Wells Fargo

Meeting date: April 26, 2016 Executive compensation at Wells Fargo is nothing if not consistent, excessive and consistent.

The salary for John Stumpf is $2.8 million, as it has been for the past several years. All the salaries for the Named Executive Officers (NEOs) are well over the 162m deductibility limit. The proxy statement explicitly states that the compensation committee, “Determined that the benefits to the Company and stockholders of achieving the appropriate compensation balance outweighed the non-deductibility of salaries and RSR awards granted in July 2015 in excess of IRC Section 162(m) limits.” Stockholders may disagree.

Newly promoted president Timothy Sloan has a salary of $2 million (a 9 percent raise) that is higher than that of the vast majority of CEOs (only 7 CEOs actually make more in salary than he does). Such high salaries drive high pay not only internally but also externally. Comparison of “peers” is easiest to peg to wages. Once again this year Stumpf received a non-equity incentive compensation $4,000,000, the identical amount he has received the last several years. These high and consistent bonuses earned the company red flags that helped place it on our overpaid list.

A high bonus should reward extraordinary performance over a given time-frame. A consistent bonus, such as seen at Wells Fargo, suggests that this feature of compensation in essence has become fixed rather than variable.