The Rich Getting Richer

While the rich continue getting richer, more and more American workers are losing jobs from the effects of the 2008 recession.

            The recent trend of bank CEOs benefitting even while others suffer seems to be continuing. Wells Fargo announced Thursday both that its CEO, John Stumpf, would be receiving restricted bonds worth $1 million as a bonus on his 2013 pay and that it would be laying off 700 more mortgage works nationwide, including 25 in Charlotte, my hometown.

            Josh Dunn, a Wells Fargo spokesman, said that the layoffs were made to “better align with the market and increase the efficiency of our organization.” The market changes Dunn is commenting on are those that accompanied extremely low interest rates. The rush of mortgage refinances that accompanied historically low interest rates drove up the demand for workers in bank’s mortgage units. Thus when rates rose in 2013, less and less homeowners were refinancing their homes and demand fell for these units.

            While drops in the market are understandable and layoffs are not surprising, the timing of Wells Fargo announcements are terrible. In regards to public relations: Following the demonization of top bank executives over the past couple years, why would a bank announce a $1 million bonus package for your CEO and layoffs on the same day? The announcement of such a large bonus also seems more questionable after more than 5,800 Wells Fargo layoffs occurred nationwide this year; 450 of these occurred in Charlotte.

            Although the two occurrences are connected and the layoffs were likely to occur, the timing of the two incidents appears like a very poor public relations decision. Couldn’t Wells Fargo wait at least a week before rubbing in a $1 million bonus in the hundreds of people they laid off?

                                            His Majesty, John Stumpf, CEO of Wells Fargo
-Det Beal

http://www.charlotteobserver.com/2014/02/27/4728495/wells-fargo-ceo-gets-1m-in-stock.html#.UxDoSHllNU0

http://www.charlotteobserver.com/2014/02/27/4727352/wells-fargo-laying-off-more-mortgage.html