Business Report: Wells Fargo CEO

Business Report: Wells Fargo CEO

Wave bye-bye to John Stumpf, who is dumped as head of Wells Fargo Bank.

Stumpf fired 5,000 employees for creating accounts customers didn't ask for. The bank also got rid of the woman who ran retail banking without the usual golden parachute. But the practice of creating unwanted accounts happened on Stumpf's watch. In fact, it continued for two years after he knew about it – until the L.A. Times exposed it.

Creating unwanted accounts is not a victimless procedure. Too many credit cards can hurt your credit score. Extra bank accounts can lead to fees, which some customers simply paid.

The fired employees reportedly created accounts and then quietly closed them in order to get bonuses. The pursuit of bonuses was also blamed for the Wall Street induced recession a few years ago.

In the long run it's cheaper and more rewarding to grow a business honestly. But these were people incentivized not to think of the long run.

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