What is the primary purpose of these Restricted Share Rights (RSRs)?

The RSRs are intended to align senior executives' interests with those of long-term stockholders by rewarding performance and encouraging the creation of sustained stockholder value. They also serve as a tool to attract and retain key executive talent.

What conditions must be met for these RSRs to vest?

The RSRs vest in equal installments over four years. Vesting is also subject to performance-based conditions and the discretion of the Human Resources Committee. The committee can cancel awards if the company experiences a significant downturn in financial performance, a material failure in risk management, or if an executive engages in misconduct causing significant harm.

Are there any post-vesting holding requirements for the executives?

Yes, executives are required to hold shares of Wells Fargo common stock equal to at least 50% of the after-tax shares acquired upon vesting and settlement of the RSRs. This holding requirement applies while they are employed by the company and for at least one year after retirement.

Can these RSR awards be clawed back?

Yes, the RSRs are subject to the company's applicable recoupment or 'clawback' policies, as amended, and any clawback requirements imposed by laws, rules, or regulations. The Human Resources Committee also retains the discretion to modify, revoke, cancel, or recover awards under certain circumstances.

WELLS FARGO & COMPANY/MN 8-K: Leadership Changes

Summary

Wells Fargo & Company filed an 8-K on July 29, 2015, reporting on the granting of long-term Restricted Share Rights (RSRs) to key senior executives, including its Chief Financial Officer and heads of major business divisions. These awards, granted on July 28, 2015, are designed to align executive compensation with long-term stockholder value creation and retain top talent, consistent with the company's compensation principles and recognition of strong past performance. The RSRs vest over four years in equal installments and are subject to significant performance-based conditions. The Human Resources Committee of the Board of Directors retains full discretion to cancel these awards under various circumstances, including significant financial downturns, risk management failures, or executive misconduct. Additionally, executives are required to hold a substantial portion of vested shares and are subject to clawback policies and post-employment non-disclosure and non-solicitation agreements.

Key Highlights

1Wells Fargo granted Long-Term Restricted Share Rights (RSRs) to senior executives on July 28, 2015.
2Awards are part of a compensation strategy to pay for performance, attract/retain talent, and encourage long-term stockholder value.
3RSRs vest over four years in equal annual installments, starting one year after the grant date.
4Vesting is contingent on performance and subject to the Human Resources Committee's discretion.
5The committee can cancel awards for poor financial performance, risk management failures, or executive misconduct.
6Executives must retain 50% of after-tax vested shares while employed and for one year post-retirement.
7Awards are subject to company clawback policies and other regulatory requirements.

WELLS FARGO & COMPANY/MN 8-K Report, Executive Changes (Jul 30, 2015)

Summary

Key Highlights

Frequently Asked Questions