PDF WELLS FARGO & COMPANY

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WELLS FARGO & COMPANY

NYSE: WFC ISIN: US9497461015

MEETING DATE: 25 APRIL 2017 RECORD DATE: 01 MARCH 2017 PUBLISH DATE: 03 APRIL 2017

COMPANY DESCRIPTION Wells Fargo & Company provides retail, commercial, and corporate banking services to individuals, businesses, and institutions.

INDEX MEMBERSHIP:

S&P 500; FTSE4GOOD GLOBAL INDEX; RUSSELL 3000; S&P 100; RUSSELL 1000

SECTOR: FINANCIALS

INDUSTRY: BANKS

COUNTRY OF TRADE: UNITED STATES

COUNTRY OF INCORPORATION: UNITED STATES

HEADQUARTERS: CALIFORNIA

VOTING IMPEDIMENT: NONE

REFER TO APPENDIX REGARDING DISCLOSURES: CONFLICTS OF INTEREST, ENGAGEMENT

AND EXPLANATION FOR REPUBLICATION

OWNERSHIP APPENDIX

COMPANY PROFILE

ESG PROFILE

COMPENSATION PEER COMPARISON VOTE RESULTS

2017 ANNUAL MEETING

PROPOSAL ISSUE

1.00

Election of Directors

1.01

Elect John D. Baker II

1.02

Elect John S. Chen

1.03

Elect Lloyd H. Dean

1.04

Elect Elizabeth A. Duke

1.05

Elect Enrique Hernandez, Jr.

1.06

Elect Donald M. James

1.07

Elect Cynthia H. Milligan

1.08

Elect Karen B. Peetz

1.09

Elect Federico F. Pe?a

1.10

Elect James H. Quigley

1.11

Elect Stephen W. Sanger

1.12

Elect Ronald L. Sargent

1.13

Elect Timothy J. Sloan

1.14

Elect Susan Swenson

1.15

Elect Suzanne M. Vautrinot

2.00

Advisory Vote on Executive Compensation

3.00

Frequency of Advisory Vote on Executive Compensation

4.00

Ratification of Auditor

BOARD GLASS LEWIS

FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR FOR 1 YEAR FOR

SPLIT AGAINST AGAINST AGAINST

FOR AGAINST

FOR AGAINST

FOR FOR FOR FOR FOR FOR AGAINST FOR FOR 1 YEAR FOR

CONCERNS Other unique issue Overboarded Other unique issue Other unique issue Other unique issue

Overboarded

5.00 6.00 7.00

8.00

9.00 10.00

Shareholder Proposal Regarding Retail Banking Sales Practices Report Shareholder Proposal Regarding Cumulative Voting Shareholder Proposal Regarding Study Session to Address Divestiture of Non-Core Banking Assets

Shareholder Proposal Regarding Gender Pay Equity Report

Shareholder Proposal Regarding Lobbying Report Shareholder Proposal Regarding Indigenous Peoples' Rights Policy

AGAINST AGAINST AGAINST AGAINST AGAINST AGAINST

AGAINST

FOR

AGAINST AGAINST

AGAINST AGAINST

Increased disclosure would allow shareholders to fully understand the steps the Company is taking to ensure equitable compensation

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SHARE OWNERSHIP PROFILE

SHARE BREAKDOWN

SHARE CLASS SHARES OUTSTANDING VOTES PER SHARE INSIDE OWNERSHIP STRATEGIC OWNERS** FREE FLOAT

1 Common Stock

5,003.4 M 1

0.20% 10.30% 89.70%

SOURCE CAPITAL IQ AND GLASS LEWIS. AS OF 22-MAR-2017

TOP 20 SHAREHOLDERS

HOLDER

OWNED* COUNTRY INVESTOR TYPE

1. Berkshire Hathaway Inc.

10.08% United States Public Company

2. The Vanguard Group, Inc.

6.01% United States Traditional Investment Manager

3. BlackRock, Inc.

5.46% United States Traditional Investment Manager

4. State Street Global Advisors, Inc.

4.23% United States Traditional Investment Manager

5. FMR LLC

2.64% United States Traditional Investment Manager

6. Capital Research and Management Company

2.52% United States Traditional Investment Manager

7. Wellington Management Group LLP

2.01% United States Traditional Investment Manager

8. Dodge & Cox

1.43% United States Traditional Investment Manager

9. J.P. Morgan Asset Management, Inc.

1.26% United States Traditional Investment Manager

10. Northern Trust Global Investments

1.18% United States Traditional Investment Manager

11. T. Rowe Price Group, Inc.

1.15% United States Traditional Investment Manager

12. State Farm Insurance Companies, Asset Management Arm

1.10% United States Traditional Investment Manager

13. Norges Bank Investment Management

1.02% Norway

Government Pension Plan Sponsor

14. Massachusetts Financial Services Company

0.96% United States Traditional Investment Manager

15. BNY Mellon Asset Management

0.91% United States Traditional Investment Manager

16. Franklin Resources, Inc.

0.83% United States Traditional Investment Manager

17. Geode Capital Management, LLC

0.83% United States Traditional Investment Manager

18.

Teachers Insurance and Annuity Association of America - College Retirement Equities Fund

0.81% United States Traditional Investment Manager

19. Barrow, Hanley, Mewhinney & Strauss, Inc.

0.71% United States Traditional Investment Manager

20. Bank of America Corporation, Asset Management Arm

0.57% United States Traditional Investment Manager

*COMMON STOCK EQUIVALENTS (AGGREGATE ECONOMIC INTEREST) SOURCE: CAPITAL IQ. AS OF 22-MAR-2017 **CAPITAL IQ DEFINES STRATEGIC SHAREHOLDER AS A PUBLIC OR PRIVATE CORPORATION, INDIVIDUAL/INSIDER, COMPANY CONTROLLED FOUNDATION, ESOP OR STATE OWNED SHARES OR ANY HEDGE FUND MANAGERS, VC/PE FIRMS OR SOVEREIGN WEALTH FUNDS WITH A STAKE GREATER THAN 5%.

SHAREHOLDER RIGHTS

VOTING POWER REQUIRED TO CALL A SPECIAL MEETING VOTING POWER REQUIRED TO ADD AGENDA ITEM VOTING POWER REQUIRED FOR WRITTEN CONSENT

MARKET THRESHOLD N/A 1.0%2 N/A

COMPANY THRESHOLD1 25.0% 1.0%2 50.0%

1N/A INDICATES THAT THE COMPANY DOES NOT PROVIDE THE CORRESPONDING SHAREHOLDER RIGHT. 2SHAREHOLDERS MUST OWN THE CORRESPONDING PERCENTAGE OR SHARES WITH MARKET VALUE OF AT LEAST $2,000 FOR AT LEAST ONE YEAR.

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COMPANY PROFILE

FINANCIALS

WFC S&P 500 PEERS*

1 YR TSR 4.6% 12.0% 25.9%

3 YR TSR AVG. 5 YR TSR AVG.

9.8%

18.2%

8.9%

14.7%

13.2%

19.6%

MARKET CAPITALIZATION (MM USD) ENTERPRISE VALUE (MM USD) REVENUES (MM USD)

276,779 598,787 84,541

ANNUALIZED SHAREHOLDER RETURNS. *PEERS ARE BASED ON THE INDUSTRY SEGMENTATION OF THE GLOBAL INDUSTRIAL CLASSIFICATION SYSTEM (GICS). FIGURES AS OF 31-DEC-2016. SOURCE: CAPITAL IQ

EXECUTIVE COMPENSATION

CHANGE IN CEO PAY*

1 YR

3 YR

5 YR

-33%

-33%

-34%

*SOURCE: EQUILAR.

SAY ON PAY FREQUENCY

1 Year P4P 2016

C

GLASS LEWIS STRUCTURE RATING Fair GLASS LEWIS DISCLOSURE RATING Fair

SINGLE TRIGGER CIC VESTING

No

EXCISE TAX GROSS-UPS

No

CLAWBACK PROVISION

Yes OVERHANG OF INCENTIVE PLANS 5.35%

BOARD & MANAGEMENT

ELECTION METHOD STAGGERED BOARD COMBINED CHAIR/CEO

Majority w/ Resignation Policy

No

No

CEO START DATE

AVERAGE NED TENURE

October 2016 8 years

ANTI-TAKEOVER MEASURES

POISON PILL APPROVED BY SHAREHOLDERS/EXPIRATION DATE

No N/A; N/A

AUDITORS

AUDITOR: KPMG MATERIAL WEAKNESS(ES) IDENTIFIED IN PAST 12 MONTHS RESTATEMENT(S) IN PAST 12 MONTHS

TENURE: 86 YEARS No No

CURRENT AS OF APR 03, 2017

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ENVIRONMENTAL, SOCIAL & GOVERNANCE PROFILE

OVERALL ESG SCORE Average Performer

Comparative Industry: Banks Board oversight for ESG Issues: Yes

All data and ratings provided by: Last Update: April 03, 2017

ANALYST COMMENTARY

"Wells Fargo (WF) is one of the largest US-based banks with total assets of USD 1.93 trillion. It is almost exclusively a retail bank, with wholesale and community banking revenues accounting for 94% of net income of USD 21.9 billion in FY2016. The bank's wealth, brokerage and retirement segment accounted for the remainder. The bank is a leader in a number of lending markets, including auto and student loans. The bank averages six products per family, representing a high product cross-selling rate. The company's large size, retail focus, many product offerings, and operations in the US expose it to very high regulatory oversight. Regulatory risk is high for the financials sector overall, especially for issues related to Business Ethics and Product Governance, and it is especially high in the US. Related fines have reached billions of dollars for individual firms, and infractions can, in extreme cases, result in criminal charges. ESG integration also presents a growing area of reputational risk for the company, as it is a large global lender. NGOs and media continue to regularly cite banks, including WF, for financing controversial industries and products. Therefore, Business Ethics, ESG Integration and Product Governance are the bank's key ESG issues. Its management of Business Ethics is poor considering it is implicated in a highly sensitive scandal involving opening up to two million retail customer accounts without their knowledge or authorization, as a result of high product cross-selling targets. While some reactive mitigating steps have been taken in the ensuing public outcry, it will take time to fully address business ethics cultural issues, and disclosure on policies and programmes still needs to be improved. ESG Integration, particularly in WF's lending standards, is also of concern. It has been singled out for its co-lead role in financing the Dakota Access Pipeline, and this raises questions about the strength and extent of disclosure of existing lending standards. For Product Governance, the bank continues to resolve legacy mortgage issues. It has proactively managed both its pay-lending exposure and subprime auto loan exposure, however a March 2017 downgrade by the OCC on community lending standards to ""needs to improve"" reflects that more work needs to be done. Overall, Wells Fargo's management of ESG issues is still insufficient considering the intense scrutiny it is under for various controversies, leading us to a negative view. "

ESG RISK PROFILE

The graph below compares the Company's ESG performance to its involvement in controversies in order to provide an assessment of the Company's ESG risk profile.

Laggard

Underperformer

Average Performer

Outperformer

Leader

None

Low Moderate Significant High HIGHEST CONTROVERSY LEVEL

Severe

OVERALL ESG PERFORMANCE

The graph below indicates the percentage of companies in the comparative industry that fall within each ESG performance category.

0%

50%

100%

Leader

Outperformer

Average Performer

Underperformer

Laggard

COMPARATIVE INDUSTRY

ESG PILLAR PERFORMANCE

For each pillar, the graph below indicates the percentage of companies in the comparative industry that fall within each ESG performance category. The governance pillar shown below is measured by Sustainalytics based on the Company's governance of sustainability issues.

ENVIRONMENT

SOCIAL

GOVERNANCE

0% Leader

50% 100% 0%

50% 100% 0%

50% 100%

Outperformer

HIGHEST CONTROVERSY LEVEL

The graph below indicates the percentage of companies in the comparative industry that fall within each controversy level.

0%

50%

100%

None

Low

Moderate

Significant

Average Performer

High

Underperformer Laggard

Severe

COMPARATIVE INDUSTRY

Rows and categories shown in dark blue or bold represent the Company's category for the relevant assessment.

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NOTEWORTHY CONTROVERSIES

SEVERE

Severe controversies are the most serious controversy level. They have the greatest negative impact on stakeholders and generate the greatest risk to a company's financial performance. Such controversies are highly exceptional. They indicate egregious practices and generally reflect a pattern of gross negligence, with the Company refusing to address the issue and/or concealing its involvement.

Business Ethics Incidents: Business Ethics

HIGH

High-impact controversies are those that have major negative sustainability impacts and typically generate significant business risk to the Company. Such controversies are generally exceptions within an industry. They typically involve a pattern of negative events or impacts and indicate a lack of company preparedness to properly manage key sustainability issues.

No high controversies

SIGNIFICANT

Significant controversies have notable negative sustainability impacts and may generate business risk to the Company. Such controversies may be isolated or they may suggest a pattern, but they are generally not exceptional within an industry. However, they raise questions about whether a company's management systems are being implemented effectively and are able to address the issue in a satisfactory manner.

Product & Service Incidents:

Employee Incidents: Customer Incidents: Society & Community Incidents:

Environmental Impact of Products Labour Relations

Quality and Safety

Social Impact of Products

NO PRODUCT INVOLVEMENT

DISCLAIMER

Copyright ?2017 Sustainalytics. All rights reserved.

The intellectual property rights to the environmental, social and governance ("ESG") profile and the information contained in the ESG profile are vested exclusively in Sustainalytics and/or its suppliers. Sustainalytics' role is limited to providing research and analysis in order to facilitate well-informed decision-making. Sustainalytics makes no representation or warranty, express or implied, regarding the advisability to invest in or include companies in investable universes and/or portfolios. The information on which the ESG profile is based has - fully or partially - been derived from third parties and is therefore subject to continuous modification.

Sustainalytics observes the greatest possible care in using information but cannot guarantee that information contained herein is accurate and/or complete and no rights can be derived from it. The information is provided "as is" and, therefore Sustainalytics assumes no responsibility for errors or omissions. Sustainalytics and/or its suppliers accept no liability for damage arising from the use of the ESG profile or this Proxy Advisory Paper or information contained herein in any manner whatsoever.

Please refer to the FAQ for further details about this page.

All data and ratings provided by:

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PAY-FOR-PERFORMANCE

Wells Fargo & Company's executive compensation received a C grade in our proprietary pay-for-performance model. The Company paid about the same compensation to its named executive officers as the median compensation for a group of companies selected using Equilar's market based peer algorithm.The CEO was paid significantly less than the median CEO compensation of these peer companies. Overall, the Company paid less than its peers, but performed moderately worse than its peers. (Note: The calculated CEO compensation includes portions paid to multiple individuals who served as CEO during the most recent fiscal year.)

HISTORICAL COMPENSATION GRADE

FY 2016: C FY 2015: C FY 2014: C

FY 2016 CEO COMPENSATION

SALARY: GDFV EQUITY: NEIP/OTHER: TOTAL:

$2,586,042 $ 0 $87,751 $2,673,794

FY 2016 PAY-FOR-PERFORMANCE GRADE

3-YEAR WEIGHTED AVERAGE COMPENSATION

EQUILAR PEERS VS PEERS DISCLOSED BY COMPANY

EQUILAR

Citigroup Inc.* Bank of America* U.S. Bancorp* Morgan Stanley* The PNC Financial Services Group, Inc.* The Goldman Sachs Group, Inc.* American Express* The Bank of New York Mellon Corporation* JPMorgan Chase & Co.* State Street Corporation* Capital One Prudential Financial, Inc. MetLife, Inc. American International Group, Inc. Visa Inc.

*ALSO DISCLOSED BY WFC

WFC

SHAREHOLDER WEALTH AND BUSINESS PERFORMANCE

Analysis for the year ended 12/31/2016. Performance measures, except ROA and ROE, are based on the weighted average of annualized 1, 2, and 3 year data. Compensation figures are weighted average 3-year data calculated by Glass Lewis based on information disclosed by the Company and its peers in their proxy filings. For Canadian peers, equity awards are normalized using the grant date exchange rate and cash compensation data is normalized using the fiscal year average exchange rate.

Equilar peers are updated in January and July. Peer data is based on public information, as well as information provided to Equilar during its open submission periods. The "Peers Disclosed by Company" data is based on public information only. Glass Lewis may exclude certain peers from the Pay for Performance analysis based on factors such as trading status and/or data availability. For details of exclusion criteria, go to:. For more information about Equilar peer groups, go to:

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1.00: ELECTION OF DIRECTORS

SPLIT

PROPOSAL REQUEST: Election of fifteen directors

ELECTION METHOD: Majority w/ Resignation Policy

RECOMMENDATIONS & CONCERNS:

AGAINST: J. Baker II (Other unique issue) ; J. Chen (Serves on too many boards) ; L. Dean (Other unique issue) ; E. Hernandez, Jr. (Other unique issue) ; C. Milligan (Other unique issue) ; S. Swenson (Serves on too many boards)

FOR:

E. Duke ; D. James ; K. Peetz ; F. Pe?a ; J. Quigley ; S. Sanger ; R. Sargent ; T. Sloan ; S. Vautrinot

UPDATE: RESULTS OF BOARD INVESTIGATION

On April 10, 2017, the board released the results of its months-long investigation into the Company's sales practices in a 110-page document. The report, which was headed by a special committee of independent directors with the help of independent counsel Shearman and Sterling LLP, covers the results of 100 interviews and a search of roughly 35 million documents.

As discussed in more detail below, our initial recommendations were based on the overall failure of the board to prevent the sales practices scandal. While we continue to have a positive view of the board's level of responsiveness, our concerns with the overall performance of the board remain. As such, our recommendations have not changed as a result of the release of this report. We have left our original analysis, published on April 3, below this section under the heading "Glass Lewis Analysis".

SUMMARY

The report largely absolves the board of much blame for the scandal, but does offer what we view as a frank and thorough assessment of failures across the Company to address the root cause of the sales practices, which it identifies as "the distortion of the Community Bank's sales culture and performance management system, which, when combined with aggressive sales management, created pressure on employees to sell unwanted or unneeded products to customers and, in some cases, to open unauthorized accounts." Further, the report finds that the Company's decentralized corporate structure "gave too much autonomy to the Community Bank's senior leadership, who were unwilling to change the sales model or even recognize it as the root cause of the problem."

Two executives already singled out by the Company for large compensation decreases--former CEO, John Stumpf, and former head of the Company's Community Bank, Carrie Tolstedt--are the most frequent targets of the report's criticism, with Ms. Tolstedt receiving the most blame for failing to recognize the problem or allow proper escalation of red flags within the Community Bank. Mr. Stumpf, the report states, was "too late and too slow" to challenge Ms. Tolstedt and call for changes to the Community Bank's sales model. Tim Sloan, the Company's new CEO, was not involved in the management of the Community Bank until his promotion to President and COO in late 2015; the board notes that Mr. Sloan decided Ms. Tolstedt "should not continue to lead the Community Bank" in mid-2016.

In conjunction with its release of the report, the Company disclosed that on April 7, 2017, the compensation committee determined that cause existed for terminating Tolstedt's employment, with resulting forfeiture of outstanding stock options with a current value of approximately $47.3 million. The committee also determined that the Company will claw back approximately $28 million of Mr. Stumpf's incentive compensation paid in March 2016 under an equity grant made in 2013.

The report also outlines a number of the remedial actions taken across the Company in response to the crisis, including the centralization of its risk reporting and the abolishment of sales goals in the Community Bank. During 2016, the Company's corporate risk group realigned 4,100 risk employees from their respective business units to the central risk organization, with an additional 1,100 to be realigned in 2017.

The report also largely dismisses claims of retaliation on whistleblowers inside the Community Bank. A discussion of this review, which covered ten potential case files related to sales practices, is included as a footnote to page 87 of the report.

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