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Wells Fargo boss John Stumpf gives up $41m over bonus fraud

The boss of Wells Fargo is to give up $41m (£31.4m) from his pay package because of an accounts fraud that has shaken the company.

John Stumpf will not receive a salary from the US' second largest bank during an inquiry into the fraud that has led to the sacking of 5,300 employees.

The conspiracy happened between 2011 and 2016 when employees at Wells Fargo - whose biggest shareholder is billionaire Warren Buffett - opened two million fake accounts that led to bank employees gaining bonuses for meeting sales targets.

The unauthorised deposit and credit accounts were secretly funded with customers' money.

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The announcement of the salary forfeit comes ahead of Mr Stumpf's appearance before a senior political committee where he is expected to face a bipartisan grilling similar to that he experienced last week from the Senate Banking Committee.

At last week's hearing, Republican senator Bob Corker said it would be "malpractice" if Wells Fargo did not ensure managers were punished financially for their part in the fraud.

Democratic senator Elizabeth Warren told the Wells Fargo boss he should resign and "give back the money you took while the scam was going on".

An independent in-house investigation is to be carried out during which time Mr Stumpf will not receive a salary. Nor will he receive a bonus for 2016.

Independent director Stephen Sanger said: "We are deeply concerned by these matters, and we are committed to ensuring that all aspects of the company's business are conducted with integrity, transparency and oversight."

While the board did not directly mention the scandal for which it is already due to pay more than $185m (£142m) in fines, it said it would take "all appropriate actions to reinforce the right culture and ensure that lessons are learned".

The bank holds some 40 million accounts for individual citizens across the US and is the nation's biggest mortgage lender.

Mr Stumpf, who has been at the bank for 34 years and CEO since 2007, has until now been admired for keeping Wells free of scandal.

The bank did not invest in as many toxic mortgages in the 2000s as its counterparts, and its CEO initially refused to take bailout money from Washington before finally accepting it in a sign of solidarity.

Former head of community banking Carrie Tolstedt is also to give up $19m (£14.6m) of her pay, as well as foregoing a bonus and any severance pay.