Wells Fargo and Company (WFC)

[ChannelTrader]

Wells Fargo: Time for the CEO to Go? -- Barron's Blog
DOW JONES & COMPANY, INC. 10:27 AM ET 9/26/2016
Symbol Last Price Change
WFC 45.31 -0.43 (-0.94%)
QUOTES AS OF 10:29:07 AM ET 09/26/2016
CLSA's Mike Mayo and Chris Spahr write that their support for Wells Fargo(WFC) CEO John Stumpf is starting to waver. They explain why:

Our support for the CEO is now wavering and contingent on his ability to better detail repercussions to top management and contain reputational damage from the cross-selling fiasco. His actions have been reactionary versus leading. This is with regard to the firm's initial response, lack of subsequent disclosures and last week's Senate hearing. Shareholders have a right to know what will be done to the pay of top executives, to the composition of the board, and for impacted customers. We believe Wells Fargo(WFC) is bigger than the CEO, notwithstanding a good financial track record during his tenure, and there should be no more excuses for the lack of answers to key questions.

Five issues that we believe Wells needs to address: First, Wells needs to clarify how and why these problems could continue for so long, so that investors are assured these problems are resolved. Second, Wells needs to specify what it is doing to help impacted customers. (Also, what percentage of impacted customers remains at Wells?) Third, clawbacks should be put in place or, at a bare minimum, Wells should provide a timeline for these decisions. Fourth, the CEO should voluntarily reduce his compensation for the current calendar year. Fifth, Wells needs to restructure the board, with changes on the Corporate Responsibility Committee and Human Resources Committee (we think both failed shareholders in terms of oversight and incentives), and possibly splitting the Chair from the CEO.

Shares of Wells Fargo(WFC) have fallen 0.9% to $45.34 at 10:24 a.m. today, while the SPDR S&P Bank ETF (KBE) has dropped 1.2% to $33.06, and the Financial Select Sector SPDR ETF (XLF) his off 0.9% to $19.21.

More at Barron's Stocks to Watch blog, http://blogs.barrons.com/stockstowatchtoday/


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09-26-161027ET
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