Wells Fargo announced on Tuesday a full restructuring of how it pays its bank branch employees, with incentives now tied to how often customers use their accounts, as the bank tries to recover from a scandal over aggressive sales practices.
The plan has been considered a high priority for chief executive 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 announced in September that it was eliminating the sales goals that led employees to open up to 2 million unauthorized accounts.
Wells Fargo’s 70,000-plus front-line bank employees will no longer be given incentives for how many new accounts they open or for meeting sales goals. Instead, they will 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.
Employees will also receive more of their overall wages as a base salary rather than in one-time incentives and bonuses. Wells Fargo said earlier it was boosting its minimum wage to a range of $13.50 to $17 an hour.
The bank was fined $185 million in September in an agreement with regulators who said bank employees opened millions of customer accounts — without customers’ permission — to meet targets that called for every customer to have eight products with the bank.
— Associated Press
Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, plans to retire Oct. 1, marking the exit of one of the central bank’s most steadfast inflation fighters as the Fed weighs how quickly to raise interest rates.
The Richmond Fed said Tuesday that a committee had been formed to find a successor for Lacker, who has led the regional bank since 2004.
The head of the Richmond Fed will be a voting member of the policy-setting Federal Open Market Committee in 2018.
Lacker, 61, was a voice of restraint in the use of monetary policy and the Fed’s balance sheet as the central bank used extraordinary powers to combat the financial crisis and the sluggish recovery.
“He was consistent in terms of wanting a narrow Fed that stuck to the business of insuring price stability because that would be the Fed’s best contribution to society,” said Vincent Reinhart, chief economist at Standish Mellon Asset Management. Lacker dissented frequently while a voter on the FOMC in favor of tighter policy. During the financial crisis, he warned about channeling credit to specific sectors of the economy, inflation risks and government rescues of troubled banks.
Lacker hasn’t lined up another job, according to Richmond Fed spokeswoman Laura Fortunato. “He does want to get back to writing and research,” she said.
● The estate of the late pop artist Prince signed a global licensing deal that gives Universal Music Group’s Bravado unit exclusive control over his image for merchandise and branding. Bravado will work with Prince Rogers Nelson’s estate to manage retail and licensing of the brand, according to a statement Tuesday. It was made with Charles Koppelman and L. Londell McMillan, entertainment experts hired by the court-appointed special administrator overseeing the estate. Prince, who sold more than 100 million albums, died of a drug overdose in April at age 57.
● Sales at established Chipotle restaurants turned positive last month, a sign that the burrito chain may be starting to recover from a food-safety scare. The Denver company said Tuesday that sales at established stores jumped 14.7 percent in December after falling 1.4 percent in November and 20.2 percent in October. It said it expects sales at established restaurants to fall 4.8 percent in the final quarter of the year.
● Valeant Pharmaceuticals is selling its Dendreon cancer-treatment business and three skin-care brands for $2.12 billion, aiming to reduce more than $30 billion in debt. The Canadian drugmaker has been trying to regain investor confidence after disclosures that it secretly worked with a specialty pharmacy to boost sales of its drugs. French cosmetics group L’Oreal is buying CeraVe, Ambi and AcneFree from Valeant for about $1.3 billion. Valeant is selling its Dendreon unit to China’s Sanpower Group for $819.9 million.
— From news services