Our Firm

Parnassus Sells its Wells Fargo Holdings

SAN FRANCISCO, CA, March 9, 2018

You may be aware that several Parnassus funds initiated positions in Wells Fargo stock well over a year ago. Initially, the firm had positive fundamental and ESG profiles. At the time, Wells Fargo was widely considered to be one of the top banks in America, with a strong focus on workplace, diversity and inclusion, and philanthropy.

As the bank’s community sales scandal and Dakota Access pipeline controversy became headline news, Parnassus immediately began using its substantial holding in the firm to engage top executives. We met with Wells Fargo management—including the CEO and key independent Directors—multiple times to share our perspective on events and suggest potential remedies. We also voted our proxy shares according to our responsible investment policies, including voting against the candidates for the Wells Board of Directors that had served on the Risk Committee for many years.

While our discussions led to positive changes within the company, troubling new issues continue to emerge. Significantly, the Federal Reserve has decided that the problems at the bank are serious enough to warrant their active involvement in Wells Fargo’s business decisions for an indefinite period of time.

As events continue to reveal further deterioration in both the fundamental and ESG profiles of the bank, we do not believe that further engagement from Parnassus will be effective. In short, Wells Fargo is not a suitable holding for our portfolios at this time.

Thank you for your investment in the Parnassus Funds.

Mutual fund investing involves risk, and loss of principal is possible.