April 24, 2018 / 8:20 PM / a year ago

Breakingviews - Wells Fargo shareholders give CEO welcome respite

Wells Fargo & Company CEO and President Tim Sloan testifies before the Senate Banking Committee on Capitol Hill in Washington, U.S., October 3, 2017. REUTERS/Aaron P. Bernstein

NEW YORK (Reuters Breakingviews) - Wells Fargo shareholders have given Chief Executive Tim Sloan a welcome respite. Owners overwhelmingly backed executive pay and directors at the $256 billion bank’s at times ill-tempered annual meeting on Tuesday. It’s Sloan’s first good news after a slew of regulatory hits, including last week’s $1 billion fine from the Consumer Financial Protection Bureau.

The San Francisco-based bank took the event on the road this year, to Des Moines, Iowa. A number of its critics tagged along, haranguing Sloan and Chair Betsy Duke on a whole host of issues.

A grandmother who said she had been shot by a rubber bullet while protesting the Keystone pipeline attacked them for financing it. Sloan also had a testy exchange with a teacher protesting Wells’s role in financing companies that manufacture and sell assault rifles. And Californian State Treasurer John Chiang got in a couple of zingers to help his bid to become the Golden State’s governor this year. “Mr. Sloan is not draining the swamp,” he said. “He has become it.”

It was enough to briefly raise the possibility that Sloan might lose a vote at the two-and-a-half-hour meeting. But the ballots went his way, as did several other moments. Chief among these was Duke’s rebuttal to Chiang’s broadside. It drew some of the loudest applause of the day.

Duke deserves his thanks not just for that, but for her help since she was tapped to lead the board last summer. Since then, the former Federal Reserve governor has sounded out investors holding more than a third of the bank’s stock, helped revamp the board – including taking the blame on Tuesday for some of its shortcomings - and spearheading the creation of a stakeholder advisory council. Two of its members took the board to task at the meeting, albeit politely.

They chided the bank for not being regarded as a leader on issues like guns and livable wages. Standing out on such concerns, under the guise of corporate citizenship, is one of several targets Sloan has set for fixing Wells’s culture. He has also pledged to improve customer service, employee engagement and risk management. Achieving these goals, as well as improving the top and bottom lines, will be no easy task.


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