BEVERLY HILLS (Reuters) - Wells Fargo & Co Chief Executive Officer Tim Sloan said recruiting and retention have improved dramatically in the wake of a sales scandal, as the third-largest U.S. bank has made big changes to how it pays and evaluates employees in its branches.
The bank’s reputation took a severe hit last year after employees created as many as 2.1 million accounts without customer authorization to hit aggressive sales targets.
Scrambling to contain the fallout, Wells Fargo stopped paying branch workers based on how many products they sold and increased its minimum pay rate to between $13.50 and $17 per hour, depending upon the market in which they work.
“Turnover now in our retail bank is the lowest it’s been, that I can recall, in my 30 years at the company,” Sloan said Monday at the Milken Institute Global Conference in Beverly Hills, California.
Sloan, who got a battlefield promotion to the top job in October after his predecessor, John Stumpf, resigned under fire, said the bank has not had trouble attracting new employees since it changed its policies.
“When you put your shareholders first – I hope Warren Buffett isn’t listening by the way – but when you put them first, then you’re going to make mistakes. Because you’re going to make short-term decisions that aren’t focused on creating a long-term, successful company,” Sloan said.
Buffett is Chairman of Berkshire Hathaway Inc, Wells Fargo’s largest shareholder.
Reporting by Michael Flaherty in Los Angeles; Written by Dan Freed in New York; Editing by Bernard Orr