Wells Fargo is saying so long to incentive compensation for retail bankers, and the industry may never be the same.

Under pressure from regulators and investors, banks that tout their sales cultures may have no choice but to follow Wells' lead and stop rewarding branch employees for hitting sales targets, industry analysts said Tuesday.

Under Wells' new model, branch employees who now receive incentive pay for selling products like credit cards or overdraft protection will instead be evaluated on such metrics as depth of relationships and customer experience, the bank said.

"Banks are going to take away anything that would ever incent any employee to push products on customers," said Marty Mosby, an analyst at Vining Sparks.

Wells announced Tuesday that it is eliminating sales goals in its branches effective Jan. 1. The move came less than a week after it agreed to pay $190 million to settle claims that branch employees set up roughly 2 million phony bank and credit card accounts in order to meet sales goals. The bank entered consent orders with regulators and has terminated 5,300 employees, or roughly 2% of its workforce, who allegedly engaged in the conduct from 2011 to 2014.

So far, no other banks have said they will stop offering incentive compensation for branch employees, but Scott Siefers, an analyst at Sandler O'Neill, said he expects others to adjust their models.

"Given the magnitude of the problem this is causing for Wells, other banks are going to, out of prudence, examine their policies and procedures," said Siefers, who covers Wells and other large banks.

For some banks, it could be a seismic change that could score them public relations points in the short term but crimp profits in the long run, as retail bankers would no longer have much motivation to sell certain retail products. Eliminating incentive compensation could also cost some banks their top in-branch producers, said Christopher Marinac, a managing principal and director of research at FIG Partners in Atlanta.

"One advantage of working at a big bank is if you perform well, you get paid," Marinac said. "What's to stop another competitor — large, small or in between — from going to your top producers and offering them a better deal?"

Wells, for its part, said that doing away with incentive compensation is the right thing to do.

"We're making this change because we want to make certain that customers have the full confidence that our retail bankers are focused on their best interests," Chief Financial Officer John Shrewsberry said Tuesday during a presentation at an investor conference hosted by Barclays. "We believe this decision is good for customers and our business."

Wells is apparently not the only large bank that has encouraged employees to use high-pressure tactics to meet sales goals. Marketwatch reported Tuesday that a review of the Consumer Financial Protection Bureau's complaint database found thousands from consumers who said banks sold them products they did not want or need.

In an interview Tuesday, a former Dallas-based employee of a large bank that competes with Wells said he was routinely pressured by management to "do whatever was necessary" to hit monthly sales targets, including accepting false identification and opening credit card accounts for customers without their knowledge.

Without referring to any banks in particular, BB&T Chairman and Chief Executive Kelly King said Tuesday that banks are committing "malpractice" when they try to sell customers products before understanding what their needs are. To discourage product-pushing, King said that Winston-Salem, N.C.-based BB&T caps incentive compensation at 10% of employees' salaries.

"We focus genuinely on trying to uncover the clients' needs and let them buy products accordingly," King said during a presentation at the Barclays conference.

Other banks have put policies in place that are designed to ensure employees are not just selling products to meet quotas. Regions Financial in Birmingham, Ala., for example, said that employees are not compensated for sales of credit cards until the cards are activated and used.

"Our incentive plan is designed to ensure that sales credit is not awarded for selling products or services that customers don't use, and we have robust checks and balances in place to deter and detect such activities," said Evelyn Mitchell, a Regions spokeswoman. "We are committed to achieving the right results in the right way."

Andy Peters contributed this story.

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