WELLS FARGO & COMPANY/MN
For the period ended Dec 31, 2024. Filed Mar 19, 2025.
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Dec 31, 2024 · Filed Mar 19, 2025
Contents
PSA Program
2025 PSA Program
Our PSA program appropriately balances the importance of absolute and relative performance while maintaining rigorous performance targets.
The 2025 PSA design maintains a consistent program design structurally, with an increase to absolute ROTCE required for payout at target, from 2024. As discussed in the Peer Groups section of this proxy statement, the HRC updated the 2025 Financial Performance Peer Group for PSA awards granted in 2025 for performance year 2024. The key features of our 2025 PSA program, for the awards granted in 2025 for 2024 performance, include:
| Award Level | •Determined based on 2024 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% | Increased target 75 basis points from prior year | 0% | <25th percentile | 0% | ||
| 5.0% | 50% | 25th percentile | 50% | |||
| 13.25% | 100% | 50th percentile | 100% | |||
| ≥14.5% | 150% | ≥75th percentile | 150% | |||
Both payout scales use linear interpolation between defined performance and payout levels.
| 2025 Proxy Statement | 67 |
|---|
| Additional Performance Conditions | •TSR1 performance modifier adjusts the ultimate payout by 20% (positively or negatively) if relative TSR results are above the 75th percentile or below the 25th percentile, respectively•Payout is capped at 150% of target, and there will be no upward adjustment for the TSR modifier 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.
2022 PSA Payout
The HRC certified payout of the 2022 PSAs in the first quarter of 2025, following the completion of the three-year performance period on December 31, 2024.
| Absolute ROTCE(75% Weighting) · Relative ROTCE(25% Weighting) | |||||
|---|---|---|---|---|---|
| Payout · Payout | |||||
| <5.0% | 0% | <25th percentile | 0% | ||
| 5.0% | 50% | 25th percentile | 50% | Payout: | 140% |
| 10.5% | 100% | 50th percentile | 100% | ||
| 12.0% | 125% | ≥75th percentile | 150% | ||
| ≥13.0% | 150% | ||||
Both payout scales use linear interpolation between defined performance and payout levels. Additionally, a TSR performance modifier 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%.
For PSAs granted in 2022, the three-year performance period ended December 31, 2024. Based on adjusted Company performance, as described below, our average ROTCE exceeded 13%, resulting in a payout of 150% of target for the absolute ROTCE portion of the award. The relative ROTCE portion was earned at 109% of target based on performance at the 55 th percentile. Our relative TSR for the performance period was at the 46 th percentile, so no modifier was applied. Based on this analysis, the HRC certified payout of 140% of target for each of our NEOs.
Adjustments were made to both Company and peer performance results in accordance with Wells Fargo’s Long-Term Incentive Compensation Plan (LTICP) and applicable award agreement. For 2022, Company performance was adjusted for operating losses in the third and fourth quarters of 2022. For 2023 and 2024, 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.
| 68 | Wells Fargo & Company |
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