Published: Wed, April 26, 2017
U.S. | By Eddie Scott

Wells Fargo board members re-elected

The Wells Fargo board narrowly survived a shareholder revolt after nearly half of the votes cast at the bank's shareholder meeting on Tuesday went against the reelection of some of its board directors.

Met by fierce protests both inside and out the annual shareholder meeting in Ponte Vedra Beach, Florida on Tuesday, members of the Wells Fargo board of directors refused to step down despite expressions of outrage and no confidence for their handling of a massive consumer banking scam.

The results were uniformly described as devastating: only three directors received solid support and four, including Sanger, squeaked by with just 53 to 57 percent of votes cast, according to the bank's preliminary tally.

Wells Fargo & Co (NYSE:WFC) last posted its quarterly earnings data on Thursday, April 13th.

A big issue was whether Wells Fargo shareholders would oust the board, as two major proxy advisory firms advised them to vote out at least some of the directors.

Wells Fargo's shareholder meeting was recessed briefly after a representative of a community activist group started asking questions, was told he was out of order and was removed by security.

"Ultimately, he made a physical approach towards our board members".

Minutes after the break, decorum was broken again by another angry shareholder who screamed at the board out of turn.

Wells Fargo's top investor Berkshire Hathaway Inc has already voted in favor of the bank's board.

Milligan, the former dean of the College of Business Administration at the University of Nebraska-Lincoln and the bank's longest-serving board member, was retained with 57 percent of shareholder votes. But in practice, directors who win with less than 80% support should consider exiting the board, said Charles Elson, a University of DE expert on corporate governance.

Other directors who received less than 60% of shareholders' support are Enrique Hernandez Jr., Cynthia H. Milligan and Federico F. Peña.

The board repeatedly from shareholders who want the board replaced. "For that, we are deeply sorry", the Wells Fargo chairman said. The agencies' board of directors each voted unanimously that the latest plan "adequately remediated the remaining deficiencies" from the 2015 plan.

In April 2016, the FDIC and Federal Reserve Board announced that five of the nation's eight largest financial institutions had failed to adequately prepare a living will. Compare that to the average for board members elected at all S&P 500 companies.

"You're defending the board, but who is defending the employees who got fired?" one shareholder said, noting the high-pressure culture and unrealistic sales goals. Sloan said the sham accounts didn't affect the company's financial controls and that KPMG "did their job properly". "There are thousands of employees who were terminated and who still live in fear now".

In December 2016, the agencies determined that Wells Fargo had not remedied two of the three deficiencies identified previously by the agencies and imposed restrictions on the growth of the firm's global and non-bank activities.

The massive scandal and fallout led to the resignation of former CEO John Stumpf and Tuesday's meeting was expected to be the moment that the directors would be held to account. "In my opinion, the board needs to refresh itself with new directors, new blood". Elizabeth Warren, D-Massachusetts, a fierce critic of Wall Street, and Sen.

Bruce Marks of NACA, the Neighborhood Assistance Corporation of America, said he wanted to hear from each of the directors whether they were "complicit and incompetent" in the bank's sales practices scandal. Hilton Capital Management LLC bought a new position in shares of Wells Fargo & Co during the third quarter worth $642,000.

KPMG has said it takes its role as Wells Fargo's auditor "very seriously" and its review of the bank's practices were appropriate.

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