WFC » Topics » Additional Information About Directors; Compensation Committee Interlocks and Insider Participation

This excerpt taken from the WFC DEF 14A filed Mar 17, 2005.

Additional Information About Directors; Compensation Committee Interlocks and Insider Participation

 

The following information is provided to comply with SEC rules regarding disclosure of certain relationships and transactions with directors. This information was considered by the Board of Directors in determining a director’s independence from Wells Fargo under NYSE bright-line tests and the Company’s categorical standards of independence described above.

 

Wells Fargo Bank, National Association (the “Bank”) holds a 20% interest in Shanghai Commercial Bank Limited (“SCB”), and has the right to nominate two persons for election to SCB’s board of directors. Pursuant to this right, Robert L. Joss has served as a director of SCB since 2002, and the Bank expects to nominate him for continued service on SCB’s board. In 2004, the Bank paid Mr. Joss $30,000 for serving as a director of SCB and providing advice regarding the Bank’s position on specific issues regarding SCB. This arrangement was terminated effective as of December 31, 2004. The Bank does not have any agreements with SCB with respect to compensation SCB may determine to pay Mr. Joss directly for his service as one of its directors.

 

Judith M. Runstad is of counsel to the law firm of Foster Pepper & Shefelman PLLC which performed legal services for the Bank in connection with a financing transaction in 2004 for aggregate fees of $7,500.

 

Enrique Hernandez, Jr. has a sister who is the owner of Hillcrest Commonwealth Associates, LLC (“Hillcrest”). Hillcrest leases space in a building in La Canada, California to the Bank for use as a retail banking facility. For 2004, the Bank paid Hillcrest under the lease an annual rental of approximately $87,900, plus the Bank’s share of taxes, insurance, and common area maintenance expenses on the leased facility. Beginning in 2005, the Bank intends to expand its facility and enter into a new lease with Hillcrest for the entire building for an approximate annual rental of $175,000, plus taxes and insurance, with the Bank providing other maintenance services at its own expense. The Company believes that the rent and other expenses paid to Hillcrest under the lease are comparable to the cost to the Bank to lease similar property in the La Canada area.

 

Susan G. Swenson served as a director and as president and chief operating officer of Leap Wireless International, Inc. and substantially all of its subsidiaries (collectively, “Leap”), a wireless

 

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communications carrier, from July 1999 until January 2004. On April 13, 2003, Leap filed voluntary petitions for relief under Chapter 11 in the United States Bankruptcy Court for the Southern District of California (the “Bankruptcy Court”). On October 22, 2003, the Bankruptcy Court confirmed Leap’s Joint Plan of Reorganization, subject to its compliance with certain terms and conditions. Leap completed its financial restructuring pursuant to the plan and emerged from Chapter 11 on August 17, 2004.

 

Donald B. Rice and Michael W. Wright each have an adult child, and Cynthia H. Milligan has a brother, each of whom is an employee of the Company or a subsidiary of the Company and was paid compensation in 2004 of more than $100,000 but less than $350,000 and received one or more other employee perquisites and benefits, including stock options. These immediate family members are three of the approximately 150,000 employees of the Company and do not report directly to any executive officer of the Company. The compensation, stock option grants, and other benefits received by each were established by the Company in accordance with its employment and compensation practices applicable to employees holding comparable positions.

 

Mr. Wright is the Chair, and Mr. Rice, Susan E. Engel, and Stephen W. Sanger are members of the Human Resources Committee (the “HRC”) of the Board of Directors. The HRC determines the compensation to be paid to the Company’s chief executive officer (subject to ratification by the Board) and to other executive officers, including the executive officers named in the Summary Compensation Table appearing on page 27 of this proxy statement. Information on the employment of Mr. Wright’s and Mr. Rice’s adult children by the Company or its subsidiary is provided above. In addition, Mr. Rice, two of Mr. Rice’s adult children, Ms. Engel, and Mr. Sanger each had a mortgage loan during 2004 from Wells Fargo Home Mortgage, Inc. (“WFHMI”), a subsidiary of the Company. Information on these loans is included in the loan table beginning on page 36 of this proxy statement. These loans were made on substantially the same terms, including interest rates and collateral, as those available at the time for similar transactions with other persons. These loans were transferred to Wells Fargo Bank, National Association upon WFHMI’s merger with the Bank in May 2004.

 

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