Wells Fargo CEO’s Annual Salary Falls 12% On Weak 4Q Results


Wells Fargo’s CEO, Charles Scharf, saw a decline in his annual pay in 2020. According to a company filing dated Jan. 26, the Board of Directors approved an annual salary of $20.3 million for 2020, compared to a salary of $23 million in 2019. This reflects a decline of around 12% year-on-year. The company filing cites its weak 4Q results as one of the reasons for the lower compensation.

Wells Fargo (WFC) CEO Scharf’s annual compensation for 2020 included a base salary of $2.5 million, annual incentive compensation of $4.4 million payable in cash and long-term incentive compensation of $13.5 million. The long-term incentive amount will be split between performance shares and restricted share rights.

A restricted share right is the right to receive shares of Wells Fargo at a future date, provided certain vesting requirements for the shares and other conditions are satisfied.

Earlier this month, the banking giant reported 4Q revenues of $17.9 billion, representing a drop of 10.8% year-on-year. Revenues in 4Q also fell short of analysts’ expectations of $18.1 billion. The lower revenues highlighted declines across all of its business segments.

The company’s bottom-line result, however, marked a 6.7% improvement from the year-ago quarter’s earnings of $0.60 per share, reflecting lower noninterest expenses. (See Wells Fargo stock analysis on TipRanks)

On Jan. 25, Credit Suisse analyst Susan Roth Katzke upgraded the stock to Buy from Hold and raised the price target from $35 to $40. Katzke said in a research note about the company’s 4Q results, “To be sure, the path forward has its obstacles and revenue growth remains a challenge, but the combination of evident progress, incremental investment, excess capital and the inherent franchise opportunity reduce the downside risk and render the aspiration of a 15% ROTE [return on tangible equity] achievable, in time.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 12 analysts recommending a Buy and 5 analysts suggesting a Hold. The average analyst price target of $36.00 implies a 20.5% upside potential to current levels.

News Sentiment for Wells Fargo is Neutral based on 33 articles over the past seven days. While 75% of the articles have Bullish sentiment, compared to a sector average of 64%, 25% of the articles have Bearish Sentiment, compared to a sector average of 36%.

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