The New York State Common Retirement Fund, Albany, has asked via a shareholder proposal that investors in Wells Fargo & Co. demand a company report on whether incentive pay practices have exposed the company to financial losses, Thomas DiNapoli, sole trustee of the $209.1 billion fund, said Thursday.
"This report would allow shareholders to better understand the risks that Wells Fargo's incentive compensation practices may pose to investment value," said a letter from Mr. DiNapoli, the New York state comptroller, to shareholders, contained in a news release. The company's annual meeting is April 24.
The Wells Fargo's board, in a March 14 filing with the Securities and Exchange Commission, recommended against the pension fund proposal because it is unnecessary.
"Our company already undertakes incentive compensation risk reviews responsive to the proposal's concerns," Wells Fargo said in the SEC filing. "We review the incentive compensation arrangements of all incentive-eligible roles across our company for a broad range of actual and potential financial, reputational and regulatory risks."
In his news release Thursday, Mr. DiNapoli asserted that "incentive pay practices have been identified as contributing to the multiple crises at Wells Fargo."
The pension fund will vote against six of the 12 Wells Fargo directors, including CEO Timothy Sloan. "The board's apparent failure to demonstrate effective oversight of these risky practices demands an overhaul of its directors," Mr. DiNapoli said in the release
The pension fund also will vote against board Chairwoman Elizabeth Duke and board members Donald James, James Quigley, John Baker II and Suzanne Vautrinot, said Matthew Sweeney, a spokesman for Mr. DiNapoli, in an email. All 12 directors are up for election to one-year terms.
The pension fund also will vote against the auditor, KPMG, and the proposed executive compensation plan, the news release said.
The pension fund holds approximately 13.78 million shares of Wells Fargo worth about $722.1 million as of March 31.