Wells Fargo CEO Versus San Francisco Demonstrators
When shareholders at Citigroup last week rebuked CEO Vikram Pandit’s compensation package in an unprecedented move to scale down top-level executive pay in the face of increasing popular pressure against what some call “obscene” levels of remuneration for the high-flyers in the financial sector, more acts were bound to follow. Now, it’s time for Wells Fargo to feel the fire.
Halah Touryalai of Forbes had noted that the “shareholders’ revolt” against Pandit was only the tip of the iceberg, as “anger over pay for chief executives has spread from Occupy Wall Street to wealthy institutional investors like pension fund and mutual fund managers,” reported Jessica Silver-Greenberg and Nelson Schwartz in the Dealbook section of the New York Times.
Dakin Campbell and Mark Chediak of Bloomberg reported that protesters at a Wells Fargo shareholder meeting in San Francisco faced off against CEO John Stumpf, who “was interrupted at least four times by shouting.” Roughly 24 demonstrators were arrested. Wells Fargo, the Bloomberg piece points out, “is the largest provider of U.S. home loans and runs the biggest servicing operation, which handles billings, collections and foreclosures for banks and investors who own mortgages.”
The tempest that has Occupy protesters and shareholder boardroom members appearing to be in common cause has to do with how much is too much when it comes to how much the chief executive officer makes. In the case of Pandit and Citigroup, $15 million was seen as far too high a number, especially given the firm’s recent lackluster performance.
Silver-Greenberg and Schwartz had quoted Brian Wenzinger, identified as a principal at the Philadelphia-based Aronson Johnson Ortiz money market firm as saying, “C.E.O.’s deserve good pay but there’s good pay and there’s obscene pay.”
Stumpf of Wells Fargo seems to be a strange target for Occupiers decrying the practice of awarding bonuses to officers regardless of performance, given that, according to the Forbes piece, Stumpf “hasn’t taken a bonus since taking the CEO job in 2007,” although his “total compensation” (base pay plus stock options) for last fiscal year was just south of $20 million.
Bloomberg quoted a Wells Fargo spokesman, Oscar Suris, as appealing for a balance between the right of aggrieved citizens to be heard and the right of his boss to speak: “We respect the protesters’ right to protest, but well before their voices were heard today we already had a deep appreciation for the many challenges our customers are facing in today’s economy.”
“We know our customers and with what’s going on in the economy, people are struggling,” Suris added.
Wells Fargo has been documented of steering subprime mortgages across the country, for which it was levied an $85 million fine last year by the Federal Reserve.
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