Wells Fargo scores the newest slim win for CEO pay By Reuters

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© Reuters. FILE PHOTO: A Wells Fargo brand is seen in New York Metropolis

By Ross Kerber and Sohini Podder

(Reuters) -Wells Fargo & Co’s govt pay plan for 2020 obtained backing from solely about 57% of investor votes on Tuesday, a slim win for the corporate and the newest proof of the more durable scrutiny that shareholders are placing on CEO compensation this 12 months.

CEO and President Charles Scharf was paid $20.4 million in 2020, down from $34.3 million in 2019, when he was first named to guide the financial institution, in keeping with the corporate’s proxy assertion filed in March. On an annualized foundation his complete direct compensation in 2020 fell about 12% from $23 million the prior 12 months, in keeping with a January submitting.

The board cited the drop in Wells Fargo (NYSE:)’s monetary outcomes for 2020, which have been hit by the COVID-19 pandemic, as one of many causes for the decrease compensation.

However the changes weren’t sufficient to fulfill buyers, who typically solid 90% or extra of their advisory votes in favor of company compensation. Ranges under 80% normally lead to revamped pay constructions, consultants say.

Influential proxy advisor Institutional Shareholder Companies advisable that buyers vote towards Wells Fargo’s pay.

ISS cited considerations together with comparatively excessive salaries for high executives, the pay discretion given to its compensation committee, and a decline in using performance-based inventory awards.

A Wells Fargo spokeswoman stated by way of e-mail that its administrators “will take into accounts the suggestions that we’ve got heard via this course of, and we’ll proceed our engagement and dialogue with our shareholders going ahead.”

The financial institution gave the determine of 57% assist for its pay throughout its annual assembly held Tuesday, which was webcast. The spokeswoman stated the determine included votes solid for and towards the pay, and abstentions.

Pending a last tally, the vote could be among the many lowest for a serious U.S. financial institution within the decade since pay votes have been required, in keeping with a separate overview by ISS.

The vote was solely the newest rebuke from buyers towards a serious U.S. firm throughout this 12 months’s proxy season. Simply on Monday, Johnson & Johnson (NYSE:) received backing for its govt pay from solely 57% of votes solid.

As of April 15, about 5% of Russell 3000 corporations had didn’t win a majority of assist for his or her govt pay, about 4 instances the frequency of final 12 months, in keeping with pay marketing consultant Semler Brossy.

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