Wells Fargo CEO Charlie Scharf, who vowed last month to do more to improve diversity within the firm’s ranks, is tying executives’ pay to their progress in doing so.
Members of the lender’s operating committee will be evaluated annually on how much they have increased representation and inclusion of diverse employees in the operations they oversee and it will have an impact on their pay packages set at year-end, Scharf told staff in a memo Tuesday.
Scharf rolled out goals including doubling black leaders at the firm — currently 6% of senior management — within the next five years, and creating a new diversity and inclusion position reporting directly to the CEO. He said he’ll add more black people to the operating committee, a process he sees as being hindered by Wells Fargo’s “unique” regulatory and control issues.
“We started with 40 people just marching, and it turned into 15,000," an advisor says.
“The unfortunate reality is that there is a very limited pool of Black talent to recruit from with this specific experience as our industry does not have enough diversity in most senior roles,” Scharf said. “Our progress will not be a straight line given the experience required in some of our roles, but I would ask that you judge our progress two years into my tenure as CEO.” He has been in the top job for almost eight months.
Leaders across corporate America have rushed to denounce racism and act on diversity after the death of George Floyd, an unarmed black man killed by police during an arrest in Minneapolis last month. The banking industry is increasing getting singled out over its involvement in creating and prolonging economic gaps.
