Board of directors dealt low-confidence vote, met with fierce protests in and outside of annual shareholder meeting
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 meeting marked the first for shareholders since the Consumer Financial Protection Bureau (CFPB) last September exposed the bank for opening millions of unauthorized accounts, which saddled many customers with fees and blemishes on their credit score, all in the name of meeting unrealistic sales quotas.
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.
Sen. Elizabeth Warren (D-Mass.) issued a series of tweets during the three-hour long meeting, advising those voting to demand accountability.
Inside the meeting, multiple shareholders stood up to express anger at the directors.
The New York Post reports:
During the first minutes of the meeting, shareholder Bruce Marks of the Neighborhood Assistance Corporation of America spurred mayhem as he demanded that board members to stand up and tell investors what they knew and when they knew it about the scandal […]
“Let them speak! Let them speak! Or are they just mouthpieces for the executives who allowed these predatory practices to occur?” Marks said. [Chairman Stephen] Sanger tried to get Marks to sit down and wait until a specific Q&A session, telling him he was “out of order.” […]
“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!”
Sister Nora Nash, director of corporate responsibility for the Sisters of St. Francis of Philadelphia, also denounced the board, saying they “failed to set the tone and the culture” that it should have, according to NBC News.
At one point, shareholders introduced a motion to break up the banking giant. Rachel Curley, democracy associate with the consumer advocacy group Public Citizen, said of the request: “One of the key arguments for reducing the size of Wells Fargo… is that the bank is too big to manage. The massive cross-selling fraud attests to this problem.”
Another proposal which recommended the bank drop its funding of the Dakota Access Pipeline (DAPL) was also tabled. “You can drink water. You can’t drink oil,” Robert Taken Alive, a member of the Standing Rock Sioux Tribal Council, said during the meeting. “We’re looking for action. We’re not looking for policy or paper.”
Outside the meeting, campaigners held a day of action to draw attention to the “corrupt and unethical business practices” of the bank—from an overnight anti-pipeline protest at a New York City location to a flyover banner above the Florida meeting, which drew attention to Wells Fargo executive Jeff Grubb’s support for an anti-LGBT extremist group. Others took to Twitter to express their outrage with the banking giant, using the hashtag #ForgoWells.
“Around the country, people are saying that we’ve had enough of Wells Fargo really doing everything it can to extract as much value out of our communities as possible, and we’re fighting back,” Saqib Bhatti, director of the ReFund America Project who also is working on the Forgo Wells campaign, told CounterSpinrecently, explaining that the campaign “is really about getting cities, states, counties, school districts across the country to stop doing business with Wells Fargo.”
In addition to the day of action, Forgo Wells is circulating a petition that, Bhatti explained, “calls on the bank to divest from Dakota Access Pipeline, to stop investing in private prisons and immigration detention centers, to stop funding the payday lending industry, to stop its tremendous lobbying that it’s doing to try to influence our politics, to stop its predatory foreclosure practices, and a number of other demands that we raise.”
Ultimately, “all but three of the directors received less than 81 percent of the shares cast, with risk committee chairman Enrique Hernandez Jr. receiving the lowest tally, 53 percent,” reported Deon Roberts and Rick Rothacker with the Charlotte Observer‘s “Bank Watch,” who described the vote as “a strong rebuke.”
“It’s extremely rare for corporate directors to be voted out or even to have a poor showing in annual shareholder votes,” they noted. “Running unopposed, they typically receive voting percentages in the high 90s.” Chairman Sanger only received 56 percent. The three directors who fared well were all hired in the wake of the scandal.
The embattled board seemed to hold on with the help of Warren Buffett, whose company Berkshire Hathaway owns about 10 percent of shares.