Connecticut State Treasurer Denise Nappier, in partnership with three institutional investors with assets under management of $355 billion, has filed a shareholder resolution at Wells Fargo calling for a change in the company's corporate bylaws to ensure an independent non-executive board chair.
Co-filing the resolution are Illinois State Treasurer Michael Frerichs and Hermes EOS. Needmor, co-lead filer, is a Toledo, Ohio-based family foundation.
The move is the latest by a municipal issuer in reaction to the bank's fake-accounts scandal.
"Shareholders rely on a board of directors to properly oversee management, and rightly expect the board to preserve and grow the value of the company in which they invest," Nappier said in a statement Tuesday.
"Unfortunately, that did not happen with Wells Fargo, as evidenced by significant reputational damage, loss of customer confidence in the bank, and loss in value for investors, including the Connecticut Retirement Plans and Trust Funds."
Nappier is principal fiduciary of the $30 billion fund.
“We appreciate the feedback that we receive from our investors and we will review the proposal,” the bank said in a statement.
In September, Nappier's office modified the assignment of lead banker for its $650 million GO bond sale in light of revelations about Wells Fargo, adding Morgan Stanley as co-lead manager. In addition, the state Treasury's Short-Term Investment Fund suspended purchasing securities through Wells Fargo's brokerage subsidiary, through which it purchased $4.5 billion of securities in fiscal 2016.
Connecticut's relationship with Wells Fargo is multifaceted, according to Nappier. They include investments, bond underwriting, brokerage and cash management services.
As of Nov. 25, the CRPTF held Wells Fargo stock and fixed income instruments valued at $125.1 million.
Several state and municipal issuers have sanctioned Wells Fargo after revelations that thousands of bank employees opened accounts for bank customers without their permission, charging additional fees to customers and generating performance incentives for employees and managers.
Wells Fargo paid a $185 million settlement to the Consumer Financial Protection Bureau two months ago and chief executive John Stumpf resigned. Pennsylvania, California, Massachusetts, Ohio, Chicago and Northern California's East Bay Municipal Utility District have also sanctioned the bank.
New York City officials said they might cancel business with Wells Fargo, while the Metropolitan Transportation Authority, whose operations include the New York subway system, left Wells Fargo Securities off its senior managing rotation list pending an internal investigation.
Wells Fargo shares were trading at $51.94 late Tuesday morning.
