WELLS FARGO COMPANYMN
For the period ended Apr 30, 2024. Filed Mar 18, 2024.
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Apr 30, 2024 · Filed Mar 18, 2024
Contents
2024 PSA Program
Our PSA program appropriately balances the importance of absolute and relative performance while maintaining rigorous performance targets. The key features of our 2024 PSA program, for the awards granted in 2024 for 2023 performance, include:
| Award Level | •Determined based on 2023 Company, individual and, as applicable, business performance.•Represents 65% of long-term equity for CEO and 50% for other NEOs. |
|---|---|
| Performance Metrics | •The number of PSAs earned at the end of the performance period is based on the achievement of three-year average absolute ROTCE (weighted 75%) and three-year average relative ROTCE (weighted 25%) as set forth below. |
| Absolute ROTCE · Payout · Relative ROTCE · Payout | ||||||
|---|---|---|---|---|---|---|
| <5.0% | 0% | <25th percentile | 0% | |||
| 5.0% | 50% | 25th percentile | 50% | |||
| 12.5% | Increased 50 basis points from prior year | 100% | 50th percentile | 100% | ||
| 13.5% | 125% | ≥75th percentile | 150% | |||
| ≥14.5% | 150% | |||||
Both payout scales use linear interpolation between defined performance and payout levels.
| 2024 Proxy Statement | 79 |
|---|
| Additional Performance Conditions | •TSR1 performance modifier, which adjusts the ultimate payout by 20% (positively or negatively) if relative TSR results are in the top quartile or bottom quartile, respectively.•Payout is capped at 150% of target, and there will be no upward adjustment if our absolute TSR over the three-year performance period is negative.•For any year in the performance period that our Company incurs a Net Operating Loss (NOL)2, the target number of PSAs will be reduced by one third. |
|---|---|
| Vesting Period | •PSAs cliff vest after a three-year performance period aligning with long-term shareholder interests. |
| Risk Balancing Features | •Awards are subject to reduction, forfeiture, and clawback under the Company’s Clawback Policies, as applicable |
Refer to Additional Information, Note 6 for a further discussion of TSR.
Refer to Additional Information, Note 5 for a further discussion of NOL.
2021 PSA Payout
The HRC certified payout of the 2021 PSAs in the first quarter of 2024, following the completion of the three-year performance period on December 31, 2023.
| Absolute ROTCE · Payout | |||
|---|---|---|---|
| ≥12% · 125% to 150% | |||
| 8 to <12% | 90% to <125% | Payout | 137% |
| 5 to <8% | 50% to <90% | ||
| <5% | 0% | ||
In accordance with the design of the 2021 PSAs, because the Company achieved an ROTCE of 12% or higher during the performance period and TSR was above the median of the Financial Performance Peer Group and there was no net operating loss for any year during the performance period, the HRC determines the final payout between 125% and 150%.
During the performance period of 2021 – 2023, the Company achieved higher than 12% ROTCE on both an adjusted and un-adjusted basis. Adjustments were made in accordance with the Long-Term Incentive Compensation Plan and applicable award agreement. For 2021, Company performance was adjusted for reversals of credit loss reserves taken in 2020. For 2022, Company performance was adjusted for operating losses in the third and fourth quarters of 2022. For 2023, Company performance was adjusted for the FDIC special assessment. In addition, pursuant to the terms of the offer letter, the ROTCE results for PSAs awarded to Mr. Scharf were also adjusted to exclude the impact of any penalties or other charges related to litigation, investigations, or examinations arising out of retail sales practices of the Company, or arising out of other material regulatory matters related to the conduct of the Company, in each case during periods prior to Mr. Scharf’s commencement of employment with Wells Fargo. Based on this analysis, the HRC certified payout at 137% of target for each of our NEOs.
| 80 | Wells Fargo & Co. |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.