By: Dr. John E. Warren
(NNPA) As if the stories of the sins and lawsuits of Wells Fargo were not enough, the shareholders vented their reactions at the annual shareholders meeting held in Ponte Verde Beach, Florida at the Sawgrass, Marriott on April 25. Angry shareholders demanded to know where the 15 member Board of Directors were when an estimated 5,300 employees opened as many as 2 million fake accounts for customers.
The annual meeting was a lively one as some shareholders questioned board members and others spoke of replacing all 15 with new or fresh faces. Although Wells Fargo fired thousands of employees including the former CEO and the consumer banking chief – that was not enough to satisfy the shareholders. Even though the bank took back more than $180 million in executive pay received over the phony accounts scandal, angry shareholders still demanded more accountability from and more blame on the bank’s board of directors.
Reports say a proxy adviser earlier recommended shareholders vote to replace at least 12 of the 15 board members of the Wells Fargo board. At one point during the board meeting, it was reported the board members were fighting for their jobs. Although all were eventually re-elected, the vote was much lower than anticipated with four of the board members receiving less than 60 percent of the vote.
It is reported that New York City Comptroller, Scott Stringer, voted against 10 of the directors and called the results evidence “investors had lost faith” in the board. It is also reported CEO Timothy J. Sloan, who joined the board in October of last year, received 99 percent of the shares voted at this meeting for Sloan to keep his job. At least one shareholder questioned who was speaking up for “the employees who were terminated and now live in fear?”
In an action questioned by some, the same board approved KMPG’s role as the bank’s independent auditor. This vote came despite concerns over the firm’s handling of the scandal over the fake accounts and the oversight leading up to it. Democratic U.S. Senator Elizabeth Warren wrote a letter recently complaining of “KPMG’s failure to prevent or even publicly disclosed the fraud that affected hundreds of thousands of customers.”
KPMG has said in its own defense that it takes its role as Wells Fargo auditor “very seriously” and its review of the bank’s practices was appropriate.
In a separate story, CNN reported on April 10 that in a 2004 internal Wells Fargo report warned employees had an “incentive to cheat” based upon fear of losing their jobs. This was a fear resulting from the belief they were unable to meet the bank’s unrealistic sales goals.
Speaking of employee terminations, the same report found “mass terminations for sales abuse went back at least to 2002, and continued sporadically over the next 10 years.” A few of these terminations resulting in legal action and the records show judges commenting on the sales practices.
The one question remaining after this annual board meeting and the reinstatement of directors is will anything really change at Wells Fargo? Especially when one considers the consistent pattern of behavior or what might be called misbehavior through more than 10 years of government fines, lawsuits, losses and settlements.
Dr. John E. Warren, is the Publisher of the San Diego Voice & Viewpoint Newspaper.