Let me guess ! There is a bonus for signing up new accounts an additional bonuses for new credit card accounts....
I'll bet a dinner at Shula's that you're right. Either bonuses or threat of termination if production didn't reach 'X' number of accounts of this or that description.
These accounts were almost certainly small. Otherwise they would have been noticed by the defrauded consumers long ago. The ironic thing there is they had to be so small that the cost of setup and maintenance would have made them unprofitable. So the WF shareholders were victims along with the account "owners."
Before anybody congratulates themselves for not owning stock in WF, check the mutual funds in your IRAs and/or 401k. There's a good chance you own shares of a mutual fund that in turn owns shares of WF. If you own an S&P index fund, there's a 100% chance you do.
If there were 5,300 people fired over this, it's the tip of the iceberg. And they've known about it for a while.
Anybody who has ever dealt with a large corporate HR department can tell you that they're exceedingly cautious on firing one, let alone a mass firing like this. To pull the trigger on a mass termination, there would have been endless discussion, including consultation with untold attorneys billing untold hours. All that doesn't happen quickly.
My guess is that this has been in the works for a minimum of six months, probably dealing with an inordinate level of year-lend bonuses paid based on ostensible 12/31/15 performance. Maybe farther back than that.
If they fired 5,300 for cause, there were almost certainly at least that many who were strongly suspected, but skated for whatever reason.
So there were several things coming together here:
1. The WF incentive plan didn't incent the right thing -- profitability. It incented the production of unprofitable widgets.
2. The WF incentive plan didn't contain governance to prevent this sort of thing.
3. With a minimum of 5,300 offenders, this was an ingrained part of the Wells corporate culture.
4. Crimsonaudio is right -- when a practice is this widespread, there's no way in 10,000 hells executive management didn't know.
5. I'll bet another dinner at Shula's that that same executive management got six-figure (maybe seven!) bonuses for achieving the account goals...point being, I'll be shocked if they didn't have a godamighty monetary incentive to turn a willfully ignorant blind eye.
6. This is far from over:
6A. Expect their accountant, their regulators, and the IRS to be well and truly embarrassed and angry. They will be all up in in Wells' stuff for years. They're going to make a combo barium enema / colonoscopy look and feel like a friendly nod between buddies passing in the hallway.
6B. Lawyers are already queuing up to file suits...class action suits on the part of the account "owners". More class action suits on the part of the shareholders. Individual suits by individual employees alleging imporoper termination.
6C. Fines from the Feds will pale in comparison to the cost of internal investigations, defense of lawsuits and settlement of lawsuits. All in, this will cost them a half-billion if it costs them a dime.
6D. Depositions on instruction from and conduct by management will be highly instructive if they ever make it into the public record.
Buy lots of popcorn. This is gonna be a long movie, and it's just starting.
