A Wells Fargo shareholder is using president and CEO John Stumpf’s position as board member for Target Corp. – and the massive data breach the retailer suffered in 2013 – in arguing for the lender to have an independent chairman.
The shareholder, Gerald Armstrong, for years has pushed for Wells Fargo shareholders to vote in favor of a resolution requesting the lender’s board adopt a policy requiring an independent chairman. His past proposals calling for an independent chairman have failed to win enough shareholder votes.
Undeterred, Armstrong is pushing a similar shareholder proposal for this year’s annual meeting of Wells Fargo shareholders to be held in St. Louis on April 28. According to Wells Fargo, Armstrong, of Colorado, held 23,934 shares of Wells Fargo common stock as of Nov. 13.
This year, Armstrong is citing the Target breach, which affected millions of its shoppers, in trying to get enough support for his proposal.
Here’s an excerpt from the proposal, which was included in Wells Fargo’s annual proxy filing Tuesday:
The Target breach “is significant to Wells Fargo & Co.’s shareholders because John G. Stumpf, our chairman, president and chief executive officer, is a member of the board of directors of Target Corporation where one person has been serving as its chairman, president and chief executive officer. The proponent asks, ‘If Mr. Stumpf could not see the weaknesses at Target Corporation, is he blind to possible problems at Wells Fargo & Co.?’”
Armstrong says too many corporate boards are weakened by their members’ “in management we trust” attitude. He says he fears that without an independent chairman, Wells Fargo’s president “has become accountable only to himself.”
Wells Fargo’s board is recommending shareholders vote against Armstrong’s proposal.
Among other things, the board argues that the company’s governance structure is working effectively, “as evidenced by the company’s strong financial performance, and our stockholders rejected a similar independent chairman proposal for the tenth consecutive year in 2014.”
Charlotte-based Bank of America had an independent chairman until the lender last year named CEO Brian Moynihan to the post.