Ditch 12 Wells Fargo execs, firm urges

CHARLOTTE, N.C. — A proxy advisory firm on Friday urged shareholders to vote against 12 of Wells Fargo’s 15 directors over the bank’s sales scandal.

In a report, Institutional Shareholder Services said the 12 members of the board’s audit, risk and human resources committees “failed over a number of years to provide a timely and sufficient risk oversight process that should have mitigated the harmful impact of the unsound retail banking sales practices that occurred from 2011-2016.”

The firm recommended yes votes for the three other board members — new Chief Executive Officer Tim Sloan and newcomers Karen Peetz and Ronald Sargent — at the bank’s annual shareholder meeting April 25 in Florida. Proxy advisory firms such as Institutional Shareholder Services play an important role in shaping the voting of big institutional investors such as pension funds.

In September, regulators fined San Francisco-based Wells Fargo $185 million to settle allegations that its employees opened as many as 2 million fake accounts to meet high-pressure sales goals. The scandal has tarnished the bank’s reputation, cost former CEO John Stumpf his job and spurred congressional hearings and new investigations.

In a statement, the Wells Fargo board responded sharply to the report, highlighting its efforts to overhaul the bank’s operations.

“The extreme and unprecedented [Institutional Shareholder Services] voting recommendation on directors fails to recognize the active engagement of the Board and the substantial actions it has already taken to strengthen oversight and increase accountability at all levels of Wells Fargo, including important improvements to corporate governance,” the statement said.

— Charlotte Observer