Sen. Reed Questions Wells Fargo CEO John Stumpf in Banking Committee Hearing — Transcript

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1. 0:00well thank you very much Mr chairman and
2. 0:01thank you Mr stum for being here let me
3. 0:03uh try to uh clarify a bit more your
4. 0:07position going forward with respect to
5. 0:09the issues of compensation not just miss
6. 0:11tolad but even your own compensation
7. 0:14will you formally recuse yourself from
8. 0:16board
9. 0:17deliberations well I'm not even uh I'm
10. 0:20not even involved in board discussions
11. 0:23around what the HRC does with anything
12. 0:27respect to me and or as a recommend to
13. 0:29the board so there's no recusal required
14. 0:32but if but I'm happy to do that but I'm
15. 0:35not even involved in that it will
16. 0:36ultimately come up though to the board
17. 0:38for a vote of affirmation of the
18. 0:40compensation commit correct uh it would
19. 0:42and I'm not part of that that's done in
20. 0:44an executive session without me it's
21. 0:46always been done that way in 2013 when
22. 0:49you learned of this
23. 0:52uh what did you do this has been asked
24. 0:55several different ways did you inform
25. 0:56The Regulators or or instruct someone to
26. 0:59inform the regulators is of a growing
27. 1:01problem uh thank you Mr Reed yes and and
28. 1:03I should have mentioned that earlier but
29. 1:05yes the our primary and credential
30. 1:07regular was informed at that time did
31. 1:10you inform the board at that time uh yes
32. 1:13I can't recall the exact meeting and and
33. 1:16but I can I can uh but it was it it was
34. 1:19sometime in 13 and I know in
35. 1:232014 various Committees of the board
36. 1:26were made aware of this the risk
37. 1:28committee the audit and exam mintion the
38. 1:30corporate
39. 1:31responsibility did you take any steps to
40. 1:34internally notify your employees of this
41. 1:38type of behavior which going back was
42. 1:42you know 11 a th000 people are gone 12
43. 1:4513 including an an area manager did you
44. 1:47communicate that or did you simply keep
45. 1:50these discussions internal to the board
46. 1:53I do a uh Team Member Town Hall every
47. 1:59quarter where I go to one of our various
48. 2:02cities and there will be a couple
49. 2:05thousand people in the audience and then
50. 2:06we webcast that broadly across our
51. 2:09company and I you know typically talk
52. 2:13about ethics and doing what's right for
53. 2:16customers and in the case the vast
54. 2:18majority do it but I was trying to
55. 2:21really bring home this there there was
56. 2:23given specific evidence of techniques
57. 2:28used to essentially the words of my
58. 2:31colleagues and to defraud customers
59. 2:34those
60. 2:36specific practices were not focused upon
61. 2:39and made very clear that they were not
62. 2:42tolerated or was it it would seemed to
63. 2:44be a generic discussion of follow the
64. 2:46rules uh again uh Senator Reed I I at at
65. 2:52the time that the the escalation
66. 2:57happened in
67. 2:582013 there were were many different
68. 3:01meetings and things happening as I
69. 3:05mentioned in my written uh or my oral
70. 3:07testimony about reducing goals talking
71. 3:11about sales efficacy having manager
72. 3:14meetings talking with leaders putting
73. 3:17more controls in place and again not
74. 3:21fast enough not far enough and and I
75. 3:24apologize for well it seems that you
76. 3:27know and I would suspect looking back uh
77. 3:30that the emphasis on meeting sales
78. 3:33objectives cross selling was unremitting
79. 3:36and yet you had examples here specific
80. 3:38examples of things that you knew were
81. 3:40happening and should not be happening
82. 3:43and yet what I what I'm hearing is more
83. 3:45or less a generic uh make those sales oh
84. 3:49and by the way you know we have this
85. 3:51ethical rules in place too again you
86. 3:54know I think you've said it and it's
87. 3:56it's obvious that tone emphasis what the
88. 3:59leader does what the leader says is
89. 4:02sometimes more important than anything
90. 4:04else yeah and for a period there this
91. 4:07was recognized uh but there was no
92. 4:11specific stop you know stop this stuff
93. 4:14well I can tell you we said stop this
94. 4:18stuff and and the thing about cross cell
95. 4:21is I'd rather have a customer with two
96. 4:25products that they use and they need and
97. 4:28they want and they value
98. 4:30than for products that are not used and
99. 4:33valued in the in the in the first case
100. 4:37customer wins we win we all do well in
101. 4:39the second case everybody loses we lose
102. 4:42money it does not help us so we've been
103. 4:45we we tried very hard and again we were
104. 4:47not as effective as we could have been
105. 4:50in talking about you know the goal here
106. 4:53is not you know products the goal here
107. 4:57is deep relationships we had the wrong
108. 4:59tool for too long to make that happen
109. 5:02and simply in conclusion it it just
110. 5:04seems that uh it took in too many too
111. 5:09many months years literally for some
112. 5:12simple steps which should have been
113. 5:14taken to be taken and it was only I
114. 5:16think as a result of what ultimately Los
115. 5:19Angeles County and the uh The Regulators
116. 5:22and others did that forc the issue thank
117. 5:25you Mr D