Anyone who really hates banks has got to love Wells Fargo CEO John Stumpf. The guy went public today for the first time since his company was accused of major shenanigans. He made Old Man Potter, the villain banker from “It’s a Wonderful Life” look like a good Samaritan. Wells Fargo was fined $185 million last week after it was caught creating more than 2 million bogus accounts without customer consent.
After several days of silence, the bank’s boss told the Wall Street Journal that neither the company’s culture or values were to blame. No, not at all. The dirty rotten scoundrels were the miscreant employees who dared to sully the Wells Fargo brand by their corrupt actions. He wants the world to know that the bad apples were immediately fired. All 5,300 of them. That’s right: thousands of low level employees somehow simultaneously created more than 2 million fake accounts, presumably in the dark of night without anyone at an executive level being any the wiser.
With a straight face, Stumpf broke all corporate records for throwing the most employees under the bus at one time. Additional busses had to be summoned. “I wish it would be zero,” the CEO told the Journal, “but if they’re not going to do the thing that we ask them to do – put customers first, honor our vision and values – I don’t want them here. I really don’t.”
And just what, pray tell, would the Wells Fargo vision and values entail? According to a lawsuit filed by the City of Los Angeles, the bank imposed a goal on its employees of selling at least eight financial products to each customer, calling it the “Gr-eight Initiative.” The suit says district managers monitored employee progress toward the goal so closely that they reviewed their performance with them four times a day, at 11 a.m., 1 p.m., 3 p.m. and 5 p.m. “The sales pressure from management was unbearable”, a former employee told CNN. Jobs were on the line.
The lofty sounding term, “goal” is a euphemism in most sales environments, meaning that those who don’t meet the goal are fired. To keep their jobs, 5,300 employees created phony credit card and other accounts for customers who never authorized them or knew they existed. This cross-sell campaign was so successful for Wells Fargo that its executive vice president for sales, Carrie Tolstedt, made $9 million in total pay last year, a reward, according to CNN, for “continued growth in primary checking customers” and other metrics. She is scheduled to retire at the end of the year with a $124 million package. The fact that Tolstedt’s performance came, at least in part, on the backs of the 5,300 discharged minions who phonied up all those accounts apparently squares just fine with Wells Fargo’s “vision and values”.
The company paid the regulatory fine without admitting or denying guilt. Even banks, of course, are entitled to mount a defense while maintaining the presumption of innocence. On the other hand, if I were a juror, and applying common sense to these facts, there is no way I could find that 5,300 employees independently came up with the same scam at the same time, allowing a totally innocent corporate management to benefit, right up until they were caught. There is but one guilty party in this caper and that is the Wells Fargo vision and values that pushed employees to reach a goal at any cost.