Wells Fargo (WFC) executives and investors are expecting some unusual company at this year's annual meeting on Tuesday.
A coalition of activists, clergymen, union advocates and others from across the country is planning to hold a large demonstration at the meeting, to protest an array of concerns including Wells Fargo's foreclosure and lending practices. The meeting is scheduled for Tuesday afternoon in San Francisco.
"We're expecting thousands of people, and we anticipate that a significant number of proxy holders will exercise their legal right in the shareholders' meeting," says Buck Bagot, a longtime San Francisco activist involved with Occupy Bernal in California, one of the groups planning to attend.
A Facebook event for the demonstration lists more than 300 expected attendees for the outside protest. Some protestors who own Wells Fargo shares or who have been authorized to vote on behalf of shareholders are also planning to demonstrate inside the meeting.
Trainings were held for "all of the fighters planning to be inside the meeting on the 24th in the event the meeting is not shut down" and for "anyone who is committed to participating in non-violent direct action on the outside takeover" in the days leading up to tomorrow's shareholders' meeting, according to the Occupy Bernal website.
Banks are already on their toes after shareholders at Citigroup (NYSE: C) rejected the company's executive compensation plan, in a non-binding vote earlier this month.
Such "say on pay" votes are also expected to be the main attraction for SunTrust Banks (STI), BB&T (BBT) and PNC (PNC), which are all hosting their annual meetings on Tuesday.
But the Wells Fargo protestors have other priorities, including the bank's foreclosure practices. While an advisory vote on compensation is mandated by the Dodd-Frank Act, Bagot says executive pay is not expected to be a central issue at the planned demonstration.
"Wells Fargo's abysmal record as a predatory lender and their impact on neighborhoods all over America has caused a great deal of anger in those communities all across the nation. And a large number of those folks are going to come together and express their feelings actively and aggressively at the shareholders' meeting," he says.
Bank spokesman Ancel Martinez defended its mortgage practices, saying that Wells Fargo has "a long history of responsible lending, local community investment and involvement, and we're working with many homeowners to remain in their homes and we've done a number of workshops for principal forgiveness and refinancing."
He adds that Wells Fargo is prepared for the demonstration.
"We're looking forward to hosting our annual shareholder meeting in San Francisco and we're taking the necessary steps to make sure that it will be run smoothly," he says. "Relative to the planned demonstrations, we see them out there. We always respect the rights of Americans to peacefully assemble and we welcome open and collaborative dialogue with our stakeholders."
Shareholders at the meeting will vote on a resolution proposed by a number of pension funds that the bank undertake "an independent review of the company's internal controls related to residential mortgage loan modifications, foreclosures and securitizations, and report to shareholders, at reasonable cost and omitting proprietary information, its findings and recommendations by September 30, 2012," according to Wells' proxy statement.
The bank's board of directors has asked shareholders to vote against the resolution, according to the proxy.
"Our federal banking regulators have completed independent in-depth examinations of the company's mortgage servicing policies, procedures and internal controls, and are overseeing an independent third-party foreclosure review process which includes detailed reviews of samples of our mortgage loan files," the proxy statement says, adding that the review would not be an "effective use" of resources and could "distract" from efforts to respond to any additional requirements from federal regulators.
The proxy statement also notes that shareholders rejected a similar plan last year.
Shareholders will also vote on a resolution requiring the bank appoint an independent director, one who has not previously served as chief executive. The resolution was submitted by activist investor Gerald Armstrong.
"John Stumpf, the current Chairman, Chief Executive Officer, and President, has been with Wells Fargo & Company, or its predecessor entities, since 1982 and this leadership has created a dominance over the board, and harms its ability to prudently control management," the resolution's supporting statement says.
The board of directors has recommended that shareholders vote against the resolution, saying that Wells' "corporate governance structure, including the composition of the board, its committees, and its lead director, already provides effective independent oversight of management," according to the proxy.
Moreover, "the proposal would unnecessarily restrict the board's ability to select the director best suited to serve as chairman of the board based on criteria the board deems to be in the best interests of the company and its stockholders," according to the Wells Fargo proxy statement, which adds that a similar proposal has been voted down consecutively for the past seven years.