Is a proxy fight brewing at Wells Fargo (NYSE: WFC)? It may be too early to tell, but maybe. The San Francisco based banking giant has been forced to vigorously defend its slate of candidates to serve on the board after two proxy advisory services recommended investors vote against certain candidates.
The Rockville, MD based ISS Proxy Advisory Services and San Francisco based Glass Lewis & Co. are recommending that investors vote against the bank’s lead direct Philip Quigley, citing concerns over corporate governance. Glass Lewis is also calling for votes against Cynthia Milligan, whose brother works for Wells Fargo, and former Wachovia directors John Baker II, Donald James and Mackey McDonald. Wells Fargo purchased the former Wachovia bank in 2008 during the financial crisis, and satisfying their goal to build an east coast presence finally. This deal was also surrounded by issues, as Wachovia had previously agreed to a sale to Citigroup (NYSE: C) before reneging on the agreement and selling to Wachovia instead. Wells Fargo and Citigroup reached a settlement last year to settle the dispute.
A spokesman for the firm commented that “Each of these directors meets the independence requirements of the New York Stock Exchange, the Securities and Exchange Commission and Wells Fargo’s director-independence standards. They have extensive experience, significant skills and attributes, which are described in our proxy statement. These qualities makes them extremely valued directors.”
The annual shareholders meeting will be held May 3 in San Francisco, and the election will take place at that time. Although Wells Fargo has so far been able to successfully avoid much of the criticism placed on the East coast banking giants, concerns over their board may be a predecessor to increased scrutiny for the firm.