Wells Fargo to Require Majority Vote for Directors

Wells Fargo & Co. said Tuesday that it would require directors running in uncontested board elections to obtain a majority of shareholder votes before being seated.

The San Francisco-based bank said the change was designed to improve its corporate governance practices.

Nominees in uncontested elections to Wells Fargo’s board who receive more votes “withheld” than “for” election must resign. The board’s governance and nominating committee would then recommend to the full board whether to accept or reject the resignations.

Wells Fargo joins more than 30 companies, including Walt Disney Co., General Electric Co. and Safeway Inc., in adopting such policies. A revolt at Disney in 2004 resulted in 45% of voting shares withholding their support of Chief Executive Michael Eisner, who later relinquished the position.

Separately, Wells Fargo declared a 52-cents-a-share quarterly stock dividend, unchanged from the previous payout.

The bank last week said that its fourth-quarter profit rose 8.1% to a record on increased borrowing by businesses. The company’s average loans increased 9% to $305.7 million.

Wells Fargo shares fell 2 cents to $61.59 on Tuesday.