As part of an annual shareholders meeting last Tuesday, the wells fargo Board Of Directors faced angry investors and shareholders during a re-election vote. Various reports say that the meeting was interrupted by those shareholders to the point where the Chairman Stephen Sanger had to have them removed. But during a statement, he said that the stockholders had made their message of dissatisfaction clear to the entire board.
Prior to Tuesday, it was reported that a few pension fund giants from California and New York were going to vote against most of the 15 board members, which was further confirmed by the New York City comptroller Scott M.
Stringer, who oversees those pension funds. But Warren Buffet's Berkshire Hathaway firm which owns 10 percent of the company's shares, has said that he intended to back the board which might have more influence than those pension fund giants.
Creating fake accounts
Last year it was discovered that Wells Fargo employees created fake accounts using the names of their customers to not only make sales goals but to collect fees. It was reported that the shareholders meeting ran for almost three hours and was frequently interrupted by shareholders who wanted to get answers about the 2.1 million fake accounts that were created. At the time, former Wells Fargo CEO John Stumpf was dragged before the congressional House Financial Services Committee where he was hammered at by most lawmakers, including Senator Elizabeth Warren who told him he needed to step down.
Despite the anger coming from investors and shareholders, Sanger said that they had a lot of work to do to rebuild the trust of the stockholders, customers, and employees. During the meeting, he apparently apologized multiple times for letting them down and said he apologized on behalf of the committee.
Sanger said that one of the shareholders made what appeared to be a "physical approach" to one of the board members before he was removed.
A chief executive of Neighborhood Assistance Corporation of America, Bruce Marks, when told that he was out of order yelled back, "You're saying we're out of order. Wells Fargo has been out of order for years!" He was then ejected from the meeting. Sanger and the Chief Executive Tim Sloan also had other shareholders ejected from the meeting when they ignored pleas to settle down.
No changes to the board
The directors initially received weak support from the adviser Institutional Shareholder Services (ISS) which said they had failed in their oversight duties. Their ratings for the board of directors went as low as 53 percent while many went up to 99 percent approval. Those with a higher percentage were newly added to the board after John Stumpf left. Its been reported that those with lower ratings should consider exiting the board. As for the demands to try and get rid of the entire board, while they've said that they understood the outrage, dismantling the entire board would not be productive.
They've said that the executives had been disciplined enough with taking back Stumpf's golden parachute payment when he resigned and the $110 million in settlement fees.
Six board members will be reaching a mandatory retirement age of 72 over the next couple of years and it's said that the expectations are that they will leave. Sanger did say that they had no intention of replacing any members after the vote since they all barely held on to their jobs.
