Wells Fargo & Co., the dominant bank in Philadelphia and many other U.S. metro areas, is the worst-performing major-bank stock this year.

It's as if investors expect its profits will keep slipping and costs will mount since revelations that the aggressive sales culture CEO John Stumpf bragged about created perverse incentives that paid bankers more for opening unauthorized accounts.

How to improve? Here are a couple of steps suggested by branch employees who have been bringing me internal Wells Fargo documents and sales-adventure stories:

Stop digging

Effective Oct. 1, the bank confirmed, it finally scrapped its quarterly bonus incentive system, which for years rewarded cheaters.

At Wells Fargo, a mid-ranking "Personal Banker 2," earning $40,000 to $50,000 base salary, could collect an extra $37,400 by logging new accounts, referrals, and loans, under a system that was too often manipulated.

You'd earn the maximum by meeting at least three of these targets, every three months (and exceeding at least one by as much as you fell short of the fourth):

21 new loans, totaling at least $125,000;

Six investment or mortgage referrals;

An average 5½ new accounts every day;

A daily average score of 485, under a point system that credited savings, checking, credit and debit card, online, mortgage, broker, and line-of-credit accounts.

If your whole branch met its targets, everyone could get an additional bonus.

A higher-ranking "Private Banker" - earning $50,000 to $90,000 a year and holding state investment licenses - could score $60,000 in bonuses each year, by funneling a stream of customers to Wells Fargo investment brokers, business lenders, and mortgage officers.

All these new accounts didn't have to be from people who walked into the branch.

They could be family members. Friends. Or people with an old Wells Fargo account, at the banker's branch or competing branches, which a diligent banker unearthed by scrolling through digital bank records, and sign them up for, say, a credit card (which got extra points because it was both an account and a loan). Without a signature. Unauthorized.

When bankers had extra accounts but not enough loans, or vice versa, they quietly swapped.

It was important to keep track and close unauthorized accounts once they got counted for your bonus. Or else some innocent unauthorized account owner would get hit with a fee; they'd complain; you'd be investigated, and fired. CEO Stumpf said Wells Fargo fired more than 1,000 a year, for five years, for failing to observe sales guidelines, while top bosses kept getting bonuses.


One veteran Wells banker told me the bank ought to stop letting staff access personal account information unless customers show a driver's license and credit card to prove they really want a new account.

Giving bankers access to your money should be at least as secure as "buying a six-pack at Wegmans," he said.

Stumpf has promised to come up with better incentives, soon. Let's hope he, or his successor, can make retail banking honest and lucrative. Because the number of U.S. bank branches fell to 92,000 this year, from 100,000 in 2009, the FDIC says.

If banks can't make their branches profitable in this digital era, lenders will close more, leaving holes in Main Streets and shopping strips.