Ahead of its annual meeting Tuesday, Wells Fargo & Co. has urged shareholders to reject proposals that would split its top executive's duties and address possible conflicts of interest.
One investor proposal seeks to separate the roles of chief executive officer and chairman of the board, both of which are held by John Stumpf. With the support of advisory services like Glass Lewis & Co. and ISS Proxy Advisory Services, investors are seeking to remove Philip Quigley, the company's lead director, because of his son's employment in Wells' wholesale banking division. Glass Lewis has also recommended a no vote against Cynthia Milligan, a current director whose brother works for Wells, and seeks the ouster of three former Wachovia directors, John Baker II, Donald James and Mackey McDonald.
Some institutional investors are also using the process to challenge Wells' handling of mortgage-servicing problems. A proposal from the City of New York's comptroller calls for the audit committee to "conduct an independent review of Wells Fargo's internal controls related to loan modifications, foreclosures and securitizations" and to issue a report to shareholders with findings and recommendations.
Other proposals include a measure that would make it easier to oust directors in contested elections, and a measure to give shareholders the right to call special meetings with 10% of the vote.
Wells Fargo has recommended that shareholders vote against all of the shareholder-driven proposals. It urges them to support the ratification of KPMG as the company's independent auditor and in favor of an annual advisory vote on executive compensation.
The meeting, held near Wells' San Francisco headquarters, is expected to draw significant protests as it has in years past.
