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Wells Fargo shareholders demonstrate their discontent

Shareholders in scandal-hit US bank Wells Fargo gave the company a signal of their dissatisfaction in voting at its recent AGM.

While the re-election of the directors was passed with the majority of votes cast the proportion in favour for many of the directors was considerably lower than normal.

The chairman of the board, Stephen Sanger received 56% support. Meanwhile Frederico Pena who is chair of its corporate responsibility (CR) committee had a 54% backing; Cynthia Milligan chair of the credit got 57% support and Enrique Hernandez chair of the company’s finance committee and its risk committee had 53% of votes in favour. Milligan and Hernandez are also members of the CR committee.

Other directors received slightly more support including Lloyd Dean (62%), James Quigley (65%), Susan Swenson (67%), John Chen (70%) and John Baker (70%) but only three directors got the normal 99% support for their re-election that would normally be expected. However, shareholders did back the company’s remuneration report with a 96% vote in favour.

Wells Fargo

Wells Fargo Fake Accounts by the Numbers Source: http://www.creditcards.com

Following the meeting Sanger said: “Wells Fargo stockholders today have sent the entire board a clear message of dissatisfaction. Let me assure you that the board has heard the message, and we recognise there is still a great deal of work to do to rebuild the trust of stockholders, customers and employees.

“In our conversations with stockholders, many have told us they support the substantial and wide-ranging actions taken by the board and management over the last seven months to address the root causes of sales practice issues, enforce accountability and ensure that such improper behaviour is not repeated. Yet they also feel the understandable need to hold the entire Board accountable for not moving quickly enough before that to address these issues – and that is the reason why all except our newest directors received support from 80 percent or less of shares voted today.

“The Board is steadfast in our commitment to continue to strengthen oversight and accountability while working closely with management to keep improving Wells Fargo. We thank the stockholders who supported us and we will continue our engagement with stockholders and other stakeholders in the months and years ahead.

Last year John Stumpf, was forced to quit as chairman and chief executive of Wells Fargo following admissions of fraudulent activities, including the opening of customer accounts without permission.

What do you think?