Activist says Wells Fargo to face tough shareholder resolutions
By Ross Kerber
BOSTON (Reuters) - An activist investor said on Wednesday it is "inevitable" that Wells Fargo & Co WFC.N will face critical shareholder resolutions after the bank agreed to a $190 million settlement with regulators over fake consumer accounts.
Tim Smith, who leads shareholder engagement efforts at Walden Asset Management in Boston, said his firm is talking with investors including state pension funds and labor groups about submitting resolutions for the bank's springtime shareholder meeting that may call for things like clawing back executive pay or requiring the company to report on its governance procedures.
The largest U.S. bank by market capitalization last week said it would pay $185 million in penalties and $5 million to customers that regulators say were pushed into fee-generating accounts they never requested.
“It’s inevitable that Wells Fargo will face a series of critical shareholder resolutions in light of this scandal,” Smith said in a telephone interview on Wednesday.
A Wells Fargo spokesman declined to comment.
Federal prosecutors are in the early stages of an investigation into sales practices at Wells Fargo, the Wall Street Journal reported, citing people familiar with the matter.
Shareholder resolutions could be a black eye for San Francisco-based Wells Fargo, which has avoided some of the investor backlash that other large banks faced coming out of the financial crisis under pressure from Walden and other activists.
JPMorgan Chase & Co JPM.N for instance agreed to publish a report in 2014 outlining improved controls it put in place including pay clawbacks and minimum share ownership requirements for leaders. Continued...