The U.S. Consumer Financial Protection Bureau fined Wells Fargo $185 million for allegedly opening “no less than two million deposit and credit card accounts without customers’ knowledge, resulting in all kinds of extra fees for Well’s customers and huge profits for the bank” (Askew, 2016, para. 2). The company’s vision is said to be blamed by roughly 5,300 terminated bank employees. Former employees state that Wells Fargo pushed unrealistic sales goals which lead them to make unethical decisions (Corkery & Cowley, 2016). “I was always getting written up for failing to bump my solutions numbers up,” states a former employee on being hounded by his supervisor to increase sales” (Corkery & Cowley, 2016, para. 20). Additionally, Wells Fargo is taking heat for retaliating against whistleblowers who reported unethical sales activities. A former Human Resource official from Wells Fargo said the bank had ways to retaliate against these employees, despite being encouraged by CEO to report. The official stated that they found ways to fire employees based on simple monitoring to find fault (Egan, 2016), para. 8). We are asked if the Wells Fargo scandal is an agency problem? …show more content…
Definitely. Former CEO John Stumpf and the management team appeared to have only their best interest at heart, not the stakeholders, employees, or the customers. In Stumpf’s testimony at a Banking Committee hearing, he stated he feels accountable, but blamed the employees for “misinterpreting” sales goals (Corkery & Cowley, 2016, para. 36). Wells Fargo has a unique selling technique called cross-selling, which through bundling, allowed employees to fulfill the bank’s vision of saving time and money by bringing their financial services to Wells (Askew, 2016; Farfan, 2016). Moreover, because of Stumpf’s large salary of $22 million per year and included stock options, and the $200 million received because of the scandal, it is obvious his best interest was that of his own (Simon, …show more content…
However, I believe it should be terminated sooner. With John Stumpf announcement of his resignation today, Wells Fargo has to do a lot to rebuild trust in its communities. The sales quotas should be stopped immediately, and the stockholders and board of directors should restructure a compensation plan that is ethical, reasonable and focuses on the customers instead of greed. Transparency is going to be critical especially with new allegations on the rise. The public needs information about the new CEO; his credentials and his plan to reassure the customers and employees that this unethical practice will not be tolerated henceforth. Finally, Wells Fargo should provide customers with something such as free credit monitoring for a year for all customers affected by the scandal. By promoting some form of social responsibility, may help rebuild customers’ confidence in the