Bank Regulation

Wells Fargo CEO Wants No Board Members Expelled

The fallout from last year’s Wells Fargo scandal continues. Most recently, Wells’ CEO Tim Sloan looked to persuade investors to not expel board members at the lender’s upcoming annual meeting.

“It would be a shame if any one of our directors didn’t receive an overwhelming majority of the vote,” Sloan told Bloomberg News. “I think that would be a mistake.”

Not everyone feels the same.

Institutional Shareholder Services Inc. (ISS), an influential counselor to the investors deciding the board’s fate, has advocated for the removal of 12 out of the 15 directors come April 25.

On the matter, ISS wrote, “The board failed to implement an effective risk management oversight process in a timely way and that could have mitigated the harm to its customers, its employees and the bank’s brand and reputation. The long-standing sales practices and unchecked incentive program evidences a sustained breakdown of risk oversight on the part of the board.”

Sloan told Bloomberg that this mass removal would be “crazy” and “absolutely irresponsible.”

Earlier this month, Wells Fargo’s board moved to claw back an additional $75 million in executive pay from former CEO John Stumpf and former head of retail banking Carrie Tolstedt.

The Office of the Comptroller of the Currency also recently removed Wells Fargo’s most senior bank examiner as a result of the bank’s scandal that surfaced last year. Bradley Linskens had been responsible for day-to-day supervision of the financial institution since 2006.

The controversy all stems from Wells Fargo employees trying to meet aggressive internal sales targets by applying for about 565,000 cards, as well as $1.5 million deposit accounts, allegedly without receiving customer consent. Those consumers then racked up annual fees and other charges on cards.

Wells Fargo recently came to a $110 million settlement with customers whose personal information their staff used to set up fake bank and credit card accounts. This deal will close dozens of lawsuits that have been filed across the U.S.

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