Friday, September 27, 2019

Wells Fargo, With a Huge Presence in Iowa, Saw Its Top-Tier Executives Average Annual Pay and Employee Benefits Increase By a Blistering 19.3% Per Year During the Past Ten Years. Wells Fargo Has 3.3 Mil Square Feet of Properties in the Des Moines, Iowa Area. Wells Fargo Also Just Got a New CEO Charles Scharf, Former CEO of Visa, Which Saw Its Top-Tier Executives Average Annual Pay and Employees Benefits Increase By an Off-the-Charts 42.5% Per Year During Scharf's Time There.

The third Democratic 2020 Presidential candidate debate was held in Houston, Texas on September 12, 2019.  The stickout strong performers in this debate were Amy Klobuchar, Pete Buttigieg, Beto O'Rourke and Cory Booker.  The only one of the Top Four candidates in the polls performing OK in this debate was Elizabeth Warren, with the other Top Three in the polls slipping in performance in this debate, especially two of them Kamala Harris and Bernie Sanders.

The most insightful recent move by the Democratic Presidential candidates is Pete Buttigieg's Bus, which is now being driven all over the State of Iowa.  With this acquisition, Pete is showing his confidence in very effectively dealing with the press on a constant basis.  This move should eventually propel him into 3rd place in Iowa behind Elizabeth Warren and Joe Biden and give Pete a decent shot of eventually reaching the coveted 15% of Iowa's caucus vote.

The fourth Democratic 2020 Presidential candidate debate will be held on October 15, 2020 at Otterbein University in Westerville, Ohio, a Columbus suburb.  It's good to see that the New York Times will be one of the hosts.  The quality and relevance of the questions should improve substantially from what they were in the first three debates where the key economic issues played such a minor part.

The key issue to Iowa and to Ohio citizens should be the huge and continuing Income Inequality Expansion which is at the core of many critical problems the US faces.

While increasing the US federal minimum wage will help here, there is a much broader and critical problem that needs to be solved.  The annual percentage increase in the pay and employee benefits of Company non-executive employees are minuscule in relation to that of Company executive employees and this has been going on for decades.  When Corporate CEOs and CFOs primarily view non-executive employees as Costs rather than as People, this is what happens. And neither political party has had the courage to take on US Corporations here.

Thus I have been doing research and making posts on the average annual pay and employee benefits increase per year that the Top-Tier Executives of large Companies with a huge Iowa presence were rewarded with in the past ten years.

The 18th Company with a huge presence in Iowa which I am addressing here is Wells Fargo.

From annual compensation information contained in Company Proxy Statement filings with the US SEC, the chart at the bottom below shows Wells Fargo's Top-Tier Executives Annual Total Compensation for each of the two consecutive full years of employment for the past ten years.
  
Wells Fargo's Top-Tier Executives Average Annual Pay and Employee Benefits Increase was a blistering 19.3% per year during the past ten years, which is the 8th highest of the 18 large Iowa-related Companies I have addressed so far.
  1. Renewable Energy Group +184.2% per year for the past ten years
  2. FGL Holdings +148.2% per year for the past two years
    1. Athene Holding Ltd +116.8% per year for the past three years
    2. Workiva +71.6% per year for the past five years
    3. Winnebago Industries +25.8% per year for the past ten years
    4. American Equity Investment Life +25.0% per year for the past ten years
    5. Casey's General Stores +24.2% per year for the past ten years
    6. Wells Fargo +19.3% per year for the past ten years
    7. United Fire Group +17.8% per year for the last ten years
    8. Principal Financial Group +14.4% per year for the past ten years
    9. Heartland Financial USA +13.8% per year for the past ten years
    10. Meredith Corp +11.6% per year for the past ten years
    11. Heartland Express +10.7% per year for the past ten years
    12. FBL Financial Group +10.4% per year for the past ten years
    13. HNI Corp +9.0% per year for the past ten years
    14. Rockwell Collins +9.0% per year for the past ten years
    15. MidWestOne Financial Group +7.0% per year for the past ten years
    16. Lee Enterprises +6.5% per year for the past ten years
    There have been many US Government laws enacted in the past two decades that have substantially increased income inequality expansion, but none more so than the Trump Tax Cuts Act.

    On the other hand, the only highly effective US Government law enacted by either party in the past two decades that has substantially reduced income inequality expansion is Obamacare.

    My objective is to get a better handle on just why the US and particularly here in Iowa has such massive continuing Income Inequality Expansion ..... it appears to be predominantly about the relative long-term annual pay raise percentages for the executives of a Company vs the many non-executive employees of a Company, coupled with the stock price appreciation subsequent to the time the company executives were rewarded in their pay with stock equity compensation.

    To fix Income Inequality driven mainly by Company and its Board of Director choices on Percentage Annual Pay Raises, the US Government should step in and pass wisely-designed, simple but effective Fair Pay Raise Income Inequality Narrowing Company tax incentives for Companies which reward non-executive employees with fair pay increases ..... the carrot ..... and Company tax disincentives for Companies which reward executive employees with clearly excessively high pay increases ..... the stick.  I am certain ..... it is simple math ..... that this tax proposal would be very effective in substantially reducing the huge income inequality expansion that has occurred for decades in annual percentage pay raises between company executives and the rest of the company employees.

    The above Fair Pay Raise Tax proposal could also be applied to US Non-Profit Organizations like Hospitals and other Health Care Organizations, which are known for their huge and continuing income inequality expansion due to their discriminating policies on annual pay and employee benefit increases.  

    And the continuing annual net tax revenues raised by the US Government here should be set up in a separate fund to be used only for wise additional income inequality narrowing initiatives.  This fund should be run by an outside group made up entirely of minorities harmed the most by Income Inequality Expansion of the past decades  .....all women, all blacks, all Latinos, all other non-white people, all past and present union members, all LGBTQ, all non-employee contract workers and all middle and lower income people of all ages, including those retired.

    Also, the US Government should require all US Corporate Boards to include at least one worker representative and to exclude any Company Executive.

    Further, the US Government should ban Golden Parachutes.

    FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE
    Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
    Wells Fargo 2018 2017 2017 2016 2016 2015 2015 2014 2014 2013
    Top-Tier Total Total Total Total Total Total Total Total Total Total
    Executive Comp Comp Comp Comp Comp Comp Comp Comp Comp Comp
    $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s
    Sloan CEO        18,427        17,564        17,564        13,015        13,015        11,039        11,039        10,448        10,448           8,835
    Stumpf Former Chairman and CEO  N/A   N/A         19,319        21,426        21,426        19,320
    Shrewsberry CFO        12,529        11,940        11,940           9,277           9,277           9,072           9,072           7,409    
    Mack Senior EVP Consumer Banking  N/A   N/A 
    Modjtabai Sr EVP Payments&Virtual Solutions        10,387        10,625        10,625           9,290           9,290           9,078           9,078           9,518           9,518           8,798
    Pelos Senior EVP Wholesale Banking           8,987           6,752
    Carroll Former Sr EVP Wealth Mgt  N/A   N/A            9,412           9,094           9,094           9,698           9,698           8,869
    Tolstedt Former Sr EVP Community Banking  N/A   N/A            9,092           9,518           9,518           8,750
    Totals        50,330        46,881        40,129        31,582        40,994        38,283        66,694        68,017        60,608        54,572
    Annual % Change vs Prior Year 7.4% 27.1% 7.1% -1.9% 11.1%
    5 Year Average Per Year % Change 10.1%
    FYE FYE FYE FYE FYE FYE FYE FYE FYE FYE
    Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec
    Wells Fargo 2013 2012 2012 2011 2011 2010 2010 2009 2009 2008
    Top-Tier Total Total Total Total Total Total Total Total Total Total
    Executive Comp Comp Comp Comp Comp Comp Comp Comp Comp Comp
    $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s $ 000s
    Sloan CEO           8,835           9,014           9,014           8,339    
    Stumpf Former Chairman and CEO        19,320        22,878        22,878        19,848        19,843        18,974        18,974        21,341        21,341           9,041
    Modjtabai Sr EVP Payments&Virtual Solutions           8,798           8,570    
    Carroll Former Sr EVP Wealth Mgt           8,869           8,613           8,613           8,016           8,011           7,922           7,922        14,303    
    Tolstedt Former Sr EVP Community Banking           8,750           8,855           8,855           8,704           8,699           8,408    
    Hoyt Sr EVP Wholesale Banking        11,087        12,843        12,843        10,547        10,542        12,765        12,765        13,477        13,477           4,840
    Atkins Former CFO  N/A   N/A            9,327        11,623        11,623           4,946
    Oman Former Sr EVP Home&ConsumerFinance  N/A   N/A            9,688        12,722        12,722           3,933
    Totals        65,659        70,773        62,203        55,454        47,095        48,069        58,676        73,466        59,163        22,760
     Totals  -7.2% 12.2% -2.0% -20.1% 159.9%
    5 Year Average Per Year % Change 28.5%
    10 Year Average Per Year % Change 19.3%


    Charles Scharf joined Visa in November 2012 and left Visa in Dec 2016.  Visa has a September fiscal year.

    From annual compensation information contained in Company Proxy Statement filings with the US SEC, the chart here below shows Visa's Top-Tier Executives Annual Total Compensation for each of the two consecutive full years of employment during the time Scharf was Visa's CEO.

    FYE FYE FYE FYE
      Sept Sept Sept Sept
    Visa 2016 2015 2015 2014
    Top-Tier Total Total Total Total
    Executive Comp Comp Comp Comp
    $ 000s $ 000s $ 000s $ 000s
    Charles Scharf CEO        16,442        11,841        11,841           7,692
    Vasant Prabhu CFO  N/A   N/A   N/A   N/A 
    Ryan McInerney President           7,402           5,163           5,163           3,883
    Rajat Taneja EVP Technology           6,954           4,411  N/A   N/A 
    Byron Pollitt Former CFO  N/A   N/A   N/A   N/A 
    Ellen Richey Vice Chair Risk&Public Policy           3,979           3,783  N/A   N/A 
    Totals        34,777        25,198        17,004        11,575
    Annual % Change 38.0% 46.9%
    Two Year Average Per Year % Change 42.5%


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