Wells Fargo board not changing quickly enough: NYC Comptroller

[July 28, 2017]  By Dan Freed

(Reuters) - Wells Fargo & Co needs to work more quickly to remake its board of directors following a sales scandal and public rebuke at the bank's annual meeting in April, New York City Comptroller Scott Stringer said.

Wells Fargo last September settled with three regulators after revelations that branch staff set up as many as 2.1 million accounts without customer authorization in order to hit sales targets. Since then, the bank has replaced its CEO and other top executives have either resigned or been fired.

The bank has been hit with several regulatory inquiries and lawsuits.

"The extent of fraud at Wells Fargo was stunning," Stringer said in a statement sent to Reuters on Thursday. "Executives have been held responsible — but now directors must answer for their part... This board needs to be refreshed — today."

Stringer oversees New York City's five public pension funds, which together own roughly $600 million worth of Wells Fargo shares. The funds voted their shares against 10 of 15 Wells Fargo board members ahead of the bank's annual meeting.

Representatives from Sard Verbinnen, the public relations firm that represents Wells Fargo's board of directors, did not immediately respond to a request for comment on Stringer's statement.

New York's comptroller would like to have seen changes to the board by now, an aide said, but wants at least two new board members in place before the bank's next annual proxy statement is issued, likely in March.

The sign outside the Wells Fargo & Co. bank in downtown Denver April 13, 2016. REUTERS/Rick Wilking

Only three Wells Fargo directors received more than 90 percent support from voting shareholders in April, and four directors, including Chairman Steve Sanger, received less than 60 percent support.

Six directors will reach the mandatory retirement age of 72 in the next few years and are expected to leave when they do, Sanger said at the annual meeting. He will hit that mark next year, but would not say when he planned to retire.

"Wells Fargo's board and management team have taken many actions in response to its retail sales practices issues, including changes in senior leadership, executive accountability actions and numerous steps to ensure we make things right with our customers and other stakeholders. That work continues," Wells Fargo spokesman Ancel Martinez wrote in an emailed statement.

(Reporting by Dan Freed; Additional reporting by Ross Kerber; Editing by Carmel Crimmins and Dan Grebler)

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