In all, 5,300 employees were fired due to sales practice violations, a figure the board did not learn of until the bank settled with regulators last September. In September, Wells Fargo agreed to pay $185 million in fines over the scandal, which has tarnished the bank's reputation, led to Stumpf's retirement and spurred multiple investigations and lawsuits. According to the report, efforts by board members to bring Tolstedt and her division to heel were thwarted by management's failure to provide accurate information about the unfolding scandal.
Former boss John Stumpf will give back $28m, while Carrie Tolstedt will lose share options worth $47m. More recently, the federal government ordered Wells Fargo to rehire one fired whistleblower and warned it may force the bank to welcome back another.
"This is an exciting time for the business as we leverage the talents and experience of our expanded team and continue to strengthen our global capabilities", said Pelos.
Board members should take more responsibility for not detecting the problems earlier and cut some of their own pay, said Alan M. Johnson, a compensation expert.
The Comptroller of the Currency's Office is now investigating the sales cultures at each of the large banks, with that investigation expected to last at least through the summer.
The board's report, compiled by the law firm Shearman & Sterling after interviews with 100 current and former employees and a review of 35 million documents, said it was obvious where the problems lay. Stumpf and Tolstedt had already given up $41 million and $19 million in compensation, respectively.
Tolstedt and other community bank leaders "were unwilling to change the sales model or recognize it as the root cause of the problem".
The tale of Wells Fargo failing to heed the 2004 warning also shows a critical flaw in the type of "decentralized structure" that the bank believed in.
The independent board members who spearheaded the internal investigation acknowledged in the report that they too were slow to aggressively call for changes at the bank.
"Throughout 2015 and 2016, the board was regularly engaged on the issue", according to the report. The abusive sales practices were considered "a problem of relatively modest significance, the equivalent of a tolerable number of minor infractions or victimless crimes", the report said.
But bank executives turned a blind eye to the practice. "I will fight this one to the finish".
For example, Wells Fargo said in its fiscal 2015 proxy report that Sloan, then president and chief operating officer, had been made eligible for more than $15 million in stock awards for 2014 and 2015, and was paid $1 million in cash incentives pay.
The report also says that problems in the bank's sales culture date back to at least 2002, far earlier than what the bank had previously said.
However, that was not even a quarter of the total $286 million in compensation he acquired during the 2011-2016 period that encompassed the time during which the scandal emerged publicly.
The goal was meeting sales targets to qualify for bonuses and salary increases, although the board determined that in some instances employees felt compelled to participate to keep their job. Put another way, while there are few new bombshells in the report, it really hammers home the extent of cultural/reporting structure issues in the bank, as well as questions about how long it will take to turnaround and reinvent the company. As for firing Tolstedt, though, he said he never even considered it.
That recommendation came after proxy advisory firm Glass Lewis suggested shareholders vote against six directors, including four who sat on the corporate responsibility committee.
San Francisco-based Wells Fargo has about 269,000 employees nationwide, with more than 24,000 in Charlotte, its biggest employee hub.