It was only two months ago when Wells Fargo, a megabank that was regarded as one of the better-run and more-reliable in the industry, was exposed to one of the biggest financial scandals since the financial crisis of 2008. The reason? Greed. The same greed shown in Wall Street 8 years ago that left the economy crippled.
At Wells Fargo, millions of fake customers accounts were created by its employees in order to boost their quarterly reports. Cue an investigation and somewhat 5000 employees are fired. However, before the heroics of Elizabeth Warren, the executive board remained untouched. They continued cashing in the ludicrous paychecks and remained silent against accusations. This clear-cut example uncovers the faults of regulations and exposes the current increasing trend of neglecting the interests and voices of stockholders.
Short-term incentives and compensations based on quarterly reports seem to have dominated corporations’ decision-making over the past few years. Any proposed regulations after 2008 that seeked to limit these motives seem to only brush past the greedy ethos of some of the board of directors across Wall Street.
What happened to the San-Francisco based bank contrasts the statement of the 1997 Business Roundtable that the …show more content…
The board itself forced an increase of the bank’s stock by applying these goals, and pressuring low-level employees to reach such figures. Yet, when this scheme was exposed, the board remained untouched while branch employees were dismissed. It was only after the inspired intervention of Senator Elizabeth Warren, that CEO John Stumpf was forced to retire. "You squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket," Warren
At Wells Fargo, millions of fake customers accounts were created by its employees in order to boost their quarterly reports. Cue an investigation and somewhat 5000 employees are fired. However, before the heroics of Elizabeth Warren, the executive board remained untouched. They continued cashing in the ludicrous paychecks and remained silent against accusations. This clear-cut example uncovers the faults of regulations and exposes the current increasing trend of neglecting the interests and voices of stockholders.
Short-term incentives and compensations based on quarterly reports seem to have dominated corporations’ decision-making over the past few years. Any proposed regulations after 2008 that seeked to limit these motives seem to only brush past the greedy ethos of some of the board of directors across Wall Street.
What happened to the San-Francisco based bank contrasts the statement of the 1997 Business Roundtable that the …show more content…
The board itself forced an increase of the bank’s stock by applying these goals, and pressuring low-level employees to reach such figures. Yet, when this scheme was exposed, the board remained untouched while branch employees were dismissed. It was only after the inspired intervention of Senator Elizabeth Warren, that CEO John Stumpf was forced to retire. "You squeezed your employees to the breaking point so they would cheat customers and you could drive up the value of your stock and put hundreds of millions of dollars in your own pocket," Warren