Wells Fargo board chairman to retire, be replaced at year end

By Dan Freed

(Reuters) - Wells Fargo & Co Vice Chair Betsy Duke will replace retiring Chairman Stephen Sanger next year, one of several changes announced on Tuesday in response to shareholder displeasure over the bank's sales practices scandal.

Sanger will retire at year-end, even though he will not reach mandatory retirement age of 72 until April. Investors have pressured Wells Fargo to speed up the planned transition as the bank has dealt with fallout from the scandal.

The two longest-serving directors, Cynthia Milligan and Susan Swenson, will also retire at year end. Juan Pujadas, a former PricewaterhouseCoopers principal, will join as an independent director effective Sept. 1.

 

The board also detailed changes to four of its committees and said it will add more directors in the future "while maintaining an appropriate balance of experience and perspectives."

Wells Fargo's board hired Mary Jo White, a senior partner at law firm Debevoise & Plimpton LLP and former Chair of the U.S. Securities and Exchange Commission, to conduct a review of its structure and composition after a harsh shareholder vote in April.

Most directors, including Sanger, received relatively little support due to revelations that the bank had opened as many as 2.1 million phony accounts in customers' names without their permission. The sales scandal led to the departure of former CEO John Stumpf. The scandal also prompted executive changes within the retail banking division and raised questions about board oversight.

The two Wells Fargo board members who received the lowest vote totals, Enrique Hernandez and Federico Peña, will remain on the board. Director Karen Peetz will replace Hernandez as chair of the risk committee.

Sanger, 71, will reach the mandatory retirement age of 72 on April 10.

(Additional reporting by Arunima Banerjee in Bengaluru; Writing by Lauren Tara LaCapra; Editing by David Gregorio)