Poor John Stumpf. The preening, silver-haired CEO of Wells Fargo sat atop the pecking order of the financial establishment, and he was hailed as a paragon of big-banker virtue ... until he suddenly fell off his lofty perch.
It turns out that being "a paragon of big-banker virtue" is not at all the same as being a virtuous human being. Banker elites don't get paid the big bucks by "doing what's right," but by doing what's most profitable — and that means cutting corners on ethics, common decency and the golden rule.
Stumpf didn't just cut corners, he crashed through them, devising a business plan that effectively encouraged Wells Fargo branches to steal from millions of their poorest and most easily deceived customers.
The courtly chief executive coldly fostered a high-pressure sales culture, pushing elderly pensioners, non-English-speaking workers and other vulnerable depositors into accounts they didn't understand or need, extracting high fees for the bank. One shameful (and illegal) profit-boosting ploy was having bank employees secretly set up fake, high-fee accounts for some 2 million customers without their knowledge, much less their consent.
Running such rackets for more than a decade, Wells Fargo prospered and the chief amassed a fabulous personal fortune. Then, as the scandal went public last year, the "paragon of virtue" tried to save himself by firing 5,300 lower-level employees. But, it wasn't enough — Stumpf was shoved out and forced to surrender $41 million in stock awards he had stashed away.
But don't weep for Poor John — he grabbed $83 million in stock payments on his way out last year, and he still holds another $147 million in Wells Fargo stock he was awarded by the board.
Meanwhile, Wells Fargo got away with paying some fines for its "fake accounts" scheme — but didn't escape the wrath of the Sisters of St. Francis of Philadelphia. These feisty nuns, who hold a block of Wells Fargo stock, are infuriated by the rank immorality of their bank's executives. They are pushing a shareholders' proposal demanding a full accounting of the "root causes" of the malicious fraud perpetuated on vulnerable depositors. Unsurprisingly, the bank's aloof and arrogant board of directors opposes any meaningful probe.
Editor's note: On April 10, after this column was written, Wells Fargo's board ordered John Stumpf to repay an additional $28 million and Carrie Tolstedt, who headed the sales division, to return another $47 million.
You can contact Jim Hightower at jimhightower.com.