In Tonight's Episode of Wall Street's Favorite Game of Blame, We Learn Once Again that:  "Perception is 9/10's of the Law."

[ by Howard Haykin ]

Scott Quigly, 44, one of 269,000 Wells Fargo workers as of 12/31/12, is just 1 of 10,000 employees in the bank's wholesale banking group.  He joined the bank in 2006, and has since ascended to the level of manager in a principal investment group that's responsible for investing deposits.  His 2012 compensation was $1.4 million, according to a proxy filing.

That's a notable, and perhaps appropriate sum for a manager is one of the bank's more profitable units.  The work isn't rocket science - the principal investments group buys bonds with the bank’s own money along with excess customer deposits.  So, we guess, one could conclude that Mr. Quigly is fortunate to hold the position he does, because jobs like this are among the most sought-after in the bank. 

Quigly's Family Relationship.   Perhaps what accounts in part for Scott Quigly's success at Wells Fargo, and what further sets him apart from associates, is his family relationship.  Scott's father, Philip Quigly, is a long-time Well Fargo Director, who plans to retire from the board in April 2013. 

The proxy filing makes not of the familial relationship providing a sort of apology:  “The company was unaware of the family relationship with Mr. Quigley until after the job offer had been made.”  Supposedly, Scott's father didn't even know his son applied for the job. 

[C-I Note:  All this out-of-touch reality appears a little too far fetched for our in-house HR experts.  And while it's been a while since I filled out a job app, I recall there being a section - particularly when the employer is publicly traded - that asks for names of anyone in the candidate's immediate family who ever worked for or been associated with the company - Wells Fargo,in this case - and/or its affiliates. Could Scott have forgotten about his father's directorship? 

And without intending to pick on the Quigly's - for I know them not - I can imagine a scenario where father Philip says he can get his son into Well Fargo in one of the sought-after units.  That would be great, says then-37 year old Scott, whose job prospects at this 30-something point in his career might not have been all that encouraging. 

One question pops up at this point in time.  If the outside world may see nepotism as the main, if not the only reason, for Scott Quigly's good fortune as Wells Fargo, why did father Philip use his connections to get his son a job with another banking company?  Surely, the father is well-connected and doesn't need to give others reasons to question the propriety of his son's employment.  After all, any questions that are raised, as they now have been, are likely to conjure up visions of impropriety at the bank level and at the individual levels - for both Philip and Scott.  Well, between the bank and the Quigly family, there are greater legal minds than mine to figure out all the angles - or at least, one would suspect there would be.]  

Notwithstanding these considerations, Wells Fargo & Co. does not appear to be the least concerned about the matter.    seems to present little doesn't seem to concern , the most valuable U.S. bank. 

Yet, in this age of the Internet, where information is at one's fingertips, others hold a very different position - like Nell Minow, corporate-governance consultant at Portland, ME-based GMI Ratings - who co-founded the Corporate Library.  Mr. Minow offers this opinion: 

“It compromises both the executive and the director.  If it were me advising the company, I would tell them not to do it under any cirumstances."

Philip Quigly's Standing as an Independent Director.   Philip Quigley is deemed an independent director by the board, led by Wells Fargo Chairman and Chief Executive Officer John Stumpf, 59, according to the the 3/14/13 proxy.  For a director to be independent, the board must determine the person has no material relationship with the company, according to guidelines for firms listed on the New York Stock Exchange.

Yet, material ties may include “familial relationships,” according to NYSE guidelines, that in relevant part states:  “The board should consider the issue not merely from the standpoint of the director, but also from that of persons or organizations with which the director has an affiliation.”

This troubles Charles Elson, director of the Univ. of Delaware’s John L. Weinberg Center for Corporate Governance, who says:  Such relationships make it harder for a director to oversee management.  He adds: "It raises independence issues for the father.  For the son, it might make it harder to work there.”

In 2010, the board adopted a policy based on a recommendation of the governance committee to “strongly discourage” the hiring of additional immediate family members of directors, according to the proxy. Philip Quigley was the committee’s chairman at the time.

Other Examples of Potential Conflicts of Interest.   Wells Fargo also employs James Hardin, brother of director Cynthia Milligan, as a wealth-management adviser and paid him about $227,000 last year, including commissions, the proxy shows.  Milligan, who’s also a member of the governance committee, was unaware of her brother’s job discussions with the company and the firm didn’t know they were siblings until after he accepted the position, Wells Fargo said in the filing. Milligan and Hardin didn’t reply to requests for comment.

The rest of the article from Bloomberg provides further fuel to the fire.  And none of it indicates why alternatives could not have been considered.

For further details, go to:   [Bloomberg, 3/27/13].