Wells Fargo is America's most scandal-haunted bank, which is quite an accomplishment in a heavily competitive field; now the bank has started closing its branches and cutting jobs (after pressuring employees to commit mass fraud on pain of being fired and blacklisted from the industry).
The company has also declared itself to have an "excess of capital" and has committed to spending $40.6 billion on stock buybacks -- a form of financial engineering that drives up stock prices without improving the company's underlying financials or business. Some of Wells Fargo's largest individual shareholders are its executives, who've effectively just voted to give themselves massive, multi-million-dollar raises.
The buybacks come on the heels of Trump's latest round of tax-cuts, which he said would boost jobs and wages, despite the fact that they encourage financial engineering of the sort that leads to business units shutting down, their workers being fired, and the responsible execs pocketing tax-free fortunes.
Wells Fargo has laid off 26,500 employees since the Trump tax-bill passed.
It is notable that Wells Fargo’s CEO describes the company as having an “excess of capital,” despite the fact that it is laying off workers, outsourcing jobs, and continuing to pay its employees nearly poverty-level wages. A fair wage for front-line bank workers is a critical part of the improved working conditions required to create an accountable financial institution that Wells Fargo has committed to being. Fair pay for workers helps companies attract and retain a qualified, committed workforce. It also provides economic security and autonomy, preventing workers from living paycheck to paycheck and being forced into a dependent work relationship that keeps them from speaking out when executives, like those at Wells Fargo, push them to commit fraud.
Wells Fargo can certainly afford the level of commitment that their motto, building a better bank, requires. Using data from the S&P Global Compustat database and Wells Fargo’s quarterly filings with the Securities and Exchange Commission (SEC), we calculated that if Wells Fargo divided the $40.6 billion that it has authorized the company to spend on stock buybacks between its 262,700 employees, each employee could have received an astounding $154,000.
What Wells Fargo’s $40.6 Billion in Stock Buybacks Could Have Meant for Its Employees and Customers [Lenore Palladino/Roosevelt Institute]
