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. Even though the bank took back more than $180 million in executive pay over the phony accounts scandal, angry shareholders still placed more of the blame on the banks board of directors.
Reports say a proxy adviser had earlier recommended that 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 that 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 % of the vote. It is reported that New York City Comptroller, Scott Stringer, voted against 10 of the directors and called the results evidence that "investors had lost faith" in the board. It is also reported that CEO Sloan, who joined the board in October of last year, got 99% of the shares voted at this meeting 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, despite concerns over the firms handling of the scandal over the fake accounts and the oversight leading up to it. Democratic U.S. Senator Elizabeth Warren wrote a letter on Tuesday 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 were appropriate".
In a separate story, CNN reported on April 10th in its money newsletter that a 2004 internal Wells Fargo report warned that employees had an "incentive to cheat" based upon fear of losing their jobs because they felt that they could not meet the bank’s unrealistic sales goals.
Speaking of employee terminations, that same report found that "mass terminations for sales abuse went back at least to 2002, and continued sporadically over the next 10 years." Where some of those cases went to court, 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 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?