WELLS SLUGFEST
15 on board spared as shareholders cry foul
There’s a holdup on the stagecoach!
Chaos erupted during Wells Fargo’s annual meeting on Tuesday as angry shareholders refused to sit down and shut up over the board’s responsibility for the fake-accounts scandal that has tainted the bank’s reputation.
In the end, all of the bank’s 15 board members retained their jobs. The vote was a remarkable show of the different standards held by investors like billionaire Warren Buffett — the bank’s largest shareholder who was said to have voted to keep the board intact — and smaller ones who demanded more accountability.
Still, while Chief Executive Tim Sloan and two other recently elected members got 99 percent of the vote, one director received just 53 percent, and none of the other dozen got more than 80 percent, Wells Fargo said.
Corporate-governance experts say directors with less than 80 percent of the vote should consider stepping down.
“That’s extremely low,” Dick Bove, analyst at Rafferty Capital Markets, told The Post.
Chairman Stephen Sanger, who only got 56 percent of votes cast, called the blistering results a “clear message of dissatisfaction.” Long-serving di- rectors Enrique Hernandez Jr., Cynthia H. Milligan and Federico F. Peña all got less than 60 percent of the vote.
During the first minutes of the meeting, a shareholder spurred mayhem as he demanded that board members stand up and tell investors what they knew and when they knew it about the scandal, which led to the bank’s ouster of its previous CEO, John Stumpf.
“Let them speak! Let them speak! Or are they just mouthpieces for the executives who allowed these predatory prac- tices to occur?” said Bruce Marks of the Neighborhood Assistance Corporation of America.
Sanger tried to get Marks to sit down and wait until a specific Q&A session, telling him he was “out of order.” But for nearly 10 minutes the share- holder refused to follow the rules of the board meeting.
“Wells Fargo has been out of order for years, and your response is, ‘Well, we’re sorry,’ ” Marks yelled. “Well, that’s not good enough!”
Sanger, in what may be an unprecedented move for a major bank, then recessed the meeting briefly and kicked out Marks.
Nevertheless, after the meeting was reconvened, other shareholders stood up to hijack it.
“We elected you to protect us!” one shareholder, Fred Hornbuckle, said.
Bove said the disruptions were reminiscent of the antics of Evelyn Davis, a notorious gadfly who rankled CEOs at annual meetings for decades.
“Everybody gets to piss on management, which the American public wants to see,” but the board walks away effectively unscathed, Bove said. “They blew their tops, they screamed, but nobody cares.”
The nearly three-hour meeting was the first since the bank settled last year with government regulators after the bank fired 5,300 employees for creating at least 2.1 million fake accounts in customers’ names.
Held in Ponte Vedra Beach, Fla., the meeting was the first major test for the board, 80 percent of which proxy adviser ISS said deserved the boot.