'Wells Fargo, you’re the worst’: Scenes from testy annual meeting
The rolling caravan of outrage at Wells Fargo rumbled into Iowa on Tuesday.
Activists descended on the bank’s annual meeting in Des Moines to air a diverse set of grievances to CEO Tim Sloan and board chair Elizabeth “Betsy” Duke. They chastised Wells Fargo for its various consumer scandals, its use of arbitration to settle customer disputes, and its business ties to gun manufacturers, payday lenders, fossil fuel companies and private prison firms.
Like the bank’s 2017 meeting in Florida, this one was interrupted by protesters, though not until close to its conclusion, when some attendees began chanting: “Wells Fargo, you’re the worst. Put the people and planet first.”
The most prominent critic was California State Treasurer John Chiang, who called for Sloan to be removed as CEO. Chiang, a Democrat who is running for governor of the Golden State, made similar remarks Monday at an event in San Francisco.
“Mr. Sloan’s move-along, there-is-nothing-to-see-here approach is a dog that doesn’t hunt,” Chiang said Tuesday in Des Moines.
“He has proven to be too much the champion of the old guard to be the change agent needed. Sloan says, ‘I don’t think we have a culture problem.’ Yet regulators have slapped the bank with penalties rarely seen in the annals of American banking.”
Within in the last 18 months, Wells has paid $185 million in penalties over millions of accounts that were opened without customers’ permission, plus $1 billion for abuses in mortgage and auto lending. In February, the Federal Reserve Board took the unprecedented step of ordering Wells to cap its asset growth.
Duke, who joined Wells Fargo’s board in 2015 and became its chair in January, defended Sloan, a 30-year company veteran.
“I think Tim’s time with the company is an advantage, and his commitment to change is unwavering,” said Duke, a former Federal Reserve Board governor, in remarks that drew applause from the audience. “And I think he’s the right CEO for Wells Fargo.”
One positive sign for the embattled bank was that its shareholders demonstrated far greater patience than outside activists on Tuesday regarding the pace of internal change.
A year ago, Wells shareholders expressed their dissatisfaction with several longstanding members of the company’s board, and seven of the company’s 15 directors have since left the board. On Tuesday shareholders re-elected all 12 of the directors who were on the ballot with more than 89% of the vote, according to the company.
By a similarly wide margin, shareholders also affirmed Wells Fargo’s choice of KPMG as its auditor, despite a contrary recommendation by the proxy advisory firm Glass Lewis.
Three shareholder proposals that were opposed by Wells Fargo’s board — including one that sought to tie the bank’s executive compensation policy to social responsibility efforts — were defeated.
Wells had sought to head off some dissent at the annual meeting by agreeing to conduct a review of its business standards that was sought by certain religiously affiliated investors.
That review, scheduled to be published later this year, is meant to analyze systemic cultural and ethical root causes of the bank’s recent scandals.
Sister Nora Nash of the Sister of St. Francis of Philadelphia, who championed the proposal, admonished the bank during Tuesday’s annual meeting.
“This company has harmed and wounded millions of its customers,” said Nash, who is also a member of a stakeholder advisory council that Wells announced in December.
“They deserve an honest reckoning of transgressions. And more importantly, they deserve a definitive apology and a process to wholeness.”
Wells Fargo also came under fire for its use of mandatory arbitration clauses, which prevent customers from banding together in class-action lawsuits. A study published Monday by the Consumers for Auto Reliability and Safety Foundation found that only two consumers won in arbitration last year against Wells Fargo.
Sloan said that Wells has agreed to pay for mediation in instances where bank employees set up fake customer accounts, if an amicable solution cannot be reached with the customer. But he also defended the bank’s broader use of mandatory arbitration clauses.
When questioned about Wells Fargo’s relationships with gun manufacturers and private prison companies, Sloan suggested that activists should lobby lawmakers rather than bankers.
“There’s an overcrowding problem in this country related to prisons,” Sloan said. “And to deal with that, our elected officials, our government, has decided to contract with private prisons. We’re not involved in that decision.”
Sloan also stood firm in the face of activists who oppose the Dakota Access Pipeline and condemned Wells Fargo for its role in financing the controversial project.
He pointed to the bank’s commitment, announced last week, to provide $200 billion in financing to sustainable businesses and projects by 2030, with more than 50% of that commitment focused on clean technology and renewable energy transactions.
At the same time, Sloan refused to apologize for the bank’s role in financing oil extraction, asking the audience to show by a show of hands if they traveled to Tuesday’s meeting by either car or airplane.
“We’re in the midst of a transition in this country. We are still dependent on hydrocarbons,” he said.
One poignant moment came when a financially strapped homeowner from California recalled that she traveled to Wells Fargo’s 2017 annual meeting in Ponte Vedra Beach, Fla., to plead with the bank to find a way to allow her to keep her home. Nonetheless, she said that she subsequently lost her home.
“I’m sorry that’s been the result,” Sloan told the woman, noting that the loan was owned by investors and only serviced by Wells Fargo. “Because we didn’t own that loan, we couldn’t help you.”
Protesters also gathered outside the meeting, directing arrows and critical signs at a stagecoach, Wells Fargo’s iconic symbol. West Des Moines is the headquarters of Wells Fargo’s home-lending division. The bank has approximately 16,000 employees in Iowa.