trending Market Intelligence /marketintelligence/en/news-insights/trending/mPvTXq-Ic4qQ76ALbl-6FA2 content esgSubNav
In This List

Wells pushes back on shareholder demands for details of fake-accounts scandal


Street Talk | Episode 94: Recessionary fears in ’22 overblown, Fed could overtighten


Insight Weekly: Ukraine war impact on mining; US bank growth slowdown; cloud computing headwinds


Investment Banking Essentials Newsletter April Edition - 2022


Banking Essentials Newsletter April Edition - 2022

Wells pushes back on shareholder demands for details of fake-accounts scandal

Wells Fargo & Co. is resisting a few shareholder proposals demanding details in connection with its fake-accounts scandal, The Wall Street Journal reported.

The Journal reported that the San Francisco-based company has asked the Securities and Exchange Commission to exclude several duplicate proposals, while their filers argue there are differences in terms of accountability demanded in connection with the fake-accounts scandal.

The company's shareholders are demanding that the company provide additional information on directors' competence, employees' bonuses and the company's risk management, during its annual meeting.

Meanwhile, the company has requested that the SEC keep these shareholder proposals out of its proxy statement. The company noted that these proposals are a duplicate of an already-accepted proposal by the Sisters of St. Francis of Philadelphia and other co-filers including Walden Asset Management, the Journal reported. The proposal asked the company to provide more information on the root cause leading to the fraudulent activity, in addition to the risk management and control processes implemented by the company. The proposal also asked the company to provide proof that Wells Fargo has aligned its incentive systems with customers' best interests.

However, a letter from the New York State Common Retirement Fund opposed the company's request and noted that the new shareholder proposals request detailed and specific information, the Journal reported, having reviewed letters with the information. For instance, the New York State Common Retirement Fund proposed that the company should disclose the employees whose compensation plans might have exposed the bank to material financial loss, the newspaper added. Furthermore, a proposal by Harrington Investments asked the company to provide information on its incentives or activities posing most risk.

As part of its continuing efforts to regain customers' and regulators' confidence following the sales-practice scandal, the company has established a Rebuilding Trust office and an Office of Ethics, Oversight and Integrity. In addition, during a conference presentation Nov. 3, 2016, President and CEO Timothy Sloan and and retail bank chief Mary Mack outlined actions underway at the company to mitigate the fallout from the scandal.

Further, Sloan and vice chairwoman Elizabeth Duke are scheduled to meet Sister Nora Nash, who filed the proposal on behalf of the Sisters of St. Francis, and about 20 Wells Fargo investors, Feb. 6.

A company representative told the Journal that the company routinely files no-action letters in response to shareholder proposals. He also said the company often engages with its investors to get their thoughts on governance and related matters.