Photograph by Nathaniel St. Clair
CEO pay has been skyrocketing for years now, fueled in part by tax cuts for corporations and ultra wealthy individuals. That’s not just unfair to ordinary workers or taxpayers — it’s dangerous for our entire economy.
I’ve seen firsthand how these CEO pay practices incentivize the very worst kinds of corporate misbehavior.
Remember the 2016 “phony accounts” scandal at Wells Fargo? Executives relentlessly pressured employees to meet extreme sales quotas, leading them to create millions of fraudulent accounts without clients’ consent.
As these fake accounts grew, the CEO of Wells Fargo at the time, John Stumpf, raked in bigger and bigger bonuses. After the scandal blew up, regulators hit Stumpf with fines totalling $20 million — only a small dent in the estimated $130 million he walked away with in compensation when he resigned.
This is just one of countless stories of CEOs taking reckless actions to pump up their own paychecks while putting their employees and the general public at risk. We’ve seen the same pattern behind the opioid crisis, the 2008 financial crash, the toxic train derailment in East Palestine, Ohio, and more. But it’s the story I know best.
I started my career at Wells Fargo over 22 years ago — first as a teller, then as a branch manager, and later as an investigator in the department that handles misconduct allegations.
I would like to be able to say that things changed after the accounts scandal. Unfortunately, Wells Fargo’s current CEO, Charles Scharf, continues to cut corners in ways that put customers at risk.
Last year, we found out about a plan to cut costs by outsourcing jobs from our investigations department to India, where, in an ironic twist, we reviewed human rights complaints from Wells Fargo employees forced to stay at work even after falling ill. We were concerned not only about losing our jobs but about how this might put our clients’ private information at risk — a particular concern for our many active-duty military clients.
Wells Fargo has also gutted their risk and complaint departments. They use shortcuts to create the illusion of fewer complaints, but in reality they are closing many cases prematurely rather than properly investigating. And, believe it or not, clients are still filing complaints about unauthorized accounts.
Like Stumpf, Charles Scharf appears to also see his job as a way to further maximize short-term profits to benefit top executives and wealthy shareholders. While slashing thousands of U.S. jobs, Scharf received a compensation package in 2024 worth a staggering $31.2 million.
Under Scharf’s leadership, Wells Fargo also spent over $73 billion on stock buybacks between 2019 and 2023. This is a financial maneuver that artificially inflates executives’ stock-based pay while siphoning resources from worker pay or improving services.
My department decided to form a union last year so we would have more power to improve Wells Fargo’s practices. But the bank is still unlawfully refusing to recognize or bargain with our union.
It’s time for our political leaders to step up and do something about a CEO pay system that rewards executives with obscenely large paychecks for practices that harm workers and the broader economy.
The current tax debate offers a good opportunity. Republicans are calling for even more corporate tax breaks, which, based on past experience, will make the rich richer but do nothing for ordinary working people.
Instead, Congress should pass bills that have been introduced to tax corporations with huge gaps between their CEO and worker pay and to increase an existing tax on stock buybacks. These bills would encourage companies to focus on long-term prosperity and stability rather than simply making wealthy executives and shareholders even richer.
In the meantime, Wells Fargo employees will continue to fight to unionize so they can do their part to make the bank better for the rest of us — the workers, customers, and the communities it serves.
Source: Counter Punch
