Wells Fargo Pays CEO Charles Scharf $30 Million Incentive to Stick Around

Charles Scharf, CEO of Wells Fargo. (Michael M. Santiago/Getty Images)

When Charlie Scharf took over as chief executive of Wells Fargo in fall 2019, the bank was less than two years into what would become a seven-year-long regulatory punishment that followed its fake-accounts scandal.

His two predecessors had resigned while the bank tried to recover from the scandal and earn back the public’s trust. By the time Scharf started, shares of Wells Fargo were trading some 24% below their last record.

The lender looks much different now, and this summer the asset cap was terminated. Wells Fargo has chosen to reward Scharf handsomely for that—with a big incentive to stay in his seat for six more years.

Wells Fargo said Thursday that it would name Scharf chairman of the board—giving him the dual role of chairman and CEO, common at big U.S. banks—and add a lead independent director to the board.

The bank is also giving Scharf a one-time payment meant to keep him at the helm: a $30 million special equity grant in restricted share rights and 1.046 million stock options.

The rights and options will vest after the fourth, fifth, and sixth anniversaries of the grant’s date, which means that if Scharf leaves before those milestones, he forfeits the unvested portions.

“The Award reflects the Board’s desire to retain Mr. Scharf in his role and to acknowledge his successful leadership of the Company,” the bank said in a regulatory filing, pointing to the board’s satisfaction with Scharf’s leadership team appointments, regulatory cleanup, and financial performance.

Wells’ stock is trading just below its all-time high. It’s up 15% this year while the S&P 500 has risen up 8%.

Last month, the bank, which is the fourth-largest in the U.S. by assets, reported second-quarter earnings that topped Wall Street’s expectations.

Write to Rebecca Ungarino at rebecca.ungarino@barrons.com