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NYS Comptroller



From the Office of the New York State Comptroller

Thomas P. DiNapoli

April 19, 2018, Contact: Press Office (518) 474-4015

NY State Comptroller DiNapoli: Wells Fargo Needs to Pull Back the Curtain on
Its Incentive Pay Program

Troubled Bank Must Address Risks to Its Customers and Investors

New York State Comptroller Thomas P. DiNapoli, trustee of the New York State Common Retirement Fund (the Fund), today announced that he has written to fellow Wells Fargo shareholders urging them to support his call for the bank to provide a report detailing the company's efforts to determine whether its incentive pay practices have exposed it to financial loss. DiNapoli's shareholder proposal will be put to a vote of fellow investors at the bank's annual meeting on April 24.

"Incentive pay practices have been identified as contributing to the multiple crises at Wells Fargo," DiNapoli said. "Investors need to know whether the company has taken steps to identify employees' incentive-based compensation that could spur conduct that puts the bank, its customers and investors at risk. If investors don't hear from Wells Fargo, we will be left to wonder when the next headline will inform us of a new scandal or more enforcement penalties. The board's apparent failure to demonstrate effective oversight of these risky practices demands an overhaul of its directors."

The Fund's proposal specifically asks the bank to disclose whether it has identified employees or positions eligible to receive incentive-based compensation tied to performance or sales metrics that could motivate them to take excessive risks and expose the company to possible material losses.

Wells Fargo is facing multiple lawsuits from employees, customers and investors, and potentially $1 billion in fines as a result of its recent scandals. In recent weeks, the bank's problems have only mounted; a federal investigation has been expanded into Wells Fargo's wealth management division, which allegedly steered clients into investments that were not in their best interest in order to maximize bank revenue.

The Fund holds approximately 13,777,454 shares in Wells Fargo with an estimated value of $722,076,364 as of March 31, 2018.

In addition to pursuing greater daylight on Wells Fargo's compensation practices at the bank's annual meeting, the Fund will vote against six of the bank's 12 directors, including CEO Timothy Sloan. The Fund will also vote against the auditor and the company's proposed executive compensation plan.

The full text of DiNapoli's letter to fellow Wells Fargo shareholders can be read here

The full text of DiNapoli's shareholder proposal can be read here

About the New York State Common Retirement Fund
The New York State Common Retirement Fund is the third largest public pension fund in the United States, with an estimated $209.1 billion in assets under management as of Dec. 31, 2017. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. The Fund has a diversified portfolio of public and private equities, fixed income, real estate and alternative instruments.

Albany Phone: (518) 474-4015 Fax: (518) 473-8940
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