Wells Fargo & Co.'s board asked shareholders to vote against two shareholder proposals asking the company to disclose the compensation of certain employees and its median gender pay gap at its annual shareholders' meeting scheduled for April 23.
The first proposal, filed by Thomas DiNapoli, the Comptroller of the State of New York, asked Wells Fargo to identify employees, aside from its top executives, who could expose the company to possible material losses through poorly structured incentive-based compensation agreements. DiNapoli argued that while the company has disclosed the compensation of its executives, it has not disclosed the compensation of other employees who could expose the company to material losses, as per Dodd-Frank Act regulations.
Wells Fargo's board said it has addressed similar concerns through various incentive compensation risk reviews and added that the reviews have been significantly strengthened in recent years. The board also said the reviews cover executive officers, senior officers and groups of team members who can expose the company to material risks or are subject to specific regulations and that from 2017 to 2019, it has disclosed various enhancements in its incentive compensation risk review program.
The second proposal, filed by Arjuna Capital LLC, said Wells Fargo should disclose its global median gender pay gap to address structural biases which may affect women's career advancements.
Wells Fargo's board said the median pay gap conflates two different issues, which are pay equity and representation of women in senior roles. The board also added the median pay gap does not take into account various factors such as geographic locations, distribution of businesses, and employee populations that are dominated by one sex. It also said that as of Dec. 31, 2018, women represented 42.1% of employees in roles designated at levels five and six, and 41.0% of those at levels two through four.
Wells Fargo previously asked the Securities and Exchange Commission to block Arjuna Capital's proposal, arguing that it fell under the guidelines for exclusion. The SEC rejected those arguments.