Wells Fargo Deferred Pay Plan Attacked
This past May, Wells Fargo settled a lawsuit covering advisors in California and North Dakota. According to court documents, under terms of the settlement, Wells Fargo paid a total of $5.1 million to 133 advisors. Now, Wells Fargo Advisors is again facing similar allegations in a lawsuit seeking class-action status that was filed against the firm in the U.S. District Court for the Southern District of Texas.
Alleging that forfeiture provisions in Wells Fargo’s Performance Award Contribution and Deferral Plan are too broad and ill-defined, the lawsuit claims that the deferred compensation plan offers to management and other highly paid Wells Fargo employees, including financial advisors, violates state laws.
The claim, according to Financial Advisor magazine, states:
…financial advisor forfeits his rightfully earned deferred compensation if he becomes ‘associated’ (not even employed) with ‘any financial services businesses’ (which is not defined anywhere in the Plan), anywhere in the world, and irrespective of whether that financial advisor actually competes [with Wells Fargo] in his or her new employment, for a period of three years.”
David Siegel, Senior Counsel at Ajamie LLP in Houston, who represents the plaintiffs, said, “The plan does not have the “reasonable limitations that Texas law would require” in a non-compete contract.”
You can read the complete article in Financial Advisor magazine.
Contact Fulcrum Partners Houston or any of the nationwide offices of Fulcrum Partners LLC to learn more about structuring a deferred pay plan for your organization.