What is the primary purpose of the new Executive Officer Performance Plan?

The primary purpose of the Executive Officer Performance Plan is to motivate executive officers and certain key employees by providing incentive compensation opportunities linked to the achievement of superior corporate, business group, and individual performance criteria and objectives. This is intended to align their interests with the long-term interests of the company and its stockholders, while promoting accountability for effective controls and risk management.

What will happen to employee 401(k) and savings plans during the blackout period?

During the blackout period, which is expected to run from December 28, 2009, to the week of January 17, 2010, participants in the Wells Fargo 401(k) Plan and the Wachovia Savings Plan will be unable to conduct certain transactions within their accounts. This includes obtaining loans, distributions, in-service withdrawals, changing contribution rates, and directing or diversifying investments. This temporary suspension is to facilitate the merger of the Wachovia Savings Plan into the Wells Fargo 401(k) Plan.

Are there any conditions under which executive officers will not receive incentive compensation?

Yes, a key condition is that no incentive compensation awards can be made for any performance period in which Wells Fargo & Company does not have positive net income. Additionally, all awards are subject to applicable laws, rules, regulations, and any recoupment or 'clawback' policies the company may have in place.

How does the amendment to the Code of Ethics affect trading in Wells Fargo securities by employees?

The Code of Ethics was amended to permit transactions in company securities that are conducted under a trading plan approved by the Company’s General Counsel or Corporate Secretary and implemented in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934. This provides an exception to the general prohibition against trading while in possession of material nonpublic information, provided the trading plan is established in advance and meets regulatory requirements.

WFC 8-K: Leadership Changes & Corporate Changes

Summary

Wells Fargo & Company (WFC) filed an 8-K on November 23, 2009, reporting on key changes in its executive compensation structure and employee benefit plans. A significant development is the adoption of the Executive Officer Performance Plan, effective for the 2009 performance period. This plan aims to incentivize executive officers and key employees through performance-based compensation tied to corporate, business group, and individual objectives, focusing on financial metrics like earnings per share and return on equity, as well as risk management. Importantly, no incentive compensation will be awarded if the company reports a net loss for the performance period. The plan replaces a previously suspended policy and is designed to align executive interests with long-term stockholder value while acknowledging existing tax deductibility limitations. Awards can be in cash, equity, or a combination thereof and are subject to clawback provisions and regulatory compliance, including those under the Emergency Economic Stabilization Act (EESA).

Key Highlights

1Wells Fargo adopted a new Executive Officer Performance Plan effective for the 2009 performance period, designed to incentivize executives and key employees based on performance criteria.
2The Performance Plan links incentive compensation to corporate, business group, and individual objectives, including financial measures like EPS and ROE, and risk management.
3No incentive compensation will be paid for any performance period in which the company does not achieve positive net income.
4The new plan covers senior executive officers, other executive officers, and certain key employees.
5Wells Fargo announced a temporary suspension of trading in its 401(k) and Wachovia Savings Plans, effective December 28, 2009, through January 17, 2010, to facilitate the merger of the two plans.
6During the blackout period, participants will be restricted from conducting transactions such as loans, distributions, and investment diversification.
7The company amended its Code of Ethics to allow for trading in company securities under pre-approved Rule 10b5-1 plans, while still prohibiting trading on material nonpublic information.

WELLS FARGO & COMPANY/MN 8-K Report, Executive Changes (Nov 23, 2009)

Summary

Key Highlights

Frequently Asked Questions