Wells Fargo got some good press earlier this month when the chairman of the board stomped his foot, thrust an index finger into the air, and declared the bank would award no cash bonuses to eight top executives for 2016, collectively depriving them of $32 million in compensation. It was a rare and dramatic showing of spinal integrity for the red stagecoach. Of course, as you may recall, the announcement included the explicit proviso that no one did anything improper, necessarily. But the board didn’t need to use words to communicate its displeasure – cash would do just fine.
But something funny happened in the intervening weeks: Those callously withheld cash bonuses miraculously transformed themselves into equity awards. CEO Tim Sloan, whose overall pay increased 17 percent to $13 million, saw his stock award grow $2.5 million as his $1 million cash bonus from 2015 disappeared. CFO John Shrewsberry’s $850,000 cash bonus vanished as his stock award grew by $1 million, according to Wells Fargo’s 2017 proxy filing.