Dive Brief:
- Wells Fargo paid CEO Charlie Scharf $29 million for 2023, the bank said Thursday in a filing with the Securities and Exchange Commission.
- As with the previous year, Scharf asked Wells Fargo’s human resources committee to “exercise negative discretion” and pay him less than it otherwise would have — to reflect that “more work remains ahead” for the bank, Wells said in its filing.
- Scharf’s compensation package represents an 18.4% boost over the $24.5 million he received for 2022. That raise is in line with at least one other package that was disclosed last week for a big-bank CEO: Morgan Stanley’s James Gorman saw his compensation jump 17.5% in 2023, his final year as chief executive.
Dive Insight:
Scharf’s pay breaks down to a $2.5 million base salary, $6.6 million cash bonus and $19.9 million in long-term equity. Performance share awards comprise 65% of that last figure, while the remaining 35% stems from restricted share rights awards, the bank said.
Scharf’s $29 million price tag means he likely won’t remain the lowest-paid CEO among the six largest U.S. banks. He shared that title last year with Citi CEO Jane Fraser.
Wells Fargo would have paid Scharf $30.3 million for 2023, the bank said, were it not for the “negative discretion” request. That amount would have put Scharf’s compensation on par with Bank of America CEO Brian Moynihan’s. Moynihan received $30 million for his work in 2022.
In its filing Thursday, Wells credited Scharf’s “strong leadership” in improving the bank’s financial performance. Net income at the bank jumped 40% in 2023, and its stock price climbed 19% on the year, according to Bloomberg.
Expenses, meanwhile, dropped nearly 3%. The bank has steadily reduced its headcount, shedding roughly 40,000 roles between the third quarter of 2020 and September 2023. Scharf has been unflinching in his effort to offload segments of Wells Fargo’s business model that are deemed “non-core.”
In its filing Thursday, Wells singled out Scharf’s effort to reduce the “size and complexity” of the bank’s home-lending business. Scharf last January announced Wells would streamline its mortgage division and exit correspondent lending.
The bank also lauded Scharf for “enabling Wells Fargo to be a source of strength during the 2023 regional banking crisis.” Wells poured $5 billion into First Republic in March as part of a multi-bank drive to save the fellow San Francisco-based lender from failing. The effort ultimately did not work, and JPMorgan Chase bought First Republic in May.
Among the work that remains for Wells Fargo, the bank is still operating under several enforcement actions tied to its 2016 fake-accounts scandal — most notably, a $1.95 trillion asset cap imposed by the Federal Reserve in 2018. Wells Fargo, in Thursday’s filing, noted “significant progress” in strengthening its risk and control infrastructure.
Wells Fargo is the third of the six largest U.S. banks to disclose its CEO’s compensation this year. Goldman Sachs, Bank of America and Citi can be expected to report theirs in the coming weeks. JPMorgan Chase last week disclosed CEO Jamie Dimon would receive $36 million for 2023. Morgan Stanley reported Gorman’s $37 million package the following day.
