'Wells Fargo should change today': Shareholders disrupt bank's annual meeting

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DALLAS — Nearly a dozen shareholders disrupted opening remarks at Wells Fargo’s annual meeting here on Tuesday, pressing executives to answer for a series of scandals that have rocked the bank.

After it was discovered in 2016 that employees were opening bogus accounts to meet aggressive sales goals, Wells has since settled lawsuits related to allegations of overcharging borrowers, including veterans, for auto insurance and home loans as well as making false certifications over Federal Housing Administration mortgages. The scandals have already cost the bank two CEOs — John Stumpf, who was ousted in 2016 after the phony accounts came to light, and Tim Sloan, who stepped down last month.

“Wells Fargo should change today!” one shareholder shouted as she was ushered out with the help of Dallas-Fort Worth airport security.

Patrick T. Fallon/Bloomberg

Interim CEO C. Allen Parker called for shareholders not to disrupt the meeting until their questions could be heard.

“I am committing to address the mistakes of the past,” Parker said.

Betsy Duke, the chair of Wells Fargo's board, did not say during the meeting when the company would replace Sloan with a permanent chief executive.

“The role of CEO of Wells Fargo should attract the top talent in banking,” Duke said.

As one shareholder was escorted out, another investor told her to "go to Bank of America."

After the initial protests from shareholders settled down, other investors — some of whom were former employees at the bank — raised personal issues with executives.

“Your reputation is worse than the tobacco companies,” one shareholder said.

The meeting may make it even harder for the bank to find a new top executive. The run-in with shareholders threw a spotlight on Parker for the first time since taking the new role. He had been Wells’ chief counsel.

Parker was even pressed by shareholders over how much compensation he reported to the IRS, which he said was about $1.5 million.

Wells faces the challenge of finding someone reputable enough to not only defuse lingering public outrage, but to persuade the Federal Reserve to lift the cap on the bank’s assets. The Fed made the rare move of imposing the cap last year to force the Wells board to toughen oversight and risk management. Sen. Elizabeth Warren, D-Mass., has urged the Office of the Comptroller of the Currency to intervene in the CEO search.

Some shareholders said the board should consider hiring a chief executive from outside the industry. Duke would not commit to that, but did reiterate that the next CEO would come from outside the bank.

During the meeting, Parker touched on efforts by the OCC to revamp the Community Reinvestment Act. Wells received a "needs to improve" rating in 2017 for its CRA efforts. Parker said the focus should be on the CRA's "original purpose."

Shareholders re-elected the existing board of directors with the addition of Wayne Hewett, elected by the board in January to replace Karen Peetz, who retired. Hewett had been the chief executive of a German packaging company.

Shareholders voted against proposals to require the bank to make additional reports on incentives it sets for workers and any gap in pay between men and women. The bank made changes in 2017 to how it paid branch employees to curb incentives for opening new accounts. At least one employee at the meeting said the bank had gone too far by eliminating bonuses for previous top performers. Several called for a raise in base pay to make up for the cuts.

An environmental activist pressed executives about Wells Fargo’s role in financing oil and gas projects that threaten the Arctic’s fragile environment. Parker said the bank will continue to finance fossil fuel companies, but indicated it is reviewing any potential deals in question.

“We are looking currently at the Arctic wildlife refuge issue,” Parker said.