2018 Guide to Effective Proxies

6 TH EDITION | GUIDE TO EFFECTIVE PROXIES 482 Executive Compensation PEER GROUP ANALYSIS The HRC uses peer group data to inform its decisions regarding the compensation of named executives. For 2017, the HRC continued to use two separate, but overlapping peer groups: (1) the Financial Performance Peer Group, which is a subset of the KBW Bank Sector Index and consists of 11 financial services companies that best match our Company in scope, scale, business model/mix, and geography and with which we most directly compete for financial capital and customers; and (2) the Labor Market Peer Group, which consists of ten companies with which we most directly compete for executive talent based on requisite expertise, knowledge, and experience. The following tables summarize our peer groups for 2017 and how the HRC used them: Financial Performance Peer Group Purpose: Assess our Company’s relative overall financial performance Set and measure RORCE performance for Performance Share awards Bank of America Corporation BB&T Corporation Capital One Corporation Citigroup Inc. Fifth Third Bancorp JPMorgan Chase & Co. KeyCorp The PNC Financial Services Group, Inc. Regions Financial Corporation SunTrust Banks, Inc. U.S. Bancorp, Inc. For 2017, the HRC compared our Company’s financial performance with the Financial Performance Peer Group based on measures commonly used for analyzing financial services companies, including those relating to: • profitability, including EPS, revenue, net interest margin, efficiency ratio, operating leverage, and pre-tax pre-provision income; • shareholder returns, including return on average common equity, total shareholder return, and price-earnings ratio; • balance sheet size and composition, including average total deposits, retail deposit market share, and average loans; • credit quality, including nonperforming assets ratios; and • capital ratios, including regulatory capital ratios. The HRC does not have a pre-established formula for scoring and weighting financial measures in evaluating our Company’s performance. The HRC relies on its judgment in evaluating our Company’s overall performance compared to the Financial Performance Peer Group. Labor Market Peer Group Purpose: Evaluate overall pay levels and practices for our named executives American Express Company Bank of America Corporation The Bank of New York Mellon Corporation Citigroup Inc. The Goldman Sachs Group, Inc. JPMorgan Chase & Co. Morgan Stanley The PNC Financial Services Group, Inc. State Street Corporation U.S. Bancorp, Inc. In considering the 2017 compensation actions for our named executives and to track competitive pay levels and trends generally, the HRC reviewed compensation data for the Labor Market Peer Group. The Labor Market Peer Group companies provide the basis for our competitive compensation comparisons that the HRC considers in establishing the total compensation opportunities for our named executives. The HRC considers total compensation for competitiveness with total compensation for comparable positions and performance at peer companies. Wells Fargo & Company 2018 Proxy Statement 67 WELLS FARGO