The plan is a leap for the banking giant while its competitor have similar compensation plans already

Published By: Eunice Gettys on January 11, 2017 09:02 am EST

Wells Fargo & Co. (NYSE:WFC) has announced that it will change the way it compensates its bank employees. The financial giant announced its plan on Tuesday which were long anticipated following the account scandal. The pay system was one of the main reason due to which these employees undertook unethical practices.

The bank used the push sales strategy for years in which it used to reward employees for reaching their sales goals. To meet their targets, workers opened around 2 million accounts without the authorization of customers. Wells Fargo was fined for about $185 million when these practices were uncovered.

The $270.33 billion banking giant said that the new system will not compensate its employees on the basis of the number of accounts opened. Instead it will gauge them on the usage of those opened accounts. The financial giant will also look at the satisfaction level of its customers.

Wells Fargo has been trying to devise a perfect plan since a long time. It has been considered as one of the most important matter by the top executives, such as Tim Sloan and Mary Mack, who head the community bank division. Ms. Mack, while commenting on the plan, said “Our goal here was to create a pay plan that would restore trust with our customers, team members and the public.”

The bank has suffered massively due to the fake account scandal as it has lost customer satisfaction. The number of new accounts has also dropped sharply and the image of the financial giant has been shattered.

The incentive system after the change has become similar to other financial giants, such as JPMorgan Chase and Bank of America. The new incentive system will give more basic pays while the additional incentives and bonuses will be reduced.

The stock prices for Wells Fargo gained 0.68% in the last session. The prices closed at $54.62, which is nearing the all-time high price of $58.02.