Wells Fargo’s leaders deserve fatter paychecks after a tough year, according to investors.
Shareholders voted 92.4% in favor of the bank’s executive compensation plan, based on preliminary results released at Wells Fargo’s annual meeting in Des Moines, Iowa. The outcome is a sign of support for management despite more than two hours of at-times heated commentary at the event.
This year’s result is down from the 96% approval rate in 2017. Some critics of the bank expressed outrage last month, after the firm awarded CEO Tim Sloan a $17.4 million package for 2017, a 36% raise. Part of that reflected his first full year running the company after a promotion.
Sloan, who started his presentation by bringing his son, daughter-in-law and two grandchildren on stage, had asked the board not to award him a bonus and most of his package was restricted stock.
Shareholders also approved the election of directors on the ballot, with every candidate receiving at least 89.9% support, according to the preliminary results.
So-called say-on-pay votes, although only advisory, give investors a chance to object if they view compensation plans as too generous based on executives’ performance. A drop in support -- even if it’s still a majority -- can prompt a board to retool incentives to ensure managers are held accountable. In some cases it may even hasten a change in leadership.
Before Wells Fargo’s meeting, about 100 protesters from national and local groups entered the lobby of the Des Moines Marriott hotel after marching from the public library. They chanted “Not enough!” about the $1 billion fine regulators announced the bank would pay to settle consumer abuse complaints.
The demonstrators were protesting a variety of issues, including the bank’s financing of gun makers, jails and fuel pipelines. They held signs with slogans including “Stop Banking on Student Debt” and “Stop Banking on the backs of poor working class black and brown communities.”
Among the most contentious moments of the meeting was a discussion between Sloan and Jordan Ash, a researcher with the St. Paul Federation of Teachers, who urged the bank to stop doing business with the National Rifle Association and do more to reduce gun violence in the U.S.
Sloan said he declined to meet with the teachers because they made public a letter he sent in response to their concerns without asking his permission. He said after that, a direct meeting “didn’t make a whole lot of sense.”
“What we’ve done is we’ve promised to engage with our customers that are in that industry. We’ve had very active dialogue,” Sloan said. “We don’t think it’s a good idea to allow banks to decide what products and services Americans buy.”
California State Treasurer and gubernatorial candidate John Chiang stood up three times to address Sloan, Chairwoman Elizabeth Duke and the board. Chiang said the bank has failed to adequately disclose how many Californians were harmed in the fake-accounts scandal and said Sloan is the wrong person to lead the company.
The CEO “cannot drain the swamp — he has become it,” Chiang said, prompting a response from Duke.
“I think he’s the right CEO for Wells Fargo,” Duke said, citing his time with the company as an advantage and describing his commitment to change as “unwavering.”