Executive Compensation Decision Highlights

Compensation Is Aligned with Performance and Promotes Accountability

The Human Resources Committee (HRC) is committed to an executive compensation program that drives pay for performance, appropriately balances risk, rewards the creation of sustained shareholder value, and reinforces individual accountability through a robust performance management program and compensation forfeiture and recovery provisions.

As approved by the Board, Mr. Scharf’s compensation under his offer letter reflected forgone compensation opportunities at his prior employer, with his go-forward compensation tied to future Company performance. In accordance with his offer letter, for 2019, he was guaranteed a target bonus of at least $5 million and the Board’s independent directors determined in March 2020 that this amount was appropriate. Mr. Scharf was also guaranteed $15.5 million in Performance Shares (granted in March 2020, subject to performance conditions, vesting, and other conditions). For 2020 and beyond, Mr. Scharf did not receive ongoing compensation guarantees or minimums (other than base salary), and we did not enter into an employment agreement with him.

Application of the Performance Assessment Framework for 2019

The HRC’s compensation decisions reflect the application of the enhanced performance assessment framework for the 2019 performance year:

The following table provides our named executives’ total direct compensation for performance year 2019 in the form of base salary rate for 2019 and annual and long-term incentive compensation awarded in March 2020 based on 2019 performance. It is not a substitute for, and should be read together with, the Summary Compensation Table, which presents compensation paid, accrued, or awarded for 2019 in accordance with Securities and Exchange Commission (SEC) disclosure rules and includes additional compensation elements and other important information.

Our Leadership and Business

Wells Fargo is a diversified, community-based financial services company, with $1.9 trillion in assets and approximately 260,000 employees working to serve one in three households in the United States. Wells Fargo provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,400 locations, more than 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 32 countries and territories to support customers who conduct business in the global economy.

In February 2020, Wells Fargo announced a new organizational model that creates a flatter line of business structure and brings greater focus and provides leaders with clear authority, accountability, and responsibility. The new model has five line of business CEOs, each reporting to our CEO.

Charles W. Scharf, CEO   (joined the Company on October 21, 2019 as CEO and a member of our Board of Directors)

 

Consumer & Small Business Banking		Consumer Lending		Commercial Banking		Corporate & Investment Banking		Wealth & Investment Management
Mary Mack, CEO		Mike Weinbach (CEO to join in May 2020)   Mary Mack, Interim CEO		Perry Pelos, CEO		Jon Weiss, CEO		Jon Weiss, Interim CEO
•   Delivers a full range of deposit, lending, investment, and payment products   •   Includes:   ¡  Branch Banking (through our 5,400 branches) ¡   Small Business ¡  Deposits ¡   New Digital team focused on digital channel acquisition		•   Elevates a core competency of the Company that provides critical capabilities to fulfill the financial needs of customers   •   Includes:   ¡  Home Lending ¡   Auto ¡  Cards & Merchant Services ¡   Personal Loans		•   Brings together relationship and product capabilities in serving businesses with annual sales generally in excess of $5 million   •   Includes:   ¡  Commercial Capital ¡   Treasury Management ¡  Business Banking ¡   Middle Market Banking ¡  Government and Institutional Banking		•   Creates a separate business line for Corporate & Investment Banking (previously part of Wholesale Banking)   •   Focused on supporting the capital markets, banking, and investment needs of our corporate, government, and institutional clients   •   Includes Commercial Real Estate		•   Provides a full range of personalized wealth management, investment, asset management, and retirement products and services   •   Includes.   ¡   Wells Fargo Advisors ¡  The Private Bank ¡   Abbot Downing ¡  Wells Fargo Asset Management

 

We Have Made Fundamental Changes to How We Manage Our Operations		We Remain Focused on Serving Our Customers and Delivering Long-Term Value for our Shareholders
•   Deployed significant resources to address outstanding regulatory and legal issues, including further enhancing our risk management capabilities   •   Hired a Chief Operating Officer (Scott Powell) in December 2019; Creating an integrated operations organization that will enable us to strengthen how we serve our customers, drive operational excellence, and execute on our regulatory priorities   •   Operations leaders for each line of business manage core operations functions and now report to the Chief Operating Officer, with joint reporting relationships to business line CEOs   •   Created a new Sales Practices Oversight and Management role (led by Michael Cleary who joined the Company in February 2020) that will establish an integrated and consistent approach to sales practice monitoring, analysis, and reporting across the Company		•   Focused on rebuilding customers’ trust and enhancing their experience, which resulted in higher year-over-year scores for both “Customer Loyalty” and “Overall Satisfaction with Most Recent Visit” (Dec. 2019 branch survey scores)   •   Overall financial performance, including profits and expenses, were below expectations, but business showed positive momentum with solid customer activity including growth in loans and deposits and strong credit performance   •   Remained well-capitalized with high levels of liquidity while still managing to return $30.2 billion to shareholders through common stock dividends and net share repurchases   •   Created a new Strategy, Digital & Innovation Group, reporting to the CEO, with responsibility for Corporate Strategy and our Digital and Innovation Teams (lead by the Chief Operating Officer on an interim basis)

Our Broader Role and Engagement with Stakeholders

Our Purpose

Wells Fargo has long believed that focusing on the needs of all of our stakeholders, including customers, employees, regulators, suppliers, communities, and shareholders, drives long-term value creation. We understand that we have a fundamental commitment to all of our stakeholders, and one of the first actions of our new CEO, Charlie Scharf, was to express his support for, and sign on to, the Business Roundtable’s Statement on the Purpose of a Corporation (statement of purpose). The statement of purpose sets forth a commitment by the companies signing the document in the following five areas that Wells Fargo believes are consistent with the Company’s priorities and goals, including:

Our Customers

Our vision is to satisfy our customers’ financial needs and help them succeed financially. We serve one in three households in the United States. The Statement on the Purpose of a Corporation starts with delivering value to customers and we must be guided by delivering for our customers every day in a manner that will make us and our stakeholders proud.   •  We are America’s #1 small business lender and #1 lender to small businesses in low-and moderate-income areas for the 17th year1   •  We have helped 435,000 minority households purchase a home since 2016 through our commitment to increase homeownership among all minority communities   •  Wells Fargo offers more than 13,000 ATMs and approximately 5,400 retail banking branches coast to coast   •  We have helped 2.7 million customers avoid overdraft charges with Overdraft Rewind®   •  We have provided 9.2 million customers with free access to their FICO® Score to help them monitor and better manage their credit   •  In Wholesale Banking, we were the #1 Treasury Management provider according to the 2019 Ernst & Young Annual Cash Management survey, measured by “fee-equivalent revenue” (November 2019 survey)   •  In Wealth & Investment Management, total client assets reached $1.9 trillion as of December 31, 2019, up 10% from a year ago   •  In Consumer Banking, fourth quarter 2019 branch customer experience surveys reflected higher year-over-year scores for both “Customer Loyalty” and “Overall Satisfaction with Most Recent Visit”

Our Employees

Wells Fargo employs approximately 260,000 employees. Our people are what set Wells Fargo apart and are critical to our success. Wells Fargo continues to invest in our employees, including by offering market competitive compensation, career-development opportunities, a broad array of benefits, and strong work-life programs.

Our Suppliers

We believe our suppliers and their actions are an extension of our own actions and reputation. We expect our suppliers to demonstrate strong values and ethical practices and to respect human rights. In addition, as we focus on the needs of diverse markets, expanding our work with diverse vendors and suppliers becomes essential.

•  For 2019, Wells Fargo achieved its sixth consecutive year of spending over $1 billion with certified diverse suppliers   •  We recognize the opportunity that working with diverse business owners presents and are working to grow our diverse supplier pipeline – We spent 11.3 percent of our controllable spend in 2019 with diverse suppliers, and continue making progress toward achieving 15 percent of our procurement spend with diverse suppliers by 2020; and a key success was the Hudson Yards Development Project in New York City where Wells Fargo spent $145 million, or 45% of the build out, with local diverse suppliers   •  We were recognized as one of 159 companies to the CDP Supplier Engagement Leaderboard based on our work to encourage our suppliers to demonstrate their commitment to environmental sustainability.   •  We maintain a supplier diversity code of conduct that reflects our additional expectations of our suppliers through complimentary programs related to risk, information security, and corporate responsibility

Our Communities

We understand our role as a community partner and the positive impact we can have on society, local and global economies, and the environment. We seek to make positive contributions to every community we serve—through our products and services, operations, and our philanthropy. The following are ways that we give back to our communities through philanthropy, community outreach, and volunteerism.

•  We committed $1 billion in philanthropic capital to address the U.S. housing affordability crisis through 2025   •  We invested $455 million in grants in the last year, funding national organizations to deliver programs at scale and nonprofits that specifically address the needs of local markets, in order to unlock economic opportunity for people and communities   •  Our employees generously volunteered 1.9 million hours in their communities in 2019, making these communities stronger for everyone and improving lives   •  Wells Fargo’s NeighborhoodLIFT® program assisted more than 3,300 homeowners by offering homebuyer education plus down payment assistance grants across a dozen communities including Los Angeles; Washington, D.C. and Prince George’s County; Houston; Sacramento; Omaha, Nebraska; Baltimore; the state of Alaska; Dallas and Fort Worth, Texas; Newark and Essex County, New Jersey; the state of Montana; Pittsburgh and Allegheny County, Pennsylvania; and Portland, Oregon   •  We made a $10 million grant to the National Association for Latino Community Asset Builders to support growth-oriented lending to minority-owned businesses across the U.S.

Our Shareholders

We believe in the strength of our diversified business model and are making changes to build a stronger foundation for the Company. In addition to the new organizational model we announced that creates a flatter line of business structure, we are conducting business reviews to look at our businesses and plans, including opportunities, as well as all of our enterprise functions. Our reported 2019 business performance, including higher expenses and lower profits, reflected significant steps that the Company is taking to resolve outstanding regulatory and legal issues, to transform Wells Fargo through enhanced risk-management capabilities, to improve technology and operational excellence to better serve our customers, and to make significant investments in our employees.

We value and consider the feedback we receive from our investors and other stakeholders and have consistently acted to enhance our governance practices and transparency through our disclosures in response to those perspectives. See Demonstrated Track Record of Responsiveness to Investors and Other Stakeholders and Shareholder Proposals – Our Engagement with and Responsiveness to Shareholders in this proxy statement for examples of the constructive result of our engagement with shareholders and other stakeholders and our responsiveness to the issues they have raised.

Corporate Governance

Corporate Governance Framework and Documents

Our Board is committed to sound and effective corporate governance principles and practices, and has adopted Corporate Governance Guidelines to provide the framework for the governance of our Board and our Company. These Guidelines address, among other matters, the role of our Board, Board membership criteria, director retirement and resignation policies, our Director Independence Standards, information about the committees and other policies and procedures of our Board, including the majority vote standard for directors, management succession planning, our Board’s leadership structure, and director compensation. Our Board reviews its Corporate Governance Guidelines annually as part of its Board self-evaluation process.

Our Corporate Governance Documents

Information about our Board’s and our Company’s corporate governance, including the following corporate governance documents, is available on our website at https://www.wellsfargo.com/about/corporate/governance:

Comprehensive Annual Evaluation of Board Effectiveness

Board Self-Evaluation Process – How Candid Feedback is Obtained

The following chart reflects the key components of the Board’s annual self-evaluation process. Additional information on the topics covered in the scope of the evaluation is included below.

Our Investor Engagement Program

As part of our commitment to effective corporate governance practices, since 2010 we have had an investor outreach program with independent director participation to help us better understand the views of our investors on key corporate governance topics. In addition to engagement with our largest institutional investors, we have enhanced our engagement efforts with additional investors and stakeholders to hear their perspectives. The constructive and candid feedback we receive from our investors and other stakeholders during these meetings is important and helps us inform our priorities, assess our progress, and enhance our corporate governance practices and disclosures each year. The following chart highlights our investor engagement program and process for considering the feedback we receive.

Demonstrated Track Record of Responsiveness to Investors and Other Stakeholders

Our Board and our Company value and consider the feedback we receive from our investors and other stakeholders and have consistently acted to enhance our governance practices and transparency through our disclosures in response to those perspectives.

Strong Independent Board Leadership

Our Board Leadership Structure

Annual Independent Chair Selection

Our Board’s Governance and Nominating Committee is responsible for periodically evaluating our Board’s leadership structure and, based on the recommendation of the GNC, our Board selects the Chair of the Board annually. Our Board believes that our current Board leadership structure with an independent Chair, with clearly defined authority and responsibilities shown in the chart below, provides strong independent leadership and oversight for our Company and our Board. As independent Chair, Mr. Noski can focus on governance of our Board, including Board composition and the recruitment of new directors, Board meeting schedule and agenda setting, Board committee succession planning, Board committee responsibilities, managing the information flow and management reporting to the Board, and investor engagement and outreach on governance matters. As CEO, Mr. Scharf can focus his attention on our business and strategy, including the risk, regulatory, and control work we have to do.

Management Succession Planning and Development

A primary responsibility of our Board is identifying and developing executive talent at our Company, particularly the CEO and other senior leaders of our Company. The Board has assigned to the HRC, as set forth in its charter, the responsibility to oversee the Company’s talent management and succession planning process, including CEO evaluation and succession planning. The Board’s Corporate Governance Guidelines require that the CEO and management annually report to the HRC and the Board on succession planning (including plans in the event of an emergency) and management development. The Corporate Governance Guidelines also require that the CEO and management provide the HRC and Board with an assessment of persons considered potential successors to certain senior management positions at least once each year.

The Board engages in an annual succession planning process through which it identifies potential successors both within and outside of the Company. After Timothy J. Sloan stepped down as CEO in March 2019, the Board decided to conduct an external search for a new CEO based on its conclusion that seeking someone from outside the Company was the most effective way to complete the transformation at Wells Fargo.

The Board formed a search committee, which was comprised of former director James H. Quigley (Chair), and current directors Wayne M. Hewett, Maria R. Morris, and Ronald L. Sargent, to lead the Board’s efforts in connection with its external search for the Company’s next CEO. The Board also elected C. Allen Parker, previously the General Counsel, as the Company’s Interim CEO and President and worked closely with Mr. Parker and the Company’s leadership team to continue to move Wells Fargo forward on its goals and commitments.

As part of talent and succession planning, the Board uses defined attributes for the qualities the Board seeks in the CEO of the Company and other senior leaders. In connection with the external CEO search, the Board used those attributes, which include financial and business acumen, integrity, risk management, passion for diversity and inclusion, and commitment to strong talent management. The HRC and the Board annually assess and update, as appropriate, those CEO attributes as part of our succession planning process.

Continuing to Enhance How We Think About Management Succession Planning

Our Board and senior management have continued to enhance our talent planning and succession program. Annually, the Board and the HRC review succession plans to assess internal talent readiness for executive roles and associated development plans to support their readiness. Enhancements to the succession planning approach have included:

Recent Results of Management Succession Planning Process

Wells Fargo has made management changes over the last few years that continue to reflect a balance between development of strong internal and leadership talent and enhancement of our leadership with external talent. The Company has used identified succession plans to fill executive roles in the last year and to continue to develop a credible pipeline of leaders in support of our ongoing business needs, to promote the stability of our Company over time, and to reflect the communities we serve. We leverage ongoing talent and succession planning to make sure we have sufficient talent to meet the short-term and long-term needs of the Company. We also identify specific needs and hire external talent to strengthen our Company’s capabilities in various areas.

Board Composition

Board Succession Planning

Over the past few years, our Board’s succession planning has focused on the composition of our Board and its committees, upcoming retirements under our director retirement policy, succession plans for committee chairs and committee members, our commitment to Board diversity, and recruiting strategies for adding new directors, including with banking and financial services experience. In its succession planning, the GNC and our Board consider the results of our Board’s annual self-evaluation, as well as other appropriate information, including the types of skills and experience desirable for future Board members and the needs of our Board and its committees at the time in light of the Company’s strategy, risk appetite, and risk profile.

Board Succession Planning Framework

Our Board conducts formal succession planning annually and has adopted a Board Succession Planning Framework to assist the Board in its annual succession planning. That framework provides for consideration of succession planning for the Board as well as succession planning for the independent Chair and Board committee chairs to enable the Board to maintain a composition and structure aligned to the Company’s needs at the time. As part of succession planning framework, the Board considers how current and evolving risks may create needs for particular qualifications and experience on the Board and its committees, including relevant banking, bank regulatory, and financial services experience. The GNC and the Board use various tools for succession planning, including to review upcoming director retirements under the Board’s director retirement policy, individual director tenure, and average director tenure, and the tenure of each director’s service on Board committees and in committee chair roles.

Director Tenure and Retirement Age Policies
•  In February 2018, our Board amended its Corporate Governance Guidelines to better reflect its recognition of the importance of periodic Board refreshment and maintaining an appropriate balance of tenure, experience, and perspectives on the Board.   •  The Board values the contributions of both newer perspectives as well as directors who have developed extensive experience and insight into the Company, and as a result does not believe arbitrary term limits are appropriate.   •  The Board believes that directors should not have an expectation of being renominated annually and that the Board’s annual self-evaluation is a key component of its director nomination process.   •  In connection with the Board’s annual self-evaluation and director nomination processes, the Board considers at least annually upcoming retirements under its director retirement policies, the average tenure and overall mix of individual director tenures of the Board, the overall mix of the diverse skills, knowledge, experience, and perspectives of directors, each individual director’s performance and contributions to the work of the Board and its committees, the personal circumstances and other time commitments of directors, along with other factors the Board deems appropriate.   •  Our Board established the retirement age of 72 for directors with the understanding that directors may not necessarily serve until their retirement age. Our Board’s retirement age policy is intended to facilitate our Board’s recruitment of new directors with appropriate skills, experience, and backgrounds and provide for an orderly transition of leadership on our Board and its committees.

Overall Board Composition and Size

The Board’s current composition has resulted from a thoughtful process informed by the Board’s own evaluation of its composition and effectiveness and feedback received from the Company’s engagement with shareholders and other stakeholders. As part of Board succession planning, the Board seeks to add new directors that complement the overall skills and capabilities of the Board. The Board’s current size is 12 directors and may fluctuate in the near term as the Board recruits new directors.

Board Qualifications and Experience

Minimum Qualifications

Our Board has identified the following minimum qualifications for its directors:

		Character and Integrity Must be an individual of the highest character and integrity
		CEO / Leadership Experience Demonstrated breadth and depth of management and/or leadership experience preferably in a senior leadership role, in a large or recognized organization or governmental entity
		Financial Literacy or Other Relevant Professional or Business Experience Financial literacy or other professional or business experience relevant to an understanding of our Company and its business
		Independence and Constructive Collegiality Must have a demonstrated ability to think and act independently as well as the ability to work constructively in a collegial environment

Our Board believes that CEO or other senior management and/or leadership experience provides our directors with substantial experience relevant to serving as a director of our Company, including in many of the areas discussed below that our Board views as important when evaluating director nominees. Our Board believes that each of our nominees satisfies our director qualification standards and during the course of their business and professional careers as a chief executive officer or other senior leader has acquired extensive executive management experience in these and other areas.

Additional Qualifications and Experience Identified by Our Board as Important to Our Business and Strategy

The GNC and our Board desire that the Board as a whole has an appropriate balance of skills, knowledge, experience, viewpoints, and perspectives that are relevant to our business and strategy. In addition to the minimum qualifications required for Board services under the Board’s Corporate Governance Guidelines, the following are additional qualifications and experience that the Board has previously identified through its annual self-evaluation process as desirable in light of Wells Fargo’s business, strategy, risk profile, and risk appetite.

Categories of Additional Qualifications/Experience Identified Based on Relevance to Wells Fargo

		Financial Services Industry Experience in one or more of the Company’s specific financial services areas				Corporate Governance Experience or expertise in corporate governance matters, including through service as the executive or independent chair or lead director of a board of directors
		Accounting, Financial Reporting Experience as an accountant or auditor at a large accounting firm, chief financial officer, or other relevant experience in accounting and financial reporting				Management Succession Planning Experience or expertise in CEO and senior management succession planning, including through service as a current or former chief executive officer or president of a large organization
		Risk Management Experience managing risks in a large organization, including specific types of risk (e.g., financial, cyber) or risks facing large financial institutions				Environmental, Social, and Governance (ESG) Experience in ESG matters, including as part of a business and managing corporate, environmental, and social responsibility issues as business imperatives
		Human Capital Management Experience or expertise through a human resources leadership role in the management and development of human capital, including management of a large retail workforce, compensation, culture and other human capital issues				Community Affairs Experience in community affairs matters, including as part of a business and managing community relations and/or relationships with communities and other stakeholders
		Strategic Planning, Business Development, Business Operations Experience defining and driving strategic direction and growth and managing the operations of a business or large organization				Government, Public Policy Experience in governmental affairs and public policy matters, including as part of a business and/or through positions with government organizations and regulatory bodies
		Information Security, Cybersecurity, Technology Experience or expertise in information security, data privacy, cybersecurity, or use of technology to facilitate business operations and customer service				Regulatory Experience in regulatory matters or affairs, including as part of a regulated financial services firm or other highly regulated industry
		Consumer, Marketing, Digital Experience in a client services or consumer retail business, including mobile and digital consumer experiences, or marketing				Global Perspective or International Experience doing business internationally or focused on international issues and operations
		Legal Experience acquired through a law degree and as a practicing attorney in understanding legal risks and obligations

Board Qualifications and Experience Matrix

The following chart reflects areas of qualifications and experience that our Board views as important when evaluating director nominees. Additional information on the business experience and other skills and qualifications of each of our director nominees is included under Item 1 – Election of Directors. Each director also contributes other important skills, expertise, experience, viewpoints, and personal attributes to our Board that are not reflected in the chart below.

Importance of Board Diversity

Although the GNC does not have a separate policy specifically governing diversity, as described in the Corporate Governance Guidelines and its charter the GNC will consider, in identifying first-time candidates or nominees for director, and in evaluating individuals recommended by shareholders, the current composition of our Board in light of the diverse communities and geographies we serve and the interplay of the candidate’s or nominee’s experience, education, skills, background, gender, race, ethnicity, and other qualities and attributes with those of the other Board members. The GNC also incorporates this broad view of diversity into its director nomination process by taking into account all of the factors above, in addition to having a diverse candidate pool for each director search the Board undertakes, when evaluating and recommending director nominees to serve on our Board so that our Board’s composition as a whole appropriately reflects the current and anticipated needs of our Board and our Company.

In implementing its practice of considering diversity, the GNC may place more emphasis on attracting or retaining director nominees with certain specific skills or experience, such as industry, regulatory, operational, or financial expertise, depending on the circumstances and the composition of our Board at the time. Gender, race, and ethnic diversity also have been, and will continue to be, a priority for the GNC and our Board in its director nomination process because the GNC and our Board believe that it is essential that the composition of our Board appropriately reflects the diversity of our Company’s employees and the customers and communities they serve. The GNC considers the self-identified diversity characteristics of each director or potential director candidate.

The GNC believes that it has been successful in its efforts over the years to promote gender, race, and ethnic diversity on our Board. The GNC and our Board believe that our director nominees for election at our 2020 annual meeting bring to our Board a variety of different backgrounds, skills, professional and industry experience, and other personal qualities, attributes, and perspectives that contribute to the overall diversity of our Board. The charts below show the diversity of our director nominees. The Board expects to maintain its focus on the importance of Board diversity as well as desired qualifications and experience identified by the Board in future director recruitment efforts.

The GNC and our Board will continue to monitor the effectiveness of their practice of considering diversity through assessing the results of any new director search efforts, and through the GNC’s and our Board’s annual self-evaluation processes in which directors discuss and evaluate the composition and functioning of our Board and its committees.

Director Election Standard and Nomination Process

Director Election Standard

Our By-Laws provide that directors will be elected using a majority vote standard in an uncontested director election (i.e., an election where, as of the record date, the only nominees are those nominated by our Board, such as at this meeting). Under this standard, a nominee for director will be elected to our Board if the votes cast for the nominee exceed the votes cast against the nominee. However, directors will be elected by a plurality of the votes cast in a contested election.

Under Delaware law, directors continue in office until their successors are elected and qualified or until their earlier resignation or removal. Our Corporate Governance Guidelines provide that our Board will nominate for election and appoint to fill Board vacancies only those directors who have tendered or agreed to tender an advance, irrevocable resignation that would become effective upon their failure to receive the required vote for election and Board acceptance of the tendered resignation. Each incumbent director nominee named in this proxy statement has tendered an irrevocable resignation as a director in accordance with our Corporate Governance Guidelines, which resignation will become effective if he or she fails to receive the required vote for election at the annual meeting and our Board accepts his or her resignation.

Our Corporate Governance Guidelines also provide that the GNC will consider the tendered resignation of a director who fails to receive the required number of votes for election, as well as any other offer to resign that is conditioned upon Board acceptance, and recommend to our Board whether or not to accept such resignation. The GNC, in deciding what action to recommend, and our Board, in deciding what action to take, may consider any factors they deem relevant. The director whose resignation is under consideration will abstain from participating in any decision of the GNC or our Board regarding such resignation. If our Board does not accept the resignation, the director will continue to serve until his or her successor is elected and qualified. Our Board will publicly disclose its decision on the resignation within 90 days after certification of the voting results.

Director Nomination Process

GNC Leadership of the Director Nomination Process

The GNC is responsible for leading the director nomination process, which includes identifying, evaluating, and recommending for nomination candidates for election as new directors and incumbent directors, regardless of who nominates a candidate for consideration. The goal of the GNC’s nominating process is to assist our Board in attracting and retaining competent individuals with the requisite leadership, executive management, financial, industry, and other expertise who will act as directors in the best interests of our Company and its shareholders. The GNC regularly reviews the composition of our Board in light of its understanding of the backgrounds, industry, professional experience, personal qualities and attributes, and various geographic and demographic communities represented by current members. As discussed above, the GNC also oversees our Board’s self-evaluation process.

Identification and Assessment of Director Candidates

The GNC identifies potential candidates for first-time nomination as a director through various sources, including recommendations it receives from the following:

The GNC has the authority to engage a third party search firm to identify and provide information on potential candidates. A key objective of the GNC in connection with its identification of potential director candidates is to use multiple sources and actively seek out qualified women and ethnically diverse candidates in order to have a diverse candidate pool for each search the Board undertakes.

Charles H. Noski, who became a director in June 2019, was recommended to the GNC for consideration by a third party search firm engaged by the GNC. Richard B. Payne, Jr., who became a director in October 2019, was recommended to the GNC for consideration by certain leaders in the financial services industry. Steven D. Black, who is a director nominee for election at our 2020 annual meeting, was recommended to the GNC for consideration by our CEO. In addition to providing information on a number of potential director candidates, the third party search firm reviewed and provided information about Messrs. Black, Noski, and Payne for review by the GNC and our Board.

When the GNC has identified a potential new director nominee, it obtains publicly available information on the background of the potential nominee to make an initial assessment of the candidate in light of the following factors:

The GNC determines, in its sole discretion after considering all factors it considers appropriate, whether a potential new director nominee meets the Board’s minimum qualifications and also considers the composition of the entire Board taking into account the particular qualifications, skills, experience, and attributes that our Board believes are important to our Company such as those described under Board Qualifications and Experience.

If a candidate passes this initial review, the GNC arranges introductory meetings with the candidate and our Chair, the GNC Chair, and the CEO to discuss the candidate’s background and determine the candidate’s interest in serving on our Board. If determined appropriate by the Chair and GNC Chair and if the candidate is interested in serving on our Board, the GNC arranges additional meetings with members of the GNC and other members of our Board. The candidate also may meet with Company executives, including as part of the candidate’s consideration of potentially joining our Board. If our Board and the candidate are both still interested in proceeding, the candidate provides us additional information for use in determining whether the candidate satisfies the applicable requirements of our Corporate Governance Guidelines, Code of Ethics and Business Conduct, and any other rules, regulations, or policies applicable to members of our Board and its committees and for making any required disclosures in our proxy statement. Assuming a satisfactory conclusion to the process outlined above, the GNC then presents the candidate’s name for approval by our Board or for nomination for approval by the shareholders at the next shareholders’ meeting, as applicable.

Board Nomination Process

1. Evaluation of Board Composition The GNC and the Board evaluate Board composition annually and identify skills, experience, and capabilities desirable for new directors in light of the company's business and strategy 2.Identification of Diverse Pool of Candidates Identification of a diverse pool of potential director candidates using multiple sources, including a third party search firm and input from stakeholders 3.Assessment of and Meetings with Potential Candidates Evaluation and assessment of candidate interest, minimum qualifications, conflicts, independence, background, and other information Members of the GNC and other Board members meet with qualified candidates 4.Recommendation of Potential Director for Approval GNC recommends potential directors to the Board for approval Shareholders vote on nominees at our annual meeting

In addition, as discussed under Comprehensive Annual Evaluation of Board Effectiveness, the GNC considers the results of the Board’s annual self-evaluation, including the individual contributions of directors to the work of the Board and its committees, in connection with its determination to nominate existing directors for election at each annual meeting of shareholders.

As reflected in our Corporate Governance Guidelines and discussed under Board Composition above, our Board has established a retirement age of 72 for directors. Under that retirement age policy, non-management directors will not be nominated for election for a term that would begin after the director’s 72^nd birthday, although the GNC may recommend and the Board may approve the nomination of a non-management director after the age of 72 if, due to special or unique circumstances, it is in the best interests of the Company and its shareholders that the director continue to be nominated for reelection to the Board. One of the Board’s director nominees, Richard B. Payne, Jr., will be age 72 at the time of the Company’s 2020 annual meeting. Consistent with our disclosure made at the time Mr. Payne was initially elected to the

Board in October 2019, the Board, based on the recommendation of the GNC, determined to nominate Mr. Payne for election at the 2020 annual meeting to serve as a director of the Company in light of the particular skills and experience that he brings to the Board. In determining that Mr. Payne’s nomination is in the best interests of the Company and its shareholders, the Board considered, among other factors, his substantial corporate and commercial banking experience, extensive knowledge of the bank regulatory environment for large financial institutions, and credit expertise. Effective March 1, 2020, Mr. Payne succeeded John D. Baker II as chair of the Credit Committee.

Process for Shareholders to Recommend Individuals for Consideration by the GNC

The GNC will consider an individual recommended by one of our shareholders for nomination as a new director. In order for the GNC to consider a shareholder-recommended nominee for election as a director, the shareholder must submit the name of the proposed nominee, in writing, to our Corporate Secretary at: Wells Fargo & Company, MAC# D1130-117, 301 South Tryon Street, 11^th Floor, Charlotte, North Carolina 28282. All submissions must include the following information: