Despite facing opposition from disgruntled shareholders at the company’s annual meeting — including one who was forcibly removed from the Sawgrass Marriott conference center — 12 Wells Fargo & Co. directors were re-elected to the board Tuesday.
San Francisco-based Wells Fargo has been under fire for months in the wake of a scandal involving its business practices, as bankers pressured to increase sales opened accounts for customers without their consent.
That scandal brought national attention to the nearly three-hour-long shareholders meeting at the Ponte Vedra Beach resort, with some advocates calling for stockholders to vote out the 12 board members (out of 15 total) who served while the improper sales practices took place.
But despite some fireworks at the meeting, all 12 received between 53 percent and 81 percent of votes in favor of re-election.
The company did not announce results for individual board members, which include Jacksonville businessman John Baker.
Chairman Stephen Sanger and CEO Timothy Sloan were apologetic during the meeting for violating the trust of customers, employees and shareholders.
Both were appointed to their positions in October, but both have been with the banking giant for a long time.
Sanger has been on the board since 2003 and Sloan has worked at Wells Fargo for 29 years, and was promoted from chief operating officer when former CEO John Stumpf retired under pressure.
“We know these issues are not what you expect of us,” Sanger said.
“Our company violated that trust and for that we are deeply sorry,” he said.
Sloan said the improper sales practices resulted from an incentive program that pressured employees to make sales, coupled with a decentralized organizational structure that kept the issues from upper management.
“As a result, we moved too slowly (to fix it) and this was unacceptable,” Sloan said.
“We have more work to do, but we firmly believe we are on the right path,” he said. “It’s been a busy seven months, but we are focused on making things right.”
That remorse wasn’t enough for some shareholders in attendance.
Bruce Marks, CEO of a homeowner advocacy group called Neighborhood Assistance Corp. of America, demanded that each individual board member face the shareholders and state why they should be re-elected.
“Tell us what you knew and when you knew it,” he said.
Sanger said the other board members weren’t speaking because he was speaking for the entire board.
Marks stood up and interrupted Sanger before the allocated time for shareholders to ask questions, and refused Sanger’s request to wait until the proper time.
“You’re saying we’re out of order, but Wells Fargo has been out of order for years,” Marks said.
When he refused to sit down and stop speaking, or to leave on his own, Sanger adjourned the meeting to allow security personnel, including St. Johns County Sheriff’s officers, to remove him.
When the meeting resumed, Sanger said Marks was taken away because “he made a physical approach to our board members.”
However, later in the meeting, during the scheduled question-and-answer session, one stockholder said he was 10 feet away from Marks during the incident “and no such thing occurred.”
Marks, and a handful of other opponents who spoke out of turn, received little support from the more than 100 shareholders in attendance, mainly for being out of order.
However, a number of shareholders agreed with Marks’ anti-board sentiment during the allocated question-and-answer period.
Brandon Rees, representing the AFL-CIO labor union, said he saw a pattern of “mushroom management” by the board.
“Like mushrooms, the board is kept in the dark and fed horse manure,” Rees said. “We need directors, not mushrooms on the board.”
Despite the sometimes-confrontational tone of the messages, Sanger ended the meeting by saying he took the criticism seriously.
“Wells Fargo shareholders today have sent the entire board a message of dissatisfaction,” he said.
“Let me assure you the entire board has heard that message.”