California Treasurer John Chiang said Wednesday he will work with the boards of CalPERS and CalSTRS to push for corporate governance reform at Wells Fargo & Co.
The $301.5 billion California Public Employees’ Retirement System, Sacramento, and the $192.9 billion California State Teachers’ Retirement System, West Sacramento, own a combined $2.3 billion in Wells Fargo stock and bonds.
Mr. Chiang, CalPERS and CalSTRS will push to have Wells Fargo separate the CEO and chairman positions. Currently, John G. Stumpf holds both positions. Mr. Chiang said at a news conference that this move would be to ensure there is a check on Mr. Stump’s management of the bank.
As part of corporate governance reform Mr. Chiang is also calling for the appointment of a consumer ombudsman or confirmation that such a position exists, with detailed information on the position’s authority and role within the organization; development of an anonymous ethics reporting process and whistleblower protection program; a review of compensation practices; and clawbacks of ill-gotten compensation for executives most directly linked to Wells Fargo’s deceptive and predatory sales practices.Mr. Chiang serves on the board of both pension funds.
The action comes after Wells Fargo’s settlement with federal regulators and the city of Los Angles attorney’s office and its admission earlier this month that it opened more than 2 million fraudulent consumer accounts. The bank announced Tuesday it will claw back $41 million of Mr. Stumpf’s compensation following the scandal.