Wells Fargo cuts top executives 2016 bonuses
Eight top executives, including CEO Tim Sloan, of troubled bank Wells Fargo will not be paid any cash bonuses for 2016, while the share equity awards handed out in 2014 will be reduced by 50%, according to a company statement. The moves are part of a bid to highlight increased corporate accountability at the bank and "ensure Wells Fargo puts customer interests first", following the damaging scandal involving the opening of unauthorised bank accounts which has cost Wells Fargo $185m.

Kevin McCoy

USA TODAY

Wells Fargo CEO Tim Sloan and seven other top executives won't receive cash bonuses for 2016, the bank said Wednesday in its latest effort to stress corporate accountability following a scandal over millions of accounts unauthorized by customers.

Along with forgoing cash bonuses, the top executives will see a 50% reduction in the performance share equity awards they received in 2014 and that vested last year, the bank added in an announcement before U.S. financial markets opened.

The decision covers positions ranging from chief financial officer to general counsel and chief risk officer. The move will produce a roughly $32 million aggregate cut in compensation, based on 2016 target bonuses and the current value of Wells Fargo shares, the bank said.

Shares of Wells Fargo(WFC) closed 3.2% higher at $59.73.

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The cuts follow previously announced forfeitures of $41 million in unvested stock awards by now-retired Wells Fargo CEO John Stumpf and $19 million in similar forfeitures by Carrie Tolstedt, the former head of the community banking division involved in opening millions of accounts that were not authorized by customers.

Announcing the new cuts amid an internal investigation of the scandal, the bank said the changes were not based on any finding of wrongdoing by any of Wells Fargo's current top management team.

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"These compensation actions for the operating committee, though not related to any findings of improper behavior, are part of the board's ongoing efforts to promote accountability and ensure Wells Fargo puts customer interests first," board Chairman Stephen Sanger said in a formal statement. "As we seek to regain trust, the board is taking decisive actions. We will continue to work to make right what went wrong and remain focused on providing the accountability and oversight that our customers, employees, and investors expect and deserve."

Wells Fargo fires four managers over unauthorized accounts scandal

The compensation changes mark the latest in a series of steps prompted by a scandal that harmed many Wells Fargo customers even as it stained the bank's reputation.

Investigation findings announced by federal and state authorities in September showed that Wells Fargo employees opened more than two million deposit and credit card accounts that may not have been authorized by bank customers. The transactions piled unanticipated fees and other charges on many of the customers, even as they enabled bank employees to meet sales goals.

Wells Fargo was hit with $185 million in civil penalties following the results of the investigation by the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and the Los Angeles city attorney's office.

The findings sparked new investigations by the U.S. Department of Justice, the Securities and Exchange Commission and several state attorneys general. Wells Fargo also began its own investigation of the damaging episode.

In February, four current or former senior managers were fired in relation to the scandal following a unanimous vote by Wells Fargo's board. The axed executives included Claudia Russ Anderson, the former chief risk officer in charge of overseeing the division that created the unauthorized customer accounts.

The four won't get bonuses for 2016 and will forfeit all outstanding awards of company stock and vested stock options, the bank said.

Wells Fargo revamps pay plan after fake-accounts scandal

Many bank employees said the scandal stemmed from Wells Fargo management pressure to meet unrealistic banking product sales targets. In the wake of those claims, the bank in January revamped its pay system for bank tellers and other employees.

The changes eliminated sales goals linked to new bank accounts and other financial products opened for customers. Additionally, Wells Fargo said employee compensation would be based on banking customer service, usage, and growth.

Separately, the bank boosted its reserves for litigation from the scandal and other legal matters by $1 million, to $1.8 billion, as of December 31, Wells Fargo disclosed in its annual report filed Wednesday.

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc