At Wells Fargo’s annual shareholder meeting in April, shareholders voted to re-elect all 15 of the bank’s directors—but barely. In a sign of discontent over aggressive sales practices that have cost the bank U.S.$185 million in fines to date, Wells’ chairman was re-elected with only 56 percent of the vote and its head of the risk committee scraped through with only 53 percent. Compared to the 95 percent or more considered normal for corporate elections, the vote was seen as a “stinging rebuke” to the scandal-ridden bank.
The meeting follows a report by Wells’ board, which found that the root cause of the sales practices scandal was the distortion of the bank’s sales culture and performance management system. This, “combined with aggressive sales management, created pressure on employees to sell unwanted or unneeded products to customers and, in some cases, to open unauthorised accounts,” the report stated. In response to these findings, the bank expanded a class-action settlement to customers affected by the scandal as far back as May 2002.
