NEW YORK (TheStreet) -- Wells Fargo (WFC) - Get Report CEO John Stumpf will give up $41 million in stock awards as well as most of his 2016 salary, as the commercial banking giant begins an investigation into the phony accounts scandal.
Earlier this month it was uncovered that Wells Fargo employees opened fake accounts in customers' names without the customer's knowledge or permission in order to meet the company's aggressive sales goals. Wells Fargo must pay a penalty of $185 million as a result.
FBR Capital Markets head of Financial Institutions Research Paul Miller joined Wednesday morning's "Bloomberg Go" on BloombergTV to discuss Wells Fargo further.
Miller subscribes to the theory pointed out by BloombergTV's Jonathan Ferro that Wells Fargo stock will rise if the CEO were to hand in his resignation.
"I think this is a good first step for John and Wells Fargo to start to move this behind them," Miller said. "You know the question is, and I don't have that answer, is this enough?"
Stumpf appeared before the Senate to answer questions about the accounts scandal and Miller believes that did not go well for the CEO. Stumpf will testify about the issue again on Thursday.
"What the regulators really want is somebody to be fired," Miller added. "They've clawed back some money, yeah, but where is the responsibility? Where is that person to get fired and shown the door?"
Ferro questioned Miller as to if he believes this issue will have a material impact on Wells Fargo, hurting the company's profit and bottom line.
"I don't think this is going to become a material issue for Wells Fargo," Miller responded. "But reputation wise, with their multiple they had a very good solid premium multiple, very solid growth. [Wells Fargo is] considered one of the better companies out there. I think this reputation hit could weigh on the multiple on the downside."
(Wells Fargo is held in Jim Cramer's charitable trust Action Alerts PLUS. See all of Cramer's holdings with a free trial.)
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate WELLS FARGO & CO as a Buy with a ratings score of B. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and attractive valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: WFC