NEW YORK (TheStreet) -- Shares of Wells Fargo (WFC) - Get Report were up in mid-morning trading on Wednesday as KBW analysts said the San Francisco-based bank's decision to claw back executives' pay may buy CEO John Stumpf more time to deal with the illegal account openings scrutiny.
Wells Fargo announced late yesterday that Stumpf would forfeit $41 million in unvested stock awards, as well as any bonus for the year. Former retail-banking head Carrie Tolstedt will forego $19 million in unpaid equity awards.
Tolstedt is leaving the company effective immediately, rather than retiring at the end of the year as was previously planned.
"The total dollar value of forfeited compensation and benefits for both the CEO and Ms. Tolstedt will be an amount greater than $67.65 million and that is more than 24 times the amount of fees charged to customers," KBW said in an analyst note, according to Barron's.
KBW noted that the monetary loss should be enough to "quell the outrage" of interested parties, such as U.S. senators. It should also buy Stumpf more time to deal with the ongoing issues, the firm added.
Negative headlines are likely to continue in connection with ongoing employee lawsuits and regulatory investigations, but KBW said the company should be able to maintain its current executive team.
Earlier this month, Wells Fargo was fined $185 million by the Consumer Financial Protection Bureau after an investigation revealed that the company had opened 2 million consumer accounts illegally. Stumpf testifed in front of the Senate Finance Committee last week.
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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:
TheStreet Ratings team rates Wells Fargo as a Buy with a ratings score of B. This is driven by a few notable strengths, which it believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks it covers. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and attractive valuation levels. The team feels its strengths outweigh the fact that the company shows weak operating cash flow.
You can view the full analysis from the report here: WFC