Wells Fargo overhauls pay plan for employees at bank branches
Incentives restructured following scandal over aggressive sales policy.
Wells Fargo announced a complete restructuring Tuesday of how it pays tellers and other bank branch employees, with incentives now tied to how often customers use their accounts, as the company tries to right itself after a scandal over its aggressive sales practices.
The long-anticipated plan has been considered a high priority for CEO Tim Sloan and Mary Mack, the head of Wells Fargo’s community bank division — both of whom took those jobs after the scandal emerged. Wells Fargo had already announced in September that it was getting rid of the sales goals that led employees to open up to 2 million unauthorized accounts.
Wells Fargo’s 70,000-plus frontline bank employees will no longer be given incentives for how many new accounts they open or for meeting sales goals. They will instead receive part of their overall salary based on how the products they sell are used, with one component also based on independently measured customer service scores for their branch locations.
“Do they use the products they have with us? Do they think of us as their primary bank? Are we growing customers who consider us their primary bank? These are the metrics we are now measuring,” Mack said.
Accounts that are used frequently, such as those where customers set up direct deposits or use debit cards often, will be a positive factor for an employee’s pay. Idle accounts will not, and an account won’t be a factor toward incentives until it’s been open three months.
“Our goal here was to create a pay plan that would restore trust with our customers, team members and the public,” Mack said.
Wells Fargo employees will also receive more of their overall compensation as a base salary, rather than in one-time incentives and bonuses. A teller, the lowest-level position, will have about 95 percent of his or her total pay as a base. Annual performance raises will be based more on how customers regard and use the branch. Customer surveys done by Gallup and mystery shoppers will also provide information on how employees perform and how customers view their local branches.
S a n Franc i s c o - based Wells Fargo had also said this month it was boosting its minimum wage for employees to a range of $13.50 - $17 an hour, depending on geography and experience.
Wells Fargo provided a summary of the plan to the AP. But compensation plans, particularly at large companies like Wells, can run hundreds of pages long. Without all the details, it is tough to see whether the changes will make a significant impact, said Lisa Barrington, a consultant in organizational psychology and compensation issues who has worked with companies like UnitedHealthcare and American Express.
“By itself, this plan is not going to solve the problems at Wells,” said Barrington. “It can only be one piece of an overhaul of Wells’ corporate culture.”
The bank was fined $185 million in September in an agreement with regulators who said bank employees opened the millions of customer accounts fraudulently in order to meet the targets that called for every customer have eight products with the bank.