- Wells Fargo is paying CEO Charlie Scharf $24.5 million for 2021, the bank reported Monday in a filing. That’s a 20.4% increase from 2020’s total of more than $20.3 million.
- The pay breaks down to a $2.5 million base salary, a cash bonus of nearly $5.4 million, $10.8 million in performance share awards and $5.8 million in restricted share rights.
- The package makes Scharf the fifth-best-paid CEO among the six largest U.S. banks, trailing all but Citi’s Jane Fraser, who received $22.5 million for 2021.
In justifying Scharf’s compensation, Wells Fargo’s board cited continued “progress on fulfilling [its] strategic and risk and regulatory priorities.”
Scharf made clear early in his tenure that he'd address the bank’s regulatory standing “with a different sense of urgency and resolve.”
To that end, the Office of the Comptroller of the Currency (OCC) terminated one enforcement order against Wells in January and let another expire last September — advancements the bank noted Monday in explaining Scharf’s price point.
Wells Fargo is operating under nine enforcement actions — most stemming from the bank’s 2016 fake-accounts scandal. That number is down from 12 when Scharf joined as CEO.
Arguably the most impactful, a $1.95 trillion asset cap the Federal Reserve imposed in 2018, is ongoing. The bank’s board praised Scharf on Monday for guiding Wells to a 14.3% return on tangible common equity despite the asset cap. The bank saw sharp increases in other metrics, too — a 59% jump in its share price in 2021, according to The Wall Street Journal, and $21.5 billion in profits for the year.
Scharf’s more than 20% pay boost stands in contrast to the 12% cut he received in 2020. But several other banks tread more conservatively with regard to pay packages that year as they plowed excess cash into loan-loss reserves amid the uncertainty of the early COVID era. Citi, for example, slashed now-former CEO Michael Corbat's compensation by 20.7% in 2020. Bank of America trimmed CEO Brian Moynihan's pay by 7.5% that year.
Compensation boosts are hovering around 20%, on average, among other top U.S. bank CEOs for 2021. Moynihan, for example, received a 30.6% raise to $32 million. Fraser saw her pay increase 31.2% from $17.15 million in 2020 — although she also received a title bump when she ascended to Citi's top role in March 2021. Goldman Sachs CEO David Solomon's pay jumped 27.2% to $35 million in 2021. (That assumes a total of $27.5 million for 2020. Goldman clawed back $10 million of that in connection with the bank's role in the 1MDB scandal.)
Two of the nation's top bank CEOs, by contrast, saw raises in single-digit percentage points. Morgan Stanley's James Gorman received a 6% bump to $35 million in 2021, and JPMorgan Chase's Jamie Dimon got an extra 9.5% to land him at $34.5 million. But they were already at the top of the banking industry's pay scale before 2021 began.