Wells Fargo Email: Sparking American Wage Revolution?

Several years from now, Tyrel Oates -- a Wells Fargo branch employee -- could be known as the Paul Revere of the American Wage Revolution.

"Listen, co-workers, for you share hear.
Of the companywide email, Tyrel sent that year..." 

Indeed, Oates sent an email to Wells Fargo CEO John G. Stumpf -- requesting a $10,000 raise. What's more, he cc:ed roughly 200,000 Wells Fargo employees on his message, which carefully outlined why the highly profitable bank should deliver the $10,000 raise to each of its 300,000 employees.

My reaction? I don't necessarily agree with all of Oates' points. But I agree with his overall view: When it comes to raises and compensation, most of America's big businesses have got it wrong. While companies bank billions in profits, buy back stock or issue shareholder dividends, employees are often last in line for decent raises.

Stating His Case

Here's the text of Oates' letter to CEO Stumpf, plus my point-by-point reaction further below:

"Mr. Stumpf,

With the increasing focus on income inequality in the United States. Wells Fargo has an opportunity to be at the forefront of helping to reduce this by setting the bar, leading by example, and showing the other large corporations that it is very possible to maintain a profitable company that not only looks out for its consumers and shareholders, but its employees as well.

This year Wells Fargo in its second quarter alone had a net income of $5.7 billion, and total revenue of $21.1 billion. These are very impressive numbers, and is obvious evidence that Wells Fargo is one of, if not the most profitable company in the nation right now. So, why not take some of this and distribute it to the rest of the employees.

Sure, the company provides while not great, some pretty good benefits, as well as discretionary profit sharing for those who partake in our 401k program. While the benefits are nice, the profit sharing through the 401k only goes to make the company itself and its shareholders more profitable, and not really boost the income of the thousands of us here every day making this company the prestigious power house that it is.

Last year, you had pulled in over $19 million, more than most of the employees will see in our lifetimes. It is understood that your position carries a lot of weight and responsibility; however, with a base salary of $2.8 million and bonuses equating to $4 million, is alone one of the main arguments of income inequality. Where the vast majority, the undeniable profit drivers, with the exception of upper management positions barely make enough to live comfortably on their own, the distribution of income in this company is no better than that of the other big players in the corporate world.

My estimate is that Wells Fargo has roughly around 300,000 employees. My proposal is take $3 billion dollars, just a small fraction of what Wells Fargo pulls in annually, and raise every employees annual salary by $10,000 dollars. This equates to an hourly raise about $4.71 per hour. Think, as well, of the positive publicity in a time of extreme consumer skepticism towards banks. By doing this, Wells Fargo will not only help to make its people, its family, more happy, productive, and financially stable, it will also show the rest of the United States, if not the world that, yes big corporations can have a heart other than philanthropic endeavors.

P.S. – To all of my fellow team members who receive a copy of this email. Though Wells Fargo does not allow the formation of unions, this does not mean we cannot stand united. Each and every one of us plays an integral part in the success of this company. It is time that we ask, no, it is time that we demand to be rightfully compensated for the hard work that we accomplish, and for the great part we all have played in the success of this company. There are many of us out there who come to work every day and give it our all, yet, we struggle to make ends meet while our peers in upper management and company executives reap the majority of the rewards. One of our lowest scored TMCS questions is that our opinions matter. Well they do! This email has been sent to hundreds of thousands Wells Fargo employees, (as many as I could cc from the outlook global address book). And while the voice of one person in a world as large as ours may seem only like a whisper, the combined voices of each and all of us can move mountains!

With the warmest of regards,"

[I assume Oates' signature appeared here]

Profits Still Rolling In

Ironically, Wells Fargo's latest quarterly results surfaced today. Net income was a lofty $5.41 billion for the quarter. On an annual basis, Wells Fargo's profits basically exceed $20 billion.

In his email, Oates is basically saying: "Hey, take 15 percent of our profits -- $3 billion -- and distribute it as salary to your employees." He also says it's unfair to measure Wells Fargo pay scales vs. other banks because all banks are, generally speaking, underpaying rank-and-file employees.

In a follow-up interview with Business Insider, Oates further explained his points and said he doesn't think he'll get fired over the email.  So far, Oates has not received a formal reply from Wells Fargo's CEO.

My Spin

I've been on three sides of the table:

  • As an employee, lobbying for every dollar I could get in compensation. For the most part, my employers always recognized my hard work with good compensation.
  • As a manager, balancing a limited budget where I had to divvy up a pool of money for individual raises and promotions.
  • As an employer, co-launching and building a company -- initially with my own money, and taking on all the risk and worrying about cash flow.

While I don't favor "blanket" raises for the sake of raises, I do favor a hard look at overall corporate wages. During my 20+ years in IT media, it's clear that rank-and-file wages have fallen further and further behind executive compensation. 

The trouble accelerated during the dot-com implosion (1999-2001), when companies asked employees to do more and more while holding the line on wages. Fast forward 15 years, and corporations seem to be preoccupied with stockpiling cash rather than raising their wage base.

I realize CEOs have to be ready for down economies. Across-the-board raises can potentially undermine cash flow when times are tough. But... how about delivering some (more) of those profits as one-time bonuses to all employees?

Either way, I get the feeling Tyrel Oates' email is the spark of something bigger -- a rallying cry to take a hard look at America's wages.

"Listen, co-workers, for you share hear.
Of the companywide email, Tyrel sent that year..." 

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