press release published Thursday. “Consumers, in turn, were sometimes harmed because the bank charged them for insufficient funds or overdraft fees because the money was not in their original accounts.”

Despite being hit with huge fines, Wells Fargo is not admitting misconduct or punishing any of its executives. As Fortune reports, Wells Fargo had created “clawback” provisions shortly after the 2008 financial crisis to hold employees accountable for this type of misconduct. The point of the provisions was to prevent banking executives from receiving huge paydays if (or when) they were found to be responsible for illegal behavior.

Now in its first opportunity to use the provisions, Wells Fargo is not asking for any money back from Tolstedt. In July, when the bank executive announced her plans to retire at the end of the year, she was praised by CEO John Stumpf, who said she was “a standard-bearer of our culture, a champion for our customers, and a role model for responsible, principled and inclusive leadership.”


The bank released a statement following the fines dished out from various federal regulators last week. “Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us,” a bank spokesperson said. “Wells Fargo is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request.”

Tolstedt, for her part, has been relatively quiet about the practice of sandbagging. She has not confirmed whether she knew about the widespread impropriety, and it’s unlikely that she’ll ever speak up about the matter. When she leaves later this year, she’s expected to earn a $1.7 million salary and $124.6 million in stock and Wells Fargo shares.


We’ve reached out for more information about Tolstedt’s payday and the timing of her retirement announcement. We will update this post if we hear back.

Technology editor at Gizmodo.



I’d say shoot the bitch, but then someone will crawl out and say that’s not politically correct.

I don’t remember which country it was (must have been a Scandinavian one) where they proposed that the highest paid employee cannot make more than 20 times the lowest paid employee.

If the janitor makes $20K a year, the CEO can’t make more than $400K a year. Janitor makes $40K a year - CEO makes 800K a year. Still a shitton of money.

But you know I’m sure I’d get flamed up on the stake for trying to kill capitalism. So yeah.