October 27, 2016—Professor Steven Bank was quoted in a Los Angeles Times article regarding new pay rules that federal financial regulators have considered for Wells Fargo after thousands of employees created unauthorized accounts for millions of customers. Senate Democrats asked financial regulators to establish stricter rules that would “claw back” executive pay if other wrongdoings occur or are discovered.
Professor Bank says, “Wells Fargo’s policy allowed them to claw back without a formal legal finding. If it were mandatory, you could argue it’s out of the board’s hands,” Banks said. “I don’t know that we solve anything by making it mandatory.”