Modern Healthcare reported in June that Dean and many other not-for-profit health system executives receive lavish pay sitting on the boards of publicly traded companies.
The Consumer Financial Protection Bureau fined Wells Fargo earlier this month after it was discovered that from 2011 to 2015, many employees illegally opened bank accounts without customers' knowledge or intent. The settlement included $185 million in penalties, as well as $5 million paid back to customers. Wells Fargo fired more than 5,000 employees who were involved with opening unauthorized accounts, but no punishments were levied on top officials.
Stumpf on Tuesday apologized in front of the U.S. Senate Banking, Housing and Urban Affairs Committee. But the hearing devolved into a roast, with many members, both Republican and Democratic, slamming Stumpf and the bank's top executives for either promoting the fraud or actively ignoring it.
“Your definition of accountable is to push the blame to your low-level employees who don't have the money for a fancy PR firm to defend themselves,” Sen. Elizabeth Warren (D-Mass.) said. “It's gutless leadership.”
Sen. Bob Corker (R-Tenn.) said it would be “malpractice” if the Wells Fargo board did not claw back executive compensation, and he expected the board would make some determination in that matter. He also asked when board members knew about the illegal practices. Stumpf told senators the board learned about the scandal in late 2013 and 2014.
When Warren asked Stumpf if he had returned any of his personal compensation, he responded, “The board will take care of that.”
“I want to be clear on this: I will respect and accept the decision of the board,” Stumpf said in his testimony.
But it's unclear if and when the Wells Fargo board will take action against top leaders. Dean wields a lot of power as chair of Wells Fargo's Human Resources Committee, particularly if the board decided to claw back executive pay. That committee's main responsibility is to propose Wells Fargo's compensation for executives.
A proxy filing says board members on the Human Resources Committee also “oversee the company's incentive compensation practices so that they are consistent with the safety and soundness of the company and do not encourage excessive risk-taking.”
Dignity Health, a not-for-profit health system that recorded a $423 million operating surplus on $12.4 billion of revenue in its fiscal 2015, did not respond to a request to interview Dean.
Regulatory filings also show Wells Fargo donated money to Dignity Health in 2015. The contributions “were less than $100,000,” according to the most recent proxy disclosure.
