Wells Fargo Elevates Former Fed Governor Elizabeth Duke to Chairman Role
August 15 2017 - 4:32PM
Dow Jones News
By Emily Glazer
Wells Fargo & Co. said Elizabeth Duke would replace its
chairman, Stephen Sanger, on Jan. 1, making the former Federal
Reserve governor the first woman to hold a top board role at one of
the nation's largest banks.
The San Francisco lender, which has battled a sales-practices
scandal and other problems in recent months, announced the
promotion of Ms. Duke, the board's vice chairman, Tuesday along
with other changes.
The moves represent the bank's strongest response yet to the
high percentage of shareholders who voted against re-electing
directors at its annual meeting in April, a clear sign of
discontent after years of Wells Fargo being an investor
favorite.
Mr. Sanger, 71, will leave after a tumultuous period presiding
over the board's response to the fake-account scandal that last
year led to the departure of former Wells Fargo Chairman and CEO
John Stumpf.
Mr. Sanger, a former General Mills Inc. CEO, is one of three
directors who will retire at the end of 2017, the company said. The
other two are Cynthia Milligan and Susan Swenson, both of whom
joined the board in the 1990s. Mr. Sanger would have hit the
board's mandatory retirement age next year and is stepping down
about four months early.
The bank also named its newest director, Juan Pujadas, who will
start Sept. 1. Mr. Pujadas recently retired from
PricewaterhouseCoopers LLP, the accounting giant where he had been
a principal and held numerous senior roles. Some of the coming
changes were outlined in a Wall Street Journal article last
week.
Wells Fargo, the third-biggest U.S. bank by assets, has spent
most of the past year trying to put last fall's sales-practices
scandal behind it. Employees of the bank opened as many as 2.1
million accounts without customers' knowledge, sparking public and
political outcries as well as numerous investigations.
More recently, the bank has said even more customer accounts may
have been impacted. It also is facing new problems in its
auto-lending unit over insurance policies potentially involving
thousands of borrowers. The bank has said it would reimburse
customers for around $80 million.
Ms. Duke became vice chair last October, when Mr. Stumpf
abruptly retired in the face of the sales-practices scandal. Ms.
Duke has served on the Wells Fargo board since January 2015.
She was a governor of the Federal Reserve from 2008 to 2013, the
seventh woman to be appointed to the board and joining in the thick
of the financial crisis.
"She developed a reputation for being extremely careful," and
being "skeptical of some of the extreme moves the Fed took" around
the financial crisis, said Peter Conti-Brown, a Fed historian and
assistant professor at The Wharton School of the University of
Pennsylvania.
Before her work at the Fed, Ms. Duke had served as an executive
or CEO at a number of community banks in Virginia, where she is
still based. Mr. Sanger said in a statement that she was the
unanimous choice to lead the board. Timothy Sloan, Wells Fargo's
CEO, added in the statement that her "regulatory expertise has been
invaluable."
The bank said the board had been advised on the matter by
another former regulator, former Securities and Exchange Commission
chairman Mary Jo White. Ms. White is now a senior partner at law
firm Debevoise & Plimpton LLP.
Wells Fargo also announced changes to key spots on board
committees. As of Sept, 1, the board's risk committee will be led
by former Bank of New York Mellon President Karen B. Peetz, who
joined the board in February. She will succeed Enrique Hernandez
Jr., who received a 53% shareholder approval rate at the bank's
annual meeting. Nine directors in total received less than 75%
approval from shareholders for re-election, with Mr. Hernandez
having the lowest percentage. He remains on the board.
The bank is also changing the chairs of its governance and
nominating committee and adding board members to committees
overseeing corporate responsibility and audit.
Write to Emily Glazer at emily.glazer@wsj.com
(END) Dow Jones Newswires
August 15, 2017 16:17 ET (20:17 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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