WFC Wells Fargo and Company

By Maria Armental 

Wells Fargo & Co. has formally separated the roles of chairman and chief executive and will require its chairman to be independent as it tries to rebuild customers' trust, following a scandal over banking sales practices.

The bylaws revisions codify the changes put in place when chairman and CEO John Stumpf stepped down in October, as lead independent director Stephen Sanger succeeded Mr. Stumpf as chairman and president, and Operating Chief Timothy Sloan became CEO.

But some institutional shareholders called on the bank to take further steps to increase oversight and guarantee greater checks and balances.

"Like a house built on shifting sands, however, this good work will be for naught if we don't have a solid foundation and put a framework in place for the board that will prevent a repeat of Wells Fargo's transgressions," said Connecticut State Treasurer Denise L. Nappier, who oversees the roughly $30 billion Connecticut Retirement Plans and Trust Funds.

So far, Citigroup Inc. is the only other large U.S. bank that keeps both roles separate, a change it made during the financial crisis. Bank of America Corp. split the roles under shareholder pressure during the crisis, but the board gave the chairman job to Chief Executive Brian Moynihan in 2014.

This week, U.S. Comptroller of the Currency Thomas Curry called on regulators to consider requiring federally chartered banks to separate the roles, a move that would affect banks such as J.P. Morgan Chase & Co., which has successfully fended off several shareholders' proposals to split the positions.

San Francisco-based Wells Fargo has been under intense scrutiny over revelations that bank employees had opened as many as two million deposit and credit-card accounts without customers' consent or knowledge. In September, the bank agreed to pay a $185 million fine and submit to a consent order -- without admitting wrongdoing -- to settle civil claims brought by the U.S. Office of the Comptroller of the Currency, the U.S. Consumer Financial Protection Bureau and the Los Angeles City Attorney.

Under the changes approved by the bank's board this week, the board chairman will receive a $250,000 retainer a year and the independent vice chairman a $100,000 annual retainer.

Write to Maria Armental at maria.armental@wsj.com

(END) Dow Jones Newswires

December 01, 2016 21:28 ET (02:28 GMT)

Wells Fargo (NYSE:WFC)
Historical Stock Chart
From Mar 2024 to Apr 2024

Wells Fargo (NYSE:WFC)
Historical Stock Chart
From Apr 2023 to Apr 2024