Senator Elizabeth Warren Grills Wells Fargo CEO John Stumpf On WFC Cross-Selling | CNBC — Transcript

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1. 0:00in your time as chairman and CEO wells
2. 0:03has been famous for cross selling which
3. 0:07is pushing existing customers to open
4. 0:09more accounts cross selling is one of
5. 0:11the main reasons that Wells has become
6. 0:13the most valuable bank in the world
7. 0:16Wells measures cross selling by the
8. 0:19number of different accounts a customer
9. 0:20has with Wells other big banks average
10. 0:23fewer than 3 accounts per customer but
11. 0:27you set the target at 8 accounts every
12. 0:31customer of wells should have 8 accounts
13. 0:34with the bank and that's not because you
14. 0:37ran the numbers and found that the
15. 0:38average customer needed 8 banking
16. 0:42accounts it is because quote 8 rhymes
17. 0:46with great this was your rationale right
18. 0:49there in your 2010 annual report cross
19. 0:53selling isn't about helping customers
20. 0:55get what they need if it was you
21. 0:57wouldn't have to squeeze your employees
22. 0:59so hard to make it happen
23. 1:00no cross selling is all about pumping up
24. 1:04wells
25. 1:05stock price isn't it no cross selling is
26. 1:09shorthand for deepening relationships we
27. 1:13all do well let me stop you right there
28. 1:15you say no no I'm here are the
29. 1:18transcripts of 12 quarterly earnings
30. 1:22calls that you participated in from 2012
31. 1:26to 2014 the 3 full years in which we
32. 1:30know this scam was going on I'd like to
33. 1:33submit them for the record if I may mr.
34. 1:35chair thank you these are calls where
35. 1:38you personally made your pitch to
36. 1:42investors and analysts about why Wells
37. 1:46Fargo is a great investment and in all
38. 1:4912 of these calls you personally cited
39. 1:54Wells Fargo's success at cross selling
40. 1:57retail accounts as one of the main
41. 2:00reasons to buy more stock in the company
42. 2:03let me read you a few quotes that you
43. 2:06had April 2012 quote we grew our retail
44. 2:11banking cross-sell ratio to a record
45. 2:14five point nine eight products per
46. 2:17household
47. 2:18a year later April 2013 quote we
48. 2:21achieved record retail banking
49. 2:24cross-sell of six point one products per
50. 2:28household April 2014
51. 2:31quote we achieved record retail banking
52. 2:34cross-sell of six point one seven
53. 2:37products per household the ratio kept
54. 2:41going up and up and it didn't matter
55. 2:44whether customers used those accounts
56. 2:46are not and guess what Wall Street loved
57. 2:50it here is just a sample of the reports
58. 2:53from top analysts in those years all
59. 2:57recommending that people by Wells Fargo
60. 2:59stock in part because of the strong
61. 3:03cross-sell numbers and I'd like to
62. 3:06submit them for the record objection
63. 3:08Thank You mr. chair so when investors
64. 3:10saw good cross-sell numbers they did
65. 3:14while this scam was going on that was
66. 3:16very good for you personally wasn't it
67. 3:19mr. Stumpf do you know how much money
68. 3:22how much value your stock holdings in
69. 3:24Wells Fargo gained while this scam was
70. 3:27underway well first of all it was not a
71. 3:30scam and cross-sell is a way of
72. 3:32deepening relationships when customers
73. 3:34go through this mr. stop I asked you a
74. 3:36very simple question do you know how
75. 3:38much the value of your stock went up
76. 3:42while this scam was going on it's all of
77. 3:45my compensation is in our public you
78. 3:48know how much it was it's all in the
79. 3:50public filings oh you're right it is all
80. 3:52of the public records because I looked
81. 3:54it up while this scam was going on you
82. 3:57personally held an average of six point
83. 4:01seven five million shares of Wells stock
84. 4:05the share price during this time period
85. 4:08went up by about $30 which comes out to
86. 4:11more than two hundred million dollars in
87. 4:16gains all for you personally and thanks
88. 4:20in part to those cross-sell numbers that
89. 4:23you talked about on every one of those
90. 4:26calls
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