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Today's Top News
Human Interest in Bank Practices
How much senior executives earn, in cash and stock, is public information. How they make it is public too. Trouble is, the two are barely brought together in reporting. One story’s a business story, the other’s, well, for the “human interest” file.
As all humans have a reason to be interested, let’s pull the pieces of one tale together. Let’s take Wells Fargo, the bank whose CEO just topped the charts — as the top earner in the country for 2009.
According to analysis released by Equilar, an executive compensation research firm, Wells Fargo CEO John G. Stumpf was paid a personal best of $18.7 million in cash and stock in 2009. That’s up 64 percent from two years earlier. That means that Mr. Stumpf is making twice as much as Lloyd C. Blankfein, his counterpart at Goldman Sachs — the “great vampire squid” himself. Does that make Stumpf Mr. Super Squid… ?
More names might come to mind if the public were reminded of just what’s been going on at Wells Fargo on his watch. The company is currently being sued by, among others, the city of Baltimore, for civil rights violations related to racist lending practices.
As we’ve reported on this program, Wells Fargo made a bundle, selling risky, high-cost subprime loans to African Americans, including long-time African American homeowners.
On GRITtv last year, former subprime mortgage broker turned whistle-blower Beth Jacobson described how African American brokers were sent into Black churches: “Plenty of people there might not even have thought of taking out loans or leveraging their property,” but through Black churches loan officers found a motherlode of clients who they steered into subprime loans, even clients with good credit scores.
The rewards for the brokers were massive: what some Wells Fargo brokers called “ghetto loans” brought upwards of twice the fees that they could make off prime-rate kind. But the cost for borrowers — and cities like Baltimore — were deadly.
Now Baltimore’s suing, foreclosures are continuing… and Stumpf’s the country’s best-paid CEO. A footnote? Hardly. Of human interest? I think so.