Shareholders of bank Wells Fargo & Co. vented their anger at the company’s board of directors during the Tuesday annual meeting, asking pointed questions about their knowledge of the recent scandal that cost the CEO his job and led to hundreds of millions in fines.
James Rufus Koren of the Los Angeles Times had the news:
At the company’s annual meeting, held at a resort outside Jacksonsville, Fla., shareholders reelected the bank’s board members — but with remarkably little support, denying the kind of near-unanimous approval that directors at large public companies are accustomed to.
Angry shareholders at the resort ballroom let loose with a long list of personal grievances and interrupted board members more than once.
They demanded to know why the board didn’t act sooner to put a stop to employees’ practice of opening accounts without customers’ permission, something that the bank recently admitted dates back to at least 2002.
“If somebody wanted to know, they could have known,” one shareholder shouted well before the meeting’s question-and-answer session. “So why didn’t you see it?”
The bank’s three newest directors, all of whom joined the board in the months after the scandal came to light, each received support from 99% of shareholders. That includes Timothy Sloan, who took over as chief executive and joined the board in October after the resignation of former Chief Executive John Stumpf.
Stacy Cowley of the New York Times reported that some board members barely received a majority of votes:
But the board’s chairman, Stephen W. Sanger, was re-elected with 56 percent of the vote. Enrique Hernandez Jr., the head of the board’s risk committee, was elected with 53 percent of the vote in his favor, the thinnest margin of any director.
Wells Fargo has been in turmoil since its admission in September that over the course of several years, employees trying to meet aggressive sales quotas had opened as many as two million fraudulent accounts. The company paid $185 million to settle cases brought by two federal regulators and the Los Angeles city attorney and refunded $3.2 million to customers who were charged fees on unauthorized accounts.
Wells Fargo has made extensive changes since then, including the replacement of its chief executive and the leader of its retail bank, alterations to governance and risk-management structure, and the elimination of sales goals for its retail bank employees.
“There is no doubt that the last seven months have been one of the most difficult periods in our company’s 165-year history,” Mr. Sloan said at the start of the meeting on Tuesday. “I can assure you that we are facing these problems head-on and that Wells Fargo is emerging a much stronger company.”
Christine Wang of CNBC.com reported that the CEO promised to fix the company’s problems:
Sanger said on CNBC’s “Power Lunch,” however, that shareholders weren’t sending a message to any particular director.
“They were voting to send a message to the board, and we clearly got that message that we need to resolve these problems and continue to make Wells Fargo a better bank,” Sanger said.
Sloan who was appointed CEO when longtime executive John Stumpf retired in the fallout of the debacle, said the board hears the message that shareholders are sending.
“We’re going to be very responsive, not only at the board level, but also at the management level to make sure that we fix everything that was broken and build a better Wells Fargo — and we’re doing that every day,” Sloan said.