Orienting executive compensation to accountability is easier
said than done. For example, it might be supposed that the cause of
accountability was aptly served by John Stumpf’s forfeit of $41 million in
unvested stock when he resigned under pressure as Wells Fargo’s CEO because of
the bank’s systemic overzealousness in signing customers up for unwanted
services. Unfortunately, he “realized pretax earnings of more than $83 million
by exercising vested stock options, amassed over his 34 years at the bank, and
receiving payouts on certain stock awards.”[1]
In other words, the man who presided over unethical business practices at the
expense of customers received double that which he was forfeiting. How can
accountability have any meaning against $83 million? This figure connotes reward rather than punishment. Tim
Sloan, who succeeded Stumpf as the bank’s CEO, received compensation in 2016 of
$13, up from the $11 million in 2015.
Interestingly, it may have been religion to the rescue.
[1]
Stacy Cowley, “Wells
Fargo Leaders Reaped Lavish Pay Even as Account Scandal Unfolded,” The New York Times, March 16, 2017.
