Wells Fargo overhauls pay plan for bank branch employees
Jan 12, 2017 02:36 PM EST
After a scandal over its aggressive sales practices, Wells Fargo is completely restructuring how it pays tellers and other bank branch employees by implementing a new incentive system.
The new incentive system, according to the San Francisco banking giant, will no longer reward employees simply for opening accounts and they will instead receive part of their overall salary based on how the products they sell are used, and the customers' satisfaction with the bank's service will serve as one of the factors.
Accounts that are used frequently, will be a positive factor for an employee's pay, such as those for which customers set up direct deposits or use debit cards often.
An account won't be a factor toward incentives until it has been open three months and same goes with the idle accounts.
Mary Mack, the head of Wells Fargo's community bank division said that the goal is now "to create a pay plan that would restore trust with our customers, team members and the public."
According to USA Today, for years Wells Fargo used sales goals to push workers to open more accounts - checking, savings, and credit cards- for customers.
Because of this, thousands of workers who are trying to meet those goals opened as many as 2 million accounts without customers' knowledge or approval. The bank were fined $185 million last year by local and federal regulators over such practises.
Though the new incentive system is a big change for Wells Fargo, it is similar to incentive systems at other banks which already give employees credit only for actively used accounts such as JPMorgan Chase and Bank of America.
As it works to restore trust with consumers, the bank remains under investigation by a handful of state and federal agencies which steadily grown over the last few months such as the U.S. Department of Labor, the California Department of Justice, and the Securities and Exchange Commission.
State insurance regulators in California and New Jersey in December said they would probe the bank's sales practices after former employees of insurer Prudential filed a lawsuit claiming that Wells Fargo workers pushed Prudential policies on customers who did not want them, according to Los Angeles Times.
Wells Fargo is set to report its quarterly results Friday and is expected to give more details about the compensation plan.