By Dan Freed
(Reuters) – New York state Comptroller Thomas DiNapoli is asking Wells Fargo & Co
DiNapoli oversees the New York State Common Retirement Fund, the third largest U.S. state pension fund with more than $200 billion in assets and a top 50 Wells Fargo shareholder with nearly 14 million shares.
“The bank has not reassured investors that its pay practices encourage long-term, sustainable growth,” DiNapoli said in an emailed statement.
Wells Fargo spokesman Mark Folk said the bank values input from shareholders and is reviewing the proposal.
Wells Fargo’s scandal began in September 2016 when the bank settled with regulators over the creation of potentially up to 2.1 million fake accounts, a number the bank later revised to as high as potentially 3.5 million.
Compensation incentives “contributed to problematic behavior,” in the creation of fake accounts, according to an internal report by Wells Fargo’s board of directors released on April 10.
Other problems have since come to light in different areas of the bank, including auto insurance, residential mortgages, and foreign exchange trading.
The proposal by DiNapoli requests that Wells Fargo’s board prepare a report disclosing detailed information about incentive-based pay throughout the bank.
Should the board agree to produce such a report, DiNapoli would withdraw the proposal, according to a letter by his staff to Wells Fargo Chief Executive Tim Sloan. Barring such an agreement, DiNapoli requested the proposal be included on the bank’s proxy statement to be voted on by shareholders at Wells Fargo’s annual meeting in the spring.
DiNapoli submitted a similar proposal last year, but Wells Fargo got permission from the U.S. Securities and Exchange Commission to leave it off the proxy, arguing it was similar to another shareholder proposal calling for a broader report on several matters, including “evidence that incentive systems are aligned with customers’ best interests.”
(Reporting by Dan Freed in New York; Editing by Chizu Nomiyama and Jonathan Oatis)