Wells banker singled out for excesses had a meteoric rise

NEW YORK — Her banking career ended in scandal, but the start was straight out of the storybooks.

The way Carrie Tolstedt told it, she caught the banking bug early when she was a child in a small Nebraska town. Her father ran the local bakery and she would join him on his visits to the local bank after a day’s work. The tellers were so nice.

“They knew my dad by name,” she told American Banker in 2010. “They treated him with respect.”

Tolstedt would eventually rise to oversee thousands of tellers and other front-line workers at more than 6,000 Wells Fargo branches. She would earn numerous awards, draw praise for blazing a path for other women and take home millions a year before a sales scandal at the bank threw those accomplishments into damaging light.

The report released Monday by the board of directors at the bank accused Tolstedt of downplaying problems at the branches, and bucking at scrutiny over fraudulent sales practices under her aegis. It recommended that the bank claw back $47.3 million that she had received in stock options, on top of $19 million it had previously taken away.

Williams & Connolly, a law firm representing Tolstedt, said “we strongly disagree” with the report and that a “full and fair examination of the facts will produce a different conclusion.”

The report is a stunning rebuke for an executive who had received nothing but praise from the bank until recently. In July, when Tolstedt announced her retirement after 27 years, former Wells CEO John Stumpf, who was also caught up in the scandal, called her a “role model” for others in the industry.

Her upbringing in Kimball, Nebraska was prized at a bank that sees itself as more Main Street than Wall Street and long run by executives with similarly modest, small town roots. Stumpf was raised on a farm in Minnesota, one of 11, and shared a bed with his brothers. His predecessor, Richard Kovacevich, used to help his father with his work as a butcher at a local supermarket.

Watching her own father at work, Tolstedt told U.S. Banker magazine, she came to appreciate the difficulties of running a small business, how owners have to juggle finance and marketing and so many other tasks at once. She said the experience also drilled in her the importance of constantly checking that customers are happy.

“With a bakery in a small town, you are serving your friends and neighbours every day,” she told the magazine in a 2005 interview. “So you never ever want to let your customer down.”

A graduate of the University of Nebraska, Tolstedt joined a Wells’ predecessor bank called Norwest in 1986, rose to oversee branches in Omaha, then all of them in 39 states. One of her biggest goals, and one directly tied to her pay, was to increase the bank’s so called “cross sell ratio,” a measure of how many different banking accounts were held on average by customers.

One rallying cry: “Eight is Great,” meaning sell eight accounts or services to each customer.

Tolstedt encouraged tellers and customer service reps to come up with their own ways of getting people to open checking accounts, credit cards accounts and sign up for others products at the bank. The branches, she enthused in one interview, were laboratories for experimenting.

And experiment they did and to great success — for a while at least.

A Nebraska market manager came up with a “sales road map,” a cheat sheet of what order to pitch accounts and services to increase the likelihood that customers would sign up. A marketer in Denver came up with the “Wells Fargo Pack” that offered customers discounts on fees if they agreed to a handful of accounts and services at once.

Stumpf, whom Tolstedt reported directly to for years, was effusive in his praise of her.

“When you mix that intellect and attention to detail with this wonderful human — a person who can empathize and deal with a team — that’s where the magic happens,” he told U.S. Banker in 2007.

Wells doubled its branches in recent years, increasing the opportunities for cross-selling ideas to spread across the company, including bad ones like opening accounts for customers without their approval.

To the end, Stumpf was full of compliments for her. In the press release on Tolstedt’s retirement last year, at age 56, he called her a “principled” banker and a “dear friend.” Wells paid her $9.5 million in 2015, citing her “strong cross-selling ratio” and her work “reinforcing a strong risk culture,” according to regulatory documents.

In his grilling before Congress last year before he stepped down in disgrace, Stumpf said he was “deeply sorry” the bank didn’t act sooner to stem the misconduct. As for firing Tolstedt, though, he said he never even considered it.

Just Posted

Mothers Against Drunk Driving hold candlelight vigil

Four-and-a-half years ago Marilyn Rinas’ husband was killed in a collision with… Continue reading

Thousands expected at memorial for fallen police officer in Abbotsford, B.C.

ABBOTSFORD, B.C. — The streets of Abbotsford, B.C., will be lined with… Continue reading

One person dead, five others injured in early-morning crash in Kingston, Ont.

KINGSTON, Ont. — A man who was checking the damage on his… Continue reading

Gus is a special, collaborative art exhibit inspired by motherhood

The portrait display by mother and son is showing in Red Deer

Robotics challenge sparks student interest in Red Deer

Student-built robots compete in fun challenge

Chicken crosses B.C. road, stops traffic

Rooster makes early morning commuters wait in Maple Ridge

Red Deerian honours her brother who died in a motorcycle collision

Houaida Haddad is encouraging Red Deer residents to donate blood

Red Deer County firefighters to be recognized for Waterton help

RCMP brass will give formal recognition Monday

Ron James tries to lighten humanity’s load through humour

The comedian returns to Red Deer for shows Dec. 1 and 2

100+ Women Red Deer donate to Christmas Bureau

About $14,000 will help with Christmas hampers and toys

Semi collides with vehicle on Highway 2 north of Ponoka

Members of the Ponoka Integrated Traffic Unit dealt with a call on Highway 2 north of Ponoka

After 70 years, Red Deer veteran still remembers his traumatic war experience

Frank Krepps feels lucky to have survived the Second World War

Merritt Mountie charged with assault

Charges are in relation to an incident in May at the detachment, B.C. Prosecution Service said

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month