Wells Fargo & Company (WFC)

AGM 2017

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Apr 25, 2017

Ladies and gentlemen, please welcome Chairman of the Board of Wells Fargo, Steve Sanger, and CEO and President of Wells Fargo, Tim Sloan. Good morning. Good morning. I am Steve Sanger, Chairman of the Board of Wells Fargo & Company. On behalf of Betsy Duke, the Board's Vice Chair, the other independent directors of the board, our CEO and President, Tim Sloan, and the management team of our company, I want to welcome all stockholders to our annual meeting. Also, I would like to welcome those who are listening to the meeting by audiocast and over the internet or by telephone. We really appreciate the opportunity to be with you here in Florida, where each of our major business lines, community banking, consumer lending, Payments, Virtual Solutions, and Innovation, wealth management, wealth and investment management, and wholesale banking, have significant operations and presence. With about 800 locations, including nearly 650 branches, and more than 14,000 team members, Wells Fargo is one of the largest corporate employers in the Sunshine State. You received an agenda and rules of conduct for our annual meeting as you entered the room, and the rules are displayed now on the stage screens. I want to cover briefly a few meeting formalities. There is a quorum present. The polls are now open for voting at 10:01 A.M. Eastern Time on April 25th, and I move all the items on the agenda for stockholder vote. We will have ballots available if you want to vote in person. You can vote here in the room in person. But before we get into the business of the meeting, I want to talk a little bit about all that has happened in the past year. Because a lot has happened, and we, as a company, look forward to hearing your comments and perspective. It is important that those who wish to speak have the opportunity to do so. We owe it to everyone listening 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 these rules that are on the screen. I am proud to lead this talented and dedicated board of directors as its chairman. I know my fellow directors, the entire senior management team, and the thousands of hardworking Wells Fargo team members serving our millions of customers are equally proud of Wells Fargo. Our company has a long history of serving customers' financial needs, supporting our communities, and generating strong returns for our shareholders. But before we begin with our agenda today, I want to talk to you about the events that occurred at Wells Fargo relating to the improper sales practices in our community bank. We know these issues are not what you expect of us. It's not what investors expect or any of our shareholders expect, and it's not what we expect of ourselves. The foundation of Wells Fargo's success is the trust that our customers, community partners and shareholders, and other stakeholders place in us. Our company violated that trust, and for that, we are deeply sorry. As you likely know, last fall, the independent directors of the board launched a comprehensive investigation into these sales practices to get to the root causes and implement changes across the company to correct areas that allowed for this behavior to occur. The six-month investigation was led by a special committee of independent directors and assisted by the law firm Shearman & Sterling LLP. Shearman & Sterling conducted 100 interviews of current and former managers, team members, Wells Fargo board members, and other relevant parties. Additionally, they searched more than 35 million documents, board minutes, emails, and reviewed hundreds of interviews of more junior team members, along with information concerning more than 1,000 investigations of team members terminated for sales integrity violations. Two weeks ago, the board released findings of that investigation. The key factual findings and some of the actions that the board and management have taken based on the findings are documented in a 110-page report that can be found on the Wells Fargo website. We are confident that we have identified the root causes of the improper practices that occurred, as well as the people responsible for them, and that we have taken appropriate actions. In his company report, Tim Sloan will also cover some of the information in detail. But let me just give you a couple of top-line comments. The investigation identified a number of factors that led to the sales practices, including the Community Bank's aggressive sales culture and performance management and incentive programs. Wells Fargo's decentralized organizational structure, which gave too much autonomy and authority to the Community Bank's senior leadership without the necessary management oversight, and this structure also limited the effectiveness of our corporate control functions. Finally, issues with the adequacy of management's reporting to the board on sales practice risk and the scope of the problem. The report concluded that the board's own actions could have been improved by moving the company towards centralization of the risk function earlier than it did, insisting on more detailed and concrete action plans from management for addressing the sales practices risk, and being more forceful in pushing for leadership changes in the Community Bank. Since the investigation began, the board and management have taken decisive actions, including compensation actions totaling over $180 million and employment termination, as described in our proxy statement and other recent public disclosures. There have been changes in the company's leadership, with Tim Sloan becoming CEO and Mary Mack now leading the Community Bank. The board has also strengthened its oversight and governance by making important changes to the leadership structure and to committee responsibilities. This includes separation of the roles of Chairman and CEO, and changing our bylaws to require such separation. It includes naming Betsy Duke as Vice Chair of the Board, and it includes adding two new highly qualified independent Directors. Many of these actions reflect the feedback that we've received from our stockholders. For the past seven years, I've been meeting with our stockholders and other stakeholders as part of our investor engagement program, and I appreciate the opportunity to hear their views, your views, on important governance and related topics. We listen closely at these meetings, and we look for ways to enhance our practices and be responsive to the feedback we receive from you. One recent example of an action we are implementing as a result of that input is a new stakeholder advisory council that we are forming to help provide us with insights on current and emerging issues. We look forward to continued active engagement with our investors and other stakeholders as part of our regular outreach efforts and through the advisory council. While we certainly have more work to do, we're encouraged by the progress the company has been making, and the board has complete confidence in Tim Sloan and in the rest of the company's senior leadership team. The board believes that the company has a strong foundation to serve our customers and earn back the trust of all our key stakeholders. At this point now, it is my pleasure to introduce Tim Sloan and invite him to present the report on the company. Tim? Thank you, Steve, and thanks to all of our stockholders who are with us today in Florida and those of you who are listening to the meeting. It is an honor and a privilege to serve as your CEO and President. Before I begin, I would like to make a few comments to remind you that during the course of the annual meeting, we may make forward-looking statements about the future financial performance and of the business. Factors that may cause actual results to differ materially from these expectations are detailed in our SEC filings. I would like to discuss four topics with you today. I want to directly address unacceptable retail sales practices in our community bank. I will talk to you about the actions the company is taking to rebuild trust, which is my number one priority and the number one priority of our management team and our operating committee. I will discuss our 2016 results, as well as our first quarter 2017 results. Finally, I want to share some exciting and innovative ways that we are serving our customers and our communities, and we are making Wells Fargo a better bank. I would like to start my presentations with our Wells Fargo vision. We want to satisfy our customers' financial needs and help them to succeed financially. It is the foundation of everything that we do at Wells Fargo. Our vision is built around a focus on our customers. Unfortunately, we lost that focus when improper sales practices in our community bank at times resulted in accounts being opened for customers that they may not have been aware of and possibly did not want or need. This exposed behaviors that were completely contrary to the fabric of our company, to our vision and our values. That is one of the things that pains me the most about the situation. There is no doubt that the last seven months have been one of the most difficult periods in our company's 165-year history. Let us talk more specifically about what happened. Steve outlined the factors that led to the sales practices issues very well in his remarks. In brief, three things happened that caused our sales practices issues. We had an incentive compensation program that focused on product sales goals and an aggressive sales culture in our community bank that sometimes resulted in behaviors and practices that did not serve our customers or our team members' interests. Our decentralized operating model resulted in corporate leaders failing to understand the seriousness and the scope of the problem. As a result, we moved too slowly, and the actions we took over the years to address these issues were not adequate. This is all unacceptable, and we accept full responsibility and take complete accountability. We are deeply sorry for letting you, our shareholders, down, and letting down our customers, our team members, and the communities that we do business in. You expect and deserve much more from us. As I stand before you today, I can assure you that we are facing these problems head on and that Wells Fargo is emerging a much stronger company. We are focused on rebuilding the trust of all of our stakeholders. While we still have work to do, we are making strong progress in addressing the root causes of the problems, making things right, and building a better Wells Fargo. So let me talk to you about a few steps that we're taking on our journey. Since we announced our initial legal and regulatory settlements on September 8 of last year, we've taken decisive actions to fix the problems that led to improper sales practices, including many of the issues that were identified in the board report. It is critically important that we fix these issues and move forward to rebuild trust. Each of you has a progress report on your chair, listing the many actions we have taken over the past several months. For the sake of time, I'll move fairly quickly through them. We centralized key enterprise control functions such as risk management and human resources, which had been reporting to lines of business. We eliminated product sales goals for retail bank team members and implemented a new performance management and rewards program that emphasizes customer experience and team goals. We've significantly strengthened ethics and risk management throughout the company, including creating a new office of ethics, oversight, and integrity to provide us with a better view into enterprise trends, enhancing our ability to investigate issues, understanding complaints, overseeing sales practices, and promoting ethics. To make things right for our customers, we've taken many steps, including the fact that we've refunded $3.2 million to 130,000 retail and small business customers whose accounts may have been linked to improper sales practices. We reached out to approximately 40 million retail customers and 3 million small business customers through statement messages, other mailings, and online communications, asking them to contact us with any concerns that they may have about their accounts. We reached an agreement in principle to settle a class action lawsuit for $142 million, which will be set aside to remediate customer harm on any unauthorized account going back to 2002. We've also launched a program offering mediation services at no charge to our customers. I want to be very clear that we are committed to making things right for our customers who are concerned about their accounts, regardless of when those accounts were opened. We've taken numerous actions to make things right for our team members. We conducted a review of our EthicsLine processes to ensure team members feel secure and confident in reporting any potential ethics violations. We met with tens of thousands of team members as part of our conversations tour conducted by me and the members of the operating committee to address concerns and to collect thoughts on how to build a better Wells Fargo for the future. We initiated new regular surveys of team members to better understand sentiment and identify issues early on. Next month, we're sending out a culture survey to all 273,000 of our team members that will give us information about where we need to strengthen or address issues in our company culture. In addition to that, to ensure that team member base pay remains competitive, we raised the minimum base pay for our entry-level team members in the United States to a level that is 86% above the federal minimum wage. These are just a few of the decisive and wide-ranging actions that we've taken to address the sales practices issues. Please refer to the progress report that I mentioned earlier to see the other steps we're taking to make things right for all of our stakeholders. We have more work to do, but we firmly believe that we're on the right path. Let me talk about our financial performance in 2016 and our financial performance in the first quarter of 2017. Though 2016 was a very difficult year in many respects, our financial performance was solid. We faced an environment that included low interest rates, a sluggish economy, and global volatility. However, our diversified business model and strong risk discipline continued to benefit us. We earned $21.9 billion in 2016, and our diluted earnings per share was $3.99. We generated $88.3 billion in revenue in 2016, up 3% from 2015. In 2016, we returned $12.5 billion to you, our shareholders, through common stock dividends and net share repurchases. Our quarterly stock dividend rose 1% to $0.38 per share. Our 10-year shareholder return of 7.33% ranked number two amongst peer financial institutions. Our core building blocks of long-term value creations, deposits, loans, and capital continued to grow in 2016. Total loans finished 2016 at $967.6 billion, up 6% from 2015, making us the largest lender in the U.S., something that we're very proud of because we understand that credit is such an important component of economic growth. At year-end, deposits reached $1.3 trillion, up 7% from the prior year. We ended 2016 with common equity Tier 1 capital at $146.4 billion and common equity Tier 1 capital ratio of 10.77%, well above the 9% regulatory minimum. In the first quarter, we generated earnings of $5.5 billion and diluted earnings per share of $1. This marked the 18th consecutive quarter that we earned more than $5 billion. We are only one of two companies in the U.S. that can say that. We generated $22 billion in revenue reflecting lower fee income from a year ago, which was partially offset by a 5% increase in net interest income. Average loans were up 4% from a year ago, and average deposits were up 7% to a record $1.3 trillion. We returned $3.1 billion to our shareholders in the first quarter and reduced our common shares outstanding by over 19 million shares from the fourth quarter of 2016. This brought our common shares outstanding below 5 billion shares for the first time since 2009. This slide provides a snapshot of our company today. We understand the important role we have in serving the financial needs of our customers and helping grow the economy. Within wholesale banking, we're the largest commercial real estate originator, and we're also the number one lender to mid-size companies. Wells Fargo originates and services more residential mortgages than any other lender, and we're the number one home originator to minority borrowers in low and moderate income neighborhoods. As the nation's number one small business lender, working with small business owners is one of the most important things that we do at Wells Fargo. Wells Fargo leads in retails deposits and debit card transaction volume. We're also a leader in serving our customers' brokerage and wealth management needs. Our work does not stop here. We play an important role in helping our communities. Corporate citizenship and caring for our communities is a very important part of our culture. We understand and embrace our responsibility to help create more resilient and sustainable communities and focus on developing deep relationships with community partners and other stakeholders to support economic growth. Here are some highlights of our community efforts. We are proud of the fact that the United Way has recognized us as having the number one employee giving campaign for eight consecutive years. In 2016, Wells Fargo team members supported nonprofits by donating a total of $98.8 million. Team members also volunteered 1.73 million hours of community service last year, with 50,000 nonprofits meeting local needs and making thousands of communities stronger. Additionally, Wells Fargo helps support and revitalize communities by donating $281.3 million to 14,900 nonprofits, the eighth consecutive year the company's corporate philanthropy exceeded $200 million. We take our responsibilities to our communities very seriously. We were extremely disappointed when the OCC recently downgraded our Community Reinvestment Act ratings for the review period 2009 to 2012. According to the OCC, the downgrade was related to consent orders issued subsequent to the review period. It's important to note that the OCC gave Wells Fargo an outstanding rating on lending and investment tests and a high satisfactory rating on the service test. The OCC noted our excellent responsiveness to credit needs in a majority of areas of the assessment, and we were also rated a minimum of satisfactory across all the states and multi-state metropolitan areas reviewed by the OCC. I want you to know that Wells Fargo is deeply committed to economic growth, sustainable homeownership, and neighborhood stability in low and moderate-income communities, and we will continue to invest and go beyond the requirements by CRA. We recently published on our website our annual corporate social responsibility report that outlines our strong track record in helping our communities and the progress that we're making regarding our CSR goals. A summary of that report is also on your chairs. We work very closely with community partners across the country and around the world. I'm very proud to welcome some of our local community partners to our meeting today. We've listed their names on the screen, and I will ask them to please stand as a group to be recognized. If you could stand. Thank you so much for your support. I'd like to wrap up today by sharing some examples of the many ways our team has worked together to build a better Wells Fargo since our last annual shareholders meeting, along with goals that we recently established for our company. As Steve noted, we've changed leadership in our community bank, and the team led by Mary Mack is focused on customer experience and ensuring that we put customers at the center of everything that we do. We've introduced new products like yourFirst Mortgage, which offers a low down payment option, lower out-of-pocket costs, and home buyer education to help our customers achieve sustainable homeownership. We've developed new resources, such as My Credit Options, to help our customers better understand different credit products to help them achieve their financial goals. We are a leader in providing innovation to our customers so that they can bank how, when, and where they choose safely and securely. Last fall, we brought teams together that were working on innovations across the company under one umbrella, forming the Payments, Virtual Solutions, and Innovation Group led by my colleague, Avid Modjtabai. We are implementing the next generation of payments capabilities and digital and online tools, such as cardless ATMs. Last month, we became the first large bank to introduce cardless ATMs to all 13,000 of our ATMs. We are very excited about a pilot that we have underway in our wealth and investment management regarding our digital advisory product that blends technology and access to human investment advice. Earlier this year, we announced six new company goals that will lead us forward as we rebuild trust for all of our stakeholders and become a better and stronger Wells Fargo. In these six areas, we do not want to be a leader in financial services. We want to be the leader in financial services. Customer service and advice. We want to provide the best customer service and guidance to our customers to help them reach their financial goals. Team member engagement. We want to be the employer of choice, a company where people matter, teamwork is rewarded, diversity and inclusion is embraced, and everyone feels respected and empowered to speak up. Innovation. We want to create new kinds of lasting value for our customers and businesses and increase efficiency for our own internal operations. We understand that the true value of innovation is when technology directly serves our customers' needs. Risk management. We want to set the global standard in managing all forms of risk. Corporate citizenship. We want to make every community in which we live and do business better. Shareholder value. We want to earn the confidence of our shareholders by generating consistent performance over time and best-in-class returns. As we now look ahead, we know that we have work to do. Your Wells Fargo is on the right track. We have 273,000 outstanding team members dedicated to helping our customers succeed financially, and we have a terrific leadership team that is focused on building and enhancing the capabilities to drive our success for the next generation. It has been a busy seven months, but we are focused on making things right, making real progress, and I am fully confident that we are on the right path. I want to thank you for your time today, and now I will turn the floor back over to Steve. Thank you, Tim. I want to review a few procedural matters and meeting details, and then we will move into the formal presentation of the items of business to be voted on at this meeting. The first four items on the agenda are management proposals that will be presented on behalf of the company. The other six items on the agenda are stockholder proposals. The stockholder proponents or their authorized representatives will each have a maximum of four minutes to present their respective proposals. At the end of the four-minute time, you will hear a chime. A chime. After all items have been presented, we will have a brief question-and-answer period, during which time stockholders present in the room may ask questions or make comments about the proposals on the meeting agenda. During this time, as stated in the rules of conduct, stockholders should wait to be recognized before addressing the meeting. During the question-and-answer period, please raise your hand, and after you are recognized, please stand and move to the end of your aisle, and a Wells Fargo usher will bring a microphone to you. This will help stockholders and others present here, as well as those listening to our live audiocast of the meeting, to hear the recognized speaker. Please identify yourself, state whether you are a stockholder or a proxy for a stockholder, and the number of shares that you represent. To allow time for others to speak, please restrict your question or comment to 2 minutes during this period of the meeting. After 2 minutes, you will hear that same chime. That will be the signal that your allotted time has expired. In order to maximize the opportunity for stockholder participation, it is important to respect these rules. After questions on these items, we will collect any ballots and close the polls. This will be followed by a general question-and-answer period during which stockholders or their proxies who are in the room can ask Tim or me questions about the company. We will announce at the end of that period the preliminary results of the vote. The notice of the annual meeting of stockholders and the affidavit of the mailing of the notice have been filed with the Corporate Secretary. As part of the record of this meeting, we have appointed Rebecca Paulsen of Wells Fargo as Inspector of Election. With us today on stage is Anthony Augliera, our Corporate Secretary. Anthony, please confirm the quorum. The Inspector of Election has advised me that holders of shares of common stock representing at least 90% 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 this meeting is duly convened for the purpose of acting on the items of business that are properly before the 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-stockholders on items 1 through 4, which are management proposals, and if properly presented, items 5 through 10, which are stockholder proposals included in the proxy statement. Stockholder proponents will have an opportunity, as I said, to present their proposals following the management proposals. If you would like a ballot to vote on items 1 through 10, please raise your hand at this time, and an usher will give you a ballot. Over here. 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. Has everybody who wants a ballot been able to get them? Great. We will collect the ballots after the polls close. At this time, I would like to introduce the Wells Fargo executive officers who will vote the proxies on file. Please, you guys stand when I call your name. Hope A. Hardison, Chief Administrative Officer. Michael J. Loughlin, Chief Risk Officer, and John R. Shrewsberry, Chief Financial Officer. If you voted by proxy, Hope, Mike, and John, as proxies, will vote your shares as you have instructed them. We will now move to the formal presentation of the items of business to be considered at this annual meeting. Stockholders at this meeting will consider and act on the items noted on the agenda. We will take questions about the following 10 items, and only those 10 items, after they have all been presented. Then if you have questions on things other than those items, we will take those in the general question and answer session after the proxies have been voted, after the ballots have been submitted. I will now present items one through four. These are presented by the company for approval of shareholders. Item one is the election of directors. According to bylaws, the board has set the number of directors to be elected at 15 and has designated 15 nominees. All the nominees are here today. Anthony, would 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, John S. Chen, Lloyd H. Dean, Elizabeth A. Duke, Enrique Hernandez Jr., Donald M. James, Cynthia H. Milligan, Karen B. Peetz, Federico F. Peña, James H. Quigley, Stephen W. Sanger, Ronald L. Sargent, Timothy J. Sloan, Susan G. Swenson, Suzanne M. Vautrinot. Thank you, Anthony. These individuals have been nominated. Steve, I think it's an opportunity to hear from the board of directors individually. My name is Bruce Marks. I'm a shareholder, CEO of NACA. I think you should hear from the board of directors, each one, of what they were doing during the activities that you were doing out there. Bruce. opening up those accounts. Let's hear. Can I wait until the question and answer period for you to. Let's hear from each one individually out there so that they can respond whether they were complicit or they're incompetent out there. We should hear. John Baker- Please, sir, you're out of order at this time. No. We need to hear that. This is the one opportunity out there that we can do an interview of each one of the board of directors. Mr. Marks, I will respond to your question if you ask it in the proper time. For the other shareholders present, we'd like you to follow the rules of the meeting. We want to hear- Get him out. From the board of directors. Please. I would like to do that. So let each one speak. I agree. Please, Tim, can each one be allowed to speak to saying what they knew and when they knew it? This is an opportunity. We are not pressed for time. Why can't each individual talk to us? I will respond to your comments and your question if you will hold off and raise it in the proper order. Can we do that? No. The meeting can move along? You can do what you want to hear from one of the board. I understand what you want, sir. On that. We need to move the meeting along. Is your answer yes or no that they can't? Why can't they speak for themselves? John, Lloyd, Elizabeth. You guys are here. Tell us what you knew and when you knew it. Sir. They had all this expertise. So why didn't they know this? Is it that they were complicit or incompetent? If you wait till the proper time, I will respond to your question. We don't want you, Steve, to respond, or Tim. We want the board of directors who have a fiduciary responsibility to tell us about what they knew. If you don't let us proceed with the meeting in regular order, we have to ask you to leave the meeting, sir. No. You're saying that we're out of order, but in essence, Wells Fargo has been out of order for years, and your response is, "Well, we're sorry." That's not good enough, and particularly when you're saying that the people who have been nominated, they've been on the board, right, guys and ladies? You guys have been on the board for years. I think it's feasible to face the stockholders out there or give them the respect that they want. Sir, I'm going to give you- Show respect. Respond to your question, even though it is out of order. One of the reasons we engaged Shearman & Sterling to do their investigation is to identify what the board knew, when the board knew it, and understand whether the board acted appropriately, and the various committees acted appropriately with the information they had. Shearman & Sterling just published a 110-page report. The board published a report of that investigation, which really deals with the questions that you're asking. It's on the Wells Fargo website. I would urge you to read that report. I think it responds to your question. Let them report, yeah. But what we want to hear is from the individual board of directors. Let's get them, as managers do, stand up to explain why they should be reappointed to the board, and to explain when they knew what was going on and what actions they take. It's a reasonable request to say, "Since we don't get the opportunity to meet with the board of directors, let them speak." Why are we surveying us? To publicly give all this expertise and knowledge. It's an opportunity. Maybe they can assist us with the original lights that they asked for. But it's certainly an opportunity for them to do that. Sir. They are right here. We are not trying to fight. Well. They are there. We made. All that. Are you kidding me, no. Please. They are staying at a nice hotel. Could we ask you to please be seated so we can continue with the meeting? No. We want to know. There are rules of the meeting. The rules that they did resulted in millions of people who signed up for joint accounts. Those are rules that they did. When you talk about rules, why do we adhere to the rules of a predatory nature when the OCC has said that you're deemed appropriate, when you have all these lawsuits against you? Those are your rules. Let the working people, who should be, stand up and have this fight with the board of directors, to stand up and say what you knew, when you knew it, whether you were complicit or incompetent. Do not take the position of, I'm too stupid to understand. Sir, Bruce. Nothing has been changed. Bruce, please. Bruce, you said you did not want to hear from me, but now you are going to hear from me. Okay? You are being disrespectful to our board of directors. We have given you more than enough opportunity. No, my turn to speak, okay? We have given you more than enough opportunity to speak out of order. We have given you an opportunity to speak about any of these shareholder proposals, if you would like. You are not doing that. You are out of order. You need to sit down or you need to leave the meeting. Your choice. If you would like to stay in the meeting and ask a question later, we will be happy to answer it, okay? But do not be disrespectful to this board of directors. Please sit down. No, Bruce. The board Bruce, you need to sit down now. Bruce. To your fellow shareholders. Bruce, you need to sit down now and respect other shareholders. You are not showing respect to other shareholders. The respect that has to happen is the board answers the questions. You want to be re-nominated. Show the working people and low- to moderate-income people and your stockholders the respect to explain what your responsibility is, why you should be re-nominated. That is the respect. That is the rule, Tim. Let's follow that lead, because you did not follow the rules. Bruce. All you are doing is apologizing. Bruce, we are not going to follow rules that you decide to make up because you are standing. Are not you reasonable? Bruce. To have them talk? Bruce. They cannot vote on it, do what you say. No. Have an interview with the Board of Directors. Bruce And says everything that you say. Bruce, once again, you are disrespecting a board of directors. I think it is inappropriate. You are out of order. Bruce. I will not say a word as long as each one of the board of directors stands up, introduces him or herself, and says what I was doing and why I should be re-nominated. I think we should show them the respect you are worth. So let them speak. Are they just mouthpieces for the executives who allowed these predatory packages to occur? Bruce, we have set the rules of the meeting. You came in, you read them. Bruce. Ask them what they want to say. Bruce. So guys, can you two turn around, sure? Bruce, you need to sit down now. You either you need to sit down or we'll have to recess the meeting until we can restore order. You're out of order. Look, are the other people that want to be here No. Don't you want to know? You are- Have the respect. Look, we're showing them the respect. We're not going to shout them down. No, Bruce, you're not showing them respect. Look, why? They will not even turn around. What are you afraid of, gang? What are you afraid of? You are supposed to be I will be the one to sit down or to take a walk. Thank you, sir. We are going to recess. Either sit down and wait, or we will recess the meeting as of now. You can do whatever you want, but we want to hear from the board of This meeting is recessed until we can restore order and follow the rules. We will resume the business of the meeting as soon as order has been restored. My mic? Ladies and gentlemen, can we reconvene the meeting? What was his name? Marks? Marks. Okay. Okay. Ladies and gentlemen, thank you for your patience. We asked Mr. Marks to observe the rules of the meeting, which he did not. We asked him to leave the meeting, and ultimately, he made a physical approach toward our board members, so we removed him from the meeting. I am sorry that we had to do that. But we do ask you all, out of consideration for each other, to observe the rules of the meeting. We have introduced the director standing for re-election. I would also like to recognize Susan Engel, who is not standing for re-election and who is retiring from the board at this meeting after 19 years of dedicated service. I thank Susan, and the board thanks Susan for her many contributions to our board. Mr. Chair, point of order. I do have a question regarding Mr. Marks. Do I have my ballot? I would like to vote now. We will recognize you, sir. What I am going to do is read each of the proposals, and then we are going to come back one by one and ask for your questions or comments, and you will be the first person I recognize. Thank you. All right. Looking forward to asking questions before I cast my ballot. Absolutely. Item 2 on the agenda is an advisory resolution to approve executive compensation. The proposal appears beginning on page 52 of the proxy statement. Item 3 on the agenda is an advisory proposal on the frequency of future say on pay advisory votes to approve executive compensation. The proposal appears beginning on page 53 of the proxy. Stockholders have the option to approve whether future advisory votes should be held every year, every 2 years, or every 3 years. Item 4 on the agenda is a proposal to ratify the appointment of KPMG LLP as the company's independent registered public accounting firm for 2017. The proposal appears beginning on page 83 of the proxy statement. I would like to introduce now Michael Pearce and Alicia Horsley of KPMG. Will Michael and Alicia please stand? As stated in the proxy statement, the board has recommended that stockholders vote for items 1, 2, and 4 and for a frequency of every year for item 3, the say on pay. Items 5 through 10 are proposals being presented by stockholders for approval at this meeting. Item 5 is a proposal from the Sisters of St. Francis of Philadelphia, a stockholder of the company, on behalf of itself and other co-proponents of this proposal identified in the proxy statement. All of whom are also stockholders. This proposal requests that the board prepare a report to stockholders relating to retail banking sales practices. The proposal appears beginning on page 85 of the proxy statement. Sister Nora Nash, representing the co-proponents, is in attendance at the meeting to present the proposal. Sister Nora, would you please present your proposal? Are you with Sister Nora, sir? Can I have it, sir? Yes, sir. I do have a question. I want to know how come we're asked to be ordered in this meeting. So many of these activities are out of order. Your own individual reports state 2002, going as far back as 2002. We have Chairman Sanger, yourself. We have Mr. Hernandez, Milligan, James, Baker, and Chen, who's been on this board as long as, I think, that's 2009, when some of these allegations have been going back as far as 2002. We only have two stakeholders, and basically the buck stops there with you executives. To answer your question, sir, the reason we are asking you to follow the rules of the meeting is for the benefit of your fellow shareholders, so they can make their points in an orderly fashion. We can hear from you. We can hear from them. Where were these rules when all these actions were taking place? Where were these rules when no one spoke up until this busted out in 2016? We're very happy to hear your point of view. We ask you- Let's talk about what we're doing moving forward, but let's talk about accountability. What about the people who weren't there? We elected you guys to be there to protect us, to be our watchdogs, and you were not. You decided to, one, look the blind eye to say, "Well, as long as they're not holding the bag- Sir and I'm not responsible, then I can get my $20 million- Could we- and I'm okay with that. It is unfair. Out of respect for your fellow shareholders, would you please make your comments at the time when it is appropriate to make them? Sir, you want to hear from them now. As Mr. Bruce Marks already explained, and from what this gentleman to my right has asked, we want to hear from the shareholders. There are people here who want to know what happened. Yeah. Please follow the rules of the meeting and take your seat. You would like me to leave, I will leave. But my voice has been heard, and I will not have it silenced. Sir, again, we are happy to hear your voice. We would like to do it in the order of the meeting. You heard the voice of that community of shareholders, there are multiple individuals in here who said, "Yes, we want to hear from you." This is all over the news. It is all over the media. No one is accountable. You want to have order, but it has all been out of order. All of this has been out of order. Where is the accountability? Why should they be reelected? Sir, I think you have the right to make your statement, but if you will not do it in conjunction with the rules of the meeting, we would have to ask you to leave. That is what you are going to have to do. We want to know why they should be reelected. Please. Everyone thinks it's forward. No one wants to stand high. But people don't know that, Ken, I see you. Yes, I see you. You know that you know. Please, sir. Again, this is You know what you know. This is disrespectful to our board, and we have to ask you to leave. Even if you don't get the majority's vote, your colleagues are going to vote you in anyways, right? Because they have the same mindset. Sir, we're going to hold you accountable because you're the newly appointed one. You have a couple of board members here who are newly appointed. If these people do not get the majority vote, please do not just sweep them into office and keep it moving like they need to be here. The American people want accountability from their board members, from their CEOs, from their chairmen. This is unfair. It's unfair to say, "We're sorry. Slap on the wrist. I'm going to put a couple of million back of my other millions in the bank." It's unfair. It's unconstitutional how the company is being run. Well, thank you for your contribution, even though it is out of order, and it exceeded two minutes, but you did have your say. What does that accomplish? What does that accomplish with our people? The people who lost their homes. The people who- My apologies to Sister Nora. I'm sorry, Sister Nora. We'd like to hear from you now to present your proposal, if you're willing. Well, before I interrupt Sister Nora, I will never Well, sir, you are interrupting Sister Nora. The problem is that this feels too much like a coronation. You say that there is a process in place. But the process in place leave us feel like we do not have a voice in a way to be done. You set it up that it works out for you. All we are asking is to do it differently in this setting. I do not know what is the big deal about having them, too, answer what is going on. The problem is that they are not royalty. They were governors and servants to the people. All we ask as servants to the people, that they can tell us why was there a culture of materialism. Why was there a culture of consumerism? Why was this going on at that time? To say that we did not know, that we were so far removed when there were reports in 2005, when there were reports that gave a glimmer that if somebody wanted to know, that they could have known. All we would like to know is why did not you see it? If you did see it, why did not you answer it? Why is this so much to ask that individuals stand up before their peers, stand up before the stockholders and say, "Yes, I was there, and this is what I knew or did not know," or, "Yes, I made the mistake." Why can not they not stand up in their own character in this time, outside of the way it is done? Because the problem is you did it the way you did it professionally and orderly. You did it that way, and you allowed it to continue for years. Well, sir. You said do it differently. Again, you are out of order. I am out of order? Out of respect for Sister Nora Nash, please take your seat or- I've taken my seat. Or leave the room. I'm leaving the room. No, we want to give everybody a chance to talk. But I think this gentleman has had the chance. Sir, if you are not going to either sit down or leave the room, we will have to recess the meeting again. Sister Nora apologizes to you. You need to stand up and tell her what we need to know. We are going to try again, Sister Nora. Please present your proposal. I think the gentleman who just spoke does have a very strong message for Wells Fargo. I do agree with the fact that we have difficulties. I also do not agree with being disrespectful, but I think we need to hear the voices that are here today. My message again, good morning, Mr. Sloan. Good morning, Mr. Sanger, board members, employees, and fellow shareholders. I am Sister Nora Nash. I represent the Sisters of St. Francis of Philadelphia and 16 other co-filers, all members of the Interfaith Center on Corporate Responsibility. I hereby move shareholder proposal number five. We have engaged Wells Fargo & Company for several years on various topics. As a result of a bank survey by ICCR and Sustainalytics in 2014, Wells Fargo was put on notice that its reporting lacked transparency and its business standards were inadequate in several areas, including responsible lending. Unfortunately, in subsequent dialogues, meetings, and in spite of repeated requests, we were unable to move management toward a holistic review of the business standards. We would like to go on record as stating our objection to the company's decision to change the title of our resolution from Business Standards Review to Retail Banking Sales Practices. First, the title attempts to confine the issue to a single business unit, retail sales, when we know Wells Fargo's problems stem from structural and systemic issues that have not been open to constructive internal and external assessments, including the mortgage business. Second, we want to eliminate any confusion it may have created among shareholders in suggesting that this report is a response to the request in our proposal. It does not respond to our request because shareholders are asking broader questions of the board and of management. The behavior of the board and numerous managers failed to set the tone and the culture that would have inspired employees to act in accordance with ethical principles and a transparent system. We acknowledge the candor and the work that the company has done in order to respond to the crisis. It justifies a business standards review. Now, as long-term shareholders, we have a laser focus on protocols for crisis prevention and robust reporting by the bank itself. We ask for strong remediation and grievance mechanisms, and going forward, to develop and implement a business standard framework founded on values, ethics, transparency, and strong principles that begin at the executive and board level and are embedded across all business lines, not just the retail banking sector. Thank you, Sister Nora. My name is Joe Torres, and I have been a personal banker of Wells Fargo since August of 2012. I still am. My first day working in the branch, I began to notice many sales practices that raised ethical concerns. I regularly spoke out against the unreasonable expectations, and that's why I urge you to support this resolution calling for a comprehensive study and report of the exposed fraudulent practices and steps to root out the sales culture. Management has come a long way, but they need to involve frontline workers for the Committee for Better Banks in a new study and in the process of revising the incentive compensation plan. I employ you to include the Committee for Better Banks so that together we can all move forward. Thank you, Sister Nora. Thank you, Mr. Torres. Item 6 for your consideration is a proposal by Gerald R. Armstrong, a stockholder of the company, asking the board to take the steps necessary to provide for cumulative voting in the election of directors. The proposal appears beginning on page 89 of the proxy statement. Jonathan Smith, representing Mr. Armstrong, is here today to present the proposal. Mr. Smith. Good morning. On behalf of Gerald R. Armstrong, I propose item number 6, stockholder proposals, cumulative voting. That shareholders of Wells Fargo & Company request that its board of directors to take steps necessary to provide for cumulative voting in the elections of its directors, which means that shareholders may cast an aggregate number of votes equal to the number of shares held, multiplied by the number of directors to be elected, and cast all of those votes for one or more nominees, thus permitting holders of less than majority of the outstanding shares of voting stock to achieve proportionate representation on the board of directors. Last fall, the board of directors of Wells Fargo & Company admitted it several problems and abandoned the dual role of one person serving as chairman of the board while being chief executive officer, and an appointed independent chairman and vice chairman of the board was created. Obviously, the board finally realized the seriousness of the issues and the impact of paying millions in fines. Mr. Armstrong, having purchased shares in the two entities back in 1969, considers himself to be a long-term investor. Throughout the years, he has made several proposals to Wells Fargo. In 2002, he put forth the end of the poison pill, which was strongly opposed by the board, but passed by a shareholder vote. In 2003 and 2004, he requested that the value of stock options be reported. Again, strongly opposed by the board, but later enacted by regulations. In 2010 and 2011, he moved that the shareholders vote on executive compensation. Passed by the shareholders each time, but only enacted by regulation in 2012. From 2005 through 2006, he has requested that the chairman of the board be an independent director. Again, strongly opposed by a board of directors, but finally adopted in 2016. The proponent believes that although some directors may claim to be independent, they may not have given their full faith in being independent, and that the presence of an outsider on the board asking the right questions could cause greater awareness of the issues before the board. The lapdog conduct by board members should be replaced by a growling Doberman on governance matters, executive compensation, auditing, and reporting standards, and the current attitude of management retrust. A prominent governance consultant stated an independent director on the board of Enron might have made Enron a name and not a number in a bankruptcy court. The proponent believes that corporate governance practices at Wells Fargo should be improved, and that the tenure of directors should be reviewed, and the current system must be expanded to allow shareholders a more reasonable way to elect a director of their own choosing. Thank you. Thank you. Item number 7 is- Why doesn't the board turn around and apologize to those employees of Wells Fargo who had to foot up this fear, this cost of fraudulent account openings, sales practices, sales cultures in Wells Fargo? Why don't you all turn around and apologize and admit you did do both? I have to work today. Sir. The pressure of people simply didn't live up to the core practices. You've got an accountable board. Why don't you all turn around and apologize? I think you heard me say at the outset that for those things. I haven't. We, on behalf of the board, are deeply sorry. Yeah, but why doesn't the board turn around and apologize to them? It's the impact to the employees that were fired for their lack of responsibility. It's a shame in itself. Please, sir. I am not doing that. Why will you not turn around and apologize for your side? I am on a word. I am not saying it is not enough. We want to hear your voice. Turn around and apologize to that employee. They did their duty. They fired them, and I am not going to. I am not doing that. Would you wait until we're commenting on the Why won't they turn around? Why won't they be accountable? Why won't you come to it? Why won't you turn out and apologize to those employees? Because every other employee that was fired was capable Sir for their practices. We're trying to respect the shareholders who are trying to make proposals. Could you please? Thank you. How do you walk in and question them four times Are you Bartlett Naylor? And take accountability. One thing I learned growing up is you have to take accountability for your actions. Everything that I've done ever, I've had to take accountability for it, good or poor. They're not held accountable. I've always just been told when I do something wrong or I do something right, be a man and own up to it. I'm not seeing that on this front. Sir, again, we're not talking about election of the directors right now. That is what I am doing. If you- You have the other guys on the phone. I am out here with the guys in the front row. We are speaking for the guys in the front row. The report that was done by Shearman & Sterling evaluates the guys in the front row. I'm not ordered. When you're not ordered, being cover-up, this whole meeting is not ordered. Please, sir, we're trying to get through the business of the meeting. Nothing else is together. Just like everyone else, I have to go. Well, again, we would like to hear from you at the proper time. I'm preparing to be a part of it. You're going to talk about it here. You want me to wait 10 more minutes? I waited for 5 years. Wait 10 more minutes. Is that what you're asking me to do? Yes, that's what I'm asking you to do. Speak your view when it's time to. Multiple letters, multiple calls, no answers, no response to emails. Now you want me to wait 10 more minutes. It's not supposed to be this way. Sir, are you a customer? Excuse me. Are you a former customer that has a complaint about your account? Is that what you're No, I have. Because if you have one, we would be happy to sit down with you and talk with you about it so you do not have to wait anymore. But now is not the right time to do that. Excuse me? These accounts I have, I will talk to you after the meeting, right? Yep. I would rather speak to this than what I have. No, I understand. What's wrong? But if I'm listening to your concerns correctly, you're concerned about some account issues that you had with us. No, sir. I'm accountability. Oh, accountability. I am sorry. Whether you call me or whoever is supposed to deal with it, somebody has to account for this. Got it. Thank you. I am not saying this. I am not saying anything. Sir, for an orderly meeting, I think when I accept and say I'm sorry on behalf of the board that this transpired, I think that speaks for all of the board. I don't agree. You can say you're sorry on behalf of the board, but I want to hear it from the people who made these decisions. They fired those- Thank you for your feedback. They're not accountable at all. Now, either we can continue with the business of the meeting, or we'll have to Thank you. I think we were with the proposal by Bartlett Naylor, a stockholder. Okay. Yeah, sure. That's right. You're Rachel Rachel Curley. Bartlett Naylor is a stockholder of the company, and he requests that the board evaluate and provide a report to stockholders on the divestiture of the company's non-core businesses. The proposal appears on the beginning of page 91 in the proxy statement. Ms. Rachel Curley is representing Mr. Naylor here today to present the proposal. Ms. Curley. Thank you. Fellow shareholders and members of the board, thank you very much. My name is Rachel, and I do second the sentiments of the gentlemen who just stood up before us, so thank you for raising your voices. I am here, I'm the democracy associate of Public Citizen, and I'm here on behalf of Bartlett Naylor, my colleague, to present proposal number seven, the resolution calling for a breakup study. I hereby formally move this proposal. This proposal asks the board to establish a committee pertaining independent experts to study reconstituting the bank into one or more parts. In principle, Public Citizen calls for a return to Glass-Steagall, separating commercial banking funded by government-backed deposits and investment banking. One of the key arguments for reducing the size of Wells Fargo along the lines of Glass-Steagall is that the bank is too big to manage. The company holds nearly $2 trillion in assets. It employs more than 250,000. These dimensions are simply too large for a management team that eventually leaves in a single CEO to supervise in any effective diligence. The massive cross-selling frauds attest to this problem. Despite the fact that this problem festered for more than a decade and involved thousands of employees, the board of directors only began examining the problem in 2014. The Shearman & Sterling report identified numerous red flags by lower divisions from risk to audit to the legal department, yet these did not command the full attention of senior management until a Los Angeles Times article made the problem public. In part because of the intense pressure to meet sales quotas, annual turnover ranged from 30%-41% in the community bank division. Somehow, this conspicuous figure did not warrant senior management attention. The Shearman & Sterling report points to management misconduct, including misreported figures by Community Bank leader Carrie Tolstedt. While misconduct can plague a firm of any size, the scale and duration of the resulting fraud seems less likely at a smaller bank. Indeed, former CEO Stumpf responded to reports that only 1% of employees were found fabricating accounts as gratifying. In a statement echoed by other community bankers, Cam Fine, president of the Independent Community Bankers of America, said, "This is the dictionary," excuse me, "definition of too big to manage and too big to regulate." Public Citizen also believes joining commercial with investment banking can lead to culture problems. As former Citi CEO John Reed explained, traditional banking attracts one kind of talent, which is entirely different from the kinds drawn towards investment banking and trading. Traditional banks tend to be extroverts, sociable people who are focused on long-term relationships. They are, in many important respects, risk-averse. Investment bankers and their traders are more short-termist. They are comfortable with, and may even seek out risk, and are more focused on immediate reward. In addition to investment banking, organizations tend to organize and focus on products rather than customers. This creates the fundamental differences in values. Reed also calls for a return to Glass-Steagall. President Trump supports Glass-Steagall, as do platforms of both the political parties. Because of this political possibility, Public Citizen believes the board should prepare this independent study of what this would mean for the company and share the findings with the shareholders. Public Citizen urges support for this resolution. Thank you very much. Thank you, Ms. Curley. Item 8 is a proposal from Arjuna Capital on behalf of Julia and Judith Bamberg as trustees of the Harold B. Bamberg Revocable Trust, a stockholder of the company, and this proposal requests that the company prepare a report on its policies and goals regarding gender pay equity. The proposal appears beginning on page 92 of the proxy statement. Ms. Shay Pillsbury, representing Arjuna Capital, is here today to present the proposal. Ms. Pillsbury, are you here? Great. Go ahead. Good morning, Mr. Chairman, members of the board, and fellow shareholders. My name is Shay Pillsbury, and I am here to move proposal number 8 filed on behalf of Arjuna Capital's clients, Julia Bamberg and Judith Bamberg. Specifically, we are asking the board to publish a report on the company's policies and goals to reduce the gender pay gap. The median income for a woman working full-time in the U.S. is reported to be 78% of that of her male counterparts. And forecasts indicate that at the current rate of change, women will not reach pay parity until 2059. Of note, the gap for African American and Latina women is wider, at 60% and 55% respectively. Gender pay disparity is not only one of the biggest social justice issues of our time, it poses a risk to companies' performance, brand, and investor returns. This issue is particularly salient to the finance industry, which struggles to attract and retain female talent. In fact, women executives are 20%-30% more likely to leave a finance career than any other career. Female financial advisors are reported to face the widest pay gap of any occupation, making only $0.61 on the dollar. While Wells Fargo has not reported its company-wide pay gap, PayScale reports the company has a mean pay gap of 14.5%, nearly $10,000. That gap yawns wider for top-range earners at 18%, or over $16,000. Research indicates gender-diverse teams are more productive, innovative, and drive better results. Clearly, a failure to attract and retain qualified female employees is detrimental to Wells Fargo's ability to innovate and compete. Wells Fargo has disclosed that 57% of our company's workforce is female, yet only 27% of our leadership is made up of women. Our company is best served by a proactive approach to address the structural biases, including pay inequities, that prevent women from entering and staying in the field, and from moving into positions of leadership. Given the material business risks gender inequality presents, investors expect transparent, honest disclosures and quantitative goals. Employees expect a new level of structural support that addresses root causes and empowers fair negotiation, promotion, and ultimately equal pay. A host of S&P 500 companies have made a commitment to disclose and close the gender pay gap. Waiting another 40 years is unacceptable and a sad reflection of a lack of organizational will. Wells Fargo could and should commit to transparently closing the gender pay gap today. Thank you. Thank you, Ms. Pillsbury. Item 9 is a proposal from the Nathan Cummings Foundation, a stockholder of the company, requesting a report on the company's lobbying policies and practices. The proposal appears beginning on page 94 of the proxy statement. Ms. Curley, representing the Nathan Cummings Foundation, is here today to present this proposal also. Ms. Curley. Thank you, fellow shareholders and members of the board. Thank you for letting me speak again. I am here representing also the Nathan Cummings Foundation to present proposal 9, asking Wells Fargo to provide a report on its state and federal lobbying expenditures, including indirect funding of lobbying through trade associations. I hereby formally move this proposal. Wells Fargo is facing a serious problem with its reputation. According to the 2017 Harris Corporate Reputation Survey, Wells Fargo reputation recently suffered the largest drop in Harris poll history. When asked which company damaged their reputation most last year, nearly a quarter of respondents cited Wells Fargo. Wells Fargo loss of consumer trust has potentially damaging implications for long-term shareholder value, and we are glad that Wells Fargo's CEO wants to earn back the company's reputation. We believe that an important step in doing so is increased transparency, including full disclosure of the company's lobbying activity. Being in compliance with the law is not enough. Although Wells Fargo makes basic lobbying disclosures required by law, its current disclosures omit critical information, particularly payments to trade associations and lobbying in states that do not have strong disclosure laws. In its current disclosure documents, Wells Fargo lists membership in 41 state and national trade associations that received more than $25,000 in dues from our company in 2016. Twelve of these trade associations disclose spending more than $138 million on direct federal lobbying alone. It's important to remember that trade associations have no obligation to disclose how much each member contributes to fund lobbying efforts. So without company disclosure, this lobbying information is not available to shareholders. Moreover, Wells Fargo's current disclosure fails to capture and disclose what we see as significant trade association membership. These include the Business Roundtable, the California Chamber of Commerce, the National Association of Government Guaranteed Lenders, just to name a few. A company that needs to regain trust and to show that it is building a culture of honesty and integrity cannot appear as if it is obscuring its lobbying efforts. Despite what was written in its statement of opposition to our resolution, Wells Fargo has not disclosed this essential information requested in our proposal. Wells Fargo does not provide any information on its state lobbying payments or its indirect lobbying. Wells Fargo does not provide sufficient disclosure to assure investors that its lobbying activities are consistent with maximizing shareholder value and minimizing reputational risk. Wells Fargo has not disclosed the dollar amounts contributed to its principal trade associations and has not disclosed all of its membership in politically powerful trade associations, including the Business Roundtable. Wells Fargo has not disclosed if or how it works within trade associations to ensure their lobbying is in line with our company's position and best interests. With this in mind, we urge fellow shareholders to vote for proposal nine, and we respectfully request that the board reconsider its opposition to being transparent about the company's lobbying expenditures. Thank you. Thank you, Ms. Curley. Sister Nora, are you going to also speak in support of this? Yes. I second that proposal. I ask Wells Fargo to remember that we filed, this resolution was filed in 2013. Investors took it in good promise that the bank would follow through on the trade association membership and post it. Unfortunately, the bank never followed through, and the disclosed information was never received. This is a continuation of that request to disclose the trade association, and we are particularly concerned about the BRT, which is the Business Roundtable, because the Business Roundtable is proposing that investors may not even have an opportunity to file resolutions. If we did, we would have to have millions of dollars to file a resolution at a company like this, and this, we believe, is not fair. We ask you to think, why are you not encouraging the Business Roundtable to support shareholders in filing resolutions? Thank you, Ms. Curley and Sister Nora Nash. Item 10 is a proposal from SumOfUs, that's S-U-M-OfUs, on behalf of individuals identified in the proxy statement, all of whom are stockholders of the company, requesting that the company develop and adopt an Indigenous peoples rights policy. The proposal is explained on page 96 of the proxy statement. Ms. Lisa Lindsley and Mr. Robert Taken Alive, as representatives of SumOfUs and As You Sow, that's S-O-W. The co-proponents of the Indigenous People's Rights Policy Proposal are here today to present the proposal. Ms. Lindsley and Mr. Taken Alive. Good morning. I'm Lisa Lindsley from SumOfUs. On behalf of our 12 million global members, who include over 7,600 Wells Fargo shareholders, I move Proposal 10, calling on Wells Fargo to adopt a policy regarding the rights of indigenous peoples, including respect for the free, prior, and informed consent of indigenous communities affected by Wells Fargo's financing. Robert Taken Alive of the Standing Rock Sioux Tribal Council will share his knowledge of this issue after I provide some background. Company risks related to the violations of the rights of indigenous peoples, such as reputational damage, project delays and disruptions, and litigation, can adversely affect shareholder value. Just since we submitted this proposal last November, Wells Fargo's role as a lender of the Dakota Access Pipeline has resulted in the loss of over $4 billion in business from the cities of Seattle, Santa Monica, and Davis, California. Exclusion from future business in San Francisco, public pressure from Los Angeles, New York, and four other major cities to stop doing business with Wells Fargo, protests at branches of Wells Fargo, closing of over 1,600 retail accounts, signatures of over 350,000 people on petitions asking Wells Fargo to stop funding the Dakota Access Pipeline, 2,000 members of SumOfUs contacting their pension funds and mutual funds about this issue. A consumer business trying to rebuild its brand after a high-profile scandal, as Wells Fargo is, can ill afford the reputational damage the bank's sustaining as a result of a lack of an effective, integrated approach to evaluating the funding of companies and projects that impact indigenous peoples. As Tim Sloan said, banks rely on trust, and shareholders should be concerned that the company's policies are not adequate to prevent another damaging scenario from unfolding. Leading proxy advisory firm, Institutional Shareholder Services, recommends that shareholders vote in favor of this proposal. I will now turn it over to Mr. Taken Alive. My name is Robert Taken Alive. I am a member of the Standing Rock Tribal Council, the recognized governing body for the tribe. I am here to bear witness to the lack of policy representing our rights. What policy representing our rights has meant, it has meant the disrespect of our tribe, for the safety of our precious water for drinking, growing food, and for our children and our future generations. Unfortunately, conflicts like the one and I and other water protectors were forced to engage in are likely to increase in the current environment. We do not want anyone else to be violated as we have. We do not want the land, the water to be degraded any further. So I want to tell you about our experience with Wells Fargo. We say water is life. You say, we cannot hear you. You say we must rebuild our reputation. We say that would be a good idea. You say you met with us to hear our concerns. We say no to the destruction of our land, our holy sites, and the poisoning of our water. We did not give our free, prior, informed consent. We do not consent. You say since October 2016, you have been conducting dialogue with both DAPL and the tribe to ensure all parties are heard and valued. You say Wells Fargo team members located near tribal communities are responding to inquiries and listening to the stakeholders to understand and address their concerns while working through all aspects of the issues related to the DAPL project. I wonder if you heard anything. We do not, and we do not consent to this violation of our rights and the destruction. You say we cannot withdraw from financing. We say ING Bank withdrew from the financing. We see you less than a month ago agreeing to the amendment, your credit agreement to merge with ETP Sunoco Logistics can proceed. You have demonstrated which side you are on, and we have taken action to our close. We close our accounts. We take our business elsewhere. We are not alone. Billions of dollars have left the bank. I have here a resolution from the Standing Rock Tribal Council, which pronounces your statement on indigenous people wholly inadequate to protect our rights as indigenous people. We call on you to stop making empty promises, enact policies that ensure respect for free, prior, and informed consent of indigenous people. In prayer and peace. Thank you, Mr. Taken Alive. Thank you, Ms. Lindsley. Now we will move to the portion of the meeting where we accept questions and comments from stockholders or their proxies on the 10 items of business. Let me remind you that these comments should deal with the items that are to be voted on. Other subjects we will take up after that is done. Please raise your hand and wait to be recognized. I promised that you would be recognized first. What I ask you again, state your name, whether you are a shareholder, a proxy for a stockholder, the number of shares represented, and as the rules of conduct, please limit your remarks to 2 minutes. Again, you will hear that chime to remind you when 2 minutes has expired. Because the meeting is being audiocast, I would like to remind you to speak as clearly as possible when you ask your question so all the listeners can hear. Sir. Thank you, Mr. Chairman. My name is Brandon Rees. I am here on behalf of the AFL-CIO. I am voting 1.6 million shares in this meeting today. I hope that is enough to pose my question and have it answered. I also, before I ask my question pertaining to the election of directors, want to point out that there are a number of current and former Wells Fargo employees. They have questions regarding the company's business practices. I urge you to hold open the general Q&A after the business portion of the meeting. Do I have your word that their questions can be recognized? We plan to have a general Q&A after the items are voted on. Yes, sir. I appreciate that. I understand everyone's patience is a little thin. There appear to be quite a few angry shareholders here today. My question is related to the election of directors. I have read the independent director's report on the cross-selling sales practices, and in my opinion, the Wells Fargo board has suffered from mushroom management. In other words, like mushrooms, the board has been kept in the dark and fed horse manure. In my opinion, the board needs to refresh itself with new directors, new blood. You have nominated two new independent directors, but there are 12 directors who are standing for re-election at this meeting here today. 12 directors that failed to detect or prevent the cross-selling sales scandal until it was in the newspapers. I find that shocking and disappointing. My question is, given that over 5,000 Wells Fargo rank and file employees were terminated in connection with the cross-selling sales scandal, isn't it time for the board of directors to turn over as well? Don't we deserve a fresh face on the board? We need directors, not mushrooms on this board. Thank you. To respond to your question, the employees that were terminated, were terminated for improper behavior. The company had no choice in that. That needs to happen. As far as the board is concerned, we are always looking to refresh the board and add new directors. We believe we have added two excellent new directors just since the wealth and the sales practices issue emerged. I will pledge to you that we will continue to look to add new directors. We expect that over the next four years, no fewer than six directors from the board will be leaving. We are urgently looking, as always, to add really great talent to the board, specific talent that we identify that we need in specific areas like Ms. Peetz in banking, Mr. Sargent in retailing. We take your suggestion, and in fact, we are always looking to refresh the membership of the board of directors. Thank you, Mr. Yeah, that's four years. I don't know if that's a year, but okay. Thank you for your comments. We're taking comments on the first question, which is the election of directors. Obviously, we've had a lot of commentary on that already, but are there others who would like to comment on election of directors? I see you, Sister Nora. I also see Ms. Lindsley here. Why don't we start with Ms. Lindsley and then to Sister Nora. Thank you. My comment regards the Board of Directors. I'm very concerned about the lack of a culture of accountability at Wells Fargo. The fact that the CEO confused this man's comments about accountability with accounts is even more troubling. I'd like to read a segment of the report by Institutional Shareholder Services, the largest proxy advisory firm which recommends voting against all of the members of the Audit and Examination, Risk, and Human Resource Committee because shareholder skepticism, given the board's track record for insufficient risk oversight appears justified. The longstanding sales practices and unchecked incentive program evidence a sustained breakdown of risk oversight on the part of the board. Moreover, the chilling case of a manager who was terminated after raising concerns of possible fraudulent behavior to his supervisors and to a bank EthicsLine raises grave concerns over processes designed to identify and manage risk at the company. Therefore, votes against members John Baker II, Federico Peña, James H. Quigley, Susan G. Swenson, Suzanne M. Vautrinot, Lloyd H. Dean, Elizabeth A. Duke, Enrique Hernandez Jr., Cynthia H. Milligan, Steve Sanger, John S. Chen, and Donald M. James are warranted given those committees' failures to provide sufficient, timely, and effective risk oversight. Thank you. Thank you, Ms. Lindsley. Sister Nora. I certainly am concerned about the board of directors, but I would like to make a positive statement about Wells Fargo's policies with regard to women on the board. Wells Fargo has been very responsible in making sure that the board has had women. The board has been committed to diversity, and I appreciate that. Thank you, Sister Nora. Other questions or comments about directors? We have one over here at the fourth row. Could you come to the aisle, sir, so we can Thank you. State your name and your shares. My name is Steven Greenspan. I am an attorney from Miami, Florida. I am also Mr. Marks' attorney as well with NACA. I will state things in an easier way, so at least to help get apart Mr. Marks' points, which are, if you look at what is the deterioration of the American culture right now, the bank seems to have a culture of dishonesty, and if you can get away with it, you do it as long until you get caught. It is no different than President Nixon saying he was not a crook, and it is no different at Fox News. First, you had Roger Ailes and he stepped down, but yet their culture of sexual harassment continued. Now Bill O'Reilly has to step down, and again, they are promising we are going to fix it. But it seems to be that it's a terrible thing that's going on in our country, including our President. He can't tell the truth for anything. The amount of lies- No. I don't have to sit down. The amount of lies that are told to people is unacceptable. There has to be some truth somewhere, and really someone needs to look after the consumer or, if the administration's concerned, the people of the U.S., because really we're being abused. What's happening is, it's not just the U.S., it's happening around the world. Before you know it, we're going to screw up the whole world, whether it's the reservations that the gentleman is talking about because Mr. Trump is getting rid of all the EPA regulations, whether it's having more rights for women. These things need to be heard. Because even though they're heard, no one really acts upon them, and that's the shame of it all, and it seems that people only act when they have no other choice, and I wish that maybe a little bit of more morality would be introduced here. Thank you. Thank you, Steven Greenspan. If there are other comments or questions on item one, otherwise, I would seek questions on item two, which is the advisory resolution to approve executive compensation. I had a question on item one. I am sorry. I did not see your hand. No problem, no problem, sir. Fred Hornbuckle, about 500 shares. I apologize to the shareholders if I came across cross initially, but you did tell me if I sat down, you would answer my question. I am assuming that means the directors would speak on their own behalf and tell us why they allowed things to go on or that they did not know. So I am expecting now, since I am in order, that I am going to get the answer that I came for. Well, you certainly are in order, and you are in order to ask a question. We have chosen, in order for the meeting to proceed in an orderly fashion, that what I am saying about what the board knew and the board's feelings about this are comments that you can take as speaking for the board. We did expend six months, a tremendous amount of energy, and a small amount of money to absolutely delve in and find the root causes, find out why this happened, what we can do to prevent it from happening again, why it was not visible to the board until early 2014, and to develop a plan of action that would assure shareholders, we believe, that we have addressed those root causes and these things won't happen again. The board has been deeply involved in that. They have worked very hard to do that, along with the company management. Our commitment is to implement these changes in a way to restore trust in the company. Sir, I give you my commitment that we will continue to work hard on that. Yes, sir. Sure. Wait till the people on the audiocast can hear you. So with all due respect, you get to defend the board and protect the board. They don't have to be held accountable. You're there to defend them. Who's defending the employees who got fired, or who's defending them for all the work that they were, all the things they were put through to do? No one's defending them. No one's standing there saying, "I speak for them." You speak for the board, but why don't you speak for those employees who were terminated, who are pressured to do the things they have to do all these days just to make a living? It's a sales culture of fear and of pressure, and it's not fair, and no one protects them. You're defending the board, but no one's defending them. So why can't the board be held accountable as those employees were? The thousands of employees that were terminated and who still live in fear now to make sure they can earn a living. Who's going to defend them? Who's going to stick up for them? Well, the employees, as we've said, we've acknowledged in the report that the culture was off the rails and it was not any community bank. It was inappropriate. People have been held accountable for that. The people who created the culture, the people who set the objectives as outlined in the board's report, the people who actually supervised and drove the excessive pressure for sales have been held accountable for it. We believe that was necessary to move to a new culture. The more important thing, I think, beyond that is the way the culture is improved is to change leadership, to change incentive systems, to change performance management systems. So with Mary Mack as the new leader and the new incentive system and the new reporting systems to make sure that any improper behavior is quickly escalated to the board, which didn't happen in this case. We believe that will make the difference that enables us to ensure that this doesn't happen in the future. Questions in the center of the row here. Stand and move to, if you would, can you move to either aisle so we can get a microphone to you. My name is Joyce Jones, and my question is, obviously, there's a lot of pain and there's a lot of suffering going on in the world in general right now. You're being addressed with a lot of concerns. In this moment, and as you move forward towards a new direction, are you willing to look at being leaders and standing with people and standing with your employees and doing things like divesting in the fossil fuels and Energy Transfer Partners? Is that something that you would consider in your new direction towards leadership? Well, you're speaking to a specific question there about the Dakota Access Pipeline. We're in a world where there are polarized views on a lot of issues. We try to be open to hearing those viewpoints and do what's in the best interest of our customers and our shareholders. Our customers don't always agree on what that is, and our shareholders don't always agree on what that is. That's why we vote. I'd say as leaders, yes, we are very open to feedback from our customers and our shareholders. Where we can, we respond to them. Mr. Robert Taken Alive. Need the microphone. Good morning again. Yes, sir. There are over 300 indigenous tribes in North America, and I know Wells Fargo does a lot of business with them. Speaking right now, I know a lot of the tribal leadership are listening to the livestream, and I would like to say hello to our tribal chairman, David Archambault II. I am doing this for our people, not only for Standing Rock, but for the whole indigenous people in North America. I say this, when are we going to be important? Our money is as green as anybody else's. When we came together this summer, we came together in showing not only the federal government, but the American people where we stand as not only indigenous people, but citizens of the U.S. And we were met harshly with a pushback as indigenous people, not as U.S. citizens. I ask that in your indigenous statement, how you are going to deem us important as indigenous people as well as citizens, as well as shareholders. I would like to say hello to President Begaye of the Navajo Nation also. Thank you. Thank you, Mr. Taken Alive. I would just say, your comments really relate to proposal number 10 rather than number one. But we still appreciate your feedback. We have revised our indigenous people's policy, as you know. You said you are still not perhaps satisfied with it, but we have that coupled with our human rights policy and our environmental and social policies posted on our website. What I would also urge you is, John Campbell, our executive who oversees these things is here in the room. He is at the back, and I would urge you to engage with him and share your views with him. We will try to see what we can do to incorporate them into our policies. We are anxious to hear, and we will evolve on this. Steve, can I follow up, Mr. Taken Alive. Very helpful for us. They were helpful for us in terms of communicating to the Energy Transfer Partners folks about your concerns. They were also very helpful for us in terms of revising our indigenous people's statement that's on our website and our policy, so that your concerns were taken into consideration when we updated our policy. We are listening. As we continue our dialogue with you, your tribe is a very important customer of Wells Fargo, and we take that responsibility very seriously, along with all the other tribes in this country because we have the largest number of relationships with them, and we value those relationships too. I'd like to say hello to them too. They're all good customers. If you have any other feedback about our new policy, we'd be happy to talk to you about that. Let me continue to entertain questions about the items that we're voting on. Item 3 is the advisory vote to approve the frequency of future votes to approve executive compensation. The company has recommended annual votes to approve say on pay. We welcome questions or comments about that. There's one over here. Yes, sir. Hi, my name is Ben Wolcott from the Committee for Better Banks, and I actually wanted to speak on number 2. Oh, okay. Fine. You skipped over it. Yeah. I am representing 86,153 shares Thank you. as a proxy today. As the independent Director's report describes, workers struggle to meet sales goals to get bonuses of just a few hundred dollars so they could make ends meet and pay the bills. Why should shareholders vote to approve Tim Sloan's pay increase of $2 million, that is more than a 15% increase, when so many frontline workers are living paycheck to paycheck? Okay. I'm going to comment about Tim Sloan's pay, and then Tim can comment about what we've done to change frontline employees' pay, because both, I think, are significant. In the case of Mr. Sloan, we'll start with the point that he and the other members of the operating committee received no cash bonus for 2016. Beyond that, were forced to forfeit up to 50% of their equity-based compensation that had been granted back in 2014 and would have paid out in 2017. That combined for that group of people is a forfeiture of over $30 million of pay that they would have otherwise gotten. In the case of Mr. Sloan and others in the senior team that received salary increases for 2016 and 2017 and increases in their equity pay going forward, those are based on changes in responsibilities. Mr. Sloan went from being a chief operating officer to CEO, and that pays more. Similarly, Ms. Mack went from being in wealth management to the head of the community bank. That pays more. So those are all logical in line with their increased responsibilities. Now let me come back to the people in the bank because we, I think, addressed some of the issues that you raised, and I'll let Tim describe the changes that have been made there. Ben, I appreciate your question. I was kind of hoping I could have a comment on my compensation, but Steve took it away. In all seriousness, one of the first things that your management team did in the fourth quarter is we stepped back, and we looked at the pay for our lowest-paid team members, most of whom, because of just the number of entry-level positions in our retail bank, were in our retail or community banking business. Your management team concluded that it was appropriate to raise their pay by an average of 12%. So now when you look across those entry-level positions, the pay is now 86% above the minimum wage, depending upon where they might be working. We think that's an important step to treat our team members in an appropriate way so they can make ends meet. I think also, and very importantly, one of your comments relates to the incentive compensation plan. I think we've talked a lot about the incentive compensation plan already today. It was reviewed in the board's report. It clearly was a problem. We have changed it. We fundamentally changed it, and we've changed it in important ways so that team members do not feel like they have to meet quotas to make ends meet. What they have to do is they have to provide good service and advice to our customers. That's what our customers want. That's what we ask our team members to do. We want to make sure that they're focused on helping their customers succeed financially. That was our vision. We also have structured the incentive compensation program, so it's much more of a team approach, meaning it's about the team in a branch and how well they're working together to provide that service and advice. We'll continue to make sure that we have the right risk oversight to that plan to make sure that what happened before never happens again. It'll be a work in process, but we are very committed to address the issues that you're concerned about. Thank you. I really hope that we can be a part of that in community progress. Thank you. Are there other comments about item 2? Or another one back here for item 3, 2. I'm sorry. I didn't realize you had moved on from one. Again, my name is Joe Torres. I rise again. I am a current employee, and I ask you a question related to the board members. But first, everyone here should know the pressure that I faced when I started with Wells Fargo was so intense. On February 8, I sent an email to an investigator from the HR advisor. I was suffering migraine headaches I'd never experienced before in my life. Six months later, that turned into a brain tumor, a bleeding tumor that nearly cost me my life. My question to you, sir, as Chairman of the Board, how will you hold board members, current and prospective members, accountable should this situation arise again? And how will you protect the employees such as myself? Well, I am very sorry to hear what happened to you. Obviously, as we investigated the culture in the community bank, we became aware of the intense pressure, and I am very sorry that had that effect on your health. I am glad you are still an employee of the community bank and of Wells Fargo after that. I will tell you that the systems we put in place and the reporting changes that have been made at the board level in terms of what the committees cover would absolutely enable, I believe, the board of directors to be aware of these kind of problems existing well down the line in the community bank. If we are aware of them and don't take action, then I think you are right, that the board should be held accountable. In this case, the information simply didn't get to the board in time for the board to do anything about it. Once it did get to the board, the board began taking actions that led ultimately to resolving the problem. We have changed the information flow pretty substantially, very substantially in the wake of this, and we believe that will solve the problem. We got to prove it. Hey, Joe, let me go one step further. One, I appreciated our recent email exchange. No, thank you. As a board member, I am also the CEO of the company. I take personal responsibility for what Steve Sanger just described. All the changes that we have talked about in terms of rebuilding trust with our team members, including you, we take very seriously. As you have seen, all those changes are in place right now. Again, they are works in process, and we will continue to look at that and improve them. If you have feedback for them on them separately, send me another email. We will be happy to describe it. Again, appreciate the feedback that I get from you and other team members. That is very important to how we are operating this company. So again, thank you very much for the feedback. Go ahead. My question was more to the point, how will you hold the board members accountable should this arise again? I understand the steps that have been taken, but how will you, sir, as Chairman of the Board, and the board members be held accountable? Well, I think every situation is based on the facts of the situation and the facts of what information is available to the board. I believe, and the Shearman & Sterling report would support this, that the board acted appropriately with the facts it had when it got the facts. I think they were accountable in this instance. But we've had to change some things to ensure that the board would get the facts sooner, and then they would act on those facts. Other questions on 1, 2, or 3? Mr. Greenspan, is it? Thanks. I'll keep this very brief. From what I've learned, Warren Buffett holds, I think, around 10% interest in Wells Fargo, and I think he was looking towards voting in favor of what the board is recommending. I know Mr. Buffett, through Berkshire Hathaway, owns WPLG TV, which is an ABC affiliate in Miami. He owns Berkshire Hathaway Real Estate, and from what I understand, everything about Mr. Buffett, he is an honest and really a very good gentleman, and I think he has a lot of respect for the American people. My request even of him, if he's listening, to reconsider how he's voting or if he is still going to vote that way, to maybe stand up and because he will be heard, and maybe not everyone here gets heard, but he would, and I think that would be a good thing. Because also things that I've read is, I think the bank proposed, I guess, a wind down proposal should everything fail. I'd rather you just fix everything and do things right. Thanks. Well, that is our intent, to fix everything and do things right. Thank you. Okay, I've covered items one, two, and three. Item four is the selection out of. Question? Back here. Over back here, and then you, sir. Which item are you going to be speaking to, sir? I'm here on behalf of Gerald R. Armstrong, who owns 23,934 shares, and this is regarding item number four, auditor ratification. Okay. KPMG has been the auditor for Wells Fargo for some time, and it was recently announced on April 16 that the top person at KPMG's audit unit has been fired over a leak of confidential information, and four others in their audit department were also dismissed for related issues. Given that KPMG has been the auditor firm for so long and has raised no red flags with problems that have existed since 2002, how can the board continue to engage KPMG and/or other firms, if any, were considered for this position? The board and the Audit and Examination Committee of the board conducts a thorough assessment of KPMG every year and considers whether they should be retained or the audit firm changed. In this instance, after assessing KPMG's work, they concluded that they should be retained. The specific instance you're talking about involves some senior employees of KPMG who received leaked information improperly. As soon as KPMG found out about it, they immediately terminated those employees and notified authorities, which is exactly the behavior I think that you would want out of KPMG in that instance. So we have confidence in KPMG to be our auditor for the next year. Question here. I want to second the concerns that the previous shareholder raised regarding the ethical lapses at KPMG, and I do urge the Audit Committee to carefully review them in its decision to renew KPMG going forward. The previous shareholder said that KPMG has been the outside auditor for Wells Fargo for many years. I believe the correct number is 1931, which is probably many more years than anyone who has been alive in this room. If there is anyone who was born before 1931, you do not have to raise your hand. But the concept of auditor rotation is viewed as a good corporate governance practice to have fresh eyes on the company's books. My question for KPMG and for the Audit Committee is, how did the outside auditor miss the cross-selling sales scandal, where 1% of the workforce was being fired year after year for ethical lapses associated with the quotas and sales goals that were set by the company. That seems like a pretty big thing that the outside auditor should have detected. We do not expect them, as share owners, to detect every evidence or every instance of corporate wrongdoing. But 1% of the company's employees are being terminated year after year, and that does not get noticed by the outside auditor? Please explain. Well, remember the job of the outside auditors is to ascertain that the financial controls are working to produce accurate financial results and certify that there are no material errors in the financial results, if you will. I am simplifying. But in this case, while the behaviors were problematic, they did not affect financial controls, and the sheer amount of money involved was not material in a financial sense. So, KPMG did their job appropriately. The improper behavior by, or too intense a selling pressure simply wasn't something that was in their purview really. That is my response to your question. I just want to let you know my ballot has not yet been collected. I just want to make sure of that. I am voting inside this meeting. I am voting against all ratifications. That's fine. Have you heard enough to vote on all the items? Are you ready to hand in your ballot? I believe so, yes. Okay. I don't think you'll like it, sir. I don't have to like it. I just want to make sure you get a chance to vote. Thank you. Other comments on item four? Okay, now we'll move to the stockholder proposals, item five, which is the proposal requesting report on, and I'm correct, it says retail sales banking practices, but Sister Nora Nash has said she really is interested in a report on a broader range of business practices. Other comments on that? Is Sister Nora Nash, are you commenting? Yes. Okay, fine. I am not sure if I am supposed to comment, but I think I have made it clear many times to the company, to the Corporate Secretary, Anthony. I have indicated that we see it as only one problem, and retail sales are very important in the local communities. But again, we believe that a lot of things were swept under the rug. The board, in some cases, had to be passive. How could so many things be taking place and not know it? We did a resolution and presented a resolution with Wells Fargo three years ago on this very same business practice. We believe that the company did not move. Also, I found it very difficult to deal with that the company actually could know that we are speaking about an issue that they don't at any point share with us. We know it's happening. Of course, when we met Mr. Sloan in February, it was addressed. But I think the ethics, the moral values of the company are in a paper. They are not in operation. That is key. They must be put in operation. Thank you, Sister Nora. Other comments on item 5, or questions on item 5? If not, other questions or comments on item 6, which is the proposal from Mr. Armstrong by proxy for cumulative voting in director elections. Questions about that? Comments about that? Seeing none, item 7. We will take questions or comments on the stockholder proposal requesting the board to evaluate and report on the company's divestiture of non-core businesses. Voting on item 7. We'll move then to item 8, a stockholder proposal requesting a report on gender pay equity. Item 8, report on gender pay equity. Item 9, a stockholder proposal requesting a report on the company's lobbying practices and policies. Sister Nora. We'll get the microphone to you. I had a prepared statement, but didn't have time to make that statement. But I really think it's very important that as members of the Business Roundtable, that Wells Fargo really look at that position. The BRT spent approximately $16 million lobbying in 2016, and today the BRT is actively involved in lobbying to eliminate the right of investors to file resolutions, like the one I had today. The BRT proposes that an investor should have shares worth 15% of a company's capitalization to file a resolution. We believe it's ridiculous because, for example, if I were to file a resolution at Apple, I would need over $1 billion. BRT has a lot of power, and we publicly ask Wells Fargo to distance themselves, saying that they respect the right of investors, and we would like to continue to have the opportunity to be able to meet and to have stockholders meeting and to file resolutions. We hope that Wells Fargo hears us today. Do you want to comment on that, John? Sister Nora, I will promise you we'll continue to meet. We appreciate the feedback that we've gotten. As you mentioned, when we got together in February with the expanded group. I thought that was a very helpful meeting for not only me, but also our Vice Chair, Betsy Duke, who was there, and our Chief Administrative Officer, Hope A. Hardison, along with Anthony. I am a new member of the BRT. Having said that, I'm not familiar with the item that you mentioned, and I will look into that on Wells Fargo's behalf. We will make a decision, and I will call you back and let you know what our decision is. Okay, let me move to item number 10 that was proposed by Mr. Taken Alive and Ms. Findley. We'll take questions or comments on that and see if anybody other than Mr. Taken Alive wants to speak, make sure everybody's heard. Nope, go ahead. Go ahead. Thank you, sir. We weren't consulted. I'm a part of the tribal council. There's 17 members, and I have never had a Wells Fargo individual executive come to the tribal council chambers and meet with full council. I have a resolution that bears witness to that we do oppose the indigenous rights statement that Wells Fargo has produced. Second is that, to share with the board members, is that you can drink water, you can't drink oil. Investing in water is going to be gold in the near future. Just to share that with you and to say thank you for the time that you have given us here from the Standing Rock Tribal Council, and that we're still looking for action. We're not looking for policy or paper, because right now, like your time going here, time's limited on the oil going under the river. Once there is a break, because it's going to break, our water on our reservation and downstream is going to be polluted for time immemorial. Thank you. Thank you, Mr. Robert Taken Alive. Sister Nora and then Mr. Steven Greenspan. I would certainly like to support the resolution and support Standing Rock. I believe that if the Business Standards Review is done and you look at free, prior, and informed consent for future issues related to the environment, which I have to commend Wells Fargo, they have done some very good actions related to protecting the environment. They certainly have looked at climate change. But again, the Business Standards Review would look at the ethics of supporting a company that does major damage to the principles by which the Standing Rock are living and to the water protection in any reservation, whether it's Standing Rock or any others. Thank you, Sister Nora. Mr. Greenspan, I believe, had a hand up. I just want to also share my support with Mr. Taken Alive. He is right. Water is bigger than gold. Water will be the main issue in our world going forward. If you look at the technological advances, I recently went to a demonstration from a startup company in Israel which developed a system how to create water from thin air, and I watched as it occurred. Also, Israel is the land, as you know, has almost no water, but yet it is providing water to its Arab neighbors. They get it. Most of the world does not get it, but they will get it when there is no water to drink. People really should take heed to that. Thank you. Thank you, sir. We have Ms. Findley? Thank you. I would like to say that the resolution which I am going to give to the trusty microphone holder here from the Standing Rock Sioux Tribal Council says that the Standing Rock Sioux Tribe hereby finds that the quote, Indigenous People Statement recently issued by Wells Fargo Corporation is wholly inadequate to protect the rights of indigenous peoples. I think that you asked for feedback on that, and so we have that in writing here. I also want to say that I have had conversations, and I do not purport to speak, nor should anyone purport to speak for the Standing Rock Sioux. It is my impression that what the tribe is interested in is action and not a meeting. It is not access to employees of Wells Fargo that they are lacking. It is meaningful action. Furthermore, as a proponent of the resolution, we did appreciate the efforts of the legal department to arrange conference calls with the company. However, the conference calls were shocking in the degree to which Wells Fargo executives are siloed and feel that they've done everything and checked every box and that nothing further is necessary. I've done shareholder engagement for a long time, and I'm rarely surprised by the level of tone deafness of a company, and I was. Perhaps it's as Sister Nora Nash says, the question of moving from good things you write on paper to good things that you're actually doing operationally. I also wanted to circle back to the other shareholder proposals because I think there's a real link between the proposal to do a study about breaking up the bank, the proposal on lobbying, and the proposal on business climate and business risks. Because what we've seen is that the financial crash of 2007, 2008, which eroded drastically the net worth of many families, especially African American families in the U.S., was a result of poor risk management and a result of enabling the investment banking and commercial banking activities to be joined. To the extent that the lobbying activities of those institutions like Wells Fargo that have those two activities going on together, those lobbying activities try to roll back laws like Dodd-Frank, that seek to prevent another financial crisis. Shareholders should be very concerned, and I also think shareholders should be concerned that the level of siloed activity and siloed supervision of risk doesn't pertain only to the Dakota Access Pipeline, but may be present throughout the corporation. I don't know that for a fact, but I, as a shareholder, am concerned. Thank you. Thank you, Ms. Winfrey, and we're happy to let you go on beyond the 2 minutes because you spoke to two different items in that particular instance. We've now put all of them out there. Steven Greenspan has another comment. One of them. Ms. Lively said. As Ms. Lively mentioned about the housing crisis in 2007, 2008, I'm going to circle back to Mr. Marks because Mr. Marks was very outspoken, to say the least. If you think he disrupted this meeting, you haven't seen him before. Thank you. He really was holding the banks accountable for the predatory lending and all sorts of things that really banks did take advantage of minorities. It is through those efforts that he was able to form NACA, which is the Neighborhood Assistance Corporation of America. I, as a lawyer for them, and I actually do many of their real estate closings in South Florida, will tell you that because of the actions that he has done, I close loans, 20, maybe 30 a month, of people who never dreamed they would get into a home. They get into a home at no money down, no closing cost, below market interest, and they do the lending based on, it is not just a score. They do it really based on the person's ability to repay. It is also Tim, you are looking into the conscience of the people. So what Mr. Marks was trying to express before is that people have to be held accountable. What they are saying, to not just write it, but to do it, that is what Mr. Marks has done. He has actually done it and created one of the most amazing organizations in this country. They have hundreds of thousands of members. Also those members happen to have bank accounts at Wells Fargo. So I really do hope you pay him a little more heed. Thanks. Thank you for your comments. We do have a relationship with NACA. I wish that Mr. Marks had been more respectful as we have been to him as part of that relationship. I would highlight the fact that we take the responsibility that we have as the largest home lender in this country very, very seriously. I mentioned that earlier in my remarks. I think in particular, in terms of our commitment to diverse customers. A couple of years ago, we made a 10-year, $125 billion commitment to Hispanic customers. Over 10 years, we want to make $125 billion of loans to our Hispanic customers. No other bank has done that. Recently, in February of this year, we made a 10-year, $60 billion commitment to increase the African American homeownership by 250,000 homeowners over a 10-year period. We take our responsibilities very, very seriously, and we'll continue to work with all groups across this country to execute on those goals because we will not only meet, but we'll exceed those goals. Thank you. Thanks, Tim. Having discussed and taken questions and comments on the 10 items of business, I would ask you to mark your ballots if you have not already, and make sure that you get them to an usher so they can be included in the Inspector of Elections vote tabulation. Now we'll open the floor to general questions and comments from the audience. I don't know, are you handing in ballots or are you looking to speak? Both? I'm going to come back to you, Sister Nora, but we got to let other people, give them a chance. Oh, okay. Raise your hand if you've got a comment you want to make. Okay. Let's start here. Then we'll go here and then back here. My name is Ruth Lan Deverde, and I was a credit manager at Wells Fargo for over a year. As a single mom with two kids, I had to regularly decide between putting food on the table or gas in my car. I needed my car to get to work. Even though I was a solid performer, the compensation plan at Wells Fargo was set up like a constant treadmill to create increasing pressure to sell without increasing the employee's overall compensation. We had to keep track of countless sales metrics, and if we did manage to make our goals in one quarter, the bank would just increase them the next. I brought in hundreds of thousands of dollars in revenue for the bank, yet struggled to make ends meet each month. My manager would also pressure me to push products on customers that didn't meet their financial needs. When I questioned why she did this, she said that I could leave if I didn't want to push these products. The stress from work and from the work environment made me sick. I had constant headaches, developed an eye tic, and even needed to seek some therapy. While the main motivation for meeting sales goals was to avoid discipline and termination, workers also felt extreme pressure to meet goals in order to obtain incentive bonuses that they needed to make ends meet. Wells Fargo must fix its compensation structure to ensure that employees are compensated fairly for their work. Frontline workers at Wells Fargo earn as little as $13.50 per hour. Frontline workers should receive a base wage of at least $20 per hour, which should increase according to their years on the job and skill level. I understand you guys have restructured the compensation plan, as you guys have stated. However, certain things need to be taken into consideration, possibly even considering a union for employees, so the correct message is being conveyed to you guys, and this way you guys can make proper decisions and adjust accordingly. My question to you in this is, will Wells Fargo work with its employees and the Committee for Better Banks, because I am a member of Committee for Better Banks. Would you guys work with Committee for Better Banks to establish a compensation structure that gives workers a fair share of the profits that are generated? Would that be a consideration? First, thank you very much for your comments. We will continue to have a dialogue with the Committee for Better Banks. In terms of the compensation program that you described, we have made those changes, as we talked about. We're going to continue to review the compensation program that we have in our retail bank across all of our businesses to make sure that we're providing appropriate compensation for our team members for the work that they're doing. We do share the profits of the company with our team members because we did, once again this year, have profit sharing for all of our team members. And I apologize to you to the extent that any of the incentive plan or any of the practices in the retail bank caused any sort of physical problem for you. I apologize for that. We're going over here next. This young lady standing. Good afternoon. Hello, my name is Patricia Flynn. I am here on behalf of the Needmor Fund. They allowed me to come and make my statement. Mr. Sloan, if you sit here in this room tasked with the job of leading Wells Fargo to a culture that exhibits ethics of 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 tasks. In 2006, without my knowledge, I was unnecessarily placed in a subprime mortgage loan. In 2012 and in good standing, I asked to reduce the 6.75 interest to a competitive rate. I was told my home's loan to value was negative, and your bank was unable to help me. That was the response from your bank even though I was making my payments every month and on time. However, last June, due to a devastating hardship, crippling pain, major surgery, a business loss. I am so sorry. Applying for mortgage assistance while trying to maintain a sense of normalcy at my home for my kids. I do not know why I am doing this. I had to enter the surreal world of your mortgage servicing and witness the flagrant use of unethical business practices on homeowners who come to you in good faith for help and stay in their homes. When your servicing perpetuates a culture that is deceptive and profits off distressed and oftentimes desperate homeowners, it is criminal. Repeatedly complying with your staff's request for information, only to be told we did not receive it, yet contradicting my transmission sheets showing the time, date, and number of pages sent. Assigned over nine different dedicated home preservation specialists, each requiring different criteria. Stating a loan cannot be modified, yet soliciting in writing to participate in another review. Providing mortgage assistance applications for your customers to complete that are intentionally incomplete. Being denied and not told why. You benefit financially by engaging a homeowner in multiple reviews. And more disturbing, the bank benefits. We are going to finish. The bank benefits as a servicer by foreclosing as opposed to modifying a loan, which is to the detriment of your investors, customers, and the community. This is a whole society of me out there. It is shocking to read my story written over and over by other Wells Fargo people, about Wells Fargo rather. The depression, angst, and stress inflicted on homeowners who have families that depend on them, grappling with hardship, trying to save their home and function in the day-to-day. Real people, part of our greater community. If you voted, you just think about the whole bigger picture because it is a bigger picture. Well, I appreciate your comments and how emotional the comments were, and there's no reason to apologize for those. What I would like you to do is, we have a customer service representative outside of this room. Would you please give her your name and a description of what you just described? Notwithstanding, I appreciate you've already provided us with a lot of information, and I will ensure that your request gets escalated to me and to Franklin Codel, who runs our mortgage business, and we will review it personally with the senior leadership team. I appreciate that, but that's not really what I want you to know. This is a bank that persists across the stage. It's imperative you understand that it's not just one area, and it doesn't mean you can't get better. It doesn't mean you can't do the right thing, but it's happening yesterday, the day before. This is all transpiring in my world, so it's the bigger picture. Thank you. Thank you. Back here, sir, standing, and then we'll come to you, ma'am. Thank you. My name is Kilian Collen, and I am a member of the Committee for Better Banks. I also worked for Wells Fargo from 2013 until 2016. Where I work at my branch in my area, no one was ever fired for fraud. All the employees that they were fired because they failed to hit their sales goals. As a member for Committee for Better Banks, I have shared my experience with the regulators both in Washington, D.C., and in the state of California. It was our work as whistleblowers that helped expose the fraudulent sales practices. Repairing trust will start with treating your workers as partners. We have drafted an update workers platform containing proposal to address a fair compensation and incentive structures, protection for workers like myself, and other workplace practices that impact both employees and the customers that we serve. Will Wells Fargo take a copy, respond in writing, and meet with workers and the Committee for Better Banks to discuss these issues? Well, we have already indicated, as we have in the past, have met with the Committee for Better Banks. I cannot commit that I will agree to everything in a piece of paper I have not seen, but please give it to me. We will take a look at it, and we will respond. Happy to do that. One more thing, Mr. Sloan. I personally delivered two petition to, you were not the CEO. John Stumpf was CEO in 2015. Yes. While both was signed by 13,000 people, and we never had any meeting with you since. Could you promise and put at LAN that you will meet with the committee? Will I promise and meet with you? I'd like to look at what you're asking me to do first. But we will meet with your committee as we've done in the past, and get your feedback. I think we are very committed to our team members regardless of what group they're in within the company. So thank you for your comments. Now, this young lady here has been waiting patiently, to make a comment. Do we have a mic? Oh, here we go. Hi. Sorry. Good morning, shareholders. My name is Melissa Davis, and I have a proxy in the name of the New Economy Project. Thank you for giving me the opportunity to speak at the Wells Fargo shareholders meeting. I'm here on behalf of my mother, Julie Davis, who is an 86-year-old and has Alzheimer's disease, and she is a victim of Wells Fargo predatory lending. Those of you who work with the Wells Fargo Elder Services program or who have a loved one suffering with this debilitating disease know that the average length of time it takes to receive a diagnosis of Alzheimer's is 8 years. You may not know that the first area affected by Alzheimer's is one's finances. My mother did not fully understand when Wells Fargo allowed her to sign for an unqualified loan that it would result in the ultimate disastrous consequence, losing her home. Since mom's first meeting with Wells Fargo, she has survived breast cancer, has broken both of her legs, and supported me through a major surgery. My mother, Julie Davis, is a beautiful person. Throughout her life, she has given generously of herself to help others. When our family appealed to the Wells Fargo attorney for help, we were told, "We are not in the business of running a nursing home." Forcing mom out of her familiar surroundings, a home that has been in our family for 80 years, would be detrimental to her health as well as emotionally devastating. This home is the only remaining thread that connects mom to her sense of self. Recently, I was diagnosed with a brain aneurysm, and I'm again facing major surgery. We are asking Wells Fargo for relief in the form of a principal reduction and dissolution of all penalty fees and interest so that we can take her home out of foreclosure. It would mean so much to my mother and make a world of difference to our family and show the world that Wells Fargo does have a heart and that Wells Fargo does care. There is an online petition at savemomshome.com that has over 130,000 signatures asking Wells Fargo to allow our mother to live out her remaining years in her home. I would also like to add, since my mother is here today, that you, Tim Sloan, issue my mother a personal apology for creating a horrific and stressful, catastrophic event in her life. Well, thank you, for attending. Is your mom here in the room? Yes. Right here. Great. I'm sorry, her first name again is Julie Davis. Julie, I apologize for any inconvenience that we've caused you. Clearly, you've done a lot for your family. I'm very familiar with how devastating Alzheimer's can be to a family. What I would pledge to you to do is if you could meet with our customer service representative in the hallway and provide them with your information, I'll make sure that that gets escalated to me and also to Franklin, and we'll respond promptly. Could you reach my mom, please? Could I ask a favor? I'll be happy to meet with her at the end of the meeting. Personal apology. Of course. I'll walk over there. But let's do it at the end of the meeting so we can have a little bit more time. I think I may have neglected to mention this because we want any of you who have personal financial situations like the last couple we've heard, to have a chance to talk to somebody who can help resolve it or get it to Tim's or Franklin's attention. While it may be unique to you, we have people here who would like to hear about it and will work with you, and that's our representatives outside the room. Are there other general questions that have to do with the business of the meeting or your experiences with the bank, whatever they may be? Over here. Hi, my name is Tori Hampson, and I want to go on record apologizing to all the customers that just experienced horrible sales tactics at Wells Fargo. That's the reason why I was at Wells Fargo for over four years, was because I wanted to be a better face of Wells Fargo. I wanted to help customers succeed financially. That's why I did whatever I can. I never got promoted from being a personal banker because I always spoke up for the betterment of my customer. I knew that in order to do my job effectively, that I had to do the right thing for the customer. If that was helping them reduce their mortgage, if that was helping them get into a better account, if that was setting up online banking, if that was just doing all the small products and services that we offer, because Wells Fargo can be a great company. It's because of the bad sales practices that they aren't. It's because of the people under so much pressure to do things that it destroys the company employees internally and also the face for the customer. I do want to apologize to you, I want to apologize to you, because I've seen it happen. I've seen my colleagues and my coworkers participate in these day after day for only a $500 bonus, only a $3,000 bonus. For me, it wasn't worth it. But for other employees, they want to have that advancement. They want to have the opportunity to grow, so they did what they had to do to get where they wanted to go. I do want to just apologize, and I want to say that that is not what should have happened to you all. I just used up all my time because that is why I was with Wells Fargo for four years, and I am sorry that that happened. My only question that I have is, will Wells Fargo commit to issuing a public statement that it will refrain neutral and will not interfere in the efforts of its employees to join together to collectively address workplace conditions and practices? As it relates to your second question, the answer is no. As it relates to the first one, I appreciate your comments, and I would encourage you, for all the things that you described that you were doing at the company, I know you are not with us anymore. Why do not you consider coming back? We have fundamentally changed our retail banking business, not only in terms of how we incent folks, but how we lead and manage. We have now hired more than 1,000 former team members who left, like you, because they were concerned about the situation, and they have come back to Wells Fargo. Give us another shot. I have to. My apartment in the Savannah, Georgia area. Yeah. They told me that I would never be employed in Wells Fargo only because I called EthicsLine over 50 times. I helped customers. I would meet them after work to help them write letters so they can stay in their homes. I would help them write letters so they could be able to reapply back for their personal lines of credit or their home equity lines. My manager sees me as a threat. I would also help small business owners who did not know how to obtain EINs or how to use the merchant services or payroll. I would take too long, they would say, over an hour with a customer that had an issue with merchant services not batching over that night. Could I ask a favor? That is that could you see our human resources representative that is also in the hallway and give her your information and let us look into it. Okay. Thanks. Thank you. The lady back here and then the gentleman in the middle. Well, good afternoon. My name is Nicole Barone. I am grateful to be here. I would like to thank Sister Nora Nash of St. Francis of Philadelphia and the Sisters of St. Dominic for allowing me this opportunity. My family and I have been directly affected by the foreclosure modification fraud, the unauthorized account scheme, and Wells Fargo's multiple fraudulent acts. I have been in the foreclosure court since 2011 as a result of numerous unethical, fraudulent mortgage practices and several other banking-related issues and wrongful acts against my family. My husband, John, has had to file two substantial RICO cases against your company in Broward County and in federal court. Since then, your company has done everything from calling him a conspiracy theorist, which all items have unfolded within his complaint, to utilizing evasive actions to conceal the wrongs against my family. For too long, the culture has been to wrongfully put profit margins ahead of ethics and morality, especially in the treatment of customers, the essential element of the company's existence. This behavior is not conducive of a company publicly promising to make things right. How many of the customers affected by the admitted FHA scheme have been fully paid restitution? When will someone from this company stand up for its advertising and promises and make things right with my family? Well, again, thank you for attending, and if you would provide all your information to our customer service representative, we will follow up on your request. We had a gentleman in the center here. I think. Hi, my name's Channing Lushbau. I am with Rantel Asset Management. We have got about 40,000 shares of Wells Fargo stock. I will get back to the big picture. I have not had any contact with the company anytime recently. I am not sure the company fully understands how it is perceived by the public and by the shareholders, but the impression is not good. From where I sit, I see a failed board. I see a failed culture. I am not sure what the resolution is, but I imagine if all the board members resigned tomorrow, the company would do just fine. I want to make one small point about Mr. Bruce Marks, who interrupted the meeting earlier. I do not know him. I have never met him before. You adjourned the meeting because he would not stop talking. After the adjournment, Mr. Sanger, you came back and told all of us in public that Mr. Marks was removed from the meeting because he made a physical approach to the board members. Mr. Sanger, I've been sitting about 10 feet from him, and no such thing occurred. He was standing quietly. He was talking quietly. You were 100 feet away behind a crowd of people. You couldn't see him. Mr. Sanger, you owe him a public apology. Well, Mr. Lushbau, if in fact I was told, because I asked why was he removed physically from the meeting. They said, the people who did it said, because he had made a move toward our directors. If that is not the case, I would apologize to him. Then I certainly would apologize to him for- Mr. Sanger, you have impugned his integrity. You owe him a public apology. Are there other shareholder comments? Yes. Good afternoon. My name is Kevin Gay. I am the CEO and founder of Operation New Hope. We are a community development corporation located here in Jacksonville, Florida. I got to say, I was not planning on speaking today. However, I felt it was important to go on record. Chairman Sanger and board, I would like to thank you on behalf of the hundreds, if not thousands, of individuals and families that have benefited from the incredible engagement of Wells Fargo here over the many years in Northeast Florida. I have been doing this work now for 18 years, and I can tell you that the commitment of Wells Fargo to this work is unparalleled in the community development world. We introduced an initiative a few years ago called EPIC, Empowering People to Inspire Change. During this time, for almost a year, the Wells Fargo staff committed to a listening phase that we went through in our community to develop a bottoms-up approach to community development. I want to thank them for that here in Northeast Florida, for that work has been incredible. I also want to give a shout-out to one of our own, John Baker, who was on your board. We are very proud of the great work that he has been doing in our community here in Jacksonville for many years. His resume is incredible, as is his commitment to integrity and responsibility. I think it speaks volumes of where the board is going. Lastly, I would just like to thank the board and hope that the incredible commitment that you have for community development continues to reach and touch many of the underserved in our communities across the country now. Thank you. Thank you, Mr. Gay. We appreciate those comments. We have more questions. There is one here in the front row. Who is it? Thank you, Mr. Chairman. My name is Augusto Sanabria, president and CEO of Prospera, an economic development organization that helps Hispanic entrepreneurs that want to start or expand businesses here in the state of Florida and now in North Carolina. I want to make a comment about how wonderful Wells Fargo has been as a company to support small businesses, especially in our Hispanic community. We serve about 5,000 businesses a year, and we couldn't have done that without the support that Wells Fargo has given us, not only monetarily but also with their people here in Florida, the volunteers, and all the man-hours that they invest in organizations like mine, like others that were recognized today. Thank you so much for your continued support. Well, thank you for your comment. That's very gratifying. Good morning, everyone. My name is Charles Garrison. I'm a current team member here with Wells Fargo since about 2011. I'm in home mortgage. I'm a home mortgage consultant. In addition to that, I am the chair for the local Pride Team Member Network. I also serve on the local Diversity Inclusion Council, and to the shareholders here, I want to give my perspective. I love my job. I love Wells Fargo. I know many of these people in these first three rows here personally, and they get it. They know we're not perfect. We're probably never going to be perfect, but we're trying every day that we get up. I just want to say that Wells Fargo, we know we did wrong. We understand. Like I said, I serve As my own individual risk officer, if you want to call it that. We get it, and I just want to say thank you. Thank you, Mr. Garrison. I see a hand back here in the row. Is that right? My apologies. I have a very limited time where I can stand, so I was not able to stand before. That is the result of what I encountered. Mr. Sloan, earlier, you brought up the email exchanges we had. Sorry, I have to brace myself. In one of those email exchanges, I explained to you how- Joe, if you want to sit down while you are talking- Yeah go ahead and do that. Do not be uncomfortable. I know. Okay. I've waited four years to get to this point. Four years. The incident that almost cost me my life. I want everybody here to know that the report that came out is incomplete. Mr. Sloan, you said you were willing to meet with the Committee for Better Banks, but will you agree to meet with an organized group? Because the reason we got to this point is we were ignored. I was on the front lines. I sent dozens of emails. I even gave you I'm not going to discuss any details here. I'm not trying to disparage the bank. I want to work with you in any way possible. But it is imperative that we on the front lines are given the voice, whether it's organized, not just as individuals, to let you know in an unfiltered way that problems exist. The sales quota or the sales pressure still exists, but in a different way. There is tremendous pressure. There is inconsistency in the branches. I wish back in September and October, I had been able to walk, because I would've walked to D.C. if possible. But I was laying on a bed dying from cancer. I made every effort to get here today. I don't feel well now, but like I said, I'm not going to pass up these next four years. I want everybody here to know that more needs to be done. That report is wholly incomplete, and I'm willing to meet with you today, tomorrow, any day, and discuss what I can do, but not as an individual. There needs to be an organized effort of individuals on the front line. Thank you for your time. Thank you. Joe, thanks again for your comments. I think you've been more than clear in our email exchanges. Your concerns are not lost. I would encourage you to be part of the outreach that we are making in the community bank today. Hopefully, you've seen a difference given that Mary Mack is now in charge of it in terms of the incentive compensation program. I know it's not perfect yet. It may never be perfect, but we're working as hard as we can, not only to change the underlying root causes which created a number of the concerns that you mentioned, but also in terms of getting feedback. How we're reaching out to team members in the community bank as well as across the company to get your feedback. We care about that a lot. That's why we're going to be sending out to all 273,000 team members a culture survey next month. We look forward to getting responses. It's not just about the numerical responses. It's about the write-in responses. Please take part of that, and thank you very much for your comments. We have a comment over here. Sir, how are you doing? Good morning, everybody, shareholders, gentlemen. My name is James Davis, legal guardian of Julie P. Davis, who has the proxy of Ms. Alexis Vonaheth. I want to thank you for giving me the opportunity to speak with Wells Fargo shareholders meeting. In addition with my other guardian of mom over there who spoke on her behalf. Wells Fargo approached our elderly mother, Julie Davis, in 2005 with the intent of refinancing a defaulted mortgage valued at $370,000. As per her tax returns, she was living on a fixed Social Security income and denied the loan application. Wells Fargo then originated the loan by contracting an outside agent, Fremont Investment and Loan, with a preexisting servicing agreement. The FRE2 securities deal with Wells Fargo investors, Société Générale, with whom I've spoken personally, bankrolled her loan. Wells Fargo acted as a Fremont signatory and then allowed mom to sign for an unqualified $600,000 mortgage in 2006. Her income was $19,000 for the year. Her payments were $5,000 a month. Three months after the loan closed, Wells Fargo assumed the servicing of the mortgage as per their agreement with Fremont. Wells Fargo then bought the loan outright and used it as leverage to finance two more loans on our mother's second property in the same fiscal year. Our mother's combined mortgage payments ballooned to $7,000 a month. Benefit money set aside for payments ran out a year later. Wells Fargo then prosecuted our mother for collections on both properties with the now-defunct fraudulent law firm of Steven J. Baum. In 2009, despite breast cancer surgery and ongoing treatment, we were forced to escort our mother into modification conferences. All attempts to help mom failed as she signed enforceable documents for three loans she was not qualified for. In good faith, her second property was sold with an understanding the net proceeds would keep her in her house. Wells Fargo did not keep its word, and now she faces the imminent auction sale of her home. Our point of discovery has proven the financial elder abuse and deception perpetrated against our mother by Wells Fargo, and hence we launched savemomshome.com to help her. I guess my question to you would then be, how are you going to continue to help her? I know you've made a comment to my other sister here, guardian, that you intend to do so. So I thank you for that. I want you to know we have authenticated the paper trail, and it's all true. Thank you. All right. If there's no more general questions, Anthony, are they preliminary voting results? They closed the polls. Oh, the polls. The polls are now closed at 12:45 P.M. on April 25th. More questions, Mr. Taken Alive? I will keep this brief, sir. Are you going to continue to fund the Dakota Access Pipeline project? Coming from the Standing Rock Tribal Council, I want to know if you are going to continue to fund it. Well, we have already funded it, and because we had a commitment to our good customer, and we have lived up to that commitment, so the answer is yes. Pardon me. Yes. Thank you. So Anthony, do you have a report on the voting results? Yes. The inspector's preliminary report indicates that all of the management proposals received the required majority support and have been approved, and the option of every year was approved for the frequency of future advisory votes to approve executive compensation. For item 1, each nominee for director received a majority of votes in favor of his or her election and has been elected a director of Wells Fargo. The percentage of votes that directors received in favor ranged from approximately 53% to 99%. Item 2, the advisory resolution to approve executive compensation. It 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. Item 4, the appointment of KPMG as the company's auditors for 2017 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. For item 3, the frequency of future advisory say on pay resolutions to approve executive compensation, a majority of the shares present in person or by proxy and entitled to vote on the proposal were voted in favor of every year as the frequency of future say on pay advisory resolutions on executive compensation. The inspector's preliminary report also indicates that the stockholder proposals items 5 through 10 did not receive the required majority support and were not adopted. The percentage of shares present in person or by proxy and entitled to vote on each proposal voted in favor of each proposal as follows. Approximately 22% of shares voted in favor of the proposal requesting a retail banking sales practices report. Approximately 8% of such shares voted in favor of the proposal requesting cumulative voting in the election of directors. Approximately 3% of shares voted in favor of the proposal requesting a report on the company's divestiture of non-core business. Approximately 15% of shares voted in favor of the proposal requesting a gender pay equity report. Approximately 8% of shares voted in favor of the proposal requesting a report on the company's lobbying practices and procedures. Approximately 17% of shares voted in favor of the proposal requesting the company adopt an indigenous people's rights policy. 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, which the meeting is now adjourned from a legal perspective. I want to say something today because, those director votes obviously were in a wide range. The Wells Fargo stockholders today, I think, have sent the entire board a clear message of dissatisfaction. Let me assure you that the board has heard that message, and we recognize there is still a great deal of work to do to rebuild the trust of stockholders, customers, and employees. In our conversations with stockholders over the past few months, many have told us that they support the substantial and wide-ranging actions taken by the board and by management over the past seven months to get at the root cause of the sales practice issue and enforce accountability and ensure that improper behavior is not repeated. Yet they also feel the understandable need to hold the entire board accountable for not moving quickly enough before that to address these issues. That is the reason why all except our newest directors received support from less than 81% of the shares voted today. The board is steadfast in our commitment to continue to strengthen oversight and accountability while working closely with management to keep improving Wells Fargo. We thank the stockholders who supported us, and we will continue. We commit to continue our engagement with stockholders and other stakeholders to build a better Wells Fargo in the months and years ahead. On behalf of the board of directors and management, I want to thank you all for being here today. This concludes our meeting.

Data Source: Quartr Last updated: Apr 25, 2017

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