Georgiev in NY Times: How clawbacks, materiality affect Wells Fargo
Wells Fargo says it will recover $60 million in stock grants from two top executives in the wake of the phony account-opening scandal. It fired 5,300 employees for opening bogus accounts, returned $2.6 million in improper customer fees and paid a $185 million fine. Those figures pale, though, compared with Wells Fargo's $1.9 trillion in assets and $23 billion in earnings last year. "Even though the fraud was on a massive scale, at the same time, the impact on the bottom line was fairly minimal," said Emory Law Assistant Professor George S. Georgiev. "Often in these borderline cases, you can tell yourself a story as to why something is material or not depending on what you want the outcome to be."