Egan-Jones Recommends "withhold" from Wells Fargo Directors Serving Before 2016
Haverford, PA - Egan Jones Proxy Services (EJP) released a report calling for a "withhold" vote for all remaining Wells Fargo [WFC] Directors who served prior to or during 2015. We had recommended those Directors leave in our 2017 report for fear that their continued presence would be detrimental to the bank and its shareholders. Unfortunately, our fears appear to have been realized as seen in recent regulatory actions.
Specifically, we state in our current 2018 report:
"…we recommend that clients WITHHOLD votes from the following nominees:
John D. Baker II
Elizabeth A. Duke
Donald M. James
James H. Quigley
Suzanne M. Vautrinot
We believe that the foregoing directors who are in service prior to or during 2015 should be held accountable for board and management oversight which we believe led to the perpetuation of poor banking and employee culture resulting in the corporate scandal last September 2016.
We cannot, in good conscience, support directors who in our opinion have exhibited a proven track record of failure to adequately and diligently perform their oversight duties. Nor can we support those whose mere presence would appear to bring with it the serious disfavor of powerful regulatory authorities who hold the destiny of the Bank and its investors in their hands.
… The bank confirmed in a filing that the DOJ is looking into the scandal. Multiple U.S. attorneys' offices are investigating and subpoenas were issued, a U.S. official told CNN in September…
The Department of Labor said it was looking into allegations from former employees that the bank violated federal law by failing to pay workers overtime."
We believe it is imperative that the Board put as much of this issue behind them and the company as quickly as possible. Keeping Board members that we believe appear "tainted" by scandal does not, in our opinion, accomplish this goal.
Additionally, as we did last year, we continue to recommend “against” ratification of the Company’s audit firm KPMG, LLP, which has been serving the company since 1931. Egan-Jones prefers audit firm rotation take place every seven years. This and other issues are reflected in the extremely poor, lowest possible score, Egan-Jones Audit Rating the firm has earned of “needs attention.”
For questions on this or any other EJP reports please contact Kevin McManus, Vice President and Director of Proxy Services, using the contact details below.
Egan-Jones Proxy Services (“EJP”) is a leading provider of independent proxy research, voting recommendations and voting services to a variety of institutional investors. EJP assists institutional fiduciaries in determining voting directions as well as assisting in the administrative submission of proxy voting, and provides research, recommendations, voting, and voting record retention services on various shareholder proxy voting matters. EJP was established in 2002 by the Egan-Jones Ratings Co., Inc. (“EJR”), a nationally recognized statistical rating organization (“NRSRO”) as designated by the U.S. Securities and Exchange Commission. EJR provides credit rating services for primarily institutional clients. EJP is a related division of EJR, and is not a subsidiary or stand-alone corporate entity. EJP and EJR have physical and electronic safeguards in place to prevent conflicts of interest and the sharing of client data.