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Wells Fargo’s WFC chief executive officer Charles Scharf’s total compensation for 2020 declined 11.7% from the prior-year level, after the bank reported a 83% fall in net income. His annual salary was decreased to $20.3 million from $23 million in 2019, according to a Securities and Exchange Commission filing last week.
The CEO’s pay package includes a base salary of $2.5 million, cash bonus worth $4.35 million and long-term incentive compensation of $13.5 million, split evenly between performance shares and restricted share rights.
The board cited poor performance in 2020, on account of pandemic-related slowdown and disruption caused to business, as the reason behind the pay cut. Notably, revenues for full-year 2020 came in at $72.3 billion, down 15% year over year.
Also, Wells Fargo reduced its quarterly common stock dividend for the first time due to limitations placed by the Federal Reserve on the distribution amounts.
Scharf joined Wells Fargo in October 2019 and took over the job to turn around the company’s fortune and name, which nosedived following the sales and subsequent auto lending scandals.
He overhauled some operations post deep review of the units after the scandal. With the streamlining of the branch network, the firm has been mulling divestiture of its asset management business as well.
Wells Fargo is likely to bear the brunt of asset growth restrictions for a little longer as the company still has to work on improving its control systems. Nevertheless, it continues to invest in businesses to enhance compliance and risk management capability. This makes the bank less vulnerable to regulatory headwinds.
Shares of Wells Fargo have gained 23% in the past six months compared with 24.7% growth registered by the industry.
Among other banking giants, JPMorgan JPM CEO Jamie Dimon’s total compensation for 2020 remained flat year over year. Other Wall Street biggies that have announced compensations for CEOs include Morgan Stanley MS, with a hike of 22%, while Goldman Sachs GS has announced a $10 million reduction.
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