Bank Watch

Wells Fargo books plush resort for company meeting – and some shareholders aren’t happy

The Sawgrass Marriott Golf Resort & Spa, near Jacksonville, Fla., is where Wells Fargo will hold its annual meeting for shareholders next month.
The Sawgrass Marriott Golf Resort & Spa, near Jacksonville, Fla., is where Wells Fargo will hold its annual meeting for shareholders next month. Sawgrass Marriott

Florida’s Sawgrass Marriott Golf Resort & Spa offers the kinds of amenities you’d expect from a swanky venue overlooking the Atlantic coast: two championship golf courses, villas with private balconies, therapy baths and massage lessons.

It’s also where Wells Fargo will hold its annual meeting for shareholders next month, the San Francisco bank said in a regulatory filing last week. It will be the first such gathering since regulators fined Wells in September over its sales scandal.

But at a time when Wells is trying to move past the scandal, the choice of the Ponte Vedra Beach venue is sparking fresh criticism from shareholders already angered by revelations of its sales practices.

“This is an indication that the company didn’t assess the value of being more humble in light of the scandal and are asking shareholders to find a place to stay that is off the beaten path because they don’t want to be exposed to protesters,” said Sister Nora Nash, a nun with the Sisters of St. Francis of Philadelphia, which owns Wells Fargo shares.

“It’s a very poor public message of visibility at a time when the company should begin to display a new culture that it not insular,” she said.

Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware and a Wells Fargo shareholder, called the choice “disappointing and somewhat troubling.”

For its part, Wells Fargo said it reserved space at the resort, near Jacksonville, before it was fined $185 million in September by federal regulators and the city and county of Los Angeles for its sales practices.

Wells Fargo spokesman Mark Folk said the move is consistent with the bank’s “ongoing practice of holding many major company meetings outside of San Francisco in cities where we enjoy a significant presence of customers, team members and operations.”

“Florida is one of our largest regions in the U.S. as it relates to retail branches, and we are the second largest bank in the state,” Folk said.

The April 25 gathering also takes place around spring break, which can be a challenging time of year to find hotel space along Florida’s coast. Changing the location after the scandal erupted might have been difficult.

On its website, the Sawgrass Marriott boasts of its “luxurious executive suites,” bike trail, volleyball court and four outdoor pools. Golf enthusiasts can enjoy “a lush PGA experience” at its course that hosts the PGA Tour’s flagship event, The Players Championship.

Timothy Smith, a senior vice president at Walden Asset Management, which manages Wells Fargo shares for clients, said the resort pick was “a very poor decision by the board.”

“It adds to Wells Fargo’s reputation and image problem to hold a meeting in an upscale resort while they are still in the midst of a scandal for defrauding average consumers,” Smith said. “There is no reason to run away from their investors instead of meeting in an easily accessible setting where investors could attend and engage the company.”

The backlash over this year’s site selection is the latest example of continued strained relations between Wells and its shareholders, despite efforts by the bank to move past the scandal.

Such strides have included tossing out product sales goals for retail bankers, firing some executives and requiring the CEO and chairman posts to be filled by two different people.

Recent revelations, though, have stoked public frustrations with the bank.

Earlier this month, Wells announced eight top executives didn’t get cash bonuses for 2016. But last week’s regulatory filing shows the executives were awarded more compensation overall last year, as higher base salaries and stock awards offset the loss of cash bonuses. Also this month, Wells said the number of customers affected by the scandal could turn out to be higher than previously thought.

Wells Fargo is not the only public company to stage annual shareholder meetings at resorts, though others have used their own corporate headquarters.

Beginning in 2013, when Wells held its annual shareholder meeting in Utah, it has moved the event around the country, typically to areas where it has sizable operations. Last year, Wells’ meeting was at Arizona’s Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch.

Wells is also not the only large U.S. bank to mix up the locations from year to year. JPMorgan, headquartered in New York, selected a high-end hotel on New Orleans’ Bourbon Street for its 2016 event, after choosing an upscale hotel in Detroit in 2015.

Bank of America, meanwhile, has kept its meetings in Charlotte.

Folk, the Wells Fargo spokesman, pointed out Wells Fargo for years has provided live audio of the annual meeting for shareholders who cannot attend. Shareholders who listen in cannot vote their shares during the meeting or ask questions, though.

He said Wells Fargo considers several criteria when selecting a venue, including ease of access and space for shareholders.

Tim Brennan, treasurer for the Boston-based Unitarian Universalist Association, said shareholders have been discussing how difficult it will be to send representatives to this year’s gathering.

“I agree that the optics are unfortunate,” he said. “But more importantly ... this looks like the company is hiding from shareholders.”

Deon Roberts: 704-358-5248, @DeonERoberts

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