WFC Wells Fargo and Company

By Emily Glazer 

Wells Fargo & Co. re-elected all of its 12 board directors with more than 89% of preliminary votes, in a shift from the bank's turbulent shareholder meeting last year.

Wells Fargo, which hosted the meeting in Des Moines, Iowa, near its mortgage-business headquarters, still heard complaints about Chief Executive Timothy Sloan, executive compensation and its relationship with the firearms industry during the 2 1/2 -hour-long meeting.

Wells Fargo Chairman Elizabeth "Betsy" Duke defended Mr. Sloan's role as CEO, saying she disagrees with California Treasurer John Chiang's and others' calls for him to be removed.

"Tim's time with the company is an advantage and his commitment to change is unwavering," she said. "I think he is the right CEO for Wells Fargo."

Ms. Duke did acknowledge that "the company can perform better."

Though Wells Fargo's sales-practices scandal erupted more than 18 months ago, it has continued to face regulatory scrutiny for a bevy of other problems. The bank late last week agreed to a $1 billion settlement with the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau related to its risk management in consumer-lending businesses.

That settlement forced the bank to adjust recently reported first-quarter earnings by $800 million. And Wells Fargo in February was hit with an unprecedented enforcement action from the Federal Reserve for failing to have proper risk controls. That order barred the bank from growing past the $1.95 trillion in assets it had at the end of 2017.

As it looked to turn the page on its problems, Wells Fargo appointed six new directors since 2017, including three this year. The bank said each director received more than 89.9% of the preliminary vote but declined to specify results further. Wells Fargo said in a news release that the final results will be reported in a securities filing later this week.

Proxy-advisory firm Glass Lewis had recommended voting against long-serving director John D. Baker because he served on the bank's corporate-responsibility committee, which didn't catch the retail banking sales-practices problems.

Ms. Duke, the chairman, said that as part of the bank's "self examination," it changed the charter of that board committee to focus on environmental, social responsibility and corporate philanthropy, moving customer complaints and related matters to the board's risk committee "where they belong."

"I would not like to see John Baker, who is deeply committed to the environmental, social responsibility, and philanthropy goals of this company to be considered less of a director because of charter issues we had with that committee," she said.

A bank spokesman declined to comment on Mr. Baker's behalf.

Shareholders also approved the appointment of KPMG as the bank's auditor with 91.1% of the preliminary vote. In an unusual step, proxy-advisory firm Glass Lewis recommended voting against KPMG because of the "severity of the fraudulent account activity and KPMG's prior knowledge of the incident," according to the firm's report. KPMG has been Wells Fargo's auditor since 1931.

KPMG hasn't commented on the Glass Lewis recommendation, and a spokesman for KPMG didn't immediately respond.

More than 100 protesters from different groups representing bank workers, affected customers and fossil-fuel activists, among others, rallied outside the shareholder meeting. Toward the end, some protesters chanted, "You only act in your own interest."

At one point, Mr. Sloan, the CEO, debated a shareholder representing the American Federation of Teachers asking about the bank's relationship with the National Rifle Association and the firearms industry. The teachers union recently ended its relationship with Wells Fargo's home-loan program for teachers, and its representative Tuesday said the bank should terminate its relationship with the NRA.

Mr. Sloan responded that when it comes to firearms, "we don't think it's a good idea for banks to decide what products and services Americans can buy."

Write to Emily Glazer at emily.glazer@wsj.com

(END) Dow Jones Newswires

April 24, 2018 16:04 ET (20:04 GMT)

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