Earlier today, Slate magazine pointed out that, contrary to previous reports that CEOs makes 347 times as much as their average employees, senior executives in big firms actually make 949 times (!!!) as much.
Keep that obscene fact in mind as we contemplate how Wells Fargo CEO John Stumpf is handling the fact that his company has been fined $185 million for setting up two million fake customer accounts.
As I pointed out in a previous post, Stumpf either knew about the fake accounts (in which case he's guilty of aiding and abetting fraud) or didn't know about them (in which case he's guilty of gross incompetence.)
Either way, Strumpf should obviously resign, but he's determined to remain in place. In fact, from his most recent statements, it's not even clear whether he understands that anything is really all that wrong at his company.
Here's his apology from an interview on CNBC:
"We deeply regret any situation where a customer got a product they did not request. There is nothing in our culture, nothing in our vision and values that would support that."
"A product they did not request?" Is he serious? He makes it sound as if the fake accounts were freebees for which customers should probably be grateful.
Stumpf apparently doesn't get that the fake accounts were huge hassles that cost his customers money and time, and might have damaged their credit scores. Stumpf instead insists Wells Fargo has a great corporate culture.
Say whut? There must have been something in the Wells Fargo culture for fraudulent behavior to become so widespread. After all, thousands of employees don't suddenly decide independently to break the law in exactly the same way.
Rather than taking responsibility for what happened, Stumpf seems determined to spread the blame as widely as possible:
"To the extent that we don't get it right 100 percent of the time, because that is our goal, if we don't make that plan, I am responsible. I am accountable. Anybody else in the company, we all feel when we fall short of that plan, we feel accountable and responsible."
Stumpf apparently considers the fraud of millions of his bank's customers to be a round-off error, as if customers are being unreasonable expecting Wells Fargo to "get it right 100 percent of the time."
And while Stumpf states, very briefly, that he's "responsible" and "accountable," he quickly extends that responsibility and authority to "anybody else in the company." (Note how many times he says "we" and "our" rather than "I"!)
Strumpf's weirdly skewed perception of his own guilt becomes clear with this zinger:
"The buck stops with all of us, including me. I am the leader."
Ai-yi-yi! Stumpf has mangled Harry Truman's dictum "The Buck Stops Here" into a statement that Stumpf is only as responsible as everyone else. Harry Truman must be spinning in his grave.
The real problem, according to Stumpf, was the company's low level employees or (as Stumpf describes them):
"Bankers, branch managers -- and in some cases managers of those managers."
As I pointed out in my previous post, those employees were assigned aggressive and unrealistic sales goals and told they'd be fired or penalized if they didn't make those goals. This is a recipe for fraud.
Strump now claims to have changed those goals, and in it's in his explanation of that decision that we see how he doesn't believe he did anything whatsoever wrong. He calls the goals:
"one of the tools to get there [that] doesn't make sense any more."
Any more? Any more?! Like they were a good idea in the first place?!? Sales goals that drive to salespeople to commit widespread fraud against your customers never make sense. Not now, not ever.
Stumpf's explanation of the sales goals does have one saving grace. He correctly identifies that, when it comes to setting them, there were some "tools" involved in the decision-making process.
I don't know how much more Stumpf is being paid than the employees he's scapegoating, but anybody this clueless and insensitive shouldn't be running a Bingo game, let alone a "too big to fail" bank.