Wells Fargo Directors Notch Strong Approval Despite Protests, Settlement with Federal Regulators
April 28, 2018
Embattled Wells Fargo reported positive preliminary proxy voting results, including almost normal levels of shareholder support for its entire slate of directors even as the company faced protests over employee and CEO compensation and agreeing to a $1 billion settlement with the federal government over its 2016 cross-selling scandal. With the company’s various investigations and scandals and resulting damaged reputation, certain employees reportedly took to the company’s internal messaging platform to protest the company’s CEO compensation and pay ratio of 291. According to Reuters, the company closed the online notice board after several days, stating that some messages were against company policy. Reuters indicated that when asked about the removal of the online forum, representatives of the Bank responded that they would “continue to invite team member participation and encourage dialogue,” although elimination of a main channel of feedback could spark further negative employee responses, given the broader internal and external contexts. The protests of the company’s employee compensation strategies come as the Committee for Better Banks, a “coalition of bank workers, community and consumer advocacy groups, and labor organizations” is pressing Wells Fargo to raise the bank’s minimum wage to $20 and “a recognition of workers’ right to organize”. Additionally, over 100 protestors showed up at the company’s annual meeting some of whom took issue with the company’s executive and employee compensation policies. Despite the protest outside and inside the meeting, Wells’ shareholders were more accepting of the company’s forward-looking strategy. All of Wells’ directors received at least 89.9% support. Say on Pay results were not available at the time of this update, but both Glass Lewis and ISS recommended shareholders support the company’s pay package.