Wells Fargo & Company (WFC)

AGM 2018

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Apr 24, 2018

Ladies and gentlemen, welcome to the 2018 Wells Fargo Annual Shareholders Meeting. Now our Chair, Betsy Duke. Good morning. Good morning. I am Betsy Duke, Chair of the Board of Directors of Wells Fargo & Company, and on behalf of the independent directors of the board, CEO and President, Tim Sloan, and the management team of our company, I welcome all shareholders to our annual meeting. Also, I would like to welcome those who are listening to the meeting by audiocast over the internet or by telephone. Thank you all for joining us. We appreciate the opportunity to be with you here in Iowa, where five major Wells Fargo business lines have significant operations and presence. They include community banking, consumer lending, payments, virtual solutions and innovation, wealth and investment management, and wholesale banking. Other Wells Fargo lines of business and staff groups are also represented in the Hawkeye State. They include enterprise finance and information technology, corporate risk, the law department, and the chief administrative office. Our home lending business, Wells Fargo Home Mortgage, is headquartered in West Des Moines, traces its roots to the Iowa Securities Company, a mortgage loan business founded near Waterloo in 1906 by Willard Beal. Helping people become homeowners has been a point of pride here ever since 1906. We have 123 locations in Iowa, including 64 community banking branches, as well as 44 home mortgage locations and 15 Wells Fargo Advisors brokerage offices. With approximately 16,000 team members in Iowa and 14,500 in metropolitan Des Moines, Wells Fargo is proud to be central Iowa's largest employer. Wells Fargo also takes great pride in supporting local community organizations and nonprofit organizations. Last year, the company and our team members donated a total of $9.6 million to Iowa nonprofits, schools, and community organizations. That includes $4.5 million in corporate and foundation giving, as well as $5.1 million pledged by Iowa team members during our annual community support campaign. In addition, Iowa team members donated 210,000 hours of community service, feeding families in shelters, serving on nonprofit boards, supporting the needs of veterans, building houses, and contributing to many other causes. So it is a real pleasure for us to be here in Des Moines for this meeting. With us is Des Moines Mayor Pro Tem, Chris Coleman, and Iowa Senate Majority Leader, Jack Whitver, will be joining us shortly. Please stand, Mayor Pro Tem. Thank you. Thank you for your hospitality and your support here in Iowa. Turning now to the business of the meeting. When you entered the room, you received a copy of the agenda and the rules of conduct for our annual meeting. The rules are also displayed on the stage screens. The order of business for the meeting is listed on the agenda. There are a lot of people here who have things to say, and we look very much forward to hearing your comments, both when the items to be voted on in the business portion of our meeting are presented, and later during the general question and answer period. It's important that those who wish to speak have the opportunity to speak, and we owe it to everyone listening, both in the room and remotely, to hold an orderly meeting. To keep the meeting safe and productive for all involved, we appreciate your adherence to our rules of conduct. I want to cover briefly a few meeting formalities that you will also hear more about briefly. There is a quorum present. The polls are now open for voting at 10:04 A.M. Central Time on April 24th, and I move all the items on the agenda for shareholder vote. We have ballots available if you want to vote in person, and we'll distribute those later in the meeting. Before I turn the meeting over to Tim for his report on the company, I want to take a few minutes to highlight some of the board's actions in 2017 and our priorities as we move forward. At our last annual meeting, you, our shareholders, sent us a strong message of dissatisfaction. In response, we engaged in rigorous self-reflection and sought candid external feedback to assess how and where the board could make changes to improve its governance and oversight of the company. First, the board conducted a comprehensive self-evaluation in order to assess effectiveness, review governance practices, and identify areas for improvement. The self-evaluation was facilitated by a third party, Mary Jo White, a senior partner at a major law firm and also former chair of the Securities and Exchange Commission. The self-evaluation included one-on-one discussions with each Director to obtain candid feedback about the board's composition, structure, agenda, and effectiveness. She also collected observations from members of management and regulators. In addition to our self-evaluation, we sought important feedback from our shareholders as part of the company's longstanding engagement program. I began meeting with investors last fall, soon after the board designated me to become chair of the board in January of this year. Since then, I've met with investors holding more than 35% of our stock to hear their perspectives about the board and the company. These meetings were mostly in person, and in some cases, included follow-up meetings by telephone as events unfolded during the year. These direct two-way board investor communications have been invaluable, not only because of the feedback that we received, but also for the opportunity to explain the changes that we were making and the reasons for them. We've engaged in board-level discussions with our regulators. Consent agreements with the Federal Reserve, the Office of the Comptroller of the Currency, and the Consumer Financial Protection Bureau outlined their expectations for the company to address identified weaknesses in risk management, and in particular, in compliance and operational risk management. The rate lock extension fee and collateral protection insurance matters that were the subject of the CFPB and OCC consent orders occurred in 2016 and before. The activities were elevated in 2016, and remediation efforts began in 2017. We acknowledge the need for improvement, and work is well underway to meet the commitments we've made. In fact, many of the risk management enhancements that were described in our proxy materials, and that I will mention later, will strengthen our oversight of this work. As we work to build a better Wells Fargo, we believe it's important to consider the viewpoint of all stakeholders and to see ourselves as others see us. To that end, we formed a new Stakeholder Advisory Council consisting of seven national thought leaders representing groups focused on consumer banking, fair lending, the environment, human rights, civil rights, and governance. While other banks have similar councils, I'm not aware of any that work so directly with the board and the Chief Executive Officer of the company. When we asked them to serve, we made it clear that we did not expect them to endorse any Wells Fargo practice or policy, but rather to provide candid and constructive feedback, and they have done so. These council members are passionate about the work and the stakeholders they represent, and their observations and recommendations about our business will make Wells Fargo a better and more responsive company. I'm pleased to welcome four of the Stakeholder Advisory Council members to today's meeting, and I would like to introduce them and ask them to stand and be recognized. Starting with Michael Calhoun, Center for Responsible Lending. I actually had the opportunity to work with Mike in a similar way when I was at the Federal Reserve. I was the governor responsible for consumer and community affairs, and Mike was the chairman of our consumer advisory council, and we had many discussions about consumers and financial services. Next is Sister Nora Nash, Director of Corporate Social Responsibility for the Sisters of St. Francis of Philadelphia, a member of the Interfaith Center on Corporate Responsibility. You'll hear more from Sister Nora a little later, probably several times. She's long been active in encouraging Wells Fargo and others to be more transparent about their business practices. We've agreed to work with her and her colleagues to produce a report later this year. Anne Sheehan, retired Director of Corporate Governance, California State Teachers Retirement, or CalSTRS. As part of our investor engagement, I attended a meeting of the Council of Institutional Investors a few months ago, and there Anne was honored for her outstanding work. I'm new to the group, so I didn't understand, but it seemed to be a lifetime achievement award. In giving Anne that award, they cited many of the practices that Anne started advocating, and they were considered quite revolutionary, and they are now universally recognized as the core principles of good governance. We're really happy to be working with Anne. Then finally, John Taylor, President and CEO of the National Community Reinvestment Coalition. I have to tell you, I've been in banking most of my adult life, and I can't remember a time when I didn't know about John Taylor or know John Taylor. He's known in banking circles as the father of the Community Reinvestment Act and credited for billions of dollars that have been invested in communities across the country. As you will hear from Tim in a few minutes, reinvesting in our communities is both a core value and a key goal for Wells Fargo, and we appreciate all the work that we've done with John Taylor over the years. So thank you to all of you for willing to work so constructively to make Wells Fargo a much, much better. There are three other members of the council who wanted to be here today but couldn't because of other engagements. They are Mindy S. Lubber, CEO and President, Ceres; Marc H. Morial, CEO and President, National Urban League; and Janet Murguía, CEO and President, UnidosUS. With feedback from our directors, investors, regulators, and other stakeholders, the board made significant changes to enhance its performance, including modifications to its composition, committee risk, oversight responsibilities, and governance practices. We're also working with management to improve the information flow and materials that are provided to the board. However, even as the board engaged in a thoughtful refreshment process, we took care to balance the fresh perspectives of new board members with the experience and institutional memory of more seasoned members. Since last year's annual meeting, the board elected four new independent directors, which brought to six the total number of new independent directors elected in 2017. Each of these directors was recruited for their experience in areas important to our strategy and risk appetite. Through this transition, the board has maintained its long tradition of diversity. This proud tradition is reflected in the fact that of the eight long tenured directors who retired in 2017 or at this meeting, seven were diverse in some dimension. Of the six new directors who joined our board in 2017 and 2018, three are women and two are ethnically diverse. As a result, six or one-half of the 12 directors nominated for election at this meeting are women or ethnically diverse. I think that's a tremendous record for any board. As the board adds new directors in the future, we will maintain our focus on diversity because we believe that diversity on our board is an important component of our commitment to diversity and inclusion in all of the company's business practices. With the election of new directors, the board also changed the composition and charters of key board committees, including the risk committee. The board reconstituted the composition of the risk committee by including four members who have experience overseeing risk for large financial institutions. We modified the charters of the risk committee, audit and examination committee, human resources committee, and corporate responsibility committee to eliminate overlap and duplication while sharpening the focus on risks faced by the company. As I said earlier, risk management weaknesses, especially in operational and compliance risk, are at the heart of problems uncovered by the company over the last year and a half. The board and management are focused on strengthening controls and assuring that we are appropriately organized to oversee these risks and meet the expectations of all of our stakeholders, including our regulators. Even as we address issues in risk management, we remain committed to creation of long-term shareholder value through consistent financial performance. I would note that despite our challenges, the company was able to maintain industry-leading returns on equity in 2017. But we all know the company can perform better. We firmly believe that the quality of our senior management and team members, along with our diversified business model, nationwide franchise, top market share in important financial businesses, and continued investments in innovation, will generate long-term value for our investors. The investments we're making in strengthening risk management, achieving operational excellence, and reducing complexity will provide a strong foundation for our future. Now it's my pleasure to introduce Tim Sloan. When Tim took the reins as CEO of Wells Fargo, not quite a year and a half ago, he immediately began to drive transformational change at the company, making it better and stronger every day. He and his team have looked deeply into the business to identify and fix problems, especially those that cause harm to customers. They have been transparent about what they found. In transitioning the management of the company from a collection of businesses to a single integrated enterprise, Tim is steadily streamlining, simplifying, and making the operations of the company more effective and efficient while creating better experiences for customers and team members. He has clearly defined, communicated, and enforced the expected culture of the company. Early last year, he identified six aspirational goals against which to measure company performance. He and his team have made much progress toward meeting those goals over the year, but I know that he believes there are more things to do before completing the full transformation he envisions for Wells Fargo. Through it all, he has been a model of the optimism, determination, and resilience that he has asked of every team member to fulfill our shared vision of the company that Wells Fargo can and will be. So now it is time to let him tell you about the substantial progress the company has made this year. Thanks, Tim. Thank you, Betsy. I want to recognize and thank you for your hard work, effort, and leadership, and dedication to this company. You've tirelessly worked on behalf of the company, not only in your role as Chairman, but also your prior role as Chair and a member of the board. So thank you for all of your hard work and effort in making Wells Fargo a better company. I want to welcome all of our Wells Fargo shareholders who are participating in the meeting today, either joining us via webcast or here in person in Des Moines. We're honored to be here in Des Moines, where we have great team members, great customers, and community partners. As Betsy said, Wells Fargo has 14,500 team members in the metropolitan area, and we're central Iowa's largest employer. This part of the country has a special place in my heart, beyond just having great team members and a great business, and that's because our son, Ben, and daughter-in-law, Alicia, and they're going to be coming out in just a minute. Then grandson Jack and granddaughter Charlotte. These are two graduates of Iowa State, so for Cyclones in the audience, go Cyclones. There you go. I mean Ben and Alicia, not Charlotte and Jack yet. We're so happy that they're here in Iowa, and it makes a big difference for me to know that you're all here and making a better place for the state. So thank you very much. Appreciate it. You can see I'm a very proud father and grandfather. Let's get back to the meeting. Before I give my presentation, I want to remind you all that during the course of this meeting, we're going to make some forward-looking statements, or we may make some, about Wells Fargo's financial performance and business, and I refer you to our cautionary statements in the presentation as well as our SEC filings. Here are the topics that I plan to cover today. As you know, Wells Fargo is in the midst of a journey to rebuild trust with all of our stakeholders and build a better, stronger company. That starts with our vision and values. So I'll spend a few minutes on our guiding principles. I want to update you on our progress by detailing some of the actions that we've taken in 2017 as well as in our recent months. And then I will describe where we are headed as we transform our company into the Wells Fargo we all want to be. A big part of that involves the six aspirational goals we have set for ourselves, and we will go over those in some detail. Whenever I give a presentation, I start with our vision and values. Our vision is to satisfy our customers' financial needs and to help them succeed financially. This is an enduring vision that is the heart of our culture. It is behind every product we design, every service we offer, every dollar we earn. It unites all of our businesses. We have five values that guide us. Doing what is right for our customers, which places customers at the center of everything we do. People as a competitive advantage, which emphasizes the importance of every individual on our team. Ethics, which means doing things the right way and doing it right all the time. Diversity and inclusion, which ensures that we are incorporating different views across the company. Leadership, which calls on every team member to be a leader for our customers, for our communities, for each other, and for our shareholders. in 2017, we streamlined our vision and values booklet into a wallet card, and we mailed one or gave one to every one of our team members. I carry mine around every day so that it is a reminder of what we are supposed to be doing, focused on our vision and our values. Because I want to make sure that all of our team members are keeping these principles close at hand and top of mind. Just a few weeks ago, we laid out in detail the behaviors that we expect from all of our team members to put our vision and our values into practice so that together we can achieve our goals. I am going to spend a little bit more time later talking about those behaviors. I said it last year, and it is still true, rebuilding trust is our top priority. We use that as the organizing principle for our 2017 annual report. As Betsy mentioned, while we have more work to do, we have made significant progress as we work to fix problems, make things right for our customers, and transform into a better, stronger Wells Fargo. You have a full progress report on your seats, but let me share a few highlights. We remain committed to making things right for any customer who may have been financially harmed by unacceptable sales practices, regardless of the time frame. We have completed most of the remediation efforts related to the retail sales practices, and a final court approval hearing has been scheduled in late May for the $142 million class action settlement agreement covering customers and former customers with claims of potentially unauthorized accounts dating back to 2002. Among the fundamental changes we have made to fix the problems are eliminating product sales goals for retail bankers who serve customers in our retail branches as well as our contact centers, and creating a new compensation and performance management plan that is focused on customer experience, stronger oversight and controls, and team versus individual incentives. We've improved controls by sending out automatic notifications to customers after a new personal or small business account is opened, and we have implemented a robust mystery shopper program encompassing up to 18,000 branch visits a year to evaluate sales and service activities. We've strengthened the overall Wells Fargo risk framework by centralizing core functions like HR and finance, and we are transforming our risk organization to help ensure our lines of business have the appropriate structure to understand and manage risk. We are not stopping there. We're examining how we get things done across the entire company, and if additional problems are found, we will act swiftly to make things right. This is just one of the many ways that we're operating differently today as a company. I'd like to talk about some of the other ways that we're transforming and building a better bank. We've made fundamental changes to our organizational structure to make us more customer-focused, more efficient, and better positioned for the future. These are not small projects. We are transforming the way our company operates by simplifying our business model, which includes streamlining and centralizing processes, and focusing on being more efficient and effective in all that we do. We're investing for the future by developing new ways to more efficiently serve our customers and to create a better customer experience. This includes building a robust data and technology infrastructure, investing in innovative products and services, and enhancing our risk management capabilities. Strengthening our culture is also central to our transformation. Of course, we can continue to invest in our team members through competitive compensation and benefits, affordable healthcare options, work-life balance programs, a discretionary profit plan, and family leave. We've listened to team member feedback and taken steps to ensure a clear and consistent team member experience across Wells Fargo's many businesses and staff groups. I'll talk a little bit more about those efforts when I speak regarding our team member engagement goal. As for what we want to become, the operating committee and I have identified six overarching goals for Wells Fargo. We want to be the financial services leader in these areas, customer service and advice, team member engagement, innovation, risk management, corporate citizenship, and shareholder value. At our meeting last year, I touched on these briefly as we had just introduced them a few weeks earlier. These goals reflect our challenges and our opportunities, clearly state our aspirations for the future, and prioritize our focus. I'd like to spend a few minutes reporting on the progress that we've made during the past year in each of these areas. Whether we're working with an individual, a family, a small business, a growing company, a public institution, or a global firm, we want to know and understand our customers and their financial needs, and then provide them with best-in-class service and advice to help them succeed financially. One way we're doing this in our community bank is through our Change for the Better work, which includes new systems, processes, and tools that empower team members to have meaningful conversations with customers about their financial goals and to solve problems for them on the spot. The first phase of these improvements were launched in September of 2017, and we've received very positive feedback from our team members and our customers. We're also innovating for our customers, including through the launch of our automatic, zero balance alerts and Overdraft Rewind, which we believe are some of the most customer-friendly policies in the industry. A year ago, we introduced automatic zero balance alerts, and now send over 20 million low and zero balance alerts a month. We've also rolled out a service last November that effectively rewinds overdrafts that are covered by a direct deposit received by 9:00 A.M. local time the next day. Since its launch, we have helped over 800,000 customers avoid overdraft charges. We offer our customers a variety of ways to waive the standard monthly service fees on their checking accounts based on account usage or direct deposit, and as a result, about 90% of our checking account customers do not pay a monthly fee. Such innovation helps our customers better manage their finances and helps us grow and build more long-term relationships. In the first quarter of 2018, our customer loyalty survey scores reached their highest levels since August of 2016. We're increasing our support for small business customers. For example, more than 11,000 of our branch bankers have completed our business advocate program training, and we're expanding our teams that serve small businesses between $2 million and $5 million in annual revenue. In every line of business, we're taking a hard look at the advice and service that we're providing and asking ourselves, how can we do better? In 2017, we asked for feedback from our team members, and we used that as well as market research to build a better experience for our team. In March of this year, for example, we raised the minimum hourly wage to $15 per hour for about 36,000 team members in the U.S., and this month, we raised pay for approximately 50,000 team members whose salaries were at or close to that new minimum hourly wage. To recognize the current and future hard work and efforts of our team as we rebuild trust, we awarded restricted stock rights to eligible full-time and part-time team members with a two-year vesting period in March. Approximately 250,000 team members received this benefit. We also added four new holidays to our time away program to allow team members to spend more time with their family or observe religious holidays. We expanded our Raise Your Hand program to encourage team members to speak up if they see something that just isn't right. The behavioral expectations that I mentioned earlier provide clarity in how we expect all of our team members to behave, regardless of the specific role they play in the company. They include things like listening, celebrating success, raising concerns, and leading by example. The expectations are also a basis for a leadership objective on every Wells Fargo team member's 2018 performance management plan. We're proud to report that the team member turnover at the end of 2017 was the lowest level that we've experienced since 2013. One of the things that I'm most excited about in our company is the pace of innovation right now. In 2017, we had many successful technology rollouts, including card-free access for our 13,000 ATMs. We also launched many new tools and functionality, including Zelle, a fast person-to-person payment option embedded in our mobile and online banking experiences. From Wells Fargo Advisors, we launched Intuitive Investor digital accounts in November. This technology gives clients affordable access to personalized investment portfolios, and since the end of last year, we have nearly tripled the assets in these accounts. Three-quarters of these accounts come from the community banking customers who have chosen to grow with us through new relationships in wealth and investment management. We recently launched our online mortgage application based on the hard work and effort of many people here in Des Moines, which combines the power of our Wells Fargo data in a digital interface. In March, 10% of completed retail mortgage applications were through our digital mortgage application. We also started a team member pilot of our Control Tower feature designed to provide customers a comprehensive view of the places their Wells Fargo card or account information is connected. In January, we were named one of only 12 companies in Apple's Business Chat pilot, which is a new way to connect with our customers and accelerates our customer transformation towards messaging. Later this year, we expect to launch Greenhouse, a mobile banking experience with tools geared toward those who may find budgeting a challenge, are new to banking, or have several income sources. It features spending trends, personalized insights that are tracked versus artificial intelligence, and reminders to help people keep their spending on track to reach their financial goals. Our industry-leading technology was recently recognized by Dynatrace, which named Wells Fargo's mobile app number one in overall performance, functionality, and quality, and availability. Managing risk is a complex and challenging effort, and we have strengthened our risk framework substantially over the past year. We have created more consistency and have a better enterprise view of how we are managing risk, and we continue to refine and build upon this work. We are transforming our risk management organization to ensure that our businesses have the appropriate structure in terms of how they manage risk. We are focused on operational excellence, providing products and services, and advice to help our customers and to minimize risk for them and for our other stakeholders. In 2017, we created a conduct management office to centralize the handling of internal investigations, ethics line and ethics oversight, and sales practices oversight. Last year, we created a new head of regulatory relations, and we have hired a new chief compliance officer and chief operational risk officer. We have strengthened our risk management function as we identified specific talent needs and hired externally more than 2,000 risk managers over the past two years. As Betsy mentioned, work is well underway to address the risk management issues that we have at our company, particularly in operational and compliance risk management. These are part of the consent orders that we have with the Federal Reserve, the OCC, and the CFPB. We share the same priorities with our regulators and are committed to meeting the requirements of the consent orders while continuing to serve our customers' financial needs. Our goals of making every community better is something that is very important to how we do business through the products and services that we offer, the way we operate, our support of diversity and inclusion, and our many forms of philanthropy. We placed in your seats a summary of the many ways that we are making a difference in our communities. Before we get to that, I want to say a few words about Jennifer Riordan, a member of our community relations team in New Mexico, who passed away last week during a tragic accident involving a Southwest Airlines jet. Corporate citizenship was one of Jennifer's jobs and her passion, and her colleagues in New Mexico called her the Ambassador of Albuquerque. Because of her tireless advocacy for her community, she was a true embodiment of Wells Fargo's values, and our hearts go out to Jennifer's family, to all who knew and loved her. She will be deeply missed. I want to thank you for that. Let me now talk about our corporate citizenship efforts. Wells Fargo continues to be one of the most active corporate citizens in the United States. For example, we contributed $286.5 million to more than 14,000 nonprofits in 2017. This year, we're targeting to increase that by 40% to $400 million in contributions. Beginning in 2019, our target is to donate 2% of our after-tax profits to nonprofit organizations. Our community support takes many forms, and I'd like to list a few here. In 2017, we donated $6 million to advance clean technology and innovation, and we met 100% of our electricity needs with renewable energy. Just last week, we announced our goal to provide $200 billion in financing to sustainable business and projects by 2030, more than half of that dedicated to clean technology and renewable energy transactions that support the transition to a lower carbon economy. Regarding home ownership, we announced a 10-year commitment last year to create at least 250,000 African American homeowners. This includes $60 billion in home loans and $15 million in home buyer education and counseling initiatives. 2017 also marked the second year of our 10-year, $125 billion commitment to help increase Hispanic home ownership through our support of the National Association of Hispanic Real Estate Professionals' Hispanic Wealth Project. We are extremely proud of the work that we do supporting military veterans and their families. For example, we've donated more than 350 homes, valued at more than $55 million to veterans in all 50 states. Since 2012, Wells Fargo has donated more than $100 million to support military service members, veterans, their families with housing initiatives, career transition, and financial education. In addition to our corporate giving, our team members are also very generous. Last year, they contributed $85 million to 40,000 nonprofits during our annual community support campaign. We are proud of the fact that United Way Worldwide recognized Wells Fargo as having the largest workplace giving campaign in the United States for the ninth consecutive year. Our team members also volunteer their time, a record 2 million hours in 2017, to help their communities and to support causes that are important to them. I'm deeply moved by the commitment that our team provides to the communities that they support. That includes right here in Iowa, where our company and team members combined to donate $9.6 million to Iowa nonprofits, schools, and community organizations in 2017. As Betsy mentioned earlier, our Iowa team volunteered 210,000 hours to support hundreds of nonprofit organizations in 2017. We work very closely with community partners across the country and around the world, and I'm proud to welcome some of our Iowa, excuse me, community partners to our meeting today. We are so honored to help you and the work that you do and the individual organizations that are represented today. We've listed those individuals of the terrific organizations on the screen. I will ask them to please stand so they can be recognized. Thank you very much for your support and for attending our meeting today. Our goal to create long-term shareholder value is last on our list because each of the five goals contributes to it. We recognize that you, our investors, our shareholders, have placed your trust in Wells Fargo. We're focusing on managing the company for the long term. Let me share a little bit about our financial performance in 2017 and how that contributed to our goal of creating long-term shareholder value. In 2017, we grew net income and earnings per share while revenue was on par with 2016. We increased deposits to a record level. Our return on equity was 11.35%, and our return on assets was 1.15% in 2017. We have a strong balance sheet and solid levels of capital and liquidity. We had very strong credit quality with net charge-offs at historically low levels at 0.31% of average loans in 2017. We returned $14.5 billion to our shareholders through common stock dividends and net share repurchases in 2017, which was up 16% from 2016. Our quarterly common stock dividend increased to $0.39 per share. We remain on track to achieve our target of $4 billion in expense reductions by the end of 2019. Our day-to-day efforts to rebuild trust and transform Wells Fargo are making a difference. Retail banking household retention has improved. As I mentioned earlier, our customer loyalty survey scores in the first quarter of 2018 are at their highest level since August of 2016. Our wealth and investment management client assets were at a record level at the end of 2017. Our commercial customers continue to turn to us for major support, including the Principal Financial Group, which is headquartered right here in Des Moines and has been a client for over 50 years. Wells Fargo Securities was an active joint book runner on its $750 million contingent capital issuance last month. We are pleased to have Principal Financial Group's CEO, Dan Houston, here with us today. Dan, could you please stand and be recognized? To summarize, we have a solid foundation, exceptional businesses, and an outstanding team. While we have more work to do, we are making progress in our work to rebuild trust with all of our stakeholders. As part of our transformation over the past year, we've strengthened our focus on customers, accelerated the pace of innovation, enhanced team member benefits, increased our commitment to communities, reinvested billions of dollars into our businesses into areas such as risk management, and continue to execute on our business strategies to provide long-term value to our shareholders. We are a better company than we were a year ago, and a year from now, we'll be even better. We are guided by our vision and our values and are working hard every day to achieve our six long-term goals. I want to recognize the great work of our team and thank them for all they're doing to help build a better Wells Fargo. I also want to thank our stakeholders, including all of you, for your trust in Wells Fargo and for your support. Now happy to turn the meeting back over to Betsy. Thank you, Tim. Now I want to review a few procedural matters and meeting details, and then we will move into the formal presentation of items to be voted at this meeting. The first three items on the agenda are management proposals that will be presented on behalf of the company. The other three items on the agenda are shareholder proposals. The shareholder proponents or their authorized representatives will each have a maximum of four minutes to present their respective proposals. At the end of that time, you will hear a chime. You will hear a chime. You will hear a chime. After all the items have been presented, we will have a brief question-and-answer period, during which time shareholders present in the room may ask questions about the proposals on the meeting agenda. During this time, as stated in the rules of conduct, shareholders should wait to be recognized before addressing the meeting. During the question-and-answer period, please raise your hand. After you are recognized, please stand, move to the end of your aisle, and a Wells Fargo usher will bring a microphone to you. This will help shareholders and others present here, as well as those listening to our live audio cast of the meeting, to hear the recognized speaker. Please identify yourself and state whether you are a shareholder, a representative for a shareholder, and the numbers of shares that you represent. To allow time for everyone to speak, please restrict your questions or comments to two minutes during this period of the meeting. After two minutes, you will hear a chime. That will be the signal that your allotted time has expired. In order to maximize the opportunity for shareholder participation, it is important to remember these rules. Please remember that during the business portion of the meeting, only questions and comments related to the matters being voted upon are in order, but after questions on these items, we will collect any ballots and close the polls. We will then open a general question-and-answer period during which shareholders or their representatives who are in the room may ask Tim or me questions about the company. We will then announce preliminary results of the vote. The Notice of Annual Meeting of Shareholders and the Affidavit of Mailing the Notice have been filed with the Corporate Secretary as part of the record of this meeting. We have appointed Rebecca Paulson of EQ Shareowner Services as Inspector of Election. With us today on the stage is Anthony R. Augliera, our Corporate Secretary. Anthony, please confirm the quorum. We have a quorum. The Inspector of Election has advised me that holders of shares of common stock, representing at least 89.8% of the total number of common shares outstanding and entitled to vote, are present in person or represented by proxy, which constitutes a quorum. Thank you, Anthony. I accordingly declare that a quorum is present and that this meeting is duly convened for the purpose of acting on the items of business that are properly brought before this meeting. We are ready to proceed with the business portion of the meeting. I remind you that the polls are open for each of the items of business for consideration at today's meeting and move for vote by shareholders on items one through three, which are management proposals, and if properly presented, items four through six, which are shareholder proposals included in the proxy statement. Shareholder proponents will have an opportunity to present their proposals following the management proposals. If you would like a ballot to vote on items one through six, please raise your hand at this time, and an usher will give you a ballot. For the proposals listed in the proxy statement, most of you have already submitted your proxy to vote, and you do not need to vote again unless you want to change your vote. If you are the record holder of your shares or if you have a legal proxy to vote shares held in street name for you by your broker or bank and you want to change your vote, please indicate on the ballot that you are revoking your proxy. Did we distribute any ballots? If we did, we will collect them before the polls close. At this time, I would like to introduce the Wells Fargo executive officers who will vote the proxies on file. Please stand when I call your name. Hope A. Hardison, Chief Administrative Officer. C. Allen Parker, General Counsel. John R. Shrewsberry, Chief Financial Officer. If you voted by proxy, Hope, Allen, and John, as proxies, will vote your shares as you instructed. Now we will move to the formal presentation of items of business to be considered at this year's annual meeting. Shareholders at this meeting will consider and act on the items noted on the agenda. After all six items have been presented, you will have an opportunity to ask questions about each of these six items and only these items. Please hold your questions until all six items have been presented. If you have questions on matters not related to these items, please hold those questions until the general question and answer period. I will now present item one through item three, the items being presented by the company for approval by shareholders. Item one, election of directors. According to the bylaws, the board has set the number of directors to be elected at 12 and has designated 12 nominees. All the nominees are here today. Anthony, will you please read the names and will each nominee for director please stand as his or her name is called? The nominees for director are John D. Baker II, Celeste A. Clark, Theodore F. Craver Jr., Elizabeth A. Duke, Donald M. James, Maria R. Morris, Karen B. Peetz, Juan A. Pujadas, James H. Quigley, Ronald L. Sargent, Timothy J. Sloan, Suzanne M. Vautrinot. Thank you, Anthony. These individuals have been nominated according to our bylaws. Information about each of the nominees is presented beginning on page 27 of our 2018 proxy statement. I would also like to recognize John Chen, Lloyd Dean, Enrique Hernandez Jr., and Federico F. Peña, who are not standing for re-election and are retiring from the board at this meeting. I thank them for their dedicated service and many contributions to our board. Item two on the agenda is an advisory resolution to approve executive compensation. The proposal appears beginning on page 62 of the proxy statement. Item three on the agenda is a proposal to ratify the appointment of KPMG LLP as the company's independent registered public accounting firm for 2018. The proposal appears beginning on page 97 of the proxy statement. I'd like to introduce Michael Pearce, James P. Liddy, and Kelly Schmitt of KPMG. Will you please stand? Thank you. As stated in the proxy statement, the board has recommended that shareholders vote for items one, two, and three. Items four through six are proposals being presented by shareholders for approval at this meeting. Before those shareholder proposals are presented, I would like to again recognize Sister Nora Nash and other members of the Interfaith Center on Corporate Responsibility who are present and acknowledge withdrawal of the ICCR proposal regarding preparation and publication on Wells Fargo's website of a business standards review and report. Information about the business standards report was included on page 99 of the proxy statement, and as noted in the proxy statement, we have agreed to publish the report and look forward to working with Sister Nora and ICCR on the preparation of the report. Now, Sister Nora, I never want you to think that if you withdraw a proposal and work with us, that you don't get a chance to speak about your proposal. I'd like to offer you the opportunity if you would like to say a few words about your proposal. Please recognize Sister Nora. She has been such an advocate. We really appreciate it. Good morning, Ms. Duke, Mr. Sloan, board members, employees, fellow shareholders, and friends. I am Sister Nora Nash, a Sister of St. Francis of Philadelphia, and I'm from Ireland originally. I'm also a member of the Interfaith Center on Corporate Responsibility and a member of the present Stakeholder Advisory Council. 22 co-filers of ICCR, including the States of Connecticut and the States of Rhode Island, agreed to withdraw the shareholder proposal that is in the proxy book. We recognize that it is extremely important for all of us because the shareholders, Mr. Sloan, and Wells Fargo board have agreed to work together on this systemic review to reduce risk and improve the social impact of the bank. Being transparent and forthright about the destructive realities of these past several years will be essential in order to regain trust and demonstrate that this company will be rebuilt on the non-negotiable principles of a strong culture, ethical values, moral integrity, and human rights. This company has harmed and wounded millions of its customers. People across the country, including those here in the audience today, have had to confront profound difficulties. They have lost their homes, they have lost their businesses, and in no small measure, their dignity. All because our company failed them. Our people, your customers, who are guilty only of having trusted Wells Fargo to do the right thing, deserve to be validated. They deserve an honest reckoning of transgressions, and more importantly, they deserve a definitive apology and a process to wholeness. That's what we're working on. We appreciate the bank's willingness to engage in good faith in a comprehensive business standards review, and we stand ready to work with the bank throughout the process. We hope to re-envision the future role that Wells Fargo can play in building a more just society. As we still work through this difficult chapter, which Tim alluded to, we find ourselves facing a very new ethical dilemma. The fact that our bank is seen as the leading lender to the gun industry. The UN Guiding Principles on Business and Human Rights clearly articulate corporations' responsibility for their operations and supply chain. Listen to the poignant silence of Emma González at March for Our Lives. Our company must not be financially associated with manufacturers of weapons, of military weapons, assault-style weapons that are sold to the public. Very important. Let this report and process be a watershed moment for our company. We have far to go. Thank you, Sister Nora. Other members of the ICCR? If there are other members of ICCR here today, would you like to stand? There are no other. Okay. Thank you. All right. Moving on to the other shareholder proposals that are going to be voted on. Item 4 is a proposal from John Chevedden, a shareholder of the company, requesting that the board amend our company's bylaws and other appropriate governing documents to permit shareholders holding in the aggregate 10% of shares outstanding to call a special meeting. The proposal appears beginning on page 100 of the proxy statement. Mr. Evan Gottsteiner is in attendance at the meeting to present the proposal on behalf of Mr. Chevedden. Mr. Gottsteiner? Thank you. Am I pronouncing that correctly? Correct. Yes. Oh, good. Shareholders ask our board of directors to take the steps necessary to amend the bylaws and each appropriate governing document to give holders in the aggregate of 10% of the outstanding stock the power to call a special shareowner meeting. This proposal does not impact our board's current power to call a special meeting. Dozens of Fortune 500 companies allow 10% of shares to call a special meeting. Wells Fargo shareholders do not have the full right to call a special meeting that is available under Delaware law. Special meetings allow shareowners to vote on important matters, such as electing new directors that can arise between annual meetings. Shareowner input on the timing of shareowner meetings is especially important when events unfold quickly and issues may become moot by the next annual meeting. It is important to improve the special meeting shareholder right at this time, given the ethics crisis at Wells Fargo that has had a serious bottom-line impact. I do have another proposal for Jing Zhao. Is that next on your agenda, or? Sure. Let me read what the proposal is. Sure Then you can do that. Okay. Item 5 is a proposal from Jing Zhao, a shareholder of the company, recommending that the company engage outside experts or resources from the general public to reform its executive compensation policy with social responsibility. The proposal appears beginning on page 102 of the proxy statement. Mr. Gottsteiner will also present this proposal. Thank you. Like I said, this is sponsored by Jing Zhao of Concord, California. Resolved, shareholders recommend that Wells Fargo engage multiple outside independent experts or resources from the general public to link its executive pay to social responsibility. The Wells Fargo Human Resource Committee has the flexibility to select multiple independent experts or sources and social elements such as the CEO worker pay ratio of Wells Fargo and the average employee's pay, the minimum wage, and jobless rate of America. For example, Intel accepted the advice of the sponsor of this proposal and organized three meetings to receive true independent insights from outside experts. This included a UN officer, a federal officer, an Australian professor, a British journalist, an activist, NPO researchers, a lawyer, and shareholders to review its human rights principles and employees code of current policy. Please vote to link executive pay to social responsibility. Item 5. Thank you, Mr. Gottsteiner. Item 6 is a proposal from the New York State Common Retirement Fund, the fund, requesting that the board prepare a report to shareholders on incentive compensation and risks of material losses. This proposal appears beginning on page 104 of the proxy statement. Jonna McCarthy, representing the trustee of the fund, is here today to present the proposal. Hold just one minute so we can get you a microphone. Thank you. Good morning, Chair Duke, members of the board of directors, fellow shareholders, and other Wells Fargo stakeholders. My name is Jonna McCarthy. I am here today on behalf of Comptroller Thomas P. DiNapoli, trustee of the New York State Common Retirement Fund, to introduce a resolution calling upon Wells Fargo to disclose whether it has identified employees or positions, individually or as a group, who are eligible to receive incentive-based compensation that is tied to metrics that could have the ability to expose the bank to possible material losses. If not, an explanation of why it has not done so. Moreover, the proposal requests a report providing shareholders with information on the methodology and results of any evaluation of incentive-based compensation the bank has done. This report would allow shareholders to better understand the risks that Wells Fargo's incentive compensation practices may pose to investment value. The bank's compensation practices have been identified as a root cause in both the retail banking and foreign exchange trading scandals. Therefore, as owners of almost 13 million shares valued at approximately over $722 million, I submit proposal number 6 on Wells Fargo's proxy. Thank you. Thank you, Ms. McCarthy. We're now going to take questions and comments from shareholders or their proxies on the 6 items of business, and I will start with the first one. I'll ask Tim to answer questions that have to do with the company, and I will take questions regarding the board. Let me remind you, no items other than the items to be voted on at this meeting are proper subjects for questions or comments at this time, and there will be time following the business items for general Q&A. Raise your hand. I see several of you are doing that. If you wait to be recognized, and after you're recognized, please stand, move to the end of your aisle, and an usher will bring a microphone to you. State your name, whether you're a shareholder, a representative for a shareholder, and the number of shares you represent. As noted in the rules of conduct, please limit your remarks to 2 minutes. Because this meeting is being audiocast, I'd like to remind you to please speak as clearly as possible when you ask your question so all listeners can hear. This is not the appropriate forum for discussion of personal financial matters. If you have personal financial matters to discuss, please speak with one of our representatives located just outside the room after the meeting. They will take your information and follow up with you. I'll ask for questions or comments on the company's items first. I'll then pause after each item is mentioned to ask and allow time for questions or comments on the item. I will then ask for questions or comments on the shareholder proposals and will likewise pause after each item is mentioned to ask and allow time for questions or comments on the item. That understanding, let's proceed with questions and comments on the items for business for consideration at this meeting. Are there any questions or comments on the following items being presented by management for approval at the meeting? Item 1, election of directors. Yes, sir. Right here. Yes, sir. Would you please stand and move to the center and we'll bring you a microphone? Oh, I'm sorry. Maybe we can take the microphone there. Good morning. My name is John Chiang. I am the California State Treasurer, the shareholder representative for TRXL, representing 76,488 shares. As the State Treasurer of State of California, I am the state's banker, managing a $75 billion investment portfolio. On behalf of the State of California, I am also the nation's largest issuer of municipal bonds and sit on the nation's two largest public pension funds. I am here to deliver a message from the people of the State of California, integrity and trust matter. Wells Fargo shares a long history with California that dates back to the Gold Rush. Wells Fargo has, for generations, partnered with the state and its municipalities to build roads, schools, dams, and critical infrastructure. Where is that bank today? Wells Fargo is a shadow of its former self. Today, unfortunately, it is known for targeting our community's most vulnerable, including immigrants, seniors, veterans, and communities of color. As each wheel has fallen off the bank's trademark stagecoach, vital questions must be raised. One of the most important being, where were the company's leaders, and where were the board of directors? There were seven directors at the helm. Each had a duty to know, to act, and to lead, but they were either MIA or knew, and turned their backs to this metastasizing greed. Six of the seven have left or will be leaving by year's end. One remains, Mr. John Baker. What did he know? When did he know it? Most importantly, why didn't he ever raise the red flag and proclaim, "Not on my watch"? Why didn't he leverage his position of power and privilege on behalf of the shareholders, customers, and the public to which this bank has a trust relationship? If you are not willing to answer these questions, Mr. Baker, you must go. Thank you. Thank you, Mr. Chiang. Your time has expired. I appreciate your comments and would endorse your comments with the long history between Wells Fargo and the state of California, and the importance of that history and the importance of Wells Fargo getting back to being that company. That is our objective with everything that we are doing in the company right now. With respect to Mr. Baker, I would say that he has been an outstanding director. I have seen, and would like to address, recommendations that people vote against Mr. Baker because of his service on our corporate responsibility committee. As part of our self-examination, we really looked at all of the committees that we had in the company and their stated responsibilities in their charters. And what we found with the corporate responsibility committee was that it had moved from a traditional environmental social responsibility, philanthropy, corporate citizenship-focused committee, and had taken on review of complaints being made to the company. It turned out that the company's processes for processing complaints were inadequate, and the information provided to that committee, just really, they did not have the tools to do that job. As we refocused our risk responsibilities, we've moved those responsibilities into the risk committee where they belong, and we reformulated the charter of the corporate responsibility committee to be focused on environmental social responsibility, corporate philanthropy, and that. When I was talking with investors, and I did talk with a lot of investors, I would blame myself because I did not pick up this concern over that particular committee. And, if I had, I probably would've recommended that rather than simply changing the charter of that committee, that we actually disband that committee and put together a whole new committee that would be clear about what its primary mission was. And I would not like to see John Baker, who is deeply committed to the environmental social responsibility and philanthropy goals of this company, to be considered less of a Director because of the charter issues that we had with that committee. So with that, are there other comments or questions about the election of Directors? Yes, ma'am. Would you stand and move to the center, please, so we can bring you a microphone. I'd just like to speak to proposal number 6, and I'm a little confused. You can do that in just a minute. Okay. We're going to do them one by one. Any more questions or comments on proposal number one? Yes, sir. My name is Jordan Estevao. I own one share. I'm an organizer with People's Action. I just want to point out that this recent run of ethical crisis isn't a new thing for this company. Wells Fargo was one of the drivers of the 2007, 2008 financial crash, their mortgage business. Was sued in 2012 by Sacramento and paid a historically large settlement for discrimination in lending. Around the same time, was implicated in the robo-signing scandal. Now is being sued again for discrimination by the City of Baltimore and others. I don't need to mention the billion-dollar fine being leveraged by the CFPB. My question is, seeing as Wells Fargo has been a force for economic destruction, particularly targeting working-class people and communities of color, the trick that keeps on coming is putting a nice friendly face on what is in fact a monster. These talking points, this performance feels like more of the same. The question is, how many more times is Wells Fargo going to rebuild and then violate the public trust? How frequently? We'd just like to know what to expect. Thank you, sir. That is actually not a question about item one, but I think, Tim, if you would go ahead and take that at this time. Let me ask, as we go forward, if you would focus your questions on the items to be voted on, and we will get to all of these comments in turn. Sure. Go ahead, Tim. Thank you for attending the meeting, and I appreciate your perspective. There's no question that in our company's 166-year history, we've made mistakes, and we've acknowledged all those mistakes. Some of the items that you mentioned were clearly mistakes that we shouldn't have made. Some of the items that you've acknowledged are allegations that others are saying that we're making. These are not just talking points. When you think about our commitment to the health and the success of this country, we're the largest lender in this country. We provide credits to large companies, to medium-sized companies, to small businesses, and to individuals. We're the largest mortgage lender in this country. Wells Fargo allows more people to afford their homes than any other company in America. That's just one example. The commitment that we have to Hispanic and African American homeowners to increase homeownership for those two groups is not a talking point, it's real. There's a 10-year, $125 billion commitment to Hispanic homeowners, and we're being very transparent in providing everyone an update in terms of how we're pursuing those. Not talking points, billions of dollars of additional loans for Hispanic homeowners. I could go on and on and on. I would completely agree with you. If everything that we were saying was just a talking point, I wouldn't believe us. But the fact is that we're making a difference in this country every day. Are there any other questions or comments about item one? If not, let's move to item two, the advisory resolution to approve executive compensation. Item three, appointment of KPMG as our independent public accounting firm for 2018. Yes, Mr. Chiang? I'd like to comment on item 3. Okay. Can we bring him a microphone? Thank you for the courtesy. In October of 2016, again, this is John Chiang, State Treasurer, I wrote to Mr. Sloan, the just-appointed CEO of this scandal-ridden bank, and said I was rooting for his success. I was skeptical Mr. Sloan, a 30-year veteran and so-called institutional man, was capable of bringing about the major reboot necessary. Unfortunately, I was right to be skeptical. He has proven to be too much the champion of the old guard to be the change agent needed. Sloan says, "I don't think we have a culture problem." Yet regulators have slapped the bank with penalties rarely seen in the annals of American banking, even capping growth until such time as you adequately address lapses. The feds share blame for widespread consumer abuses and other compliance breakdowns. On Friday, the Consumer Financial Protection Bureau levied an eye-popping $1 billion fine. Mr. Sloan's move along, there-is-nothing-to-see-here approach is a dog that does not hunt. Under your leadership, Mr. Sloan, Wells Fargo shares are down more than 5% in the last 12 months. During the same period, shares of other banks are up more than 25%, while the Dow has gained 17%. Consumer confidence in Wells Fargo is at an all-time low. The bank landed dead last in Barron's magazine's rankings of most respected publicly traded companies. Meanwhile, Mr. Sloan failed to satisfy my year-and-a-half-year old request for data on how many Californians were harmed in the account fraud scandal. This is not the time to approve the $15 million in performance compensation for Mr. Sloan. Time has proven Mr. Sloan cannot drain the swamp. He has become it. It is time for him to go. Thank you. Thank you, Mr. Chiang. As I said in my remarks at the beginning, I just disagree with your analysis of it. I think Tim's time with the company is an advantage, and his commitment to change is unwavering. He knows this company. He cares deeply about this company, and he cares deeply, importantly, about the company that we know we can and should be. He has worked every day to make those changes within this company, tirelessly to do that. He has inspired the team to work every day to do that, and a lot of them are here, and I think he's the right CEO for Wells Fargo. Thank you. We have another question on item 2? Wait just a minute. They'll bring you a microphone. Thank you very much. I'd just like to do a reflection as kind of a local person. By the way, thank you for coming to Des Moines. It makes it much more convenient. Happy to be in Des Moines. My concern is about your support of the predatory payday lending industry, which allows them to continue to extract money from the pockets of low-wage workers in my neighborhood here in Des Moines. Many of my friends and neighbors live paycheck to paycheck and struggle to provide the basic needs for their families. An unexpected expense like a car breakdown or a medical event puts them in a state of economic emergency. Payday lenders literally surround my neighborhood. They target poor communities. I can literally walk north, south, east, or west and get to a payday lender very easily. Their slick advertising fails to reveal the fact that the interest rates escalate rapidly because it is a rigged system they know will result in an average of 12 consecutive trips through the door as borrowers won't be able to pay the first loan in 14 days. It's a debt trap by design. My question is, will you stop providing millions of dollars in lines of credit to the payday lending industry? Thank you for your comment. I certainly agree that there are some payday lenders out there that provide products in a very aggressive way, and many of the statistics that you just mentioned are absolutely true. We have some relationships to some of the firms in that industry that we believe are acting responsibly. You've hit on an item that I think is very important, and that is, post the financial crisis, many of the products that were traditionally provided by banks are not provided by banks anymore. That created a void that payday lenders and other firms, similar non-bank firms, jumped into. One of the reasons that we're introducing the Greenhouse product that I mentioned from an innovation standpoint is to address that issue, and that's provide a much lower cost and simpler way for customers to be able to interact with a bank on their phone. We're looking forward to introducing that this summer. We're looking forward to continuing to work with all of our customers as well as our prospects who have different ideas in terms of how we can provide better products and services. Thank you. Thank you. Let me ask again, please, to hold the questions on items other than each item that's brought up until we get through the business items. Are there any more comments on item two, the advisory resolution to approve executive compensation? If not, we'll move to item three. That's two. There's one. Oh, okay. I'm sorry. Yes, ma'am. Please stand up and move to the center, and state your name so that the people listening outside the room can hear. Hi, my name is Abby Frerich. I'm here representing the Twin Cities Lumbers, holder of 2,158 shares. I am also a member of Student Action, and I am here to discuss the predatory student loans that Wells Fargo is letting students fall into. My family and countless others have fallen trap to these predatory loans. I am not even in my 20s, and I'm afraid of my future. I'm facing tens of thousands of dollars of debt with 5%-7% interest rates that are occurring now. And I'm wondering what this new board will do to settle my fears and the fears of my entire generation. Well, again, appreciate your question and your attendance. First and foremost, we don't make predatory student loans at Wells Fargo. We make private student loans, most of which, when we make them to the student, are guaranteed by their parents or some other responsible party. We used to be in the student loan business, that was the guaranteed student loan program. We operated that on behalf of the federal government. The federal government and the prior administration took that business away from the banking industry and has been operating it directly ever since. So again, we don't make predatory student loans. If you are a Wells Fargo borrower and you have a concern about your student loan, please see one of our representatives outside of the auditorium here, who will be happy to talk about your individual borrowing issues. Thank you. Let me ask one more time, please, that if you would confine your comments to the business items, so we can get through the business items. Or what my shareholders, when I was CEO of a community bank, used to call the boring part of the meeting. Not that here. Are there more questions or comments on the advisory resolution to approve executive compensation? All right. Let's move to item three, appointment of KPMG as our independent public accounting firm for 2018. Are there any questions or comments on the following items being presented by shareholders for approval at the meeting? Item four, a shareholder proposal regarding special shareholder meetings. Item five, a shareholder proposal regarding reforming executive compensation with social responsibility. Yes, sir. Hi there. My name's Alex Ross. I'm here representing the AFL-CIO Equity Index Fund, holding 1,680,351 shares. I'm also a Wells Fargo team member and a member of the Committee for Better Banks. I came on board to the company early in 2017, shortly after some of the ethics issues had been exposed, and I've been extremely happy to see the progress the company's been making internally to deal with those. Thank you. The process of rebuilding community trust is ongoing, and it must be an integral bottom-up process centering team members. Team members must be given adequate resources, including time, training, and management support to execute our responsibilities. In a meeting with Wells Fargo executives last June, team members representing the Committee for Better Banks raised three proposals. The first was an end to the persistent and aggressive sales culture. The second was a base wage of at least $20 per hour, and the third was appointment of a CBB member employed by Wells Fargo to the Stakeholder Advisory Council. While steps have been taken to address the first of these points, the others are just as important, and I think they relate to the issue of executive-to-worker compensation ratio referred to in this proposal. A competitive wage will reduce team member turnover, and team members who are committed to Wells Fargo will be better placed to provide adequate and ethical service. Most team members this year received annual increases of 2% or less, and this does not show a commitment to investing in employees. Similarly, an employee representative to the Stakeholder Advisory Council could identify and address the concerns of frontline workers. In a CBB survey last fall, 54% of respondents stated they had not been able to provide constructive feedback to their managers, and 12% stated they still feared retaliation for doing so. By offering team members a peer voice on the advisory council, Wells Fargo could allow us to be part of the solutions to the problems we encounter. We are allies and not adversaries, and we have a unique perspective from our experience on the job. While the issue of executive-to-worker pay ratio is on the table, will Wells Fargo commit to a compensation structure that is fair and adequate to all team members and to a CBB representative on the Shareholder Advisory Council? Thank you very much. Thank you. Thank you for your comment and thank you for joining the Wells Fargo team. We are happy to have you. Are there any other questions? Betsy, can I respond to that? Sure. Again, thank you for being on the team. I completely agree with you that we need to make sure if one of our fundamental values out of the five that I showed is that people are a competitive advantage, we need to make sure that we compensate our team members in an appropriate way. We worked very hard in the last year, not only in terms of raising the pay. I think the statistics that you indicated weren't exactly accurate, but we can talk about that later. They didn't include the base pay increases for the lowest-paid team members, and then the additional 50,000-plus that were impacted just recently. They didn't include the 250,000 team members that received restricted stock rights into 50 shares, if you're a full-time team member, that will vest in two years. They don't include the $13,000 per team member in benefits that we provide. We take compensation very seriously, and we're going to make sure we continue to be focused. We're also going to make sure that we listen. You raised a point, which is a fair one, and that is, how about having one of our team members on the Stakeholder Advisory Council? The Stakeholder Advisory Council is a very important part of how we're going to govern the company. Candidly, we need to hear from our team members more often, and that's why we've increased the pace and frequency of how we interact with our team. You're probably aware that every other month, I hold a town hall along with other executive leaders where we literally get somewhere between, I don't know, 500 and 2,000 team members in a room. We broadcast that to tens of thousands of team members across the company. My presentation has been shortened because I can be a little bit boring sometimes. Instead, what we do is we take unscripted questions for an hour from our team members, both live in the room as well as video. That feedback has encouraged us to make changes in how we compensate our team members. In addition, we have team moments where one of our executives will get online and will communicate. I tend to not be very good at that because I don't type very quickly, but others are better, and we get feedback that way. We also make sure that we are doing surveys of our team members. We provide that information, by the way, to the board. That feedback in our new corporate governance structure gets provided. I don't want you to think that we're not listening. We absolutely are. The work that you do is so important to our success, and I want to thank you again for attending and being confident enough to stand up and speak with us. Thank you. 100% agree. I would also, before we move on to the next item, thank you for sharing your experience in terms of sales practices pressure as a new team member. That is something that we, as a board, try to understand exactly how that is being experienced, and I know Mary Mack is working every single day to make sure that there is not that unhealthy pressure of the incentive plan. I appreciate your saying that. Are there any more questions on item five? If not, we did have a question or a comment on item six, and this would now be the time, ma'am, for you to stand up and come to the center of the aisle and ask your question or make your comment. Item six is a shareholder proposal regarding a report on incentive compensation and risks of material losses. I am Molly McGrath. I am speaking on behalf of the International Brotherhood of Teamsters Local 710 Pension Fund. Wells Fargo has at least 232,000 employees in the U.S., as far as I understand, and 263,000 in the world. I want to speak in full support of this proposal for the company to disclose whether or not it has identified employees in positions who are eligible to receive incentive-based compensation tied to metrics that could expose the bank to material losses. Given the problems with sales practices that have been steadily uncovered since 2016 and that workers have been collectively shining a light since 2014 on the aggressive sales culture and more or less coercive employment relations that have led to millions of Wells Fargo's customers to be deceived, now is the time for our company and Wells Fargo to make a fundamental change to transform its practices. This change appears to have been very difficult to achieve from the top down. While I appreciate all those efforts, don't you believe such a report, supported by proposal six, would shed light on how real change could be achieved from the bottom up, starting with the over 200,000 rank-and-file employees of Wells Fargo? Thank you. Thank you. Are there additional comments or questions on item six? If not, this concludes the question and answer period for the items of business presented for consideration at the annual meeting. If you have not already done so, please give your completed ballot or proxy card to the nearest usher so that your vote may be included in the Inspector of Elections' final vote tabulation. I now declare the polls closed for the items of business for the annual meeting at 11:31 A.M. Central Time on April 24th. While we wait for the preliminary vote totals, we will take general questions, the moment you have all been waiting for. Now questions are in order for Questions on any topic about the company's business. Had one over here, I think was the first hand I saw. If you want to stand up, we'll try to get the microphone to you. Good morning. My name is Jordan Ash. I'm with the St. Paul Federation of Teachers. As educators and school staff, our first responsibility is to ensure our schools and campuses are safe and welcoming environments for teaching and learning. This must trump any other interests, including financial interests. We must stop the gun violence epidemic in our country. We were alarmed to read in multiple media reports about Wells Fargo's financial backing of gun manufacturers and its financial support of the NRA. The NRA has used its wealth and power to actively resist gun safety measures that even its own members support. NRA leaders have launched shameful personal attacks on educators and the student survivors of mass shootings. Last week, our national organization, the American Federation of Teachers, AFT, announced that it would terminate its relationship with Wells Fargo's home loan program for teachers after Mr. Sloan refused to meet and discuss these issues with the AFT president. Approximately 1,600 AFT members a year use this mortgage program, and more than 20,000 AFT members currently hold mortgages through this program. Other companies like Bank of America, BlackRock, and Vanguard have stepped up and engaged in meaningful relationships about what responsible relationships with gun companies look like, but Wells Fargo won't. Have you disclosed to your shareholders how much money you've made off of doing business with the NRA and the assault rifle manufacturing industry? Have you weighed that against the mounting risks you face from failure to do your part to address the increase in mass school shootings in this country? The AFT continues to call on Wells Fargo to act in the best interest of students, teachers, our communities, and our country by ending its financing of assault weapons manufacturers and by terminating your relationship with the NRA. Thank you. Thank you. Thank you for your question. There's no question that gun violence is a very serious issue in this country. We believe, as I know you do, that we want schools and communities to be safe places for our students to attend and our teachers to teach. As it relates to the interaction with the AFT, I received a letter and provided a detailed response to that letter to the AFT. Unfortunately, the AFT decided to make my response public without asking me. From my perspective, then sitting down and meeting on a direct basis after being treated inappropriately didn't make a whole lot of sense. considering how many kids are being killed by guns every year. That's a different issue and I- No, it's not. No. The fact that you are personally offended by that, to put that ahead of the safety and wellbeing of the student body. I did not put- That's what you're saying. No, it's not what I'm saying. That's exactly what you're saying. No, it's not what I'm saying. I'm saying that we want to have- That's your problem with the company. No, it's not. You're mad that you took a personal offense to that when we're talking about the wellbeing of kids. How many different kids are going to be killed this century? Because you are personally offended, you're the President of this company, you shouldn't be willing to take that. Yeah. Well, I've taken a lot of criticism, including here, so don't- Yeah. But Wells- Yeah. But just could I answer your question? If you'd like, because this is part, I think this is- All of that wasn't a problem with you, for the most part. This is a perfect example of the challenge with discord in this country today. You ask a question, I want to be able to respond. What I responded was what I was focusing on was a response to the AFT. We're very focused on our commitment to education. We're very focused on When are you going to meet with that AFT president? We have reached out to the AFT, to set up a meeting. That's ongoing. As it relates to the fundamental issue, we think that gun safety and gun violence are best addressed by legislation. We have had outreach with all of our customers that are in that business, providing feedback that we've received from our customers. You said legislation, but legislation doesn't work. No. You said you could expand on legislation. Legislation doesn't work. Could I finish and then you could respond? Sure. What we've done is we've promised to engage with our customers that are in that industry. We've had a very active dialogue. We've provided them with feedback that we're hearing from our customers, our team members, from community groups, from nonprofits, and we're also providing that feedback to our legislators. We think that this issue is best decided by the American people. We don't think it's a good idea to allow banks to decide what products and services that Americans can buy. It shouldn't be up to me, to us, to decide that. It should be up to the folks following the laws and folks making decisions. That's where we are on that, and I really appreciate your question. Thank you. Thank you. All right. We're going to move on. That's fine. We need to move on to other speakers. Please take your seat. Sir, please take your seat. We need to move on to other speakers. Please take your seat. We need to move on to other speakers. We have a lot of people who want to speak. Please take your seat. Yes, sir. Well, good morning. It's a pleasure to be with you this morning. My name is Jack Whitver, and I am a state senator from Ankeny, which is a northern Des Moines suburb. This isn't part of my remarks, but I want to thank Wells Fargo, because as a young businessman, Wells Fargo was the only bank that reached out and was able to give us a small loan to start our business when I was 24 years old. So thank you for that. As Senate Majority Leader here in the state of Iowa, I appreciate the opportunity to welcome you all to Des Moines on behalf of Governor Kim Reynolds and Lieutenant Governor Adam Gregg. They cannot be with you today, but they want to send their regards. The governor and I want to thank Wells Fargo for having such an unbelievable presence here in the state of Iowa and Des Moines. We appreciate that there are more than 14,000 Wells Fargo team members in the Des Moines area, and there's over 16,000 team members across the state of Iowa. Your large presence is very positive, and it's very productive for the state of Iowa. There's a few things that you might want to know about the state of Iowa if you've never been here before. Obviously, we're a great place to do business, as you guys well know. We have great employees. We have a highly educated workforce. We have strong values, and we have a quality work ethic. Iowa has recently been recognized in numerous ways as being first in the nation. US News and World Report recognized Iowa as number one in best states rankings in the entire country. Mediacom's launch of one gigabit service for residential and businesses in over 300 Iowa communities has garnered national attention, and there's an unbelievable insurance industry presence here in the state of Iowa. We're a large agricultural state, and we're perhaps best known for that, but we are working hard to diversify our economy. I think the best attribute and the best quality of the state of Iowa is the quality of our people. So I want to thank you for coming to Des Moines, and welcome to Iowa. Thank you. Thank you, and thank you for all the support that you provide to the company and the welcome that you give the company in this state. We really appreciate doing business here. My name is Chris Coleman. I am on the Des Moines City Council and serve as mayor pro tem of the City of Des Moines, and it is my high honor to welcome and thank you for bringing this annual meeting to the City of Des Moines. We very much appreciate it. We have a long winter in Iowa, so we are very glad that when you all got to town yesterday, you brought spring with you. It is really clear to me as I sit here today that Wells Fargo is in its own spring, and we are happy that the meeting here in Des Moines will be marked in the history of Wells Fargo as positive steps forward for you and your company. We are very proud that you are here, and we are very proud. Jack has a Wells Fargo story. I do, too. I delivered the newspaper, and I would go out and collect the money. We had to collect back then because Wells Fargo had not yet invented auto pay. So I would take my money up to the branch that is now Wells Fargo. But I have seen Wells Fargo's heart and work. As a person that spent their career in Iowa in charities and nonprofits, I know the kind of company that you are here in Iowa, and I am sure it is the same way around the country. I took a look at the Iowa Business Hall of Fame members. There are a couple of dozen people that have been recognized over the last 30 years, and I think four members are alumni or leaders of Wells Fargo, rivals of any other company in our state, and that tradition continues with so many great leaders here in Iowa now. We are very proud that you are here. We want to thank you, encourage you to continue to grow here in Iowa and in Des Moines, and we hope while you are here from out of town, you show your pride in Wells Fargo. I cannot think of a better way to do it than take out that Wells Fargo credit card and buy something. Go to a restaurant. Thank you for being here. Thank you, sir. Sit down. Sit down. Could you bring a microphone here, please? I'm sorry. We'll do the lady, and then we'll get you. Thank you. Thank you. Good afternoon. I'm here on behalf of the Needmor Fund. My name is Patricia Flynn. Mr. Sloan, Ms. Duke, one year ago, I came to the Wells Fargo Annual Meeting and stood before you. I shared my experience with Wells Fargo Home Mortgage. I made last year's trip from California, my home, to Florida because I truly believe that if I shared my outrageous experience with the leaders of Wells Fargo Bank during their purported time of change, they might work with me in good faith, allowing me to save my home and honor my obligations to your bank and shareholders. It's all about that. I stated, and I will quote, "Mr. Sloan, if you sit in this room tasked with the job of leading Wells Fargo to a culture that exhibits ethics, a fiduciary duty to shareholders, and the expectation of honest business interaction with your customers, then you understand the implications of ignoring what is actually happening in your company, compromising the trust of your beneficiaries, and putting you in direct conflict with your assigned task." Mr. Sloan, you responded by first apologizing for my experience with the bank and told me you would personally follow my situation. You then instructed me to meet with, sorry, with a designated representative in the foyer. Not knowing what your words meant, I'll admit it gave me considerable hope, a hope you cannot begin to imagine. But then nothing happened. Mr. Sloan, after that meeting, did you do anything? If so, what? Did you even review my file? I never heard from you again, and on December 1st, I lost my home. To be clear, my family's home is not just a house, Mr. Sloan. That home hosted the birth of both our daughters, 23 years of our birthdays, holidays, graduations, our children's handprints in the cement. A warm and welcoming place to gather with our family and friends. Our home brought us together with our community, growing friendships that blossomed with our neighbors and cemented relationships forever. Our home comforted us during the times of loss and surrounded us with memories of happy experiences that eased the pain of those losses. Photographing our daughters together on our front porch the first day of school every year is just one example of the memories and the growth that came from inside those walls. Our home truly embodied home is where your heart is, and our hearts were broken. I admit that I feel almost foolish standing here telling you that as a little girl, I recall Wells Fargo commercials featuring your iconic stagecoach. Wells Fargo claims that stagecoach is an enduring symbol of the company's heritage and values, that there is no way to square that iconic symbol with the depravity to which Wells Fargo now subjects customers like myself on a daily basis. Wells Fargo claims that for more than 160 years, through prosperity, war, and social changes, Wells Fargo attention to customer needs has remained constant. However, it is Wells Fargo's wild prosperity which caused my complete devastation. You see, Mr. Sloan, and this is the end of this, so you know. You see, Mr. Sloan, it is not possible for any person to have reviewed my file or have followed my situation over the past year and a half and conclude in good conscience that Wells Fargo adheres to even the most basic principles of good customer service or even common human decency. You would never, ever have let me go. Thank you very much. Mrs. Flynn, thank you for your statement. I want to correct a couple of things. We did have that interaction last year, and I did personally stay involved in our mortgage team's review. That review was escalated to the most senior leaders within our mortgage business. We interacted with you, the description that we didn't do anything is not an accurate statement. The result is correct. Unfortunately, that loan was not on our books. We didn't own that loan. That loan was owned by investors, and we were servicing that loan on behalf of investors, and we had to follow, which we did, and we make every effort to try to help homeowners that are in similar circumstances stay in their homes. Over the last 10 years, we've forgiven $8.8 billion in principal, and we've kept over 1.2 million homeowners. Unfortunately, we can't do it every time. I'm sorry that that's been the result. We tried our best. I wish we could have helped you, but because we didn't own that loan, we couldn't do anything more than we did. Sir, you ready? Good morning, members of the board and fellow shareholders. I'm Tom McIntyre, head of the Capital Stewardship for the International Union of Bricklayers and Allied Craft Workers Pension Fund with $1.9 billion in assets. I'm here today to talk about an issue that impacts Wells Fargo shareholders, clients, and the lives of workers and their families throughout New York City and beyond. Wells Fargo is the lead arranger of a construction loan at a massive building project at 50 Hudson Yards in New York City. We applaud the development, but the hiring choices on this project pose risks to the company's return on investment and harm Wells Fargo's precarious reputation with local stakeholders. The developer of the project, Related Companies, is undercutting local standards and using irresponsible subcontractors. The New York Times and other media outlets have reported on the picket lines accusations of unfair labor practices and workers unqualified to perform on a project of this magnitude with a heightened risk to health and safety. In The Times story, David Stronger, a union electrician interviewed by The Times, said, quote, "Without the unions, it's a race to the bottom. They pay as little as they can. It doesn't hurt us. It brings the whole economy down." End quote. David is one of the many contributors to the multi-employer funds that look to Wells Fargo as a service provider and an investment. Multi-employer pension funds have long-term interests in sustainable companies that act as good stakeholders in the communities where they do business. The very existence of these pension funds depends on the health of employment and the industries that support them. There is much to lose in standing idly by on the Hudson Yards project. We ask the board to take a closer look at what is happening in New York. We ask that Wells Fargo expresses support for responsible contracting policies in compliance with local area wage and safety standards. Wells Fargo should expect more of the companies with which it does business, and we certainly do. I want to thank you for your time. Thank you, Mr. McIntyre, and we want to thank you also for the relationship that we have with the Bricklayers and Trowel Trades International Pension Fund and appreciate the business that we do with you. We received your letter a few days ago regarding the 50 Hudson Yards project, and some of my colleagues, not myself, but were able to reach out to you and spoke with one of your colleagues, I think it's David Stolper. Had a very productive conversation with him. You mentioned the 50 Hudson Yards project. You and your colleagues were actually involved in the 30 Hudson Yards project, which is almost complete, and we bought a 500,000 sq ft interest in. We want to appreciate all the hard work and effort of your colleagues in constructing that building because we're very much looking forward to moving into it. In terms of the concerns that you have related to the 50 Hudson Yards project, which you're correct, we're the lead arranger for a number of banks. We will make sure, and I will personally make sure that I pass along your concerns to the Related team. Thank you. Thank you. Right here in this pleasure, Sir. My name is Bob Schrim. I am from New York, now living in Iowa. I am pleased to be living here. My comments are not prepared. I traveled here today. They are a little bit more nuanced, and I think we will all agree that crises are not easy. Whether it be a marriage or a health crises, sometimes it kind of shakes us up. It wakes us up. I would contend that it is the same with a business crises. We are moving along, and then suddenly we are shaken up, and we are woken up. With regards to that, and with all the issues that have been coming up, I think there is actually value in acknowledging, of course, in a marriage or in a health crises, what we have been doing wrong, and so that we can correct it. I would say the same in a business crises. I am a little befuddled why I think it would be helpful to acknowledge on some level that there has been a cultural problem, rather than just putting it to the side. I think it is a source of strength to acknowledge that we have a culture problem. With regards to that, and I am very empathetic. I understand. You have been with the company, or a set of administrators have been there for 30 years, and sure, we wake up. That is one issue, the culture, acknowledging that. The second quick thing is there are new initiatives that are coming down the line now that you have outlined today, all the objective kinds of things that are being done. My question is, with the previous CEO, of course, Tim Sloan, you were there as well, that here we are. We have been going on. I will complete in 30 seconds. Sure. We have been going on this road for 20 or 30 years, and then suddenly we have the crisis, and are we redefining the path that we were on? Is it a new road, a new bridge? Are we repairing the road? So what did you go through internally? This is more of a subjective, nuanced experience view. Thank you. Thanks. I appreciate your question. There was a lot to address there. I am going to stay away from the marriage portion of the program. Let me start with the last comment and work backward. When I think about the company today, on one hand, I think about the 166 years of performance that we have in making a difference in this country, like we have just heard, while we make a difference in Iowa. We have made some serious mistakes. Not only has management taken responsibility for those mistakes, but the board, in an appropriate way, engaged an independent firm to look into the matter and make the review very public. I believe that we have acknowledged responsibility. When I stepped into this role, I was very focused on making sure that our senior leadership team and the entire company was focused on uncovering anything else that was problematic within the company. I think we're going in a new direction. We're going in a new way. Everything you said is changing at the company, and we really believe that it's changing for the better. In terms of the comment about culture, I get asked that a lot, and for good reason, by the way, and so your question is a thoughtful one. When you Google the word culture, in 0.45 seconds, there will be 2.2 billion references. Everybody's got a different perspective about what culture might be. This is how I think about it at Wells Fargo. I think about it as our vision and our values. That's the foundation of the culture of this company. We had a culture survey with our team, all of our team members, and they responded to us that they absolutely believe and are committed to our culture. But a very important part of culture, and I think where we have made some mistakes, is how that vision and those values are put into practice. So it's the practices and the policies that we need to change, and that's what we're very focused on, and that's what we're in the midst of changing. But from a personal standpoint, it's been a journey the last year and a half. But I want you to know that as a 30, now almost 31-year team member of this company, I'm committed to our success, and I won't stop until we reach that success. Thank you for your question. I'm sorry, are you together or one after the other. We'll do one and then the other. Okay. Good morning. My name is Faith Spotted Eagle, and I'm from South Dakota, and I represent a shareholder who has one share, and I am, in fact, running for a state representative, what that my question relates to. Research was proven in the Bakken region of North Dakota as to the impact of pipeline and oil development in man camps as a precursor to violence against women. Wells Fargo's investments in these areas is creating a major public health problem and violations of human rights for all women and girls. This is not a comfortable topic, but most certainly an intersect of racial justice, structural violence, and the economy. The fossil fuel development via the pipeline is violating our land and water rights and is a form of structural violence. It is a form of elite profiteering. When the girls and women on the frontline pipeline communities exist in economic distress, just as many farmers do. Shareholders must accept corporate accountability for inhumane actions and divest from promoting this form of structural violence. This is the right thing to do. I do not want my daughters and granddaughters to be at risk in the communities that I represent. One of your interests, the KXL Pipeline, is attempting to bring in three man camps in my state with hundreds of men who are 40 minutes from our place of business, the casino. We are at risk. Secondly, the Missouri River main stem is the primary source of water for South Dakotans and people of Iowa who have polluted their streams with the cattle. Our river is already compromised and polluted from gold mine tailings and agricultural drain off. We do not need more oil spills and damage to our environment. This is not meeting customer needs and those tribes that do bank at Wells Fargo. By investing, you are creating a corporate-funded means of structural violence on women and girls by potential reproductive justice impact for the unborn. My question is, why has there not been any discussion about divesting from this violence that is actually not meeting our needs, which I see up on your literature? Yes. Thank you. Thank you. I am not familiar with the specific project that you referenced. What I would like to do, if it is okay, is have one of our colleagues meet with you after the meeting to get some of the more details that you just provided. As it relates to our commitment to providing energy in this country, we believe that it is critical to the growth of the economy and jobs across the entire country, excuse me. We are proud to provide credit to folks that are in companies that are in the energy industry, both in terms of those companies that provide fossil fuels, as well as those that are dedicated to environmental sustainability. We believe that we need to balance that as we move to a healthier planet. We will follow up specifically and get the details so that we can dig into the concerns that you have. Thank you. One comment. We do have an Oceti Sakowin Power Authority that we are creating four wind farms in our lands, which is the renewable project that you talked about. Yes. I think those need to be paid attention to because we're doing our part in sticking up for Mother Earth, and we need to see your part. Thank you. Well, we are too. In fact, I don't know if you're aware, but Wells Fargo has been a lead investor in wind projects across the entire country. In fact, in 2016, I don't have the numbers handy for 2017, we provided the equity for 9% of all the wind that's produced in this country. So we're absolutely a believer that we need to make sure that we're involved in environmentally sustainable projects, which is why we announced our $200 billion commitment to occur by 2030. So thank you again for your comment. Okay. Yeah. I have a request to speak over here, and then I'll come back to you. Go ahead, sir. Yeah, I'm better when I speak. I don't know about all that. Over here, because I think we got feedback. Hold my own mic. You have to hold it yourself. Okay. I'm used to holding the mic, man. But he's not going to let me hold my own mic. Okay. My name is Ako Abdul-Samad. I'm state representative of District 35. Again, like my colleagues just did, I'd like to welcome you to Des Moines. But I also would like to say that I represented a community. I'm wearing two hats, because my name was up there about Creative Visions. So I want to thank Wells Fargo for working with us at Creative Visions because of the people that I represent. Iowa is a great place, but as we heard individuals and their pain today, I appreciate you listening to them. I think, though, it's important for us to be able to deal with ills that we have, is that we confront those ills, that we come up with solutions for those ills. Not cosmetic, but systemic. It's so easy a lot of times for us to talk about the ills that we have before us to solve problems. Iowa is a great place. Iowa has unemployment that is phenomenal across the country. But for the minority community, it's in the double digits. We have a problem. Iowa's doing a great job in bringing people to it, and working with Wells Fargo is doing great with that. But we also have a problem that we have overpopulation of minorities in our institutions. Just like the African Americans are 3% of the population of Iowa and 27% in the penitentiary. We have issues that are here. One of the things I think when you mentioned before, you talked about your town hall meetings that you hold. I think that's an example that can be used in every branch, in every city, in every state. Because if we don't do town hall meetings in the community and the communities we serve, then we don't hear what the people have to say. And then we come to meetings here to where we have protesters downstairs that are saying that, "We want to be heard." Or you have other individuals in here, stockholders are saying, "We feel the pain, but we want to see something different. So it makes it hard if we're not reaching out to the people. It makes it hard if we're not dealing with the pain that we see in this country. A lot of individuals, when you hear about mass shooting of children. Yeah, Wells Fargo doesn't and shouldn't say who should buy what. But Wells Fargo can take leadership in making sure the conversation is taking place. Wells Fargo can take the leadership in making sure that predatory lending is something that we don't have to worry about in the community. Wells Fargo can take the leadership, and why not step above other banks? I heard that this morning. But continue stepping above systemically. Continue listening to individuals like ourselves. I don't know how many people just from the community are on the boards that you talked about. There's Joe Six-Pack who would love to just sit down and tell you what the pain that they have and what they see. Those are the things that Wells Fargo can do. You outlined, you laid out a great program, but how many of us know about it? How is the communication getting out to Joe Six-Pack? Your shareholders. I listened to some individuals when they got up, and the people in pain talked about, and they. Then when you said something of support was there was, "Wow." We should clap just as much for those in pain as we agree, because everybody has a right to share. If we're going to resolve our issues in Iowa and across this country, we have to start here. You, as stakeholders, must now stand up and take responsibility, and let's work it together. Because if we don't do it together, and we keep dividing two Americas, if we keep dividing this country, your next meeting will either be worse than it is now, whether it's held here or anyplace else. You came to Iowa. Now make it a difference. You came to Iowa. Let's make a stand for what Iowa stands for, and that's change. When those babies across this country walked out the other day from school and said, "All we want to do is have a change so we all could be safe," let Wells Fargo pick up the same mantra and say, "All we want to do is make this country a better country. And we're going to take the lead to do that." Thank you. Thank you. Thank you, sir. I don't know if I can respond to that because it was so articulate, and I mean that in a very sincere way. I completely agree with you, and I think that's fundamental to our business and fundamental to how we continue to change this company. It's by interacting with our customers, interacting with community organizations like the one that you lead. It's by making a difference in the communities. When I talked about the mortgage commitment that we have to Hispanic and African American homeowners, that came about by us listening to community groups in particular, but also our customers saying, "We have an issue here. Can you help us deal with that?" That is a good example of making fundamental change. When I think about why did we change our overdraft policy so we would earn less money last year. Because we listened to not only our Stakeholder Advisory Council, but also listened to other community groups and customers and said, "If you can provide us with better information in terms of how we can manage our finances better, we'll go ahead and do that." That's exactly what we've done. I completely agree that communication is important and appreciate the feedback and the comments. Thank you. Thank you. Okay. Over here. You've been very patient. I'm Carolyn Raffensperger, and I like to think that I hold the proxy for future generations. I just want to let you know something you might not have heard when you came to Iowa. We're the most ecologically damaged state in the union, the most plowed over and paved over state in the union. Yet you've got something pretty interesting at your campus. You've got a nesting osprey. They've been returned to Iowa, and they're growing here. I want to encourage you to move in that direction, to restoring this earth. You've got a contradiction in your own annual report, which I read. In the annual report, you've got these wonderful goals, including things that were highlighted here about investing in sustainable energy. Yet you all invested in Dakota Access Pipeline. That crude oil pipeline crosses the drinking water of Des Moines. In case your grandchildren are drinking the drinking water of Des Moines, they are threatened by that crude oil pipeline. You do have a choice in what you invest in. You have a choice about promoting green energy so that we do have good jobs. You have a choice about not investing in fossil fuels that are contributing to global warming, climate change, and to the death of those ospreys and to the destruction of our water. You can do better than that. When I read that goal about green energy and sustainable businesses, I was heartened. Then I went to Table 18 in your annual report when you talked about the loans to oil and gas, and I was heartsick. Mm-hmm. Well, I appreciate your comments. Let me ask a question for folks in the audience. How many came to this meeting by car or by airplane? Raise your hand. We're in the midst of a transition in this country, right? We are still dependent on fossil fuels and hydrocarbons. It's important in terms of how our economy can grow, how we go about our business every day. So we need to make sure that we're playing a responsive role, right, in the development of hydrocarbons. We may agree or disagree about the Dakota Access Pipeline, but we also appreciate that it's important for us to be committed to environmental sustainability projects like we are. No other bank in this country has a $200 billion commitment by 2030, but we do. Right. So we're in the midst of a transition, we're in the midst of a balance. We're going to serve our customers. One of the reasons why we have this environmental sustainability goal, which we will likely exceed and will provide a lot of transparency, is because of feedback from customers and shareholders like yourself. So thank you. Thank you. Yes, ma'am. My name is Joy Braun, and I am representing somebody that has 87 shares. I am not going to say their name because they are being publicly broadcast right now. So I am going to protect them, but all the information is up there. I agree we need to move forward with just transitions into clean energy. However, you said that you had all these, and I have seen, I have read the reports about moving into green energy and whatnot. But at the same time, you provided $1.5 billion to TransCanada, which is one of the dirtiest fossil fuels in the industry. My auntie Tueli, Faith over there, talks about missing and murdered indigenous women. Our women go murdered 10 times more than any other person, any other race, and it is largely due to oil and gas development, whether it is from the tar sands down here. Keystone XL threatens my grandchildren. I was so glad to see your grandbabies up there. They are so cute. Thank you. I just wanted to do what we call akiniy, which is like this. Because that is why I came, because I have three grandbabies. Should Keystone XL break along the Cheyenne River, the southern border of my reservation, it will get into the water intake in 33 minutes. There was the largest inland spill just in South Dakota, just last year in November, 210, and then they said 400,000. We do not even know because TransCanada is not being transparent with us or with you, their investors, or with anybody else here. This is not being corporate responsible to invest in companies like them. I was up there at Standing Rock, and I am going to finish this because you are looking at one of the people that got maced. You are looking at one of the people that got rubber bulleted. You are looking at one of the people that got beat by cops, and all I was doing was praying for my grandbabies. That is it. That is it. I was not one of the ones raising cane and doing whatever else was went. I was just praying. Please. The other thing is you guys put $50 million into providing grants over five years, right? And you just let a Rosebud tribal member to oversee that. I am grateful to see that inclusion. But $50 million versus $1.5 billion, that is greenwashing the money, and it is not going to change the fact that tar sands have significantly caused cancer and death up in Alberta with our Athabaskan relatives, all along the corridor of missing and murdered indigenous women, threatening my grandbabies on my reservation. Please do not invest in these companies. Let us move forward in a positive, just transition to cleaner, positive energy, because I really honestly believe we can do that. Thank you. I very much appreciate your comments. We are not involved in the tar sands projects that you described. We do have a relationship with TransCanada, we are not involved in that project. We will continue to be committed to outreach with all tribes that could be impacted by any sort of pipeline that we might be involved in, and we will be committed to our relationships with tribes in this country, and our $50 million commitment is an example of that. I am not aware of any other bank or company in this country that has that sort of commitment. But we appreciate your comments, and we will continue to have that dialogue and listen. Thank you. Thank you. Yes, ma'am. Right here, with your paper. I'll stand next to you. Hi, my name is Lainie Hashorva, and I wanted to speak to the issues that you talked about in regard to values and customers that have been harmed. When friends ask me how I am, I say, "Wells Fargo." I was denied over 32 times for a HAMP modification for reasons that didn't apply to me at all. I'm single, self-employed, and in remission from non-Hodgkin lymphoma. Wells Fargo instructed me to default on my mortgage payments, or I would not be considered as having a legitimate hardship. Apparently, cancer and loss of work didn't count. Some of the reasons I was denied for a modification of my high interest-only rate were failure to submit my husband's earnings, and I've never been married. Denied for the fax not being legible, but I returned the documents via Federal Express. Denied because they said I withdrew my application, but that was false. Denied again and again for lost documents or missing pages. Denied because the underwriter asked me how I knew that I would be employed a year from now, and I asked him the same question. Denied for my profit and loss statement being formatted incorrectly and resubmitted after the Wells Fargo single point of contact told me exactly how it should be formatted. How many ways are there to do a profit and loss statement for a small business? I then qualified for a Keep Your Home California grant modification, grant program funding, which paid Wells Fargo directly for 18 months of my mortgage, during which time Wells Fargo dual-tracked me and sent me 42 notices of default. 42 notices. My credit was ruined and my business of 26 years destroyed, with no access to credit for trade shows or inventory. The only negative aspect of my credit report is Wells Fargo and the foreclosure action that still remains on my property while accepting the mortgage payments from the state of California. I went to three separate branches to pay my mortgage and cure the arrears after the government program ended, and I was refused every time at each Wells Fargo branch. I called several times to ask why, and I was told to speak to my lawyer, but she doesn't pay my mortgage. Wells Fargo's casual patterns of abuse, harm, and negligence is more deadly now to me than the actual cancer and chemo that I somehow survived. Your attorneys, Severson & Werson in Southern California, are now retaliating against me for speaking out and my activism and for fighting back for myself. I am only one of millions of consumers Wells Fargo continues to harm. I have worked very hard to survive this, and I want to keep my home. Thank you for your time. Thank you. It shocks me that I am standing between these two women. It must be a very serious situation. I do not know this lady, but I really beg you, Mr. Sloan, to truly look into these cases. There is more to it than meets the eye. We will. We have the head of our mortgage business here, as well as the head of our servicing business here. If you would, after the meeting, meet with one of our representatives, and we will make sure that they meet with you also, and I will make sure that I am personally involved in that. I apologize for the service that you received. Thank you. It's been years and years of denial. Thanks. Yes, sir. You're on the end of the aisle. Yes, sir. Thank you for letting me speak today. My name is Larry Ginter. I'm from a small town called Rhodes, Iowa, about 350 people, about 35 miles northeast of here. I'm a retired farmer and proud member of Iowa Citizens for Community Improvement. I stand in solidarity for all the folks who are out here who've been victimized by the criminal activities of Wells Fargo. Where is the outrage from the representatives from Ankeny? A billion-dollar fine. Not enough. I'm thinking about all those folks that committed petty crimes, rotting in jail, and when they get out, they can't vote. Mr. Sloan and Wells Fargo executives will be able to vote. I don't know. It's pretty sad when I hear acceptance of criminal activity, because this is what it's all about in this room. I'm outraged. If I ran my farm the way Wells Fargo ran their business, I'd be kicked out of Marshall County. I'd be a failure. You ought to hang your heads in shame, quite frankly. I got a couple comments here. Today's farmers are experiencing a severe cost-price squeeze, yet Wells Fargo finances the Dakota Access Pipeline that destroyed thousands of acres of Iowa cropland. Much of that disturbed soil has lost its organic integrity, is now producing an average of 40 bushels less than historical average. When will Wells Fargo start to respect the Earth? Family farmers have quit financing big oil, whose drilling legacy has left a trail of environmental destruction all across this planet. Will Wells Fargo stop bankrolling big oil projects? Thank you. Thank you for your comments. The concerns that you raised have been raised by others, and we responded to it, but I appreciate your comments. Yes, ma'am. Thank you. I am Alexa Rodriguez. I am representing New York Carpenters with 50,500 shares. Wells Fargo, you have a relationship with private prison groups like GEO Group and CoreCivic. Being top of the six largest contributors to the private prison industry. This is harmful to the community of color and the community of immigrants in this state and in this nation. As someone who grew up in a mixed-status household, and who grew up in a community where hardworking people live in fear now more than ever in the current administration, because of their status, and because our immigration system is set up in a way to tear families apart and not give people who want the same thing as all of us, the American dream. I couldn't imagine losing another family member and not knowing where they're going, and how they're being treated in these private holding facilities. This is a country of immigrants, and these immigrants have contributed and made Wells Fargo what it is. It's shameful to know that Wells Fargo is benefiting abundantly from them, while also profiting from mass incarceration and the criminalization of immigrants. You keep hurting people. My question is, will you divest from these private prison industries? Because honestly, hearing you say that the mortgage agreement has made it's great for Hispanics and the African American community, feels like a slap in the face when those communities we know are affected largely by these mass incarcerations and these private prison industries. Thank you. Thank you. We certainly appreciate your concerns and agree with your concerns as it relates to immigrants and immigration policy. We've been very vocal, for example, in terms of the dreamers issue in particular, and I've been very vocal about that. As it relates to our relationships with private prisons, there's an overcrowding problem in this country related to prisons, right? We didn't create that. To deal with that, our elected officials, our government, has decided to contract with private prisons. We're not involved in that decision. I would encourage you that if you're concerned about those issues, which you clearly are, and I'm sure you've already done this, is to contact your legislators and elected officials because they're the ones that are making the laws that you're concerned about, not Wells Fargo. Thank you. Right. I'm saying it's just, you almost take such pride in helping my community when you are being the one who's profiting from that mass incarceration that largely impacts my community, people of color and African Americans. I just want your words to match the actions that you're taking. I appreciate that. Thank you. Mr. Chiang. Oh, good. Thank you. Yes. John Chiang. I understand my comments this morning may have made many in this room uncomfortable, but the conversation needs to be started and held in earnest. In November of 2016, committees of the California State Legislature invited Mr. Sloan and longstanding members of the bank's board to hearings. None of you appeared. Would you like another bite at the apple? I would like to hear more about how you will repair the trust. This part follows up on that conversation by the state representative of Iowa. It's important we have this conversation. Furthermore, on another point, Wells Fargo maintains a morally indefensible policy of forcing victimized customers to settle disputes through forced arbitration and blocking them from filing class action lawsuits. Your latest slogan, "Building Better Every Day," won't pass the giggle test until you embrace the common sense reality that you can't continue to argue that arbitration clauses included in the contracts customers sign to open legitimate accounts also cover the bogus ones set up without consent. What better indicators that the bank's promise to make things right is a bold lie. Moreover, by forcing fraud cases into secretive, closed behind closed doors proceedings, Wells Fargo uses forced arbitration to keep scandals out of the public view, allowing fraud to mushroom, unfortunately. That is why in 2017, I sponsored a bill to open the way for victims of bank fraud to sue in California courts. The bill is now the law of the land in California. I now call upon this board to eliminate entirely Wells Fargo's practice of imposing forced arbitration on fraudulently opened accounts and provide fairness to customers nationwide by giving them the opportunity to bring their cases into the light of day. Until the forced arbitration policy is changed, customers and shareholders should not believe for one second that this bank is committed to changing the practices that led to this once storied financial institution becoming one of the least respected companies in America. This is a very important opportunity to give customers the opportunity to have their voices heard. Thank you. Treasurer Chiang, we will follow the laws of State of California, just like we work very hard to follow the laws of every state that we do business in. As it relates to arbitration, and in particular, those retail banking customers or small business customers that were impacted by inappropriate accounts, we've actually gone one step better than arbitration. That is that if one of those customers comes in and we cannot satisfy their needs, then we will pay for a mediator that represents the customer to resolve the issues, so that the customer doesn't even need to deal with paying any sort of lawyer to represent them from an arbitration standpoint. I find it very interesting that in the CFPB's own study of arbitration, they found that most customers were worse off when they went to arbitration than better off. In any case, we will absolutely follow the laws of the state of California because it's a great place to do business. Thank you. John Taylor. Can we get a microphone down here? Or you probably don't need one, but we'll get you one. My name is John Taylor. I'm with the National Community Reinvestment Coalition, and I'm on the Stakeholder Advisory Council. Thank you for allowing me to make a comment or two. As I sit here and listen, first off, I'm concerned that some of these stories sound anecdotal or individual to a particular geography or something like that. The problem is what people are raising here, whether they're talking about guns or livable wages, or what CCI folks are talking about and others, elected officials, really is a systemic problem that's happening across this country. The income inequality that's occurring in this country ought to be of concern to all of us. I know that some of your directors are probably sitting here, and hopefully not yourselves as the CEO and as the chair of the board, thinking, "When is this meeting going to be over?" Because really this is a microcosm of what is really needed in this country now, and that is corporate leadership. We have a breakdown in government leadership on these issues. The problems that are facing working poor people, average Americans, people of color, women, it's just endemic right now in our society. If we're going to see the kind of change, bank leadership is critical. Corporate leadership is critical. But for most of our communities, there is no better hope than a bank seeing a neighborhood, seeing the issues, seeing the people, and saying, "That's part of our business model." So it's a culture that talks about really seeing yourself in that role, that it isn't just about shareholder value. I think your shareholder value is at a low now, not necessarily because you don't know how to do the business of banking, but because of the way people perceive you. To reverse that they need to perceive you as a leader, as a trendsetter, as somebody who's going forward in the future to really change what's happening in this country as one bank. As one bank that takes a stand perhaps on bump stocks. As one bank that takes a stand on, we want to fund companies that fund livable wages. We want to do the kinds of things that are being raised here. I think the ill will that came from the missteps and bad practices will be replaced by the goodwill that occurs when you lead and respond to these kinds of things. I want to really encourage you to see yourself in a role as being part of the leadership because the leadership we have now, particularly in Washington, there's only one group rated by the American public lower than banks, and that's Congress. We have the worst political system we could possibly have in a long time. It's really up to us as community people coming together, working with corporate leaders to try to resolve a lot of these problems, whether they're environmental, social, poverty, prisons. I really encourage you and the board to really consider that perhaps maximizing always the most amount of profit you can squeeze out of something is not necessarily in the best interest of the company or this country. Thank you. John, thank you. Thank you very much. I would actually like to respond to that on behalf of the board, and then Tim can say. When you looked at the six places where we want to be a leader, corporate citizenship, and I would say along with that corporate leadership, is an aspiration of ours. It's an objective of ours. You might not always agree with the positions that we take in that leadership, but we want to be a leader in this country for good and to use our appropriate role to address as many of these issues as we possibly can. We commit to continuing to listen. You'll never agree with all of our positions, but I promise you, we will listen, and we will consider, and we will think about them. Tim? I agree with what Betsy said, John. You've been very vocal and have made a tremendous difference in this country, particularly as it relates to housing. Betsy mentioned you were the father of the CRA. I think you were the grandfather. The stepfather. The stepfather. Okay. I wasn't married to Gail Nonn. Okay. Well, we weren't going to talk about marriage. I understand that. I understand what you're saying. I think there's a lot of frustration on the part of lots of folks in this country. We're going to do our part. I think we've given a lot of examples where we're actually doing that and taking a leadership role. We can't be all things to all people. I know that's frustrating sometimes. We're going to do our best, and we're absolutely going to listen, and every once in a while, I'll take your advice. Thank you to everybody for your comments, for taking the time to be here, for taking the time to talk to us, and to help make Wells Fargo a better company. We are committed to improving every day. Wells Fargo before the work. Put people and planet first. Wells Fargo before the work. Put people and planet first. Wells Fargo before the work. Put people and planet first. Wells Fargo before the work. Put people and planet first. Wells Fargo before the work. Put people and planet first. Wells Fargo before the work. Put people and planet first. Wells Fargo before the work. Put people and planet first. Wells Fargo before the work. Put people and planet first. Wells Fargo before the work You are not a citizen. You do not have corporate citizenship. You cannot absolve yourself from your responsibilities or their consequences. The preliminary voting results are available. The inspector general has given the corporate secretary the preliminary voting results on the items presented at this meeting. Anthony, please read the results. The inspector's preliminary report indicates that all of the management's proposals received the required majority support and have been approved. For item one, each nominee for director received more than approximately 89.90% of votes cast in favor of his or her election and has been elected a director of Wells Fargo. Item two, the advisory resolution to approve executive compensation was approved with more than a majority of the shares present in person or by proxy and entitled to vote on the proposal voted in favor. Approximately 92.4% of such shares voted in favor of the proposal. Item three, the appointment of KPMG as the company's auditors for 2018 was ratified with more than a majority of the shares present in person or by proxy and entitled to vote on the proposal voted in favor. Approximately 91.1% of such shares voted in favor of the proposal. The inspector's preliminary report also indicates that the shareholder proposals item four through six did not receive the required majority support and were not adopted. The percent of shares present in person or by proxy and entitled to vote on each proposal voted in favor of each proposal as follows. Approximately 36.1% of such shares voted in favor of the proposal regarding special shareholder meetings. Approximately 6.0% of such shares voted in favor of the proposal regarding reforming executive compensation with social responsibility. Approximately 21.7% of such shares voted in favor of the proposal regarding a report on incentive compensation and risks of material losses. Thank you, Anthony. The company will report the final voting results on a Form 8-K to be filed with the SEC. This concludes the business portion of the annual meeting, and the meeting is now adjourned from a legal perspective. On behalf of the board of directors and management, I want to thank you for being here and listening in by audiocast today. This concludes our meeting. Thank you.

Data Source: Quartr Last updated: Apr 24, 2018

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