Wells Fargo & Company (WFC) Earnings Call Transcript & Summary

Good day and welcome to the Wells Fargo & Company Annual Meeting of Shareholders. Wells Fargo owns all rights to any photographs and audio/video recordings of the annual meeting. Any rebroadcast, retransmission or other audio or video distribution of the annual meeting without the expressed written consent of Wells Fargo is prohibited. Remarks made during today's Annual Meeting of Shareholders may contain forward-looking statements. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties. Factors that may cause actual results may materially differ from expectations are detailed in Wells Fargo's SEC filings, including the 2020 Form 10-K available on Wells Fargo's website at www.wellsfargo.com. I'd now like to turn the meeting over to Charles H. Noski, Chairman of the Board of Directors.

Thank you, operator. Welcome, everyone. I'm Chuck Noski, Chairman of the Board of Directors of Wells Fargo & Company. On behalf of the Independent Directors of the Board, Charlie Scharf, our CEO, and the rest of our senior management team, I welcome all shareholders and guests to our annual meeting. All of our directors and director nominees for election and members of our senior management team are in virtual attendance today at the meeting. Thank you for joining us. 2020 was a year like no other. The world faced a global health challenge associated with the COVID-19 pandemic that touched every single one of us in some way. We trust each of you have taken and continue to take actions necessary to care for yourselves, your loved ones and your communities. Wells Fargo responded to the dynamic events of 2020 with a focus on the safety of our employees and customers and the needs of our customers and communities. We have taken and will continue to take actions to support our employees, customers and communities. As the pandemic unfolded, Wells Fargo employees worked tirelessly to support our customers' financial needs. This is significant work and it touches the daily lives and livelihoods of so many in our communities. You'll hear more about the company's COVID-19 efforts a little later in this meeting. In the interest of the health and safety of our shareholders, employees and communities and in light of the ongoing COVID-19 pandemic, this meeting will be held in a virtual-only format. We remain grateful that technology allows us the opportunity to meet together in this fashion. Please note that if we experience technical issues such as a loss of audio or webcast connection, we ask that shareholders and guests stand by and allow us time to try to resolve the issue and resume the meeting or otherwise provide an update relating to the meeting. If a technical disruption occurs that prevents us from continuing the meeting and the polls have been opened but the meeting is not adjourned, the polls will be closed immediately. In that situation, votes received prior to the time the polls were closed will be counted, the meeting will not be reconvened and the results will be announced publicly. As we get underway, I would, first and foremost, like to thank all of our shareholders for your investment in Wells Fargo. We truly appreciate the trust you have placed in us. Please take a look at our agenda today, posted under Meeting Materials located on the bottom right of the virtual meeting site as it lists the order of business for our time together. Our rules of conduct for the meeting also are posted under Meeting Materials located on the bottom right of the virtual meeting site. The rules of conduct explain how we will conduct the meeting, including the 2 question-and-answer sessions. During the first question-and-answer session, shareholders may submit questions on the items of business to be considered at the meeting. After the company update, we will hold a general question-and-answer period. As noted in our rules of conduct, the company does not intend to address questions or comments relating to certain types of matters, including matters not pertinent to the meeting or business of the company and matters about a personal concern or agreements. If you have a personal financial or employee workplace matter to discuss, we have customer service and human resources representatives available to help you. Contact information for each of these groups is included in our rules of conduct. In addition, if we are unable for any reason to answer all of your questions during today's meeting, please contact us directly through our Investor Relations website. We may group, summarize and answer together questions from multiple shareholders on the same topic or that are otherwise related. I'll start with some brief remarks, after which we will proceed to the presentation of business items to be considered at this meeting. Following the presentation of all company and shareholder proposals, we will hold a question-and-answer session on the proposals. At the end of that question-and-answer session, we will close the polls and then announce the preliminary voting results. We will then adjourn the business portion of the meeting. After the business portion of the meeting, Charlie will provide an update on the company. After the company update, we will hold a general question-and-answer session. Before we get to the business of the meeting, I'd like to spend a few minutes highlighting some of the Board's areas of focus during the past year and as we move forward in 2021, including how the Board works together with company leaders to enhance Wells Fargo's value for our customers and shareholders. Last year, I talked about the transformation underway at the company, and the transformation of Wells Fargo continues. Even with the many challenges relating to the pandemic in 2020, the company made important progress on top goals set by the Board of Directors and Charlie. We have been steadfast that our top priority remains to strengthen Wells Fargo's risk and control foundation while working to address outstanding regulatory matters. There is a sense of urgency within the company as employees work hard each day to drive the necessary changes to enhance our processes to better serve our customers, support our communities and generate value for our shareholders. On behalf of the Board, I'd like to thank Wells Fargo employees and recognize them for their heroic work during this past extraordinary year. In 2020, in consultation and with the support of the Board, Charlie continued to review the company's businesses, flatten the organizational structure to align with our operating model, transform the management team by elevating strong internal talent while bringing in people with the experience necessary for our success and provided our management team with clear authority and accountability. Company's efforts are focused on improving the company's financial performance and helping it realize its full potential. Charlie will expand on company highlights and provide an update after we conclude the business portion of this meeting. I want to underscore that your Board of Directors is an active and engaged group, and we consistently work to enhance our governance practices, including based on the perspectives we hear from our shareholders. Since becoming Chairman, I've met virtually with a number of our shareholders, and I've appreciated the opportunity to hear their feedback, answer their questions about the company's performance, progress and transformation. My discussions with shareholders are focused on key topics relating to the company and the work of the Board. Many of these topics are described in our proxy statement and annual report, but let me highlight a few of the items that have been and continue to be priorities for the Board. The Board continues to be focused on its composition and effectiveness. Since our last Annual Meeting of Shareholders, we welcome Mark Chancy to the Board. Mark brings additional financial services experience and strategic and operational expertise to the Board as we oversee the company's foundational risk management improvements that we believe will result in improved performance. As you'll hear during the meeting, the Board is actively engaged in overseeing the company's continued response to the pandemic including the company's support of customers, employees and communities. Safety of our employees and customers is paramount to us. The company's efforts to drive meaningful change in diversity, equity and inclusion initiatives and human capital management remain at the top of the Board's oversight priorities. Board's Human Resources Committee is and will continue to be focused on assessing management's progress in these areas and on other key goals, and will continue taking this progress into account in making compensation decisions. We know that 2020 was a year that emphasized the need to address societal and sustainability challenges and the Board's Corporate Responsibility Committee oversees the company's significant strategies, policies and programs on social and public responsibility matters, including environmental sustainability and climate change. Much of the shareholder feedback that I received during my meetings with investors were focused on these important issues. I share the feedback that I received with the Board and management. Our management team also is engaged with our many stakeholders. Wells Fargo has demonstrated a track record of responsiveness to the feedback we receive and one recent example of this response is the company's decision to set a goal to achieve net 0 greenhouse gas emissions by 2050. As I conclude my first full year as Chairman, I'd like to thank our exceptional group of board members and company leadership. Collectively, we're dedicated to transforming this important institution to better meet customers' needs and delivering long-term value to shareholders. I'm honored to serve as Chair. While there is more work to be done, my fellow directors and I are confident, Wells Fargo has a bright future. We thank you again for your investment in Wells Fargo. Before we turn to the business of the meeting, I'd also like to take this opportunity on behalf of the Board to thank Don James who is retiring from the Board at this meeting for his valuable contributions to Wells Fargo over the years. We'll now proceed to present the items of business to be considered at this annual meeting. First 3 items on the agenda are management proposals that will be presented on behalf of the company. The next 4 items on the agenda are shareholder proposals. Shareholder proponents or their authorized representatives will present their respective proposals. [Operator Instructions] After all agenda items have been presented, we will respond to questions on these proposals. Polls will close after the question-and-answer period on the business items is completed, and we will announce the preliminary results of the vote. The business portion of the annual meeting will then be adjourned. I confirm that the notice of the Annual Meeting of Shareholders and the Affidavit of the meeting of the notice have been filed with the Corporate Secretary as part of the record of this meeting. We've appointed Rebecca A. Paulson of EQ Shareholder Services as inspector of election. Also joining us virtually today is Anthony Augliera, our Corporate Secretary. Anthony, please confirm the presence of a quorum.

Thanks, Chuck. The inspector of election has advised me that holders of shares of common stock representing at least 82% 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 declare that a quorum is present and that this meeting is duly convened for the purpose of acting on the items of business that are properly presented at this meeting. We are ready to proceed with the items to be voted upon on this meeting. It is 10:14 Eastern Time and the polls are now open. I move for vote by shareholders, items 1 through 3, which are management proposals and, if properly presented, items 4 through 7, which are shareholder proposals included in the proxy statement. 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 wish to change your vote, and you are a record holder of Wells Fargo shares, you may vote online by following the instructions in your proxy materials mailed to you beginning on March 16, 2021. if you wish to change your vote, and you are a beneficial holder of Wells Fargo shares, you may vote by proxy by following the instructions in your proxy materials, also mailed to you beginning on March 16, 2021. At this time, I'd like to introduce the Wells Fargo executive officers who will vote the proxies submitted. Mary T. Mack, CEO of Consumer and Small Business Banking; Amanda G. Norton, Chief Risk Officer; and Michael P. Santomassimo, Chief Financial Officer. Each of them is attending virtually today. If you submitted your proxy, Mary, Mandy and Mike, as proxies, will vote your shares as you've instructed. We will now move to the formal presentation of the items of business to be considered at this year's annual meeting. I will now present item 1 through item 3, the items being presented by the company for approval by shareholders. Item 1, election of directors. According to the bylaws, the Board has set the number of directors to be elected at 12 and has designated 12 nominees for election. Anthony, will you please read the names of each nominee for Director.

The nominees for Director are: Steven D. Black; Mark A. Chancy, Celeste A. Clark; Theodore F. Craver, Jr.; Wayne M. Hewett; Maria R. Morris; Charles H. Noski; Richard B. Payne, Jr.; Juan A. Pujadas; Ronald L. Sargent; Charles W. Scharf; and Suzanne M. Vautrinot.

Thank you, Anthony. These individuals have been nominated according to our bylaws. Information about each of the nominees is presented beginning on Page 21 of our 2021 proxy statement. Item 2 on the agenda is an advisory resolution to approve executive compensation. The proposal appears on Page 65 of the proxy statement. Item 3 on the agenda is a proposal to ratify the appointment of KPMG LLP as the company's independent registered public accounting firm for 2021. The proposal appears beginning on Page 103 of the proxy statement. Mark Shrekgast and Chris Hosmer of KPMG are also in attendance virtually at today's annual meeting. As stated in the proxy statement, the Board has recommended that shareholders vote for each of the director nominees for election under item one and for items 2 and 3. Items 4 through 7 are proposals being presented by shareholders for approval at this meeting. As a reminder, under our rules of conduct, each shareholder proponent or their representative, will have up to 4 minutes to present their proposal. After 4 minutes, the operator will place your line back on mute. Item 4 is a proposal from John Chevedden, a shareholder of the company, requesting the Board of Directors take the steps necessary to make shareholder proxy access more accessible. The proposal appears beginning on Page 110 of the proxy statement. Mr. Chevedden will now present Proposal 4.

This is John Chevedden. Can you hear me okay?

Yes, John, we can hear you.

Proposal 4, improved -- Proposal 4, improve our Catch-22 proxy access. Shareholders request that our Board of Directors take the steps necessary to enable as many shareholders as may be needed to combine their shares to equal 3% of our stock owned continuously for 3 years in order to enable shareholder proxy access. Proxy access allows a group of shareholders to nominate a director who will compete with management nominated directors to see who gets more votes. Competition is good for our Board of Directors. Currently, a strict limit of 20 shareholders must have owned $5 billion of Wells Fargo stock for an unbroken 3 years in order to nominate 1 candidate for the Board under our proxy access rules. A strict limit of 20 extremely deep pocket shareholders does not allow for a diverse group of shareholders. It is disappointing that management does not support the diversity that this proposal calls for. As a practical matter, it is unlikely that more than 50 shareholders would participate in nominating a director using proxy access with this proposal. There is hardly any administrative difference in 20 shareholders submitting proof of only $5 billion of our stock compared to 50 shareholders submitting proof of owning $5 billion of our stock. Adopting this proposal would show management's commitment to diversity. This proposal is asking for so little. The beauty of a good governance proposal like this proposal is that it would not result in more cost because the mere presence of good governance serves as a guardrail to make sure the management elects the best directors on their own. Because the management does not elect the best directors, then shareholders have a remedy with teeth to make their director nominations known to management. Our current proxy access is way out of balance. There has not been 1 proxy access candidate placed on Board of any company during the past 5 years. There have been 500 companies with a shareholder right for proxy access during these 5 years. 500 companies x 5 years equals 2,500 company years without 1 proxy access candidate. This means that under the current rules, any company such as Wells Fargo, would not expect 1 proxy access candidate during the next 2,500 years. This is way out of balance as far as shareholders are concerned. Plus a proxy access candidate then has the formidable challenge of getting more votes than at least 1 established director. This would require impressive shareholder support over an incumbent director and would be a clear indication that an incumbent director needed to be replaced. If you have voted against this proposal, please change your vote before the poll is closed. Please vote yes and prove our Catch-22 proxy access, Proposal 4.

Thank you, Mr. Chevedden. Item 5 is a proposal from Harrington Investments, Inc., a shareholder of the company, requesting the Board of Directors amend the company's restated certificate of incorporation to become a public benefit corporation under Delaware law. The proposal appears beginning on Page 112 of the proxy statement. Rick Alexander will now present proposal 5 on behalf of Harrington Investments.

Thank you, Mr. Chair. Can you hear me?

Yes. Thank you.

So thank you, everybody, for having me. I'm here today on behalf of Harrington Investments, to present Proposal #5, that the company convert to a public benefit corporation. So what's this proposal about? The proposal asked the company to become a PBC, a relatively new type of corporation. If successful, the company would have to balance 3 considerations going forward. The first would be the shareholders' financial interest. The second would be the best interest of those materially affected by the company, like its employees, its customers and the community. Third, a benefit corporation has to consider the interest of a specific benefit that the Board would establish. In contrast, today, as a conventional company, the companies are currently required to prioritize financial return to its shareholders in every decision. Of course, it can consider the interest of other stakeholders because that's just good business but can only do that to the extent that, that helps the company make more money. So that ultimately, the company has to prioritize financial return. Why is this important? The prioritization of financial return can be very harmful to our economy, society and the planet. Ironically, the company's first principle that's now being followed actually harms most shareholders because most shareholders don't just hold stock in our company, they're widely diversified with investments in many companies. These portfolios suffer when the company as a whole suffers -- these portfolios suffer when the economy as a whole suffers from systemic threats, like climate change or inequality, things that are loan -- the company's loan portfolio may contribute to. For example, Wells is the third largest source of fossil fuel financing in the world. The consequences of climate change are well known. It degrades many of the social and environmental systems that we all depend upon and thriving economies dependent upon. Climate change could directly shave 3% off of global GDP by 2050. This drag on the economy directly reduces the return on a diversified portfolio over the long run in addition to threatening catastrophic consequences around the globe. If we, as a society, are going to realistically address climate change, companies like Wells have to take actions that do not always optimize their own financial return by quickly ending lending to fossil fuel projects. In light fashion, addressing inequality, racial disparity and environmental challenges beyond climate change may require large financial institutions, like Wells, to adopt lending policies that optimize the value of the environmental and social systems that all companies rely on as well as people rather than only optimizing its own financial return. By voting for Proposal #5, shareholders can urge Wells to become a PBC as hundreds -- well, no, I shouldn't say hundreds, thousands of companies have already done. And I should also say it's not just small companies. There are now a dozen publicly traded companies in the U.S. that have become PBCs. This will allow Wells to better serve the needs of its diversified shareholders and directly account for the critical social and environmental system upon which a thriving economy depends. And let me just say, whatever happens with this vote, I want to extend an offer to the Board and management to help with the transition. I have personally worked with legislators around the country and around the world to develop these new PBC laws, and I've worked with many companies, and the management of many companies are actually excited about the opportunity to operate under a system of laws that doesn't put the dollar as the #1 measure of success in all cases and to better serve their constituencies. So I hope that this will become an ongoing dialogue between the company and shareholders. Thank you, Mr. Chairman, and I hereby move the vote on Proposal #5.

Thank you, Mr. Alexander. Item 6 is a proposal from Thomas P. DiNapoli, as Trustee for the New York State Common Retirement Fund, a shareholder of the company, requesting report on incentive-based compensation and risks of material losses. The proposal appears beginning on Page 116 of the proxy statement. Gianna McCarthy will now present Proposal 6.

Good morning. On behalf of the New York State Common Retirement Fund, I'm here to present Item 6. This proposal requests that the Board prepare a report on the incentive-based compensation metrics that could expose Wells Fargo to material losses. We believe the incentive compensation design for the company's employees played a significant role in regulatory and legal action, which resulted and continues to result in reputational and substantial financial harm to Wells Fargo. If the bank does not disclose the information we have been asking for years, even after the company has paid billions of dollars in fines, penalties and judgments and lost substantial value. In 2018, Office of the Comptroller of the Currency's consent order related to the miss-selling of mortgages and auto insurance products remain in effect. Of even more concern is the 2018 federal cap limiting Wells Fargo assets to approximately $1.95 trillion until the bank improves governance and internal oversight through that cap. Though that cap was somewhat relaxed out of necessity to support the Payroll Protection Program. Nonetheless, last year, Bloomberg estimated that Wells Fargo miss-sold roughly $4 billion in profits and counting since the cap was imposed. Though it appears progress has been made towards meeting the Fed's requirements, the damage is ongoing until the cap is lifted. Numerous other regulatory actions and simple bus suits are ongoing. While the bank has made some improvements to its risk management and certain disclosures, it still does not disclose the information regarding the compensation of employees other than senior executives, who could expose our company to material losses. Because investors, like regulators, have significant interest in understanding risks that could expose Wells Fargo to material losses, Wells Fargo should disclose this information to shareholders. We urge all Wells Fargo shareholders vote for Item 6 on the proxy. Thank you for your consideration.

Thank you, Ms. McCarthy. Item 7 is a proposal from the Service Employees International Union Pension Trust, a shareholder of the company, requesting the company conduct a racial equity audit. The proposal appears beginning on Page 119 of the proxy statement. [ Ted Laurel ] will now present the proposal on behalf of the SEIU Pension trust.

Hello. My name is [ Ted Laurel ]. And on behalf of the Service Employees International Union Pension Plans Master Trust, I'm here to present Proposal #7 at this year's annual meeting of Wells Fargo shareholders. The proposal calls for the Board of Directors to oversee a racial equity, analyzing Wells Fargo's adverse impacts on nonwhite stakeholders and communities of color. Input from civil rights organizations, employees, and customers should be considered in determining the specific matters to be analyzed. A report on the audit, prepared at a reasonable cost and omitting confidential or proprietary information, should be publicly disclosed on Wells Fargo's website. High-profile police killings of black people, such as that of George Floyd, have galvanized the movement for racial justice. That movement together with the disproportionate impacts of the COVID-19 pandemic have focused the attention of the media, the public and policymakers on systemic racism, racialized violence and inequities in employment, health care and the criminal justice system. In June 2020, Wells Fargo's CEO, Charles Scharf, urged that inequality and discrimination that has been so fairly exposed must not continue. And Wells Fargo announced initiatives to improve workforce diversity and inclusion and invest in black-owned businesses. Those actions followed some missteps. Scharf's statement that he appointed white men to top job after arriving at Wells Fargo because of a very limited pool of black talent demoralizing black employees and a loss of black female top managers. Wells Fargo's problems predate Scharf's 2019 arrival. Wells Fargo has settled employment discrimination claims on several recent occasions, including incidents of race discrimination in 2014 uncovered through a labor department audit. Wells Fargo sued to recover property tax revenues lost due to foreclosures on predatory loans, which it made more than twice as often to black and Latino borrowers. It settled a similar lawsuit by the city of Philadelphia in 2019. In 2012, the same discriminatory lending practices were the subject of a $184 million Department of Justice settlement. Wells Fargo's activities with potential adverse impacts are not limited to the employment and lending context. Wells Fargo has donated to police foundations in Sacramento, Houston, Los Angeles and Seattle, which typically bypass normal procurement processes to buy equipment for police departments, including surveillance technology that has been used to target communities of color and nonviolent protesters. Wells Fargo recently paused such donations after being targeted by Color of Change. Wells Fargo's political contributions are not fully aligned with its public statement. Wells Fargo has donated to Senator Tom Cotton who called for military air strikes on Black Lives Matter protest as well as other members of Congress with racist records. The racial equity audit would help Wells Fargo identify, prioritize, remedy and avoid adverse impacts on nonwhite stakeholders and communities of color. We are encouraged by Scharf's recent acknowledgment that his statements about the black talent pipeline reflected his own unconscious bias. And we urge Wells Fargo to assess its behavior through a racial equity lens in order to obtain a complete picture of how it contributes to and could help dismantle systemic racism. And thank you very much for your time this morning.

Thank you, Mr. [ Laurel ]. As stated in the proxy statement, the Board has recommended that shareholders vote against items 4 through 7. That concludes the presentation of the company and the shareholder proposals. Charlie and I will now respond to questions from shareholders or their proxies on these 7 items of business. Please refer to the rules of conduct for information about the question-and-answer sessions. We're joined today by John Campbell, our Head of Investor Relations, who will assist with our Q&A sessions. John, would you please let us know how many shareholders and guests are attending the meeting today and if there are questions on the company and shareholder proposals.

Thank you, Chuck. There are approximately 290 shareholders and approximately 215 guests in attendance in today's meeting. We will now begin the Q&A session on the proposals. We've received multiple questions on the racial equity audit proposal, including the following. I see that the Board is recommending voting against the racial equity audit supported by shareholders. I understand the Board's explanation in support of their recommendation is the fact that Wells Fargo is currently in the process of conducting a human rights impact assessment, which includes as a component, a specific focus on racial equity. What are the similarities and differences and what shareholders have asked for and what the human rights impact assessment will look at as part of its focus on racial equity. In essence, what makes the HRIA the better option? The second question is why is the Board's recommendation against a racial equity audit with the increased visibility to the racial inequities in our country, CEO, Charlie Scharf, made a commitment to team members specific to senior management representation and compensation, which speaks directly to these topics. It appears as though the recommendation of the Board against a racial equity audit will limit the company's view into the very inequities these commitments were made to address. With the long-standing history of racial inequities, internal evaluations will not give a reasonable view into the topics that need to be addressed. An external audit would be more suitable to ensure that inequities are exposed to create a true plan of action to address.

Thank you, John, and thanks for the questions. Wells Fargo is currently conducting a human rights impact assessment, which includes a specific focus on racial equity and is being overseen by the Board's Corporate Responsibility Committee to assess and determine the company's human rights risks. Wells Fargo has engaged a third party, an outside third-party to conduct the HRIA during 2021, and will publicly report a summary of the results and actions being taken by Wells Fargo in response to that third-party assessment. We believe that our human rights impact assessment, which is being conducted by a third party, is fully responsive to the proposal's specific request. The difference is that our focus on racial equity is part of a broader assessment that also includes other aspects of human rights. I'd also like to point out that Wells Fargo created a new operating committee role, the Head of Diverse Segments, Representation and Inclusion which reports to our CEO and is responsible for advancing the company's diversity, equity and inclusion efforts in the marketplace and workplace. Wells Fargo has taken a number of actions to promote and enhance diversity, equity and inclusion goals within the company and externally that include a focus on diverse workforce representation, including significantly increasing black leadership, accountability of senior management for progress in improving diverse representation and inclusion, unconscious bias education and training for employees and new business initiatives and investments focused on support for diverse communities.

Thank you, Chuck. The next question is in relation to Item #5. What is a Delaware public benefit company?

Thanks, John. Wells Fargo is incorporated in the state of Delaware. Delaware law permits the organization of public benefit corporations, which are for profit corporations organized under and subject to Delaware law that are intended to produce a public benefit and to operate in a responsible and sustainable manner. In response to a shareholder proposal request last year, the Board's Governance and Nominating Committee commissioned and published the results of an independent study on the feasibility of becoming a public benefit corporation. That report is available on the Corporate Governance page of Wells Fargo's website. Reflected on Page 113 of this year's proxy, the Board recommends a vote against the proposal requesting that the Board amend the company's certificate of incorporation to become a Delaware public benefit corporation. The Board concluded previously and continues to believe that converting to a public benefit corporation is not in the best interest of the company and is unnecessary because the company's existing corporate forum provides our management team and board with appropriate flexibility to promote the interest of our various stakeholders and to manage important public benefit issues without incurring the costs and generating the uncertainties, risks and distractions involved with converting to a public benefit corporation.

Thank you. The next question is from Ben Cushing, who is attending on behalf of the Sierra Club. The Sierra Club notes that Wells Fargo has committed to achieve net 0 emissions from its financing portfolio before 2050. However, this pledge does not go nearly far enough or fast enough to address the firm's role in the climate crisis. A recent report showed that Wells Fargo provided $223 billion in lending and underwriting to the fossil fuel industry, making it the world's third largest funder of fossil fuels in the 5 years since the adoption of the Paris Climate Agreement, which the firm claims to support. How does Wells Fargo plan to take action this year to begin phasing out fossil fuel financing in order to provide a credible pathway to reaching the firm's long-term climate commitment? If Wells Fargo's leadership cannot provide an adequate answer to this question, I urge shareholders to vote against the reelection of Chuck Noski.

Thank you, John. Perhaps let me start and then ask our CEO, Charlie Scharf, to comment as well. We think the Board plays a critical role in protecting and serving the interest of shareholders and meeting the expectations of our regulators, our shareholders and our other stakeholders. Over the past few years, we've made a number of changes to our Board to improve its composition and take in the valuable feedback from shareholders. As I've mentioned in my earlier remarks, the Board and its Corporate Responsibility Committee has been overseeing the company's efforts in this important area of climate change. And we believe we've made significant progress with last month's announcement regarding the company's objectives and commitments to 0 greenhouse gas emissions by 2050. We're going to continue to report, and we've expanded our public disclosures in recent years to reflect our progress. Perhaps since the shareholders suggest that you vote against me, I might ask Charlie Scharf to comment further on the company's efforts.

Sure. Thanks, Chuck. And I certainly appreciate the question. I think it's very clear to the management team and to the Board, the importance of us addressing this extremely important issue. And I think what you saw in our announcement in early March was a fairly comprehensive approach to us doing what we think is necessary to do our part to get to what was set out in the Paris accord. As Chuck mentioned, our goal is to get to net 0 greenhouse gas emissions, including our finance emissions by 2050. It's an ambitious goal, but it's something that we think is the right goal. To ensure that we're progressing in a clear fashion. We have said that we're going to measure and disclose financed emissions for select carbon-intensive portfolios. We're going to set interim emission reduction targets, and we're going to deploy a significant amount of capital to help finance climate innovations. And so this is an effort that we intend to work very closely with our customers and clients on. It affects consumers and corporations broadly. And we want to be a partner with our clients as they go through their journey. To ensure that we're doing everything that we can to arrive at the goals of the Paris climate accord, but do it in a way which preserve jobs and preserves industry and helps companies and industries more broadly transition their businesses.

Thanks, Charlie. The last question on proposals is from Nezhla Mehmed on behalf of DWS Investment, which is a global asset manager based in Frankfurt, Germany. At DWS investment, our commitment to sound corporate governance and responsible environmental and social practices among our net fees is not only a crucial element of our responsibilities but also, forms an integral part of our investment process. Despite previous efforts and assurances by management to mitigate them, concerns over ethical business practices at Wells Fargo continue to present themselves. In what ways have the firm's internal controls and board oversight been upgraded to address ongoing concerns surrounding business ethics issues? The CEO was awarded 87% of his target variable compensation for 2020 despite significantly worse TSR relative to financial performance of peer group, and failure to meet preset threshold goals. The same concerns exist for other executive members. How is this evaluated by the Compensation Committee and how do you ensure an adequate pay-for-performance and a sustainable pay structure?

Thanks, John. Really 2 questions there. Let me try to address the first, which was about what the Board is doing with respect to oversight of controls and regulatory matters. We certainly recognize that the Board plays a critical role in protecting and serving the interest of shareholders and meeting the expectations of our regulators and other stakeholders. And as a result, over the last few years, our Board has made changes to its composition and practices, including many that reflect valuable feedback that we've received from investors and other stakeholders. 10 of our 11 independent director nominees have joined the Board since 2017, so after some of the difficult periods that we have reported in the past. During 2020, for example, we enhanced the financial services, regulatory, financial reporting, risk management, business operations and corporate governance skills and experience represented on the Board through the addition of 2 new independent directors, Steve Black and Mark Chancy. Board has also made changes to its committee structure and oversight responsibilities that are intended to enhance risk oversight, including the Risk Committee and continues to review committee oversight responsibilities in light of regulatory expectations, best practices and changes in the company's strategy and risk appetite. We currently believe that the Board has the right mix of professional experiences, capabilities and diverse perspectives to provide effective oversight and governance of our company. I would also point out that we meet regularly with our regulators, that is our directors do, in order to get a very clear line of sight into what their concerns are, where we need to be focusing our attention, and it's actually a very constructive engagement. Let me turn to the point about the say-on-pay proposal. Certainly, 2020 was an extraordinary year by any measure and not surprisingly, our 2020 financial performance was impacted by COVID-19 and the necessary ongoing work to put our legacy issues behind us. In that context, the Board and our Human Resources Committee exercised our best-informed judgment and discretion in assessing 2020 company performance and making necessary compensation decisions. These decisions, by the way, affected not only our senior executives, but also employees eligible for incentive compensation under our broad-based compensation plans, nearly 120,000 employees. So we really thought it was important that there be appropriate levels of incentive compensation paid to all of our employees that were part of those groups. Obviously, we value the feedback of our investors. In connection with the preparation of our proxy statement this year, we engaged in a very significant fashion with quite a number of our largest shareholders to get their perspective and understand as best we could what their concerns were, and we discussed the challenges we had in this extraordinary COVID-19 year. The Human Resources Committee and the Board will take into consideration the feedback, such as the shareholder questions today as well as other input, and we'll continue our engagement and our dialogue with our shareholders to continually be responsive to and improve the appropriateness of our compensation plans. And the fact that this was the last question, then this will conclude our Q&A period for the business items presented at this annual meeting. I now declare the polls closed for the items of business for the annual meeting at 10:49 a.m. Eastern Time. We'll pause for a moment now to receive the preliminary voting results. The inspector has given the Corporate Secretary the preliminary voting results on the items presented at this meeting. Anthony, please read the results.

The inspector's preliminary report indicates that each of the nominees have been elected to the Board and all of the other management proposals received the required majority support of the shares present in person or by proxy and entitled to vote on the proposals and have been approved. For Item 1, each nominee for Director received more than 94% of votes cast in favor of his or her election and has been elected as a Director of Wells Fargo with a range of approximately 94% to 98%. Item 2, the advisory resolution to approve executive compensation was approved with approximately 57% voted in favor of the proposal. Item 3, the appointment of KPMG as the company's auditors for 2021 was ratified with approximately 94% voted in favor of the proposal. The inspector's preliminary report also indicates that the shareholder proposals, items 4 through 7, did not receive the required majority support of the shares present in person or by proxy and entitled to vote on the proposals and were not adopted. Approximately 32% of shares voted in favor of the proposal regarding shareholder approval of amending shareholder proxy access requirements. Approximately 3% of shares voted in favor of the proposal regarding amendment to the company's certificate of incorporation to become a public benefit corporation under Delaware law. Approximately 26% of the shares voted in favor of the proposal regarding a report on incentive compensation and risks of material losses and approximately 13% of shares voted in favor of the proposal regarding a racial equity audit. The company will report the final voting results on a Form 8-K to be filed with the SEC.

Thank you, Anthony. This concludes the business portion of the annual meeting, and I declare that the meeting is now adjourned from a legal perspective. On behalf of the Board of Directors and management of the company, I want to thank you for participating in the meeting. Now I'm pleased to introduce Charlie Scharf, Wells Fargo's CEO, who will provide an update on the company. Charlie?

Thank you, Chuck. I'll add my thanks to all the shareholders who have joined us virtually today. Today, I will spend a few minutes discussing the work we've done to support our customers, our employees and our communities during the COVID-19 pandemic. Then I'll provide a brief update on our business performance and an overview of the ongoing work we're doing to transform Wells Fargo. It's been over a year since the world began to recognize the severity of the COVID-19 pandemic. This period has been incredibly difficult for everyone. I remain extremely proud of the work Wells Fargo employees have done throughout this crisis. Over the course of this unprecedented year, Wells Fargo provided meaningful support to our customers, employees and communities. We've been aggressive in our actions to ensure we can best serve customers while also prioritizing employee and customer safety. We quickly enabled over 200,000 employees to work from home and provided financial support for those employees in need. We extended significant credit to our clients during the height of the crisis and over the course of 2020. We also provided significant accommodations. Through the end of March 2021, we deferred payments and waived fees for 3.7 million consumer and small business customers. As part of our participation in the Paycheck Protection Program, or PPP, Wells Fargo funded 264,000 loans, totaling over $13.2 billion through the first quarter of 2021. 84% of our loans went to companies that had fewer than 10 employees. This year, we focused even more on small business and diverse businesses as our average loan size was $40,000, down from $54,000 in 2020. Our community support included a commitment to dominate all of our 2020 PPP gross processing fees approximately, $420 million, by creating the Open for Business Fund, which provides support to struggling small businesses impacted by COVID-19. We directed a total of $475 million in charitable giving, including $125 million deployed from our Open for Business Fund through March 2021 to help address food and security, small business support, housing stability and other urgent community needs. The impact of the pandemic on Wells Fargo has been significant and has certainly added to the complexity of our work, but I'm proud of what we've done to continue to deliver for our customers, communities and employees. Now I'd like to take a moment to briefly touch on our 2020 financial performance and provide a few key highlights from the first quarter of 2021. Our financial performance in 2020 was challenged by both the COVID-19 pandemic and the necessary work to put our substantial legacy issues behind us. In terms of the significant drivers, the provision for credit losses increased $11.4 billion with large reserve builds in the first half of 2020, reflecting forecasted credit deterioration due to the COVID-19 pandemic. Low interest rates negatively impacted our net interest income. We recognized restructuring charges to accelerate our efficiency initiatives, and we continued to spend significant amounts to build out our risk and control infrastructure as well as to provide remediation to customers to address our historical shortcomings. The pandemic increased our expenses and reduced revenue as we took actions to protect the safety of both our employees and customers while continuing to carry out our role as a provider of essential services to our communities. Despite the challenging environment, the strength of our balance sheet was evident throughout the year, although we reduced our dividend, we continued to maintain a significant amount of excess capital. We also announced expanded commitments to diversity, equity and inclusion. In the first quarter of this year, we earned $4.7 billion and recorded total revenue of $18.1 billion. Our results, which included a $1.6 billion pretax reduction in the allowance for credit losses reflect an improving U.S. economy, continued focus on our strategic priorities and ongoing support for our customers, employees and communities. Charge-offs were historical lows, and we're making changes to improve our operations and efficiency, but low interest rates and tepid loan demand continued to be a headwind for us in the quarter. Compared to first quarter 2020, net interest income decreased 22%, noninterest income increased 45%, and noninterest expense increased 7%. We believe our model as an integrated U.S. bank with significant scale and breadth of capabilities positions us to achieve our goal to be the preeminent provider of core financial services in the U.S. Our strategy is about becoming even crisper in serving our target market and taking actions necessary to leverage our strong competitive position. We are clear on who we are. We target U.S. consumers and businesses of all sizes. We do have capabilities outside of the U.S., but these activities are built predominantly to support our core U.S. customers with their global needs or in domains where we have the scale and expertise to compete locally. I believe we have the right businesses at Wells Fargo today to achieve our goal. Our individual businesses are strong and valuable. We have the products and services, people and scale to be a leader in each business and every one of them has opportunities to serve customers more broadly and improve its own financial profile. Consumer banking and lending serves approximately 65 million customers across our businesses. And I believe our bank branch footprint will continue to be a competitive advantage. We have bank branches in 25 of the largest 30 markets in the U.S. Wealth and investment management provides us with unique breadth and scale to serve the ever more complicated needs of investors. We have one of the largest and most complete platforms in the industry with over 13,200 advisers who serve 2.8 million customers, all with access to the Wells Fargo Investment Institute's capabilities. Commercial banking serves private family-owned and small midsized public companies with core deposit lending and payment solutions. We have a leading and enviable franchise and our strong local relationships that have been built over decades, complement our branch footprint. With approximately 5,800 bankers, we serve nearly 480,000 clients and 46 of the largest 50 markets in the country. Corporate Investment Banking has been a core part of our company for many years. As our corporate clients grew, their banking needs expanded, and they wanted access not only to bank capital, but also the capital through public markets. Our investment banking and trading capabilities are built around satisfying this need. And given our status as a trusted partner, we have also earned the right to be a strategic adviser. We've also changed our external reporting with the goal of giving investors a clearer understanding of our results as well as the ability to compare our businesses on a more like-for-like basis to competitors and track our performance as we do internally. Our strengths and weaknesses should be clearer than ever, but the potential for improvement should also be clear. We have conducted rigorous reviews of our businesses with an eye towards assessing their strategic fit to the company, evaluating the risk return profile and creating a road map for improved operational and financial performance. In the past few months, we have announced the sale or intention to exit a number of our businesses, including Asset Management, Corporate Trust, Student Lending, International Wealth Management and Direct Equipment Finance in Canada. We are also exploring options for our Railcar Leasing business. As recently announced the sale of Wells Fargo Asset Management and the Corporate Trust Services businesses are both expected to close in the second half of the year. These activities are not consistent with the core strategic priorities I outlined. Now turning to our ongoing efforts to transform the company. We are changing our operating model at its core. Our transformation is dependent on our attention to several foundational pillars. In many ways, they're about getting back to the basics and getting them right, but they are truly critical to our success. Building and implementing an effective risk and control framework across the company is our top priority. In 2020, we announced an enhanced corporate risk organizational structure to provide greater oversight of all risk-taking activities and a more comprehensive view of risk across the company. We made a number of important hires throughout the year in just the fourth quarter, a new Chief Appliance Officer, and new Chief Risk Officers in Commercial Banking and Wealth Management joined the company. As we announced in January, the OCC terminated a 2015 consent order related to the company's Bank Secrecy Act and to money laundering compliance program. This is just one accomplishment for us, but it is a step forward. It's important to remember that we have a significant amount of work to do and it's a multiyear journey. Progress may not be a straight line, but we're committed to get it done and will ensure it remains our top priority. We're focused on consistent, effective and efficient execution as a core discipline. We have transformed the management team by elevating strong internal talent while bringing in outside leaders where the necessary -- with the necessary skills and experience. Each member of the Operating Committee has expertise and experience in their area of responsibility and brings a diverse set of skills and perspectives to our decisions. We have introduced monthly business reviews where we conduct financial and operational performance in a disciplined way. Doing what's right for customers must be at the center of everything we do. We're taking steps to embed this mindset into all of our decisions from product design and pricing to our coverage and service models to how we approach complaints and remediations. As we continue to make progress on our foundational work, we're focused on building technology and digital solutions that will power our business over the longer term. All of our businesses need to continue to build digital solutions to complement our physical presence. Ultimately, our goal is to transform our business model from one that is reliant on physical presence and interaction, accentuated by technology solutions to one primarily driven by technology platforms and enhanced by physical distribution and interaction. The events of 2020 only accelerated and confirmed how critical this ongoing migration will be. Despite the turmoil of the past year, our capital and liquidity levels remain well in excess of regulatory minimums. But as I outlined previously, the impact of COVID-19 on our earnings has been substantial, and our margins should be larger. We have a company-wide effort underway to eliminate inefficiencies with an eye towards improving our operating performance. This work is crucial. Our inefficiencies don't just inflate our cost base, they make it more complicated to serve our customers and each other. The events of 2020 also reinforced the urgency of working to create a company culture with broad representation into who we are and how we make decisions. Having an inclusive environment in which our differences and perspectives are respected and valued, is both business imperative and the right thing to do. Throughout 2020, we announced a number of expanded commitments to diversity, equity and inclusion. In November, Wells Fargo welcomed Kleber Santos as Head of Diverse Segments, Representation & Inclusion, a role that reports to me and sits on the Operating Committee. Kleber is responsible for leading our efforts to advance all aspects of diversity, equity and inclusion in our company and in the marketplace, including partnering with line of business CEOs to deliver products and services, specifically designed to meet the needs of our diverse customer base. We know we have a lot of work to do in this area. The addition of Kleber and the creation of this new group are critical to those efforts. In 2020, Wells Fargo launched a new social impact and sustainability strategy, focused on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health and a low-carbon economy. In the near term, that includes fostering an inclusive recovery from the COVID-19 pandemic and strengthening communities that have been disproportionately impacted. Wells Fargo's rating of outstanding in the most recent Community Support Campaign performance valuation reflects the company's proven commitment to serving low-to-moderate income communities. In 2020, Wells Fargo also began an effort to be more transparent and comprehensive in nonfinancial reporting and disclosures. One example is our inaugural environmental, social and governance report, which details how the company is working to create solutions for stronger communities through diversity, equity and inclusion, economic empowerment and environmental sustainability. Climate change is one of the most urgent environmental and social issues of our time, and we are committed to aligning our activities to support the goals of the Paris Agreement. Last month, Wells Fargo announced a major step in our effort to support the transition to a low-carbon economy by setting a goal of net 0 greenhouse gas emissions, including our financed emissions by 2050. To help meet this ambitious goal, we will measure and disclose financed emissions for select carbon-intensive portfolios, set interim emission reduction targets, deploy more capital to finance climate innovation and continue to work with our clients on their own emissions reductions efforts. We also will launch an institute for sustainable finance to manage the deployment of $500 billion in financing to sustain -- to sustainable businesses and projects by 2030 as well as support science-based research on low-carbon solutions and advocate for policies that enable client transitions. In conclusion, let me reiterate that I believe the opportunities for Wells Fargo are meaningful. Working together, our businesses can form a differentiated platform that should benefit all stakeholders and deliver superior financial performance over time. We are committed to building the necessary foundation for a bank of our size and complexity and we are making substantial changes in how we operate to fully realize our potential. 2020 was a challenging year for all, but I'm proud of what our employees have done to support our customers, our country and our communities. I want to thank everyone at Wells Fargo for what they have done through extremely difficult circumstances. I'm optimistic for a better year ahead. Thank you all for your support and investment in Wells Fargo. Next in our meeting agenda, we'll now hold the general question-and-answer session. As a reminder, please refer to the rules of conduct for information about the general question-and-answer session.

Thank you, Charlie. [Operator Instructions] We received multiple questions relating to the dividend, including the 2 following questions. When will dividends increase? I am a retiree, and one of the reasons I bought Wells Fargo was for the dividend. I'm a longtime customer and common share stockholder. I'm happy to see the increase in the share price. The second question was the dividend was reduced last year, when will management start increasing the dividend rate?

Thanks, John, and thank you for those questions. I guess, first of all, I'll start with -- just to be clear, this is a Board decision, and it's something that we, as management, think an awful lot about as we plan our capital base on a prospective basis, but it's a very, very active discussion that we have with our Board, and ultimately, it is their decision. I do want to acknowledge that we understand just how significant the impact is when we had to reduce the dividend on our shareholders. Shareholders, whether it's individuals or institutions, we understand the importance of the dividend. We understand that people will come to rely on it. And so it's not a decision that we took lightly, but was just the reality that our earnings didn't support the level of the dividend. And it's paramount that we have a strong capital base, both to protect the company, but also to have the capital to support an economic recovery. As we sit here today, it's not lost on us that the dividend is low. And I think that's true relative to where we're earning today. And if their -- economy continues to recover, it certainly appears to be the case for that as well. And so as we look forward, we would like to increase the dividend. And it's a discussion that we will have with our Board. We are looking to see what the Federal Reserve will do when it comes to releasing some of the restrictions that are in place. But it's also a conversation that really we have to ensure that we've got the appropriate capital base.

Thank you, Charlie. We received multiple questions on CEO pay, including the 2 following questions. What happened to our company that was exemplified and Jim Collins' Good to Great? How does compensating the CEO 274x more than the median employee help in looking through the window to all who help with greatness. The team, the whole team pulling together. We seem to be and have been overpaying at the top, all executives and Board members. Comps need to be more from within our company, not from the crowd. That, I believe, will propel us back to greatness. The second question was, why is the proposed executive compensation ratio so high compared to when we were featured in Jim Collins' Good to Great. Are we looking and valuing our team members enough to help us become great again.

Thank you, John, and thanks for the question. We certainly agree that the entire team needs to pull together to restore Wells Fargo to where we all want it to be, and that is to be the preeminent provider of financial services in the United States. We recognize that the CEO pay ratio, which compares CEO pay to a calculated median employee compensation amount is typically a high number that may be difficult to understand. Because of different calculation methodologies and varying businesses and pay structures across industries, comparisons across industries may not be meaningful. But Wells Fargo's pay equity ratio is in a range similar to those of our large bank peers, and frankly, is in the lower end of that range. Our Board and its Human Resources Committee are focused on making sure that our CEO is compensated fairly and competitively and also that Wells Fargo has a compensation and benefits program in place and values and compensates all of our employees fairly. We want to attract, retain and motivate our employees to help Wells Fargo as the question states become great again. Our employees, we believe, are our competitive advantage. Let me turn it over to Charlie for some ways in which we are focusing on compensating and supporting our employees.

Sure. I'll start with I agree with Chuck's sentiment of just how important everyone is who works at Wells Fargo to the success of the company. And so to that extent, we're continually focused on thinking about how we can invest in everyone throughout the company. Our estimated total annual compensation for the median employee at Wells was $74,000, a little bit in excess of $74,000. That doesn't include -- that does not include the annual investment in our benefits programs per employee, which was almost $16,000 per employee. We raised the minimum pay levels in the majority of our U.S. markets in 2020, which impacted more than 25,000 people across the Wells Fargo footprint receiving a salary adjustment and we're focused on helping people advance so that they can grow and ultimately earn more. During 2020, we invested more than $200 million in learning and development, which includes a whole series of things and functional training, but also regulatory compliance, but certainly, talent development and leadership and professional development. So -- and then the most important thing, I think we have to do is to be successful as a company. As a successful company, it creates opportunity for people broadly across the organization. And we'll continue to make sure that we're focused on doing everything that we can to help everyone's growth in Wells Fargo.

Thank you, Charlie. The next question is as follows. Have you -- or do you have any intention to do a review of the businesses you support with an eye to becoming more planet and human friendly. For example, why would a bank that wants to do good in the communities where it operates, still finance gun manufacturers. Wouldn't you want the bank to be more supportive of renewable energy and begin to move away from companies developing fossil fuels? Don't you want to be on the right side of history? As a shareholder and former employee, I'd certainly like to see you move in that direction.

Thanks, John, and thanks for the question. Let me start and then invite Charlie to comment. The Board's Corporate Responsibility Committee oversees and our management team directs the company's policies, programs and strategies regarding significant social and public responsibility matters, including human rights, environmental sustainability and climate change. We made a number of enhancements to our long-standing commitments to these efforts in 2020 on issues including climate change based on the Board's and management's focus on this important issue and taking into account substantial shareholder feedback. Charlie, I invite you to comment as well.

Sure. Yes, I think we take all of those issues extremely seriously. As I commented earlier, we believe we took a major step forward with our announcement around climate. And just to reiterate, we announced that we're setting a goal of net 0 greenhouse gas emissions, including our financed emissions by 2050. And -- but we did more than that. We said we're going to measure and disclose emissions for select intensive portfolios. We're going to set interim emission targets. And we're going to deploy more capital to help finance climate innovation, but most importantly, work with our clients in their transition, as this is something much broader than just something that banks have to do. I would just say, if you look -- I encourage you to look at our ESG report, which can be found on wellsfargo.com. It just contains a wealth of information of our approach to stakeholder engagement and financing of sensitive industries. And as we think about who we bank, we've got a very thorough process to think through this, and it's something that we continue to do and make sure that we and everyone have a deep enough understanding about. And as an example, in 2019, we announced that we were going to invest more than $10 million over the next 3 years to support nonpartisan research into what contributes to gun violence and how to protect it. And in that same year, we made our first $3 million donation under the commitment. And we'll continue to do more work in that industry and other industries.

The next question is, when do you expect Wells Fargo will be removed from the Federal Reserve's overall limitation or cap of bank asset?

Listen, I wish I could answer the question, but it's not something that I can answer. We're focused on doing the work that's required to satisfy what's -- in terms of what's contained in that consent order. And ultimately, it's up to our regulator to determine when it's done to their satisfaction. I've said continually, and I will continue to make it clear that this work and all of our regulatory work, which is really about building out the appropriate risk and control infrastructure, is my and this company's clear #1 priority. That is what we have to do in order to take advantage of opportunities that we'll have in the future. The work to do is very significant, both in this consent order as well as the other consent orders. I do believe we're making progress on our overall agenda. But it's not straight line. As I said, the work is significant. It's requiring us to devote all necessary resources, which we are committed to do. And unfortunately, I just can't give a time frame for what that looks like but just know that we are committed to getting it done.

Thank you, Charlie. The next question is a 2-part question. Is the Board and management keeping a commitment to the LGBTQ community? Also is Wells Fargo standing up against any type of voter suppression. I can't stay invested in a company that's not for human rights.

Thanks, John. Let me start. Diversity, equity and inclusion is a key focus of our Board and management. In fact, in 2020 we identified campaigning diversity, equity and inclusion as one of 6 expectations we set for all employees at Wells Fargo. And obviously, we're committed to further advancing these efforts in the months and years ahead. The Corporate Responsibility Committee of the Board is overseeing a human rights impact assessment. I discussed that a little bit earlier in the meeting. That's conducted by a third party to determine broadly our human rights risk, including, obviously, racial equity, but also this issue of diversity and inclusion. As a part of that assessment, we will be seeking input from external stakeholders, including members of our external stakeholder advisory council, which is broad-based and represents a lot of different stakeholders of our bank. The key goal of this assessment, as I mentioned, is enhancing our dialogue with stakeholders on matters relating to human rights, which we think is quite important. I would also mention to you that this issue of DEI is a topic that is regularly on our Board agenda. We discuss it with management and the responsible leaders, including Charlie at every one of our regularly scheduled meetings. It is frankly, right near the top of our agenda. Charlie, perhaps you want to talk more specifically about the LGBT community.

Sure. Yes. No, listen, I think to answer the question directly about are we keeping a commitment? The answer is, absolutely. We've contributed more than $50 million and provided support to various LGBTQ organizations such as Human Rights Campaign, the National Gay and Lesbian Chamber of Commerce, Out and Equal Workplace Advocates, GLSEN, The Trevor Project, Point Foundation and SAGE. And so it's something that we have -- it's a stance that we've had for a long period of time, and it's something that certainly will continue. And just regarding voting, I would just say, well, that we support the right of every American exercise their voice by voting. We believe it's a key pillar of our democracy. We opposed legislation that tends to limit this right or discriminate in nature. And we have said that publicly. And I will just add, just -- we've also encouraged Congress to establish federal election day as the national holiday, establishing the importance of this right.

Thank you, both. The next question is about the company's efficiency initiatives. Why not state a more specific target for layoffs and cost cutting to bring the efficiency ratio down into the mid-50% range. BofA did set specific time frames for their layoffs a few years ago and also successfully reduced office space by 40 million square feet, the equivalent of 8 Empire State buildings. Why can't wells Fargo do the same and restore investor confidence instead of stretching this out for years to come?

Sure. Thank you for the question, and I certainly understand the perspective. What I would say is that our situation as a company is unique. I described several questions earlier, just some significant amount of work that we have to do. And we have to dedicate all necessary resources to doing that. This year alone, we're spending approximately $400 million more than we spent in 2020 to ensure that we've got all of the right resources on this. And we need the ability to continue to invest where it's necessary in order to do that. At the same time, I certainly understand your comments, and we look at the same set of facts. And we kind of look at it from a slightly different perspective as well, which is we know we can run the company better and more efficiently. Running the company more efficiently will not just reduce the expense base, but it will reduce risk inside the company. It will make it easier for us to serve our customers and serve each other, all -- which is extremely important. And so we've got a concerted effort underway to do that. But we've avoided putting specific time frames on specific goals because given the work that we have, we believe we've got to take this in kind of one step at a time. And so we certainly do believe that there's nothing structural in our business that stops us from having a competitive efficiency ratio from where we are today. But it will take time given our situation. And we also recognize that we would like to do it in a way that is as clear and open with our employee base as we possibly can as we go through this transition.

Thank you, Charlie. The next question is about outsourcing. U.S.-based Wells Fargo jobs have moved to India. Reportedly, there are now already 17,000 Wells Fargo employees in India and a push to move even more. Why this focus to outsource jobs when other U.S. companies are now ensuring jobs? Doesn't it add a new layer of risk to move operations and support outside the U.S.? Doesn't it also represent headline risk by outsourcing to a lower-cost country while laying off employees in the United States?

Sure. So first of all, let's make sure -- I know we're clear on who we are, which is we're a U.S.-based company, but we do have a global footprint. And we do have businesses outside the U.S. and we offer services for our customers that operate both domestically and globally. Like many companies, including our banking peers, we have employees located around the world. And what we work on is ensuring that we can provide outstanding service to meet their needs 24 hours a day, 7 days a week. And so we structure our global operations as part of an overall location strategy, which is really meant to ensure that we're doing everything we can to support our customers' expectations, which includes round the clock service. And our global operations allow us to provide faster turnaround time on decisions and inquiries, help us with our product development and functionality. All the while we deliver on consistent customer experience. We're a significant employer in the U.S., one of the most significant of all employers and intend to continue to be.

Thank you, Charlie. The next one -- the next question is, in order for Wells Fargo to rebuild trust with our customers, frontline employees, like myself, need to deliver excellent customer service. Unfortunately, announced policies are demoralizing many frontline employees, creating obstacles to the bank's successful rehabilitation. With massive layoffs hanging over our heads, while the bank's profits have rebounded, below market compensation causing frontline talent to leave the bank and COVID safety measures inconsistently implemented, what steps is management taking to motivate, reassure and empower frontline workers to effectively serve customers?

Sure. Thank you for that question. First of all, I just want to acknowledge that the pandemic required an unprecedented and coordinated response across all of Wells Fargo. And at the very front of our thoughts were the health and well-being of everyone who works at Wells, as well as our customers, whether they were coming into our facilities or not. And there's no question that people across the organization have worked tirelessly to support our customers and each other, but also certainly our communities throughout the pandemic. And we've done a broad range of things, including allowing employees up to 8 hours of paid time off in order to get their vaccine. We've expanded our work-in-home capabilities and very quickly, had over 200,000 people working remotely, including 30,000 from the contact centers, and we launched 24/7 employer manager support. We paid our U.S. non-exempt employees double their hourly rate for time worked over 40 hours. We made a special onetime cash award to approximately 165,000 employees who have base compensation less than $100,000. We donated $25 million to a We Care Employee Fund, which aided more than 23,000 employees. And so -- and I could talk more about some of the things that we've done, but I think -- we tried to think about this every step of the way, including putting employee safety at the top of our list. And so as we look forward, we'll continue to evaluate things that we can do to to support everyone, especially those that are on the frontline that come into our facilities every day. And I could -- I'm just -- I'm so proud of everything that everyone has done here at Wells to get through this -- these extraordinarily difficult times and continue to be there to support our communities and our customers.

Thank you, Charlie. We've received multiple questions on cryptocurrency, including the following. Although cryptocurrencies attract current speculative interest, the fundamental premise on which they are based, has sound application and wide implications on banking. What role is Wells Fargo taking to help lead crypto technologies to capitalize on the benefits they offer once the speculative frenzy settles?

Yes, that's -- it's a great question. It' certainly something that we spend a significant amount of time talking about, and I'll widen the conversation to be -- it's all the -- all of the terms that we all hear, whether it's crypto, whether it's blockchain, whether it's digital currencies. And so I mean, our approach is simple, which is number one, let's make sure we understand what all of these different underlying technologies that power these different services in terms of what capabilities they create. We have a series of activities going on inside the company, much more so on the wholesale side than on the consumer side around some of these technologies. But it's something that I would describe it as, ultimately, we're going to follow the desires and the needs of our customers with one very big caveat, which is it has to fit into the regulatory framework in which highly regulated institutions like ours are expected to follow. So it's certainly a living, breathing topic but one that, I think, not just we, but all financial institutions need to be very, very cautious and thoughtful about and make sure that we're doing what's necessary so that when a customer does want something that we're prepared with the response.

Thank you. The next question is about the company's headquarters. When will the Wells Fargo headquarter be officially moved to New York City from San Francisco? All direct reports to the CEO with the exception of 3 are now on the East Coast. Only 2 executives left in San Francisco and 1 in Portland. Furthermore, San Francisco, neither San Francisco nor California have been business-friendly to the bank. Why not move?

Sure. Listen, I mean, first of all, San Francisco is still very, very important to the company. We have executives, and I'll define the executives more broadly than the question was in many locations around the United States. And it's been that way for quite some time. We have a hugely significant presence in North Carolina, for example. We have a hugely significant presence in Minneapolis, Minnesota, in Iowa, in Arizona, in parts of Texas, and other locations. So as a company, we are representative of where there are significant populations around this country and that will continue. And the importance of California to us is as strong as it ever was.

Thank you, Charlie. We have 2 more questions. The first is on credit cards. Will there be more co-branding of credit cards? JPMorgan has been successful co-branding their credit cards with hotels, airlines, car manufacturers, et cetera. Wells Fargo credit card has failed doing so, and the only co-branding has been with American Express, which appears not to be a success. Will Wells Fargo start co-branding the credit card business as JPMorgan has demonstrated can be successful? Will the CEO bring in new leadership to run the credit card business after current leadership has failed for years? It's just a missed opportunity, thinking of the bank's large consumer base.

Yes. So let me start at the end of that question and work my way backwards. I do think that there is a significant opportunity for us in the credit card business. I would say, predominantly serving our existing customer base, as you pointed out in the question, given just how many consumers we have relationships across the U.S. And so just to be clear, we do have a card business. We've had it for quite some time. It is more important than I think people have given credit to us and just in terms if you look at the size and how much the business does earn. And so we are focused on serving our customers' cards needs and making sure that we have just the very best products and services available. And I think that -- both of those things are extraordinarily important drivers. And so we're very, very focused on our product design, and you should expect to see a series of new products come to the marketplace, which we think will be extraordinarily competitive and a very smart thing for us to do as a company. But we're also focused beyond the product, the things that make the card experience important. And those are things like our online capabilities, the control capabilities, customer service, fraud and things like that. And so we're looking at it as an improvement in our holistic card proposition. And the co-brand space is it's very, very competitive. There are a series of people that are really, really large in it. We do have some co-brand relationships. And as co-brand opportunities come up, we will certainly look at them. And -- but it will have to fit the criteria of all of the financial hurdles and things that we set. And I think that's just one piece of the opportunity that we have in the card space. And I'll close with just -- as I think about a series of the growth opportunities we have, we're looking at this as a very, very linear, path. Meaning we've got expertise today. We've elevated a series of folks internally, and we've also brought in some folks from the outside. So we have a predominantly new management team running the business. And we do think there are opportunities to grow in a steady and consistent way within the risk parameters of what makes Wells Fargo Wells Fargo from a credit risk perspective and all other risks.

Thank you, Charlie. We've reached the last question of the session, which is actually more of a comment, but let me read it to you. In 2016, I retired as Treasurer of Flint Hill Resources, which is part of Koch Industries. Over my 15-plus years as Treasurer, Wells Fargo was an excellent partner, serving as remarketing agent on our IRBs as well as a key member of the Flint Hill Resources LLC. I strongly believe in the bank and Mr. Scharf's ability to turn around performance. At its core, Wells Fargo appeared well-managed with conservative in a good way, lending and credit practices, and our relationship bankers always did an outstanding job in being responsive to our needs. That is why once I retired, I elected to become a shareholder in the firm, which is no higher -- which there is no higher compliment or vote of confidence than that. For many reasons, I look forward and I'm confident in management's ability to get past the many issues confronting it and return the bank to its former market position.

Let me start and I will give you the last word, how's that? First of all, thank you to the shareholder who shared those views with us today. And obviously, we, as a Board, share those views as well. We think we have an outstanding leader in Charlie and an exceptional leadership team. There is a lot of work to do. We have no illusions about the hard work that's in front of the company. I would just assure you as a fellow shareholder and as a director, that this Board is laser-focused on returning Wells Fargo to the sustainable success that we think it has the prospects to achieve. And we think we have the right team to get that done, and we will be working hard for you every day in the year ahead. Charlie?

Yes. Chuck, thank you for those comments, and I would just reiterate and just add a little bit, which is thank you very much for the confidence and the support. It means a tremendous amount as we continue to do the difficult work that's necessary to return Wells to where we think it should rightfully be. And the only thing that I'll add is, I certainly appreciate the call out. This is a team effort. This is a very large company. I do want to reiterate that we do continue to have a significant amount of work to do. And one person is just one person. And it's certainly our Operating Committee, which I'm just thrilled to be able to sit around at least virtually these days and hopefully somewhat soon physically and work together, but also with the broader management team and everyone at Wells, it is the work that's required, it does require everyone's involvement. And I greatly appreciate what everyone does to try and restore Wells to, as I said, what we all believe it should be. So thank you very much for that.

Thanks, Charlie. This concludes our general question-and-answer session. On behalf of the Board of Directors and management of the company, I want to thank you again for joining us today. We appreciate the feedback we've received on the proposals and during the question-and-answer sessions today. And we will take this feedback into consideration as we continue to engage with shareholders on these and other important topics. This concludes our meeting. Thank you for attending.