2017 was a relatively scandal-light year for banks that have been under heavy scrutiny since the financial crisis. Even better news for the banks: stock prices soared, interest rates rose, and a new administration looked favorably upon lighter regulations. Things were looking up for the Wall Street giants. But not so much for the “golden child” of the financial crisis, Wells Fargo. While the consumer banking titan emerged from 2008 relatively unscathed, new CEO Tim Sloan spent 2017 issuing apology after apology. After losing consumer confidence for creating 2.1 million fake accounts a year earlier, Wells Fargo admitted in 2017 that an additional 1.7 million fake accounts had been made. The bank also admitted that it had charged as many as 570,000 consumers for unneeded auto insurance. And, further tarnishing its “golden child” moniker, Wells Fargo revealed a $1 billion charge for previously disclosed regulatory investigations into its pre-crisis mortgage activities. Still, those scandals may not be immediately obvious from its revenue, which grew a steady 1.2% in 2017. Where it does rear its head: The company’s stock price, which underperformed peers in 2017 as investors saw the bank’s regulatory headaches and reputational woes dampening its financial performance during the year–and potentially into future quarters.
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The man charged with righting the Wells Fargo ship announced his resignation last week. Now, it's back to the drawing board for the bank.
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They're just not sure its value is as great as supporters say.
Despite scandals, a Wells Fargo security filing reveals CEO Tim Sloan got a 5% pay raise in 2018, giving him $18.4 million in total salary.