The annual Wells Fargo shareholders meeting was disrupted by angry shareholders wanting to understand how 2 million accounts were created without customers' knowledge and without the knowledge of senior leaders of the organization. One attendee shouted, "You did it that way and you allowed it to continue for years." Another yelled, "We elected you guys to protect us, to be our watchdogs, and you were not." Security removed three protestors.
Despite the protests, all 15 board members were re-elected, although some narrowly. The board's three newcomers, including the new CEO, Tim Sloan, won more support.
Sloan started the meeting with a promise to change:
"There is no doubt that the last seven months have been one of the most difficult periods in our company's 165-year history. I can assure you that we are facing these problems head-on and that Wells Fargo is emerging a much stronger company."
Board turnover will happen over time. Some directors are nearing the mandatory retirement age, and others may still be forced out. But for Brandon Rees, the deputy director of the A.F.L.-C.I.O.'s investment office, the change isn't coming quickly enough. The group holds 1.6 million shares of Wells Fargo, and Rees voted against all of the current board members:
"Fresh blood is needed to ensure that the board has sufficient independence. The narrow vote puts incredible pressure on some directors to reconsider their membership. I hope that by this time next year, we have a new slate."
In March, Gretchen Morgenson wrote a New York Times piece about the increasing number of online shareholders meetings. Partly for convenience, partly to skirt accountability and confrontations like this, more and more companies are holding web-based meetings. The director of an asset management group was quoted in her article:
"These are not management's meetings; they are the meetings of the owners of the company." Online-only events give company officials "tremendous power over controlling, censoring and really limiting the engagement of share owners with the board and management."
- Are you surprised at the board vote? Why or why not?
- What's your view of the shareholders who spoke out? Were they inappropriately disruptive or just finding their voice?
- What do you think of online shareholder meetings. When might they be appropriate or not?