Wells Fargo to Freeze Raises for High Earners as It Limits Costs
(Bloomberg) — Wells Fargo & Co. plans to freeze raises for top earners as the bank’s new leadership team retools compensation practices with a close eye on costs, according to people briefed on the plans.
A spokesperson for the San Francisco-based lender declined to comment.
Chief Executive Officer Charlie Scharf, who took over last October, has embarked on a cost-cutting spree aimed at shaving $10 billion in annual expenses. Already, the company has started workforce reductions that could ultimately number in the tens of thousands.
The bank aborted an attempt last month to stop matching contributions to its 401(k) retirement system for employees who earn more than $250,000 a year. In that case, the firm announced the change, then reversed course just a few days later. The company said the move was part of a push to put “greater emphasis on how we support our lower-paid employees through our compensation and benefits program.”
WF’s search for a palatable way to punish hard wok and success continues.
If I were a Wells Fargo guy or gal, and I think my lucky stars that I am not – I’d be licking to hit the eject button.
No wonder they have to pay 300+ to get a recruit.
If I was going to WFA, I would do everything I could to negotiate my grid rate and what ran through the grid in writing for the entire period of my note.
I’m a few years removed now, but remember the annual comp call would always start with “we’re really pleased to tell you we haven’t changed the grid for 3/4/5 years now, and this year is no different. Now let’s dive into what’s changed.”
This was laughably misleading. Sure the grid didn’t change, WFA just kept exempting things from the grid and all seemed like decisions made in an ivory tower by people who’ve never done the job. For example:
-Familial IRA’s were set to 0% payout to advisor and 100% to WFA.
I always found this funny – what advisor doesn’t manage relatives money? And who would have your relatives best interests at heart more than family? I recall branch management suggesting advisors swap family accounts with non-related advisors or put them on joint rep codes with other advisors. I think this was unpopular enough they reversed it after I left.
-Small households were a 20/22% payout.
Perfect example of ivory tower/never done the job. Most of your top clients are older, and they have adult children which WF wouldn’t allow to be lumped with parents. So you were encouraged to rehome the adult children to the call center or elsewhere until they were “of substance”. Great – let’s get them used to working with someone else or DIY so when the parents pass away, the kids ACAT out right away.
-Redistributed accounts from departing advisors were restricted to 20/22% (can’t remember).
The redistributed accounts was presented in a particularly laughable way. Management explained that since WFA had done all the work sourcing the account for you, you did not deserve a full payout until they had been compensated for giving you the account. I remember thinking to myself, “wait a minute, WF switched the rep code in the computer. I’m going to have bust my ass to convince this total stranger to trust me with their nest egg over the departing advisor who’s probably gonna call them and talk about why they left WF with all the scandals…” Yeah, I’m pretty sure there are 1,000 higher return things to do; like call my own clients I’m getting a full payout on.