Wells Fargo ups sales practices settlement to $142 million

A Wells Fargo bank in northeast Jackson Miss. California’s state’s two largest public pension systems said Friday they are voting against nine of Wells Fargo’s 15 directors all of whom are standing for re-election at the company’s annual meeting

An unidentified shareholder quickly interrupted the meeting and shouted demands at Sloan and the board members.

However, one activist fund, CtW Investment Fund, an organization that advises pensions for unions belonging to the Change to Win labor group, plans to vote in favor of incumbent directors. In October, Sloan was named CEO and joined the board as its only non-independent director.

Scott Siefers, an analyst with investment bank Sandler O'Neill, said the vote tally was remarkable for a major bank. All but three directors received support of 80 percent or less. The purchase was disclosed in a filing with the SEC, which can be accessed through this link. But he said the bank has implemented reforms to ensure that doesn't happen again.

As well CalPERS says some directors have been there too long - some have tenures of 12 years or more, "which we believe could compromise director independence".

Though all off the directors of Wells Fargo's board were re-elected, some received unusually low levels of support. Deutsche Bank AG reissued a buy rating on shares of Wells Fargo & Co in a research report on Friday, December 23rd.

The meeting, which ran almost three hours, was repeatedly interrupted by angry shareholders seeking answers about how and why thousands of bank employees were able to open 2.1 million fake accounts in customers' names without their permission.

Wells Fargo has presented the class-action settlement agreement and summary of claims process in the Northern District of California (Jabbari v. Wells Fargo, N.A., et al.) to settle the lawsuit concerning retail sales practices.

A 2013 Los Angeles Times investigation found that bank employees were driven to open the accounts because of onerous sales goals. It also clawed back another $75 million in pay from Stumpf and former community bank executive Carrie Tolstedt, saying both dragged their feet for years about the problems. Wells Fargo & Co's quarterly revenue was down.9% compared to the same quarter a year ago. Tensions were high at the bank's shareholder meeting Tuesday in Florida as shareholders voiced their complaints, prompting Mr. Sanger to halt the meeting for several minutes. Wells' board has advised shareholders to vote against at least two proposals that the proxy firms endorsed.

The bank has changed the way it pays branch employees, reclaimed promised compensation to several executives and apologized to customers after regulators imposed $185 million in fines last September.

"The systemic breakdown that allowed these abuses to take place demands new leadership", New York State Comptroller Thomas DiNapoli said in a statement.

“Our company violated that trust and for that we are deeply sorry, ” he said.

Some investors who voted against directors told Reuters their intention was not to get them ousted immediately, but to signal dissatisfaction with the bank's response to a scandal involving thousands of employees creating as many as 2.1 million unauthorized customer accounts.

The bank's biggest shareholder, Warren Buffett's

The Federal Reserve Board is also releasing the feedback letter issued to the firm, detailing the specific steps taken by the firm to resolve the previously identified deficiencies.

10 a.m.: This article was updated with details on the election results. If you are accessing this article on another domain, it was illegally stolen and republished in violation of United States and worldwide trademark and copyright laws.


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