Activist shareholders and Democratic lawmakers on Capitol Hill are pressing forward with their campaigns to shake up Wells Fargo's (WFC) board and push for other changes even after the megabank announced Wednesday that its embattled CEO, John Stumpf, was resigning from the company.
Specifically, Stumpf's resignation comes in the wake of revelations a little more than a month ago that about 2 million customer accounts had been set up by the bank's employees without clients' knowledge or approval.
In early September, the bank disclosed a $185 million settlement with federal and local regulators over the accounts, which led to the dismissal of 5,000 employees over a five-year period and set off a firestorm of criticism. Chief Operating Officer Tim Sloan will succeed Stumpf as CEO, and lead independent director Stephen Sanger will become chairman of the board.
However, a top official at CtW Investment Fund, an organization that advises pensions for unions belonging to the Change to Win labor group, said it was pressing forward anyways with a campaign the fund had launched last month urging the embattled bank to add two directors to its board who understand human capital management. The fund advises funds representing roughly 12 million Wells Fargo shares.
"A new CEO alone does not fix the multileveled failures at Wells Fargo," said CtW executive director Dieter Waizenegger. "We are encouraged that the bank is finally enacting reforms, but it must look beyond the C-suite and make sure that strengthening board oversight is part of its succession plan."