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SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.      )

Filed by the Registrant                                   x

Filed by a Party other than the Registrant      ¨

Check the appropriate box:

Wells Fargo & Company

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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March 19, 2004

Dear Stockholder:

The annual meeting of stockholders will be held on Tuesday, April 27, 2004, at 1:00 p.m., Pacific daylight time, in the Penthouse Boardroom, 420 Montgomery Street, San Francisco, California.

At the annual meeting you will be asked to elect directors, to approve the Company’s Supplemental 401(k) Plan, to ratify the appointment of independent auditors for 2004, and to vote on four stockholder proposals regarding expensing stock options, restricted stock, executive compensation and predatory lending, and political contributions.

For reasons explained in the accompanying proxy statement, the Board of Directors recommends that you vote FOR the director nominees, FOR the proposals in Items 2 and 3, and AGAINST the stockholder proposals in Items 4, 5, 6, and 7.

We hope that you will be able to attend the meeting. If you have a disability and need an accommodation in order to attend the meeting, please contact the Corporate Secretary, at least one week in advance of the meeting, at Wells Fargo Center, MAC #N9305-173, Sixth and Marquette, Minneapolis, Minnesota 55479, telephone 612-667-8655. Whether or not you expect to attend, to make sure that your vote is received, please vote promptly by mail, telephone, or internet as instructed on your proxy card or voting instruction card. Thank you for your interest in the Company.

Sincerely,

Richard M. Kovacevich

Chairman, President and

Chief Executive Officer

Please vote promptly by mail, telephone, or internet regardless of whether you plan to attend the

meeting. You may later decide to vote in person at the meeting if you are a stockholder

of record, or you may revoke your proxy or voting instructions for any

other reason before your shares are voted.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

APRIL 27, 2004

To the Holders of

Common Stock of Wells Fargo & Company:

The annual meeting of stockholders of Wells Fargo & Company (the “Company”) will be held in the Penthouse Boardroom, 420 Montgomery Street, San Francisco, California, on Tuesday, April 27, 2004, at 1:00 p.m., Pacific daylight time. The purpose of the meeting is to:

The Board recommends that stockholders vote FOR the director nominees named in the accompanying proxy statement, FOR Items 2 and 3, and AGAINST Items 4, 5, 6, and 7.

Only holders of common stock at the close of business on March 9, 2004 may vote at the annual meeting or at any adjournment thereof. A list of stockholders of record who may vote at the meeting will be available during business hours for any stockholder of the Company to examine for any purpose relevant to the meeting. The list will be available for at least ten days before the meeting at the office of the General Counsel of the Company, 633 Folsom Street, San Francisco, California.

By Order of the Board of Directors,

Laurel A. Holschuh

Secretary

March 19, 2004

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420 Montgomery Street

San Francisco, California 94104

PROXY STATEMENT

The Board of Directors of Wells Fargo & Company is soliciting proxies from its stockholders to be used at the annual meeting of stockholders on Tuesday, April 27, 2004. This proxy statement contains information related to the annual meeting. This proxy statement and the proxy card or a voting instruction card were mailed to stockholders of the Company beginning on or about March 19, 2004. Certain information appearing in this proxy statement reflects that in November 1998, Norwest Corporation changed its name to “Wells Fargo & Company” upon the merger (the “Merger”) of the former Wells Fargo & Company (the “former Wells Fargo”) into a wholly-owned subsidiary of Norwest Corporation. Norwest Corporation as it existed before the Merger is referred to as the “former Norwest.” As used in this proxy statement, the “Company” refers to the corporation named Norwest Corporation before the Merger and now named Wells Fargo & Company.

ABOUT THE ANNUAL MEETING

What is the purpose of the annual meeting?

At the annual meeting stockholders will be asked to elect directors, to approve the Company’s Supplemental 401(k) Plan, to ratify the appointment of independent auditors for 2004, and to vote on four stockholder proposals regarding expensing stock options, restricted stock, executive compensation and predatory lending, and political contributions.

Will stockholders be asked to vote on any other matters?

As far as the Company’s Board of Directors and management know, stockholders at the meeting will vote only on the matters described in this proxy statement. However, if any other matters properly come before the meeting, the persons named as proxies for stockholders will vote on those matters in the manner they consider appropriate.

Who is entitled to vote at the annual meeting?

Only stockholders of record at the close of business on March 9, 2004 may vote at the meeting. On March 9, 2004, the record date for the meeting, there were 1,699,548,460 shares of common stock outstanding. Each outstanding share is entitled to one vote.

If your shares are registered in your name on the Company’s stock records, you are considered the stockholder of record with respect to those shares. As the stockholder of record, you have the right to vote your shares in person or by proxy at the annual meeting. The Company has sent its proxy materials directly to you, including a proxy card for you to use.

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If you hold shares of common stock through an account with a broker, bank, or other nominee rather than directly in your own name, then your broker, bank, or other nominee is considered the stockholder of record, and you are considered the beneficial owner of these shares. The Company has supplied copies of its proxy materials for its 2004 annual meeting to the broker, bank, or other nominee holding your shares of record, and they have the responsibility to send these proxy materials to you. As the beneficial owner, you have the right to direct your broker, bank, or other nominee on how to vote your shares at the annual meeting. The broker, bank, or other nominee that is the stockholder of record for your shares is obligated to provide you with a voting instruction card for you to use for this purpose. If you hold your shares in a brokerage account but you fail to return your voting instruction card to your broker, stock exchange rules will determine whether your broker may vote your shares without first receiving instructions from you on an item being presented to stockholders for approval at the annual meeting.

For additional information on how to vote your shares, including shares you beneficially own, and how that vote is counted, see the information below under the questions “How do I vote?”, “Can I change my vote?” and “How is the vote counted?”. Information on how to vote can also be found on your proxy card if you are a stockholder of record, or the instruction card you received from your broker or bank if you are a beneficial owner.

What are the Board’s recommendations on how to vote my shares?

The Board recommends that stockholders vote:

How do I vote? Can I vote by telephone or internet?

If you are a stockholder of record, you can vote your shares of common stock in person at the annual meeting or by proxy by returning your signed proxy card, by telephone or on the internet. The deadline for voting by telephone or internet is 12 noon, Central daylight time, on April 26, 2004.

If your shares of common stock are voted by proxy, the shares will be voted as you instruct. If you vote by returning your signed proxy card, but you do not give any voting instructions on your proxy card, your shares will be voted by the persons named as proxies on the proxy card by following the Board’s recommendations given above.

If you hold your shares through a bank, broker, or other nominee, you should follow the directions on the voting instruction card supplied to you for voting your shares.

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Can I change my vote?

Yes. If you are a stockholder of record, you can revoke your signed proxy card at any time before it is voted—either by signing and returning a proxy card with a later date or by attending the annual meeting in person and voting your shares by ballot at the meeting. If you have voted your shares by telephone or internet, you can revoke your prior telephone or internet vote by recording a different vote, or by signing and returning a proxy card dated as of a date that is later than your last telephone or internet vote.

If you are the beneficial owner of your shares, you may submit new instructions to your broker, bank, or other nominee.

How do I vote my shares held in the Company’s 401(k) Plan or Stock Purchase Plan or in the Wells Fargo Financial Thrift and Profit Sharing Plan?

If you participate in the Company’s 401(k) Plan or its Stock Purchase Plan, or both plans, you will receive a single instruction and proxy card that reflects all shares you may vote under each of these plans, either with a copy of this proxy statement or, if you are a participant in one of these plans who also has a Company e-mail address, after you were notified by e-mail that you can review a copy of this proxy statement on the internet. If you are an employee of a Wells Fargo Financial subsidiary of the Company who participates in the Thrift and Profit Sharing Plan (the “TAPS Plan”) and have elected to invest any portion of your TAPS Plan account in the Company’s common stock, you will receive with a copy of this proxy statement an instruction card that reflects all shares you may vote under that plan. Under the terms of the Company’s 401(k) Plan and the TAPS Plan, all shares held by each of the 401(k) Plan and TAPS Plan are voted by Wells Fargo Bank, National Association as trustee (the “Trustee”) of each plan, but you have the right to instruct the Trustee to vote the shares of the Company’s common stock allocable to your 401(k) Plan or your TAPS Plan account as of March 9, 2004, the record date for the annual meeting. Under the Stock Purchase Plan, you can vote all your Stock Purchase Plan shares directly. You can instruct the Trustee how to vote your 401(k) Plan shares or your TAPS Plan shares and/or vote your Stock Purchase Plan shares by marking and returning the 401(k) Plan and Stock Purchase Plan instruction and proxy card or the TAPS Plan instruction card. In the case of the Company’s 401(k) Plan and the Stock Purchase Plan, you can also give your voting instructions by telephone or by using the internet following the instructions on the card.

The deadline for giving your voting instructions to the Trustee and for voting your 401(k) Plan and Stock Purchase Plan shares, whether by mail, telephone, or internet, is April 23, 2004. With respect to your 401(k) Plan or TAPS Plan shares, the Trustee will have the votes from all participants received by the deadline tabulated and will determine the ratio of votes for and against each item. The Trustee will then vote all shares held in the 401(k) Plan or the TAPS Plan according to these ratios.

On October 31, 2003, Pacific Northwest Bancorp (“PNB”) merged with a subsidiary of the Company. I understand that the Pacific Northwest Bancorp Employee Stock Ownership/Money Purchase Pension Plan (the “PNB Plan”) is a separate plan from the Company’s 401(k) Plan and Stock Purchase Plan. If I participate in the PNB Plan, how do I vote my shares?

In the merger, all shares allocated to participants under the PNB Plan were exchanged for shares of Company common stock. T. Rowe Price Trust Company (the “PNB Trustee”) is the trustee of the PNB Plan. If you are a participant in the PNB Plan, you will receive with a copy of this proxy statement an instruction card that shows all of the shares of Company common stock allocated to your

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account under the PNB Plan. Except as described in the next sentence, all shares of Company common stock held by the PNB Plan are voted by the PNB Trustee, but you have the right to instruct the PNB Trustee how to vote the shares of Company common stock allocable to your Plan account as of March 9, 2004, the record date for the annual meeting. Any shares held in participants’ PNB Plan accounts for which the PNB Trustee does not receive instructions will be voted by Wilmington Trust Company, which has been appointed by the Company under the terms of the PNB Plan as the independent fiduciary to vote such shares. You can instruct the PNB Trustee on how to vote your PNB Plan shares by marking and returning your instruction card as directed on the card. The deadline for giving your voting instructions on how to vote your PNB Plan shares is April 23, 2004.

Who pays the cost for soliciting proxies?

The cost of soliciting proxies will be paid by the Company. The Company has retained Georgeson Shareholder Communications Inc. to aid in the solicitation for a fee of $15,000 plus out-of-pocket expenses. Proxies may also be solicited by employees and directors of the Company by mail, telephone, fax, e-mail, or in person.

What vote is required to approve each item?

How is the vote counted?

A quorum consisting of the holders of a majority of the outstanding shares of common stock on the record date must be present in person or represented by proxy for the transaction of business at the annual meeting. Shares present in person at the meeting that are not voted for a director nominee or shares present by proxy where the stockholder has withheld authority to vote for a nominee will be counted in determining whether a quorum is present, but will not count toward a nominee’s plurality. Shares properly voted as “ABSTAIN” on a particular matter are considered as shares present at the meeting for quorum purposes but are treated as having voted against the matter.

If a stockholder holds shares through a broker, stock exchange rules prohibit a broker from voting shares held in a brokerage account on some proposals (a “broker non-vote”) unless the beneficial owner has given voting instructions to the broker. Shares that are subject to a broker non-vote are counted for determining the quorum but not as having voted on the proposal. Under New York Stock Exchange rules, a member broker may not vote in its discretion on Item 2, the approval of the Supplemental 401(k) Plan, or on Items 4, 5, 6, and 7, the stockholder proposals being presented at the annual meeting.

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Is my vote confidential?

Yes. It is the Company’s policy that all stockholder meeting proxies, ballots, and voting records that identify the vote of a particular stockholder are confidential. The vote of any stockholder will not be disclosed to any third party before the final vote count at the annual stockholders’ meeting except (i) to meet legal requirements; (ii) to assert claims for or defend claims against the Company; (iii) to allow the inspectors of election to certify the results of the stockholder vote; (iv) if a proxy solicitation in opposition to the Board of Directors takes place; or (v) to respond to stockholders who have written comments on proxy cards or who have requested disclosure. Inspectors of election and those who count stockholder votes may not be employees of the Company but may be employees of an affiliated bank who have been instructed to comply with this policy.

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STOCK OWNERSHIP

Does any stockholder own more than 5% of the Company’s common stock?

The Company does not know of any person or group that beneficially owned more than 5% of its common stock on December 31, 2003. A person is the beneficial owner of securities, as defined by the Securities and Exchange Commission, if he or she has or shares voting or investment power for such securities or has the right to obtain beneficial ownership within 60 days after such date.

How much stock do the Company’s directors and executive officers own?

The table below shows for current directors and executive officers named in the Summary Compensation Table on page 25 of this proxy statement, and all directors and executive officers as a group, the shares of common stock beneficially owned, and phantom common shares credited to plan accounts as of February 29, 2004.

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CORPORATE GOVERNANCE AND BOARD MATTERS

Governance Policies

The Board of Directors is committed to sound and effective corporate governance principles and practices. Pursuant to this commitment, the Board has adopted corporate governance guidelines to provide the framework for the governance of the Company. These guidelines, among other matters, set forth director qualifications and standards of independence, and mandate that at least a majority of the Board and all the members of the Audit and Examination, Governance and Nominating, and Human Resources Committees meet the criteria for independence discussed on pages 16 and 17 of this proxy statement under the heading “Director Independence Determination.”

The Company expects its employees to adhere to the highest possible standards of ethics and business conduct with other employees, customers, stockholders, and the communities it serves, and to comply with all applicable laws, rules, and regulations that govern its businesses. Accordingly, the Company has had in effect for over 25 years a Code of Ethics for all employees, including executive officers, of the Company and its subsidiaries. The Board has adopted a Director Code of Ethics which sets forth the Company’s policy and standards for ethical conduct by its directors and its expectation that directors will act in a manner that serves the best interests of the Company.

Security holders and other interested persons may view the Company’s Corporate Governance Guidelines and Codes of Ethics on our website, www.wellsfargo.com (select “About Wells Fargo,” then “Corporate Governance”).

Meetings and Attendance

Directors are expected to attend all Board meetings and meetings of committees on which they serve, and each annual stockholders’ meeting. In 2003, 13 of the 14 nominees for director attended the Company’s annual meeting of stockholders.

The Board of Directors held six regular meetings during 2003. The Board met in executive session without management present during four of these meetings. The committee Chair who is most familiar with the subject matter being discussed acts as the “lead” director during executive sessions. Director attendance at meetings of the Board and its committees averaged 97% during 2003, and each director attended more than 75% of the total number of meetings of the Board and committees on which he or she served.

Committees of the Board

The Board of Directors has established five standing committees, each of which is identified below. Each committee has adopted a charter setting forth its purpose and duties. Security holders and other interested persons may view each committee’s charter on the Company’s website, www.wellsfargo.com (select “About Wells Fargo,” then “Corporate Governance”). A copy of the Audit and Examination Committee’s charter is also attached to this proxy statement as Exhibit B. Information about each committee of the Board, its members, purpose, and the number of meetings held in 2003 follows.

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Audit and Examination Committee

Governance and Nominating Committee

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Human Resources Committee

Credit Committee

Finance Committee

Director Nominations

Governance and Nominating Committee.    The Governance and Nominating Committee (the “Committee”) of the Board of Directors has been delegated the responsibility to identify, evaluate, and recommend for nomination candidates for election as new directors. Each of the members of the

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Committee is an “independent director,” as determined by the Board under the rules of the New York Stock Exchange (“NYSE”) and the categorical standards of director independence adopted by the Board and described below under the heading “Director Independence Determination.”

The goal of the Committee’s nominating process is to assist the Company in attracting competent individuals with the requisite management, financial, and other expertise who will act as directors in the best interests of the Company and all its stockholders. The Committee consults with other Board members, the Company’s chief executive officer, and other Company personnel in implementing this process. The Committee will consider an individual recommended by a stockholder for nomination as a new director provided the stockholder making the recommendation follows the procedures for submitting a proposed nominee’s name and the required information described below.

Director Qualifications and Nomination Process.    The Board has approved certain minimum standards for candidates for service as a first-time director and the Committee has developed a process for identifying and evaluating first-time nominees in light of these standards and such other factors as the Committee deems appropriate. These standards, and the Committee’s evaluation process, apply to all proposed first-time nominees for directors, including those nominees recommended by stockholders. This process is based on the Committee’s familiarity with the composition of the current Board, its awareness of anticipated openings, and its assessment of desirable talents or expertise. The Committee regularly reviews the composition of the Board in light of its understanding of the backgrounds, industry, and professional experience, and the various communities, both geographic and demographic, represented by current members. It also monitors the expected service dates of Board members, any planned retirement dates, and other anticipated events that may affect a director’s continued ability to serve. The Committee periodically reviews Board self-evaluations and information with respect to the business and professional expertise represented by current directors in order to identify any specific skills desirable for future Board members.

The Board has approved the following minimum qualifications for first-time nominees for director, including nominees recommended by stockholders, for election to the Company’s Board: (1) a demonstrated breadth and depth of management and/or leadership experience, preferably in a senior leadership role (e.g., chief executive officer, managing partner, president) in a large or recognized organization; (2) financial literacy or other professional or business experience relevant to an understanding of the Company and its business; and (3) a demonstrated ability to think and act independently as well as the ability to work constructively in a collegial environment. The Committee will determine, in its sole discretion, whether a nominee meets these minimum qualifications. Under the Company’s Restated Certificate of Incorporation, a director also must own shares of Company common stock.

In addition to these minimum qualifications, the Committee will also consider, in evaluating a candidate for nomination as a first-time director, the current composition of the Board in light of the diverse communities and geographies served by the Company and the interplay of the candidate’s experience with the experience of the other Board members, as well as such other factors as the Committee considers appropriate.

The Committee is responsible for managing the new director nomination process. The Committee identifies potential candidates for first-time nomination as a director using a variety of sources—recommendations from the chief executive officer, current Board members, contacts in communities served by the Company, or by conducting a formal search using an outside search firm selected and engaged by the Committee. The Committee then commences an inquiry to obtain sufficient

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information on the background of a potential new director-nominee. Included in this inquiry is an initial review of the candidate with respect to the following three factors: whether the individual meets the minimum qualifications for first-time director nominees approved by the Board; whether the individual would be considered independent under the NYSE rules and the Company’s categorical standards of director independence; and whether the individual would meet any additional requirements imposed by law or regulation on the members of the Audit and Examination and/or Human Resources Committees of the Board.

Following its initial review, the Committee arranges an introductory meeting with the candidate and the Company’s chief executive officer or the Committee Chair or, in some cases, with another director, to determine the candidate’s interest in serving on the Board. The Committee, together with several members of the Board, the chief executive officer, and, if appropriate, other key Company executives, then conducts a comprehensive interview with the candidate. If the Company and the candidate are both interested in proceeding, the Committee then reviews personal information provided by the candidate in light of the same factors used by the Committee for its initial review. The individual will also be asked to provide the information required to be disclosed in the Company’s proxy statement.

Assuming a satisfactory conclusion to the process outlined above, the Committee then presents the candidate’s name (or names, if more than one acceptable candidate has been identified by the Committee) to the Board of Directors for election as a director.

Director Nominations by Stockholders.    A stockholder who wishes to submit an individual’s name for consideration by the Committee for nomination as a director of the Company must provide (1) the stockholder’s name and address and the number of shares of Company common stock beneficially owned by the stockholder; (2) the name of the proposed nominee and the number of shares of Company common stock beneficially owned by the nominee; (3) sufficient information about the nominee’s experience and qualifications for the Committee to make a determination whether the individual would meet the minimum qualifications for directors; and (4) such individual’s written consent to serve as a director of the Company, if elected. The Committee has the right to request, and the stockholder will be required to provide, such additional information with respect to the stockholder nominee as the Committee may deem appropriate or desirable to evaluate the proposed nominee in accordance with the nomination process described above, including information about the proposed nominee that is required to be disclosed by the Company in its proxy statement under Regulation 14A of the Securities Exchange Act of 1934, as amended.

In order for any stockholder-proposed nominee to be considered by the Committee for election as a director at the Company’s 2005 annual meeting, a stockholder must submit by November 19, 2004 the name of the proposed nominee and other required information, in writing, addressed to: Chair, Governance and Nominating Committee, Wells Fargo & Company, P. O. Box 63750, San Francisco, California 94163.

Communications with Directors

Security holders and other interested parties who wish to communicate with the Company’s Board of Directors, including non-management directors, should refer to the information provided on the Company’s website, www.wellsfargo.com (select “About Wells Fargo,” then “Corporate Governance”).

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ITEM 1—ELECTION OF DIRECTORS

Director Nominees for Election

The Board has set 14 directors as the number to be elected at the annual meeting and has nominated the individuals named below. All nominees are currently directors of the Company and have been previously elected by the stockholders except for Stephen W. Sanger, who was initially recommended as a candidate for director by the Company’s chief executive officer and was elected a director by the Board effective July 23, 2003. The Board has determined that except for Richard M. Kovacevich, each nominee for election as a director at the 2004 annual meeting is independent from Wells Fargo under the tests and standards outlined below under the heading “Director Independence Determination.”

Directors are elected to hold office until the next annual meeting and until their successors are elected and qualified. All nominees have informed the Company that they are willing to serve as directors. If any nominee is no longer a candidate for director at the annual meeting, the proxyholders will vote for the rest of the nominees and may vote for a substitute nominee in their discretion.

Biographical information about each director nominee appears below.

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Director Independence Determination

At its meeting on January 27, 2004, the Board of Directors considered information regarding the relationships between each director and his or her family, on the one hand, and Wells Fargo, on the other, for the purpose of determining a director’s independence from Wells Fargo. The Board made its determinations under the bright-line tests of the NYSE and, as mandated by the NYSE, also considered whether the significance of any of these relationships would impair the director’s independence. To assist it in making the latter determination, the Board adopted the categorical standards of independence described below. After reviewing the information presented to it, the Board concluded that Benjamin F. Montoya, a current director who is retiring at the 2004 annual meeting, and each nominee for director named above, except Mr. Kovacevich, satisfied the NYSE bright-line tests as well as the Company’s own categorical standards of independence.

NYSE “Bright-Line” Tests.    Under NYSE rules, a director will not be considered independent if he or she was an employee of Wells Fargo during the past year or if an immediate family member was an executive officer of Wells Fargo during that time. The director may not have received more than $100,000 in compensation other than director’s fees and deferred compensation during the past year, and no immediate family member may have received more than $100,000 from Wells Fargo during that time, excluding compensation for service as a non-executive employee. The director may not have been employed or otherwise affiliated, and no immediate family member may have been employed or affiliated in a professional capacity, by KPMG or Wells Fargo’s internal auditor during the past year. Neither the director nor an immediate family member may have been an executive officer of another company which had an executive officer of the Company serving on the compensation committee of its board of directors. Finally, neither the director nor an immediate family member may have been an executive officer, and the director may not have been an employee, of another company that made payments to or received payments from Wells Fargo during the past year in an amount which exceeded the greater of $1 million or 2% of the other company’s consolidated gross revenues for the year.

Company’s Categorical Standards of Director Independence.    A director will be considered independent under the categorical standards adopted by the Company’s Board so long as all business relationships between Wells Fargo and either the director, any immediate family member in the director’s home, or any business or professional entity of which the director is an officer, partner, or a 10% or greater owner are non-preferential and comply with applicable law. In addition, any entity of which the director is an officer or employee or in which the director is a partner or has a 10% ownership interest, any law firm to which the director is of counsel, or any entity of which an immediate family member is an executive officer may make payments to, or receive payments from, Wells Fargo for goods and services so long as such payments last year were less than the greater of $1 million or 2% of the other entity’s consolidated gross revenues for that period and such property or services were provided or received in the ordinary course of business of each of the parties. A director who is, or whose immediate family member residing in the director’s home is, an executive officer of a

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non-profit institution will be independent of Wells Fargo if contributions to the institution (excluding matching gifts) by Wells Fargo and its foundation did not exceed the greater of $1 million or 2% of the institution’s consolidated gross revenues for the most recent year that such information is available. The director may not have received more than $60,000 during the last year for personal services rendered to Wells Fargo, excluding services as a director. Wells Fargo may have employed an immediate family member of the director during the past year so long as the immediate family member was not an executive officer, did not reside in the director’s home, and the family member’s compensation was established in accordance with Wells Fargo’s employment and compensation practices applicable to employees holding comparable positions.

For purposes of the foregoing discussion, an “immediate family member” means any of the director’s spouse, parents, children, brothers, sisters, mother- and father-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone (other than domestic employees) who shares the director’s home; and “Wells Fargo” means Wells Fargo & Company and its subsidiaries.

Additional Information About Directors; Compensation Committee Interlocks and Insider Participation

The following information is provided to comply with SEC rules regarding disclosure of certain relationships and transactions with directors. This information was considered by the Board of Directors in determining a director’s independence from Wells Fargo under NYSE bright-line tests and the Company’s categorical standards of independence described above.

Robert L. Joss has an agreement with Wells Fargo Bank, National Association pursuant to which he has agreed to serve as a director of Shanghai Commercial Bank Limited (“SCB”) in which Wells Fargo Bank has a 20% interest, and to provide advice to the Bank on specific issues regarding SCB for an annual fee of $30,000.

Judith M. Runstad is of counsel to the law firm of Foster Pepper & Shefelman PLLC which performed legal services for two subsidiaries of the Company in 2003 for aggregate fees of $1,970.

Susan G. Swenson served as a director and as president and chief operating officer of Leap Wireless International, Inc. and substantially all of its subsidiaries (collectively, “Leap”), a wireless communications carrier, from July 1999 until January 2004. On April 13, 2003, Leap filed voluntary petitions for relief under Chapter 11 in the United States Bankruptcy Court for the Southern District of California (the “Bankruptcy Court”). On October 22, 2003, the Bankruptcy Court confirmed Leap’s Joint Plan of Reorganization, clearing the way for Leap to complete its financial restructuring and emerge from Chapter 11. Consummation of the Joint Plan of Reorganization is subject to compliance with the terms and conditions set forth in the plan, including approval from the Federal Communications Commission.

Michael W. Wright is the Chair, and Susan E. Engel, Donald B. Rice, and Stephen W. Sanger are members of the Human Resources Committee (the “HRC”) of the Board of Directors. The HRC determines the compensation to be paid to the Company’s chief executive officer and other executive officers, including the executive officers named in the Summary Compensation Table appearing on pages 25 and 26 of this proxy statement.

Mr. Rice has an adult child and an in-law, and Mr. Wright has an adult child, each of whom is an employee of the Company or a subsidiary of the Company and was paid compensation in 2003 in excess of $60,000 but less than $300,000 and received other employee benefits. These immediate

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family members are three of the approximately 140,000 employees of the Company and do not report directly to any executive officer of the Company. The compensation and other benefits received by each were established by the Company in accordance with its employment and compensation practices applicable to employees holding comparable positions.

Ms. Engel, Mr. Sanger, Mr. Rice, and three of Mr. Rice’s adult children each had a mortgage loan from Wells Fargo Home Mortgage, Inc., a subsidiary of the Company, during 2003. Information on these loans is included in the loan table beginning on page 35 of this proxy statement. These loans were made on substantially the same terms, including interest rates and collateral, as those available at the time for similar transactions with other persons.

Director Compensation

Annual Compensation.    Non-employee directors receive compensation for service as directors in the form of an annual cash retainer, formula stock award, and stock option grant under the Company’s Directors Stock Compensation and Deferral Plan (the “Directors Plan”).

Each non-employee director who served on the Board of the Company during 2003 received a cash retainer at an annual rate of $50,000 plus $1,500 for each Board or committee meeting attended. The Chairs of the Credit, Finance, Governance and Nominating, and Human Resources Committees were paid an additional annual fee of $10,000. The Chair of the Audit and Examination Committee was paid an additional fee of $20,000 in recognition of the additional time commitment this position requires.

Within five years after joining the Board, directors are expected to own Company common stock having a value equal to five times the cash portion of the annual retainer. At the 2003 annual meeting, stockholders approved the Directors Plan which consolidated three existing director plans into a single plan, allowing the Company to continue to use stock-based compensation and provide income deferral opportunities for its non-employee directors. Information with respect to the stock-based compensation paid to non-employee directors in 2003 under the formula stock award and stock options programs of, and the deferral program available under the Directors Plan appears below.

Formula Stock Awards.    Each non-employee director who has served on the Board for at least the month of April in any year and is re-elected as a director at the annual meeting of stockholders held that year or who is elected to the Board before September 30 in that year will receive, as of the date of the annual meeting or September 30, as the case may be, an award of shares of Company common stock worth $50,000. Non-employee directors who are elected to the Board at other times receive an award of Company stock worth $25,000 as of the date of the next annual meeting of stockholders. For their service on the Board for 2003, each current non-employee director received 1,065 shares of Company common stock under this program, except for Messrs. Hernandez and Sanger, who joined the Board on January 29, 2003 and July 23, 2003, respectively. Mr. Hernandez received, as of April 22, 2003, 1,438 shares, and Mr. Sanger received, as of September 30, 2003, 967 shares of Company common stock under this program.

Stock Options.    Each non-employee director elected or re-elected at the annual meeting of stockholders receives an option, having a Black-Scholes value of $57,000, to purchase Company common stock at an option exercise price equal to the closing price per share of the common stock as of the trading day immediately preceding the date of the meeting. A non-employee director joining the Board at another time will receive a stock option with a pro-rated value and an option exercise price equal to the closing price per share of the common stock as of the trading day immediately preceding

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the date of joining the Board. The options become exercisable six months after grant and remain exercisable for ten years. Directors who exercise an option under the plan by delivering shares of previously owned common stock or shares purchased in the market are granted a reload option. A reload option allows the director to purchase the same number of whole shares of common stock, at the closing price per share as of the trading day immediately preceding the date the original option was exercised, as were used to pay the option exercise price. A reload option is exercisable at any time during the remaining term of the original option. Under this program, all current non-employee directors received options to purchase 4,435 shares of common stock at $46.95 per share as of April 22, 2003, except for Stephen W. Sanger, who joined the Board as a director on July 23, 2003 and received an option on that date to purchase 3,385 shares of common stock at $51.97 per share.

Deferral Program.    A non-employee director may defer all or part of his or her annual retainer, meeting fees, and formula stock awards under the deferral program of the Directors Plan. The annual retainer and meeting fees may be deferred into either an interest-bearing account or phantom shares of Company common stock with dividends reinvested. All other deferrals may be made only into phantom shares of Company common stock with the reinvestment of dividends. Deferred amounts are paid in the same form in which they are invested, either in a lump sum or in installments, at the election of the director.

EXECUTIVE COMPENSATION

(How the Company Pays Its Executive Officers)

Report of the Human Resources Committee on Executive Compensation

This Report on Executive Compensation is furnished by the Board’s Human Resources Committee (the “Committee”). This report describes, using a question-and-answer format, the Committee’s objectives and the procedures used to determine 2003 compensation for the Chief Executive Officer and the other highest paid executive officers listed in the Summary Compensation Table on page 25 of this proxy statement.

What are the goals of the Company’s compensation policies?

The Company’s compensation policies have two goals:

What is the function of the Committee?

The Committee reviews competitive compensation data, including salary, bonus, and long-term incentives, from a comparison group of banking organizations for the purpose of establishing overall compensation for executive officers. The Committee approves, and submits to the Board of Directors for ratification, the annual base salary for the Chief Executive Officer and approves the annual base salaries for other executive officers. It administers the Company’s “Performance-Based Compensation Policy” (the “Performance Policy” or “Policy”), including establishing performance goals at the beginning of each year for each executive officer covered by the Performance Policy, certifying achievement of the goals, and determining the amount of annual incentive compensation payable to

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executive officers who have met their goals, subject to the maximum limit on incentive compensation under the Policy. The Committee also determines long-term compensation awards for executive officers in the form of stock options and other stock-based awards under the Company’s Long-Term Incentive Compensation Plan (the “LTICP”). In the case of the Chief Executive Officer, the Committee approves, and submits to the Board of Directors for ratification, the annual incentive and long-term compensation awards to be made to the Chief Executive Officer. The Committee also conducts the annual performance evaluation of the Chief Executive Officer. The Chair of the Committee presides at the presentation of this evaluation to the Board of Directors meeting in executive session.

More detailed information on the Committee and its procedures for determining compensation for the Chief Executive Officer and the other executive officers named in the Summary Compensation Table can be found below under the heading “How does the Company pay its executive officers?”.

What is the purpose of the Performance Policy?

The Company adopted the Performance Policy to comply with Section 162(m) of the Internal Revenue Code with respect to incentive compensation. This law places limits on tax deductions for annual compensation expense in excess of $1,000,000 for the chief executive officer and certain other highest paid executive officers. These deduction limits do not apply if:

The Performance Policy, which contains these business criteria and the maximum compensation amount, was originally approved by stockholders at the 1994 annual meeting and was amended and reapproved by stockholders at the 2003 annual meeting.

How does the Company pay its executive officers?

Compensation for the Chief Executive Officer and the other executive officers named in the Summary Compensation Table consists of annual compensation (base salary and an incentive compensation award) and long-term compensation. The Committee sets base salary ranges for executive officers using available compensation data for the prior year from a comparison group of 15 banking organizations. It also awards annual incentive compensation and long-term compensation in the form of stock options or other stock-based awards under the Company’s LTICP to the Company’s Chief Executive Officer and other executive officers. The discussion below applies generally to the 2003 annual salary, incentive compensation, and long-term compensation approved by the Committee and submitted to the Board of Directors for ratification, in the case of Mr. Kovacevich, as Chief Executive Officer of the Company, and approved by the Committee for the other executive officers named in the Summary Compensation Table who are covered by the Policy. A more complete description of Mr. Kovacevich’s 2003 compensation can be found below under the heading “How is the Chief Executive Officer’s compensation determined?”.

Howard I. Atkins, who is named in the Summary Compensation Table, is considered a covered executive officer under the Policy. Mr. Atkins entered into an employment arrangement with the Company upon his employment as Chief Financial Officer in August 2001. This arrangement provided

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for certain stock-based compensation awarded in 2003, as well as certain other benefits. The terms of Mr. Atkins’ employment arrangement are discussed on pages 33 and 34 of this proxy statement under the heading “Other Compensation Arrangements for Certain Executive Officers.”

Annual Compensation.    To establish base salaries and determine final annual incentive compensation awards, the Committee considered available competitive compensation data from a comparison group (the “Peer Group”), defined as the 15 largest publicly-traded bank holding companies based on total market capitalization as of December 31, 2003.¹ The Committee considers that these banking organizations, based on their size and prominence in the financial services market, compete directly with the Company for talented management. As a result, these companies set the competitive compensation levels the Company must consider in order to retain and attract talented management.

Base Salaries.    Mr. Kovacevich, as the Company’s Chief Executive Officer, recommends the individual base salaries for all other executive officers. The Committee approves base salaries for these executive officers and approves and recommends Mr. Kovacevich’s base salary for ratification by the Board of Directors. For these other executive officers, salaries are reviewed each year and adjusted periodically, typically at intervals of 12 months or more. The Committee adjusts salaries after considering the relationship of the executive officer’s current salary to the base salary range for the position and after its subjective evaluation of the executive officer’s overall performance. Base salaries paid in 2003 to executive officers named in the Summary Compensation Table were near the median of estimated base salaries of the Peer Group.

Incentive Compensation.    The Performance Policy governs annual incentive compensation for each covered executive officer. The Policy defines a covered executive officer as an individual who, on the last day of a taxable year, is the Chief Executive Officer of the Company or is acting in such capacity or is among the four highest paid executive officers (other than the Chief Executive Officer) of the Company determined under Securities and Exchange Commission rules. Mr. Kovacevich and each other covered executive officer are included in the Summary Compensation Table.

Under the Policy, payment of an incentive compensation award to a covered executive officer depends upon achievement of one or more performance goals. The Committee establishes these goals in writing at the beginning of each year. The Committee has the discretion under the Policy to reduce the incentive compensation award to a covered executive officer from the maximum award permitted by the Policy, even though the officer may have met the performance goals.

In exercising this discretion, the Committee reviews available competitive market data from the prior year and reasonable estimates of incentive compensation to be paid by the banking organizations in the Peer Group to their executive officers for the most recently completed year. To determine the incentive compensation award to the Chief Executive Officer that the Committee approves and submits to the Board of Directors for ratification, the Committee also considers the quality of the Company’s

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earnings based on the factors discussed below under the heading “How is the Chief Executive Officer’s compensation determined?”. For covered executive officers other than the Chief Executive Officer, the Committee also reviews the Chief Executive Officer’s recommendations.

The maximum amount of an incentive compensation award payable under the Policy, as amended in 2003, for any year to any covered executive officer who has met one or more of his or her pre-established performance goals, may not be greater than one-half of one percent (0.5%) of the Company’s Net Income² for the year. Based on the Company’s 2003 Net Income of $6.202 billion, the maximum incentive compensation award payable under the Policy would have been $31,010,000 (0.5% of $6.202 billion).

For 2003, the Committee established alternative performance goals for Mr. Kovacevich, as Chief Executive Officer, and for each other covered executive officer. These performance goals were based on the Company’s “Earnings Per Share” and “Return on Realized Common Equity,” as defined in the Policy.

Mr. Kovacevich and each other covered executive officer met his respective performance goals for 2003. Based on the Committee’s certification that the performance goals established by the Committee had been met, its review of projected 2003 executive officer incentive compensation data from the Peer Group, and the Company’s performance for 2003, the Committee determined and approved, and submitted to the Board of Directors for ratification, with respect to Mr. Kovacevich, and awarded to each other covered executive officer an incentive award under the Policy. No covered executive officer, including the Chief Executive Officer, received the maximum incentive compensation award under the Policy. Each incentive award consists of cash in the amount shown for 2003 in column (d) of the Summary Compensation Table.

Long-Term Compensation.    Long-term compensation is provided primarily in the form of stock option grants and/or restricted share rights (“RSRs”) awarded under the LTICP. The purpose of long- term compensation is to increase management ownership of stock and to provide an incentive to executive officers to improve the long-term performance of the Company.

In determining original option grants each year, the Committee considers the stock option grant practices of the Peer Group at the time of grant. Stock options granted by the Committee to covered executive officers under the LTICP are considered performance-based compensation under Section 162(m) of the Internal Revenue Code and are not subject to the Performance Policy. Under stock ownership guidelines established by the Committee, each executive officer is expected to retain shares of the Company’s common stock equal to at least 50% of the after-tax profit shares (assuming a 50% tax rate) acquired through option exercises. The number of shares expected to be owned under these guidelines continues to increase each time an executive officer exercises a stock option.

Information with respect to option grants made in 2003 under the LTICP to the Chief Executive Officer and the other executive officers named in the Summary Compensation Table appears in the

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table headed “Option/SAR Grants in Last Fiscal Year” and related footnotes (page 27). No RSR awards were made in 2003 to such executive officers.

Other Compensation.    Executive officers also receive various perquisites and supplemental retirement benefits of a type and value comparable to those made available to executive officers of Peer Group banking organizations. They also receive retirement and medical benefits generally available to the Company’s employees.

How is the Chief Executive Officer’s compensation determined?

The Committee determined Mr. Kovacevich’s 2003 salary based on the salary procedures described above for covered executive officers. With respect to Mr. Kovacevich’s incentive award under the Policy, the Committee certified that Mr. Kovacevich had met his performance goals based on the Company’s 2003 Return on Realized Common Equity and Earnings Per Share, as determined pursuant to the Policy. The Committee concluded that Mr. Kovacevich was eligible to receive the maximum incentive compensation award under the Policy, but used its discretion to reduce the award.

In exercising its discretion, the Committee evaluated the quality of the Company’s earnings based on factors including total stockholder return (assuming reinvestment of dividends), total market capitalization, return on common equity, return on assets, earnings per share growth, loan loss reserves as a percentage of total non-performing loans, and non-performing loans as a percentage of total loans. The Committee also compared the Company’s performance to that of the banking organizations included in the Peer Group using these same factors. In particular, the Committee noted that the Company’s return on common equity, return on assets, earnings per share growth, and non-performing loans as a percentage of total loans placed the Company near the top of its Peer Group banking organizations. The Committee also noted that in 2003 both Moody’s Investors Services and Standard & Poor’s had upgraded the debt ratings of both the Company and its national bank subsidiary, Wells Fargo Bank, National Association, giving the Company one of the highest debt ratings of any financial services company in recognition of the Company’s consistent earnings and strong financial position. The Committee ultimately exercised its discretion to determine Mr. Kovacevich’s 2003 incentive award based on (a) its evaluation of the Company’s 2003 overall performance and (b) the aggregate compensation paid by Peer Group banking organizations to their chief executive officers. Based on Mr. Kovacevich’s achievement of his performance goals, and the Committee’s exercise of its discretion to reduce incentive awards under the Policy, the Committee awarded incentive compensation for 2003 to Mr. Kovacevich of $7,500,000, and submitted this award to the Board of Directors for ratification. The Board of Directors of the Company, meeting in executive session, ratified the award to Mr. Kovacevich.

Members of the Human Resources Committee:

        Michael W. Wright, Chair

        Susan E. Engel

        Richard D. McCormick

        Donald B. Rice

        Stephen W. Sanger

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STOCK PERFORMANCE

The graphs presented below compare the cumulative total return on the Company’s common stock (NYSE trading symbol “WFC”) for the five- and ten-year periods ended December 31, 2003, with the cumulative total returns for the same periods for the Keefe, Bruyette and Woods 50 Total Return Index (the “KBW 50 Index”) and the S&P 500 Index.

The cumulative total stockholder return computations in the graphs assume the investment of $100 in Company common stock, the KBW 50 Index, and the S&P 500 Index. For purposes of these graphs, the stock performance used to compute total stockholder return for the Company for all years prior to 1998 is the stock performance of the former Norwest, as the ongoing company after the Merger.

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COMPENSATION TABLES AND INFORMATION

The table below shows the cash and non-cash compensation paid to the Chief Executive Officer and the five next highest paid executive officers of the Company for the last three years.

Summary Compensation Table

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Option Grants and Exercises

These tables summarize for 2003 option grants under the Company’s Long-Term Incentive Compensation Plan and option exercises by the executive officers named in the Summary Compensation Table, and the value of the options held by them as of December 31, 2003.

Option/SAR Grants in Last Fiscal Year

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Aggregated Option/SAR Exercises in

Last Fiscal Year and Fiscal Year-End Option/SAR Values

Pension Plans and Other Retirement Arrangements

Effective July 1, 1999, the Company adopted the “Wells Fargo & Company Cash Balance Plan” (the “Cash Balance Plan”) and the “Wells Fargo & Company Supplemental Cash Balance Plan” (the “Supplemental Cash Balance Plan”) (the “Combined Plans”). These Plans amended and restated the Norwest Corporation Pension Plan (the “Norwest Pension Plan”) and the Norwest Corporation Supplemental Pension Plan (the “Norwest Supplemental Pension Plan”) (the “Norwest Plans”). All employees of the Company who meet certain eligibility requirements automatically participate in the Combined Plans. All of the individuals named in the Summary Compensation Table on page 25 of this proxy statement participate in the Combined Plans.

Cash Balance Plan.    The Cash Balance Plan is a defined benefit plan intended to qualify under the Internal Revenue Code (the “Code”) and comply with the Employee Retirement Income Security Act of 1974 (“ERISA”). Under the Cash Balance Plan, pension benefits generally are determined by the value of the employee’s vested cash balance account (the “Account”). Each quarter, an employee’s Account is credited with compensation credits. Compensation credits to the Account are based on a percentage of the employee’s certified compensation for each quarter. Certified compensation means compensation paid to an employee during the year which is reportable on Form W-2, subject to an annual IRS maximum ($200,000 for 2003). Certified compensation includes salary reduction amounts made under Section 401(k) and Section 125 of the Code, but generally excludes contributions to any non-qualified deferred compensation plan maintained by the Company, perquisites, severance pay, gross-ups, payments in lieu of vacation, and stock option or equity-like gains. Incentive compensation

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amounts will be included in compensation for Cash Balance Plan purposes in the year received rather than the year earned.

The Cash Balance Plan bases the percentage on which compensation credits are calculated on “points” assigned to each employee equal to the sum of the employee’s age and years of credited service as of the end of each quarter. For 2003, this percentage ranges from 4% to 8% of an employee’s certified compensation. The Account balance vests 100% after five years of service with the Company. Subject to certain requirements, employees of the former Wells Fargo and First Interstate Bancorp received credit for vesting and compensation credit purposes for their prior years of service.

As of the quarter ended December 31, 2003, the years of credited service and the percentages used to calculate compensation credits under the Combined Plans for the executive officers named in the Summary Compensation Table are as follows: Mr. Kovacevich, 17 years, 7%; Mr. Hoyt, 22 years, 7%; Mr. Oman, 24 years (including his years of service with Wells Fargo Financial, Inc.), 7%; Mr. Atkins, 2 years, 5%; Mr. Edwards, 19 years (including his years of service with First Interstate Bancorp), 7%; and Mr. Stumpf, 21 years, 7%.

Each Account will also be credited, on the last day of each quarter, with “investment credits.” For 2003, the quarterly investment credit was determined by multiplying the amount of the Account balance by 25% of an average of 30-year U.S. Treasury rates (adjusted quarterly). The value of the vested Account balance is payable to the employee upon termination of employment with the Company either in a lump sum or as a monthly annuity.

Supplemental Cash Balance Plan.    As permitted by ERISA and the Code, employees who participate in the Cash Balance Plan, including the executive officers named in the Summary Compensation Table, whose benefits under the Cash Balance Plan are limited pursuant to Code Sections 401(a)(17) and 415, also participate in the Supplemental Cash Balance Plan. Under this plan, participants also receive compensation and investment credits to their plan accounts, determined by points assigned to each employee at the end of each year based on years of service and age. Certified compensation under the Supplemental Cash Balance Plan includes the participant’s base salary as well as designated incentive compensation, whether or not that compensation is deferred.

In the case of Messrs. Kovacevich, Hoyt, Oman, Atkins, Edwards, and Stumpf, all of whom are named in the Summary Compensation Table, the amount shown as “Salary” for 2003 (column (c) in the table) and the amount shown as “Bonus” for 2002 (column (d)) were treated as certified compensation for 2003 under the Combined Plans. The amount shown as “Bonus” for 2003 (column (d)) will be included in each such executive officer’s certified compensation for purposes of compensation credits to his account for 2004.

Under the Combined Plans, “normal retirement age” is defined as the earlier of completion of five years of service with the Company, or age 65. As of December 31, 2003, the executive officers named in the Summary Compensation Table other than Mr. Atkins had attained “normal retirement age” for purposes of the Combined Plans and had accrued an estimated benefit under the Combined Plans, assuming payment of such annual benefit in the form of a single-life annuity, as follows: Richard M. Kovacevich, $635,008; David A. Hoyt, $34,990; Mark C. Oman, $168,608; Howard I. Atkins, $8,096; C. Webb Edwards, $99,853; and John G. Stumpf, $75,420.

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Alternative Retirement Benefits Under the Former Norwest Plans.    Participants in the former Norwest Plans who were at least 45 years of age and had at least five years of credited service as employees of the former Norwest on June 30, 1999, will receive the greater of the benefits under the Combined Plans or the benefits he or she would have received under the former Norwest Plans. Richard M. Kovacevich and John G. Stumpf, each of whom is an executive officer named in the Summary Compensation Table, would have received a greater benefit under the former Norwest Plans, as shown in the table on page 31 of this proxy statement, than under the Combined Plans if they had retired as of December 31, 2003.

Benefits based on the former Norwest Plans formula are determined by age, years of credited service, and compensation. Mr. Kovacevich’s and Mr. Stumpf’s years of credited service as of December 31, 2003 for purposes of computing their alternative benefits are 17.83 years and 21.92 years, respectively. The monthly benefit at regular retirement age is a life annuity equal to 1.1% of final average monthly earnings up to the “Integration Level” plus 1.6% of final average monthly earnings greater than the Integration Level multiplied by years of credited service. The former Norwest Plans do not take into account more than 35 years of credited service. The Integration Level for any year is $1,400 times the Social Security wage base for the current year ($87,000 for 2003) divided by $48,000. The Integration Level (stated as an amount per month) is $2,537.50 for participants retiring in 2003.

A participant’s final average monthly earnings are defined as the highest average monthly compensation paid during any 36 consecutive months within the last 120 months of employment. Compensation for purposes of this calculation is similar to the definition of “certified compensation” under the Combined Plans. The alternative Norwest Pension Plan benefit for a plan year is subject to the same limitations imposed by the Code on benefits under the Cash Balance Plan.

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The table below shows the estimated total annual average alternative retirement benefits that would be payable using the former Norwest Plans formula for individuals with various combinations of annualized final average compensation and years of credited service. These estimated benefits do not take into account any Internal Revenue Code limits on retirement benefits. The annual amounts shown below, as estimated and when paid, are not reduced by the amount of Social Security benefits.

Supplemental Retirement Arrangements for Executive Officers.    Mark C. Oman and C. Webb Edwards, who are executive officers named in the Summary Compensation Table and were employees of the former Norwest, are eligible to receive certain benefits under the Combined Plans. In the case of Mr. Oman, these benefits result from his service as an employee of Wells Fargo (formerly Norwest) Financial, Inc. (“WFFI”). In the case of Mr. Edwards, they relate to his service as an employee of First Interstate Bancorp, a predecessor corporation to the former Wells Fargo, until 1995 when he joined the former Norwest. Mr. Oman and Mr. Edwards are also entitled to certain supplemental retirement benefits under the arrangements described below.

Mr. Oman was employed by WFFI and was an active participant in its retirement plan (the “WFFI Retirement Plan”) from April 30, 1979 until January 1, 1990, when he transferred to Wells Fargo Home Mortgage, Inc. (formerly Norwest Mortgage, Inc.) and became eligible to participate in the former Norwest Plans. As a result of certain amendments made to the Combined Plans as of January 1, 2001 to include former WFFI’s employees’ years of credited service with WFFI for purposes of

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computing points and calculating compensation credits, Mr. Oman’s Account balance was re-calculated retroactive to July 1, 1999 to reflect his additional years of credited service. The information given with respect to Mr. Oman on page 29 of this proxy statement with respect to his years of credited service and his estimated benefit as of December 31, 2003 under the Combined Plans takes into account the amendments made to the Combined Plans described above.

Mr. Oman is also entitled to receive a supplemental annual retirement benefit under a supplemental retirement arrangement with the Company. This supplemental benefit will be determined based upon the difference between what Mr. Oman would receive under the Combined Plans and a hypothetical benefit calculated using a formula which takes into account his final average monthly earnings and years of credited service with the Company (excluding his years of service with WFFI) as of the date his employment with the Company terminates. For purposes of this formula, Mr. Oman’s benefit will be adjusted by an additional amount based upon his actual final average earnings as of the date of his transfer from WFFI, his final average earnings as of the date his employment with the Company terminates, the benefit he had accrued under the WFFI Retirement Plan as of the date of his transfer, and certain additional subsidies if he terminates employment with the Company prior to age 65. Assuming that Mr. Oman had reached the age of 55 as of December 31, 2003 (the earliest retirement age at which benefits become payable under the WFFI Retirement Plan) and that his final average earnings, for purposes of calculating his supplemental benefit under this arrangement, were the amounts shown as “Salary” for 2003 and “Bonus” for 2002 in columns (c) and (d) of the Summary Compensation Table on page 25 of this proxy statement, Mr. Oman would receive an annual supplemental benefit of $542,650 under this arrangement.

In addition to his benefits under the Combined Plans and the supplemental retirement arrangement described above, Mr. Oman is entitled to receive certain accrued retirement benefits under the WFFI Retirement Plan. His accrued benefits under this plan were frozen upon his transfer to the Company in 1990. As of December 31, 2003, the annual retirement benefits Mr. Oman would be entitled to receive under the WFFI Retirement Plan beginning at age 55 and at age 65 (normal retirement age under the WFFI Retirement Plan) would be $6,516 and $15,492, respectively.

C. Webb Edwards is entitled to receive an alternative retirement benefit calculation under the Combined Plans. Mr. Edwards was an employee of First Interstate Bancorp, a predecessor corporation of the former Wells Fargo, until 1995 when he joined the former Norwest. Mr. Edwards also participated in the First Interstate Plan which was frozen for purposes of additional benefit accruals in 1996. For any participant in the Combined Plans who terminates employment with the Company and who was a participant in the First Interstate Plan, was at least 45 years of age, and had at least five years of credited service on June 30, 1999, the Company will compare the opening balance in that participant’s Account, plus investment credits made to the Account through the date payment of benefits to the participant are to commence, to the lump sum value of the participant’s frozen First Interstate Plan benefit as of such payment date. If the value of the frozen First Interstate Plan benefit is greater than the participant’s total Account balance, the participant will receive the difference in the form of an extra benefit amount credited to the Account. Mr. Edwards will be eligible for this special transition comparison calculation at the time he terminates his employment with the Company. Based on an estimated special transition benefit comparison, assuming Mr. Edwards had terminated his employment with the Company as of December 31, 2003 and elected to receive payment of his benefits under the Combined Plans as of that date, a special transition benefit amount equal to $105,187 would be added to Mr. Edwards’ Account under the Combined Plans.

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Mr. Edwards is also entitled to a supplemental annual retirement benefit pursuant to an agreement made in 1995 at the time he was employed by the former Norwest. To determine the amount of this benefit, the Company first will calculate a hypothetical annual retirement benefit assuming Mr. Edwards had been employed by the Company since July 23, 1984 (the date of his original employment by First Interstate Bancorp). The Company will calculate this hypothetical amount under the Combined Plans and, alternatively, under the former Norwest Plans, using the greater of the two amounts as the hypothetical annual retirement benefit for purposes of determining Mr. Edwards’ supplemental annual retirement benefit. The Company then will subtract from the hypothetical annual retirement benefit (1) the actual combined annual retirement benefit Mr. Edwards will receive under the Combined Plans and (2) the amount by which the annuitized value of Mr. Edwards’ combined balances in the Company’s 401(k) and Supplemental 401(k) Plans (referred to in footnote (4) of the Summary Compensation Table) exceeds the annuitized value of a hypothetical combined account balance under the First Interstate 401(k) and Supplemental 401(k) Plans. The Company will calculate the annuitized value of Mr. Edwards’ combined balances in these plans using certain actuarial, contribution, and investment rate assumptions. If Mr. Edwards had terminated his employment with the Company as of December 31, 2003, he would be entitled to receive an annual supplemental benefit of approximately $242,000 under this agreement.

Former Wells Fargo Retirement Plans.    David A. Hoyt also participated in a defined benefit plan sponsored by the former Wells Fargo. This plan was terminated in 1984, and annuities were purchased for all participants eligible to receive benefits under this plan. Mr. Hoyt’s annual benefit payable under this annuity beginning at age 65 is $16,226.

Long-Term Disability Plans

The Company’s Long-Term Disability Plan covers compensation of up to a total of $500,000 in salary and designated incentive compensation. The plan provides a monthly benefit to an eligible employee, who is totally disabled (as defined in the plan) for more than 22 weeks, equal to 65% of the participant’s average covered compensation, up to a maximum compensation of $500,000 per year and a maximum monthly benefit of $27,083. The Supplemental Long-Term Disability Plan extends similar disability coverage for the base salary earned by Richard M. Kovacevich in excess of $500,000. The monthly benefit payable under either plan may be offset by other sources of income.

Other Compensation Arrangements for Certain Executive Officers

Howard I. Atkins.    In connection with his employment as the Chief Financial Officer of the Company in August 2001, Mr. Atkins entered into an employment arrangement with the Company pursuant to which he is entitled to receive certain minimum stock option grants for 2003 and 2004 under the Company’s LTICP. Under this arrangement, Mr. Atkins received in 2003, and is entitled to receive in 2004, stock option grants, each having a minimum Black-Scholes value of $2,000,000. Mr. Atkins also received certain relocation benefits under the Company’s Relocation Program discussed on pages 37 and 38 of this proxy statement. Mr. Atkins is also entitled to receive certain other perquisites under this arrangement consistent with those available to all executive officers. Information with respect to Mr. Atkins’ stock option grant in 2003 under this arrangement is included in the Option/SAR Grants in Last Fiscal Year table on page 27 of this proxy statement and related footnotes.

Mr. Atkins is entitled to certain retirement and severance benefits under this arrangement with the Company. With respect to retirement benefits, if Mr. Atkins’ employment terminates before the date he

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is 100% vested for benefit purposes under the terms of the Company’s 401(k) Plan, Supplemental 401(k) Plan, and the Combined Plans, he will receive a retirement benefit computed in accordance with those plans as if he were fully vested as of the date of such termination. With respect to severance benefits, if Mr. Atkins’ employment is involuntarily terminated by the Company for any reason other than for cause within three years from the date of his employment, Mr. Atkins will be entitled to receive certain severance benefits for a period equal to the longer of three years from his original employment date and two years from his employment termination date. These benefits will include his then current salary, incentive compensation awards, eligibility for additional stock option grants, and full vesting of his initial RSR award and any additional stock options granted during this period. Mr. Atkins’ right to receive these benefits is conditioned upon his entering into a customary non-competition, confidentiality, and release agreement with the Company. If Mr. Atkins’ employment with the Company is involuntarily terminated other than for cause more than three years from his employment date, he will be eligible to receive severance benefits under the severance plan, if any, then maintained by the Company for comparable employees.

Severance Agreements.    In addition to the severance benefits under the employment arrangement with Howard I. Atkins described above, the Company has severance agreements with Messrs. Kovacevich, Oman, and Edwards, each of whom is named in the Summary Compensation Table.

The change-of-control severance agreements with Messrs. Kovacevich, Oman, and Edwards are intended to encourage them to continue to carry out their duties if there is a change-of-control of the Company. Under the terms of these agreements, these executive officers may receive certain payments if their employment is terminated or if their job duties or compensation and benefits are substantially reduced within three years following a change-of-control of the Company. The maximum payments are two times the sum of the executive officer’s (i) base salary rate, (ii) the value of perquisites provided by the Company, and (iii) the highest potential incentive compensation award or, in the case of Mr. Kovacevich, an amount equal to the two-year average of his incentive compensation awards. The agreements also continue certain medical, dental, and life insurance benefits for up to two years after termination. If payments received by any such officer as a result of a change-of-control result in an excise tax liability for such officer, the Company will also pay to the officer an additional amount equal to the excise tax plus a gross-up for additional income taxes, interest, and penalties related to the excise tax.

Mr. Kovacevich also has a severance agreement with the Company under which he can receive benefits of a minimum payment of 12 months’ salary (less the amount of any other severance payments to which he may be entitled under any severance plan of the Company then in effect), a pro rata portion of his incentive compensation, and certain life and health insurance benefits. The benefits are payable if his employment is terminated by the Company for a reason other than for cause or if his job duties are substantially reduced and he resigns within 90 days thereafter.

The Company also has a plan that provides salary continuation pay to any executive officer or other employee who is discharged under the circumstances stated in the plan and who does not have another separation agreement with the Company. The amount of salary continuation pay under this plan is based on years of service and job level and includes payment of base salary and continuation of benefits for specified monthly periods.

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OTHER INFORMATION ABOUT DIRECTORS

AND EXECUTIVE OFFICERS

Loans

During 2003, certain directors, executive officers, members of their immediate families, and their associates had banking transactions, including loans, in the ordinary course of business with the Company’s bank subsidiaries. All loans were made on substantially the same terms, including interest rates and collateral, as those available at the time for similar transactions with other persons. The loans did not involve more than the normal risk of collection or have other unfavorable features.

Also during 2003, five non-employee directors and four of the executive officers of the Company named in the Summary Compensation Table, as well as certain members of the immediate families of two directors and two of these executive officers, had outstanding mortgage loans with Wells Fargo Home Mortgage, Inc. (“WFHMI”), a mortgage lending subsidiary of Wells Fargo Bank, National Association Information about these loans appears in the loan table and related footnotes below.

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Two executive officers not named in the Summary Compensation Table and an immediate family member of one of such officers had outstanding mortgage loans during 2003 (including two mortgage loans made under the Relocation Program) totaling $2,181,000. These mortgage loans (excluding the interest-free down payment mortgage loan under the Relocation Program) were 30-year adjustable rate mortgage loans made by WFHMI with annual interest rates ranging from 4.0% to 5.0% and one 15-year fixed rate mortgage loan with an annual interest rate of 4.88%. Of these loans, one was refinanced by WFHMI, one was sold by WFHMI in the secondary real estate mortgage market, and two were paid in full during 2003.

Relocation Program

The Company offers a relocation program (the “Relocation Program”) for eligible employees, including executive officers, who relocate at the Company’s request and, in appropriate circumstances, to eligible new employees who relocate in connection with their employment by the Company. The Company believes this program offers a valuable incentive to attract and retain key employees.

Effective July 30, 2002, the Relocation Program was revised in response to the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) to eliminate certain loan benefits for executive officers who relocate at the Company’s request. The following description of the Relocation Program describes benefits available to eligible executive officers prior to this date, and the revisions made to the program for executive officers in response to Sarbanes-Oxley. The relocation benefits made available prior to July 30, 2002, to eligible executive officers, as described below, continue to be made available to eligible employees who are not executive officers of the Company.

Prior to July 30, 2002, executive officers who relocated were eligible to receive a first mortgage loan (subject to applicable lending guidelines) from WFHMI on the same terms as those available to any employee of the Company, which terms include a waiver of the loan origination fee. In addition, prior to July 30, 2002, executive officers who relocated to a designated high cost area (or in certain limited circumstances to a location not designated as a high cost area) may have received from the Company a mortgage interest subsidy on the first mortgage loan of up to 25% of the executive’s annual base salary, payable over a period not less than the first three years of the first mortgage loan, and a 30-year, interest-free second mortgage down payment loan in an amount up to 100% of his or her annual base salary to purchase a new primary residence. The second mortgage loan must be repaid in full if the executive terminates employment with the Company or retires, or if the executive sells the residence. A relocating executive officer may have also received a transfer bonus of up to 30% of the executive’s base salary.

On and after July 30, 2002, executive officers are still eligible (subject to applicable lending criteria) to receive a first mortgage loan from WFHMI, except that the loan must be on substantially the same terms as those available to other residential home mortgage customers. However, executive officers are no longer eligible for a mortgage interest subsidy from the Company relating to the first

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mortgage loan on, or an interest-free second mortgage down payment loan for the purchase of a new primary residence. Under the revised Relocation Program, the Company may pay a relocating executive officer a transfer bonus in an amount determined by senior management on the earlier of the date he or she commences employment or purchases a new home, and annually thereafter. Any executive officer who had received the mortgage interest subsidy and interest-free down payment loan benefit prior to July 30, 2002, pursuant to the Relocation Program may continue to receive such benefits, but may not amend the terms of the loan to which these benefits relate.

For many relocations made at the Company’s request, the Company pays all related home purchase closing costs and household goods moving expenses for the relocating executive officer. The Relocation Program also assists eligible relocating executives in defraying costs associated with selling their current residences. Available benefits may include payment of selling costs customarily incurred by a seller of residential real estate (such as real estate commissions, title and appraisal fees, and other routine closing costs), purchase of the relocating executive’s home at its appraised market value by a third party relocation company using Company funds, and certain cash incentives to executives who locate buyers for their homes directly.

With the exception of expenses paid to or on behalf of the executive officer to move household goods and sell his or her home, the benefits described above (other than the mortgage loans) are treated as taxable income to the executive. The Relocation Program also includes, as a potential additional benefit, reimbursement of the amount of taxes paid on the taxable portion of amounts received by the executive under the Relocation Program.

Information about the amount and type of loan and other benefits received under the Relocation Program by Richard M. Kovacevich, Howard I. Atkins and John G. Strumpf, each of whom is named in the Summary Compensation Table on page 25 of this proxy statement, is included in column (e) and footnote (2) of the Summary Compensation Table and in the loan table on page 35.

Certain Relationships—Executive Officers

Mark C. Oman, who is an executive officer named in the Summary Compensation Table on page 25 of this proxy statement, has an in-law who is employed by a subsidiary of the Company and was paid compensation in 2003 in excess of $60,000 but less than $130,000 and received other employee benefits. The compensation and other benefits received by Mr. Oman’s family member were established by the Company in accordance with its employment and compensation practices applicable to employees holding a comparable position. This individual is one of the approximately 140,000 employees of the Company and its subsidiaries and does not report directly to Mr. Oman or any other executive officer of the Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 and related regulations require the Company’s directors, executive officers, and anyone holding more than 10% of the Company’s common stock (“reporting persons”) to report their initial ownership of the Company’s common stock and any changes in that ownership to the Securities and Exchange Commission (the “SEC”) and the New York Stock Exchange. The Company assists its directors and executive officers in complying with these requirements and is required to disclose in this proxy statement the failure to file these reports on behalf of any reporting person when due. All reporting persons of the Company satisfied

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these filing requirements except as follows: reports were not timely filed on behalf of Patricia R. Callahan, David A. Hoyt, and Carrie L. Tolstedt, executive officers of the Company, to reflect their beneficial ownership of 14.5134, 21.1104, and 6.3332 phantom stock units, respectively, purchased through salary deferrals as of January 31, 2003. Also not timely reported was the distribution as of January 1, 2003 to Philip J. Quigley, a director, of cash resulting from the conversion of 259.373 phantom stock units previously purchased through the deferral of directors’ fees and the purchase of 54.9615 phantom stock units as of January 2, 2003 by the spouse of Carrie L. Tolstedt with funds held for him under the Company’s Deferred Compensation Plan for employees was not timely reported. These transactions were subsequently reported on Forms 4. In making these disclosures, the Company relied on written representations of each reporting person and copies of the reports filed with the SEC.

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EQUITY COMPENSATION PLAN INFORMATION

The following table provides information about the Company’s equity compensation plans in effect at December 31, 2003, aggregated for two categories of plans: those approved by stockholders and those not approved by stockholders. The first category—equity compensation plans approved by stockholders—consists of the Long-Term Incentive Compensation Plan and the Directors Stock Compensation and Deferral Plan. The second category—equity compensation plans not approved by stockholders—consists of:

The Norwest Corporation Directors’ Formula Stock Award Plan, the Norwest Corporation Directors’ Stock Deferral Plan, and the Performance Deferral Award Plan for Mortgage Banking Executives were in effect at December 31, 2003, only with respect to the payment of outstanding awards or deferred compensation benefits. No future awards or deferrals may be made under those plans.

The material features of the equity compensation plans not approved by stockholders are described immediately following the footnotes to the table. All outstanding awards relate to shares of the Company’s common stock. Information is as of December 31, 2003, unless otherwise indicated.

Equity Compensation Plan Information(1)

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Deferred Compensation Plan for Employees.    This plan allows participants to defer receipt of salary and certain other compensation until a future year or years as selected by the participants subject to the terms of the plan. The plan administrator determines which employees of the Company and its subsidiaries will be eligible to participant in the plan for a given year. The plan administrator may delegate this authority to one or more officers of the Company. Participants in the plan can defer up to 85% of their base salary and all of their bonuses and incentive compensation. Once made, deferral elections are irrevocable. The Company treats amounts deferred by a participant as if invested in the valuation option or options selected by the participant or required under the plan, and determines the deferred compensation benefit payable to the participant based on those valuation options. The plan offers a number of valuation options, including one indexed to the Company’s common stock. For deferral years 2000 and later, participants are required to allocate at least 20% of their deferral to the common stock valuation option. The Company distributes amounts allocated to the common stock valuation option in shares of common stock. Participants have no direct interest in any of the valuation options and are general unsecured creditors of the Company with respect to their deferred compensation benefits under the plan.

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Non-Qualified Deferred Compensation Plan for Independent Contractors.    This plan is sponsored by WF Deferred Compensation Holdings, Inc., a wholly-owned subsidiary of the Company, and allows participants to defer all or part of their eligible compensation payable to them by participating affiliates of the Company until a future year or years as selected by the participants, subject to early distribution as provided in the plan. To be eligible to participate, a person must be an independent contractor who performs qualifying investment or other financial services for a participating affiliate and must have been designated as eligible to participate in the plan by the participating affiliate. The plan sponsor treats amounts deferred by a participant as if invested in the valuation option or options selected by the participant or required under the plan, and determines the deferred compensation benefit payable to the participant based on those valuation options. The plan offers a number of valuation options, including one indexed to the Company’s common stock. Amounts allocated to the common stock valuation option are distributed in shares of common stock. The Company has guaranteed the obligations of the plan sponsor under the plan. Participants have no direct interest in any of the valuation options and are general unsecured creditors of the plan sponsor and the Company with respect to their deferred compensation benefits under the plan.

Norwest Corporation Directors’ Formula Stock Award Plan.    Under this plan, the Company awarded shares of common stock to its non-employee directors. The plan allowed participants to defer receipt of all or a portion of their awards until a future year or years as selected by the participants subject to the terms of the plan. Participants can elect one time to defer commencement of distribution of their deferral accounts if the election is made sufficiently in advance of the original distribution commencement date and the new distribution commencement date is sufficiently beyond the original distribution commencement date. Participants receive credit for dividends paid on shares of the Company’s common stock. Participants have no direct interest in the shares deferred under the plan and are general unsecured creditors of the Company with respect to payment of their deferred stock awards under the plan. No future stock awards or deferrals of stock awards are permitted under this plan.

Norwest Corporation Directors’ Stock Deferral Plan.    Under this plan, a participating director could defer receipt of all or part of the annual cash retainer and meeting fees payable to the director until a future year or years as selected by the director subject to the terms of the plan. A participating director could elect distribution of his or her deferral account in a lump sum in either cash or whole shares of the Company’s common stock, or a combination of both. Alternatively, the director could elect to receive the distribution in up to ten annual installments of cash. A participant can elect one time to defer commencement of distribution of his or her deferral account if the election is made sufficiently in advance of the original distribution commencement date and the new distribution commencement date is sufficiently beyond the original distribution commencement date. No future deferrals may be made under this plan.

PartnerShares Stock Option Plan.    Under the PartnerShares Stock Option Plan, the Board of Directors, the Human Resources Committee, or a PartnerShares Committee can grant options to buy the Company’s common stock to any employee of the Company or affiliate of the Company other than employees subject to Section 16 of the Securities Exchange Act of 1934 and certain other specified categories of employees. Participants in the Long-Term Incentive Compensation Plan are generally not eligible to receive option grants under the PartnerShares Plan. The PartnerShares Committee determines, subject to the terms of the plan, the exercise price, the expiration date, and the other exercise terms of each option grant including any vesting price or vesting schedule. Under the terms of the PartnerShares Plan, the exercise price may not be less than the closing share price of the common

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stock as of the trading day immediately preceding the grant date and the expiration date may not be more than ten years from the grant date.

Performance Deferral Award Plan for Mortgage Banking Executives.    Under this plan, a specified portion of a participant’s unvested bonus award was credited to the participant’s plan account in the form of phantom shares of the Company’s common stock. Participants include certain employees of Wells Fargo Home Mortgage, Inc. and other Company subsidiaries in the mortgage banking, home equity or trust businesses. No future awards may be made under the plan, and 2000 was the last deferral year covered by the plan. The portion of each bonus award covered by the plan vests in three equal annual installments beginning on March 1 of the first year following the year in which the award was granted. For deferral years 1999 and earlier, participants receive the value of the vested portion of their plan account in cash. For deferral year 2000, participants receive the value of the vested portion in shares of the Company’s common stock. Participants can elect to defer receipt of some or all of the vested portion of their plan account into the Deferred Compensation Plan for employees.

Supplemental 401(k) Plan.    The Supplemental 401(k) Plan is a non-qualified supplemental retirement plan that provides benefits to participants in the Company’s 401(k) Plan whose employer matching contributions under that plan are limited because of IRS-imposed limitations on their plan contributions and/or because they elected to defer compensation that would otherwise have been available for contribution to the 401(k) Plan into one or more non-qualified deferred compensation plans maintained by the Company. The terms of the existing Supplemental 401(k) Plan are substantially similar to those of the amended and restated Plan being presented for stockholder approval. Refer to “Item 2—Approve Supplemental 401(k) Plan” below for a description of the material terms of the amended and restated Plan.

ITEM 2—APPROVE SUPPLEMENTAL 401(k) PLAN

At the 2004 annual meeting, stockholders are being asked to approve the Company’s Supplemental 401(k) Plan, as amended and restated (the “Plan”). The Plan is a non-qualified supplemental retirement plan that provides benefits to participants in the Wells Fargo & Company 401(k) Plan (the “401(k) Plan”) whose employer-matching contributions under that plan are limited because of various Internal Revenue Code (the “Code”) limitations on their plan contributions and/or because the participants elected to defer compensation into one or more non-qualified deferred compensation plans maintained by the Company that would otherwise have been available for contribution to the 401(k) Plan. The Company has provided unfunded deferred excess benefit plans similar to the Plan since 1988.

On February 24, 2004, the Board of Directors approved the amended and restated Plan, and is submitting the Plan for approval by stockholders at the 2004 annual meeting as required by New York Stock Exchange rules. The amended and restated Plan increases the number of shares of common stock that the Company may credit to Plan accounts after January 1, 2004 by 2,000,000 and updates certain administrative provisions. Other than these amendments, the amended and restated Plan is substantially similar to the existing plan. The purpose of the increase is to ensure that the Company has flexibility to meet its foreseeable future needs for its contribution allocations under the Plan. If stockholders fail to approve the Plan, the Company will no longer be able to distribute amounts credited to Plan accounts in shares of the Company’s common stock. If that occurs, the Company will evaluate its options to determine how to replace the benefits to employees provided by the Plan.

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Set forth below is a summary of the terms of the Plan. A copy of the Plan is included at the end of this proxy statement as Exhibit A, and stockholders are urged to read the complete text of the Plan.

Description of the Supplemental 401(k) Plan Terms

General.    Employees of the Company or of any other Participating Employer who have one year of service under the 401(k) Plan and who satisfy one or more of the following criteria are eligible to participate in the Plan:

“Participating Employer” means any participating employer under the 401(k) Plan that has at least one employee eligible to participate in the Plan. Eligible employees are automatically enrolled in the Plan. As of February 29, 2004, 3,313 employees were participants in the Plan.

Allocation of Credits.    In the 401(k) Plan, the Company provides a dollar-for-dollar match of participants’ eligible contributions up to 6% of 401(k) Plan certified compensation. If the Company’s 401(k) Plan matching contributions for a participant are limited due to such participant’s deferral of compensation to a nonqualified deferred compensation plan, the Company will make the contribution allocation to the Plan that would have been made in the 401(k) Plan had such participant not deferred compensation. If the Company’s 401(k) Plan matching contributions for a participant are limited as a result of the employee contribution limit under the Code, the Company will make the contribution allocation to the Plan that would have been made in the 401(k) Plan, except it will not match compensation exceeding Plan Certified Compensation. Also, if a participant’s Plan Certified Compensation for purposes of the 401(k) Plan exceeds the Code limit on such compensation, an allocation will be made to the Plan on such certified compensation in excess of the compensation limit. The Plan provides for Company allocations only. No employee contributions are accepted.

Company contribution allocations to the Plan are credited on the last day of the calendar year and converted to equivalent shares of Company common stock based on the closing price of a share of Company common stock on the New York Stock Exchange for the last trading day of the calendar year. Additional allocations are made to reflect dividends paid on the common stock, based on the number of share equivalents credited to a participant’s account as of a record date, and are converted to equivalent shares of Company common stock based on the closing price for the trading day immediately preceding the dividend payment date.

Participants are general unsecured creditors with respect to their benefits under the Plan. Participants earn vesting (ownership) rights to their Plan account based on years of service with the Company in a manner consistent with the vesting of a participant’s account under the 401(k) Plan. A

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participant’s Plan account and the shares of Company common stock credited to such account are not assignable or transferable by a participant or his or her beneficiary. No right or interest of any participant in his or her Plan account under the Plan may be sold, pledged, assigned, or transferred in any manner while the Plan account is in the possession and control of the Company.

Termination of Employment and Distribution of Plan Accounts.    Upon termination, any portion of a participant’s Plan account that is not vested is forfeited. If a participant reaches age 65, dies, or becomes disabled while employed by the Company, such participant will become 100% vested in his or her Plan account.

Distribution of a vested account balance will begin as soon as administratively feasible in the calendar year following the year a participant retires or otherwise terminates employment. The Plan provides for a single lump sum distribution of a participant’s Plan account. Participants with vested account balances in excess of $5,000 may, however, elect to receive their benefits in up to 10 annual installments. All distributions are subject to income tax withholding and are paid in whole shares of common stock, with cash paid in lieu of fractional shares. If a participant dies before receiving a complete distribution of his or her vested Plan account balance, it will be paid to his or her beneficiary.

Administration.    The Plan is administered by the Company’s Executive Vice President Human Resources (or his or her delegate), who has exclusive authority and responsibility for all matters in connection with the operation and administration of the Plan, including, among other matters, authorizing the payment of benefits and expenses, interpreting the terms of the Plan, adopting procedures for implementing the Plan, and determining participants’ eligibility for benefits and the amounts of such benefits.

Amendment and Termination.    The Board of Directors of the Company or the Human Resources Committee of the Company’s Board of Directors may at any time terminate, suspend or amend the Plan in any manner; provided that to the extent required by applicable law, rule or regulation, approval by the stockholders of the Company is required to (i) increase the number of shares of common stock to be credited under the Plan (except for adjustments by reason of stock dividends, stock splits, subdivision, consolidations, combinations, reclassifications or recapitalizations), or (ii) make other material revisions to the Plan. No such action may deprive any participant of any benefits to which he or she would have been entitled under the Plan if such participant’s termination of employment had occurred on the day prior to the date such action was taken, unless agreed to by such participant.

Shares Available for Credit

As of December 31, 2003, a total of 1,371,487 shares of common stock have been credited under the Plan for all employees (including executive officers) who participate in the Plan. Information about the total shares of common stock credited as of that date to Plan accounts of each executive officer named in the Summary Compensation Table and for all executive officers as a group is provided in footnote (4) to the Stock Ownership table on page 7 of this proxy statement. If the Plan amendment is approved by the stockholders, an additional 2,000,000 shares of common stock will be available for credit to accounts under the Plan, subject to appropriate adjustments in the event of certain changes in the outstanding shares of common stock by reason of stock dividends, stock splits, subdivisions, consolidations, combinations, reclassifications, or recapitalizations.

No information can be provided with respect to future contribution allocations or credits in the form of Company common stock that may be made under the Plan (assuming the amended and restated

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Plan is approved by stockholders), since such contribution allocations and credits are affected by, among other matters, the amount of compensation earned or deferred by Plan participants and changes in Code limits for contributions to the 401(k) Plan. Information about shares of common stock credited for 2003 to the Plan accounts of the executive officers named in the Summary Compensation Table appears in footnote (4) to that table on page 26 of this proxy statement. For 2003, a total of 23,051 shares and 201,273 shares were credited to the Plan accounts of, respectively, all executive officers as a group, and all employees (including executive officers) who participate in the Plan.

Federal Tax Considerations and Withholding

Currently, allocations to the Plan are not subject to federal and state income tax until they are paid to a participant. Company allocations are considered wages for purposes of Social Security (FICA-Medicare and FICA-OASDI) and, in those states where it applies, State Disability Insurance (SDI). Each year, the value of the vested portion of a participant’s current year’s allocation and the value of prior years’ allocations that vest in the current year are subject to FICA and SDI withholding. The Company will deduct the applicable taxes from participants’ regular pay. The amounts withheld will be reported on the participant’s form W-2.

Distributions from the Plan are subject to ordinary income tax at the time of distribution but are not subject to any tax penalty for distribution prior to age 59½. Taxes on such distributions cannot be deferred by making a rollover to another employer’s plan or an IRA. The Company’s tax deduction for benefits distributed from the Plan occurs at the same time as the benefit becomes taxable to the participant for income tax purposes.

Vote Required; Recommendation

Approval of this proposal requires a vote in favor of the Plan by the holders of a majority of the Company’s shares of common stock present in person or represented by proxy and voting on this proposal at the annual meeting.

The Board of Directors recommends that stockholders vote FOR the proposal to approve the Supplemental 401(k) Plan (Item 2 on the enclosed proxy card).

ITEM 3—APPOINTMENT OF INDEPENDENT AUDITORS

Stockholders will also vote at the annual meeting to ratify the appointment by the Audit and Examination Committee of KPMG LLP (“KPMG”), certified public accountants, as independent auditors of the Company and its subsidiaries for the year ending December 31, 2004. KPMG or its predecessors have examined the financial statements of the Company each year since 1931. Although the Company is not required to seek stockholder ratification of this appointment, the Board believes it is sound corporate governance to do so. If stockholders do not ratify the appointment of KPMG, the Audit and Examination Committee will consider the stockholders’ action in determining whether to appoint KPMG as the Company’s independent auditors for 2005.

Representatives of KPMG will be present at the annual meeting to answer appropriate questions and to make a statement if they wish.

The Board of Directors recommends that stockholders vote FOR the proposal to ratify the appointment of independent auditors (Item 3 on the enclosed proxy card).

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KPMG Fees

The Company incurred the fees shown in the following table for professional services provided by KPMG for 2003 and 2002:

Audit and Examination Committee Pre-Approval Policies and Procedures

The Audit and Examination Committee is responsible for the appointment, compensation, and oversight of the work of the Company’s independent auditors. The Committee has adopted policies and procedures which prohibit KPMG from providing to the Company certain non-audit services and require Committee pre-approval of all audit and permissible non-audit services provided to the Company by KPMG. The Committee pre-approves on an annual basis services that are of a recurring nature. Changes in the scope of services that have been pre-approved on an annual basis are deemed to be pre-approved by the Committee provided they do not result in fee increases in excess of a relatively small amount established by the Committee. The Committee must pre-approve any scope changes resulting in fee increases in excess of this amount. New recurring services and services that are not recurring in nature are pre-approved by the Committee from time to time throughout the year. Actual fees incurred for services provided to the Company by KPMG are reported to the Committee after the services are fully performed. In determining whether to pre-approve the provision by KPMG of a permissible non-audit service, the Committee considers whether the provision of the service by KPMG could impair the independence of KPMG with respect to the Company. As part of this process, the Committee considers the facts and circumstances of the proposed engagement, including whether KPMG can provide the service more effectively and economically than other firms because of its

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familiarity with the Company’s business and operations. The Committee also considers the proposed engagement in light of the other non-audit services provided to the Company by KPMG and the fees paid to KPMG for those services. The Committee requires competitive bidding for non-audit services unless it is not warranted because of the facts and circumstances of the proposed engagement.

The Committee has delegated pre-approval authority to each of two designated Committee members. Pre-approval by a designated Committee member is used only for time-sensitive engagements. Pre-approval decisions by a designated Committee member are reported to the full Committee at its next scheduled meeting.

Audit and Examination Committee Report

The Board of Directors has adopted a written charter for the Audit and Examination Committee which sets forth the Committee’s purposes and responsibilities. A copy of the charter is included at the end of this proxy statement as Exhibit B. The eight members of the Committee are named below. Each member is independent, as independence for audit committee members is defined by NYSE rules. The Board has determined, in its business judgment, that each member of the Committee is financially literate as required by NYSE rules, and that J.A. Blanchard III, Enrique Hernandez, Jr., Cynthia H. Milligan, Philip J. Quigley, and Susan G. Swenson each qualifies as an “audit committee financial expert” as defined by SEC regulations.

Management has primary responsibility for the Company’s financial statements and the overall reporting process, including the Company’s system of internal controls. The independent auditors are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States. This audit serves as a basis for the auditors’ opinion included in the annual report to stockholders addressing whether the financial statements fairly present the Company’s financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States. The Committee’s responsibility is to monitor and oversee these processes.

The Committee has reviewed and discussed the Company’s 2003 audited financial statements with management. The Committee has discussed with KPMG the matters required to be discussed by Statement on Auditing Standards No. 61 (Communication with Audit Committees), including matters relating to the conduct of the audit of the Company’s financial statements. KPMG has provided to the Committee the written disclosures and the letter required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Committee has discussed with KPMG that firm’s independence from the Company. Based on this review and these discussions, the Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, for filing with the SEC.

Members of the Audit and Examination Committee:

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ITEM 4—STOCKHOLDER PROPOSAL

REGARDING EXPENSING STOCK OPTIONS

Mr. Gerald R. Armstrong, 820 Sixteenth Street, No. 705, Denver, Colorado 80202-3227, who held 19,377 shares of common stock on November 16, 2003, intends to submit a resolution to stockholders for approval at the 2004 annual meeting. Mr. Armstrong’s resolution and supporting statement are printed below.

Resolution

That the shareholders of WELLS FARGO & COMPANY request that the Board of Directors cease using executive stock options unless the costs of such options are included as an expense in the annual income and expense statements.

Statement

In last year’s meeting, owners of 694,720,491 shares worth $33,228,481,084 on the date of the meeting voted their shares FOR this proposal; however, our Board has failed to adopt its practice. Only 487,322,565 shares were voted against it.

Stock options are an important component of Wells Fargo’s executive compensation program. Grants of options are to provide positive incentives for executives to focus on long-term value. Increasing the use of stock options at a time of growing investor skepticism of the accuracy and transparency of financial reporting has prompted an intense public awareness on the appropriate accounting treatment for stock options.

Current accounting rules give companies a choice of reporting stock option expenses in the company income statement or as a footnote in the annual report (See: Financial Accounting Standards Board Statement No. 123). Many corporations, including Wells Fargo, choose to report the calculated costs of company stock options as a footnote in the corporate annual report. Thus, the option costs are not included in the determination of the operating income.

The proponent believes that including the estimated costs of stock options in company income statements would more accurately reflect the operational earnings.

Warren Buffett has stated, “stock options are compensation and compensation is an expense . . .  it should be included as an expense.”

Alan Greenspan has said this disclosure should not effect market prices for shares.

Several corporations seem to be following this advice and will now be disclosing the option costs as an expense.

Standard and Poor’s report—“Measures of Corporate Earnings” (Revised May 14, 2002)—outlines the formula for accurately calculating the after-tax earnings effect generated by a corporation. Its call for a more accurate “core earnings” calculation of earnings was prompted by financial reporting. The accounting treatment for stock options was the main subject and the compelling logic advanced by S & P for including stock options costs in earning statements is that stock grants are components of executive compensation packages, and like other compensation such as salaries, cash bonuses, and other employee benefits, it should be included as an expense in the calculation of operational earnings.

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The proponent believes the failure to treat stock option grant costs as expenses on income statements can misrepresent the level of profits at Wells Fargo & Company. He believes the failure to expense stock option costs can result in a “no-cost” compensation attitude that could increase the excessive use of stock options.

If you agree, please vote “FOR” this proposal.

Position of the Board of Directors

The Board of Directors recommends a vote AGAINST this proposal, which is identified as Item 4 on the enclosed proxy card. We considered this proposal last year following its approval by stockholders at the 2003 annual meeting and determined not to implement it for the reasons discussed below.

There continues to be widespread disagreement over whether employee stock options should be accounted for as a corporate expense or as a potential cost to stockholders. The Financial Accounting Standards Board (“FASB”), which has been debating a uniform standard for stock option accounting for a number of years, finally announced last year that it intends to issue for public comment an exposure draft on accounting for stock-based compensation in the first quarter 2004. Given the accounting concerns with expensing employee stock options and the possibility that the FASB will adopt a new standard, we believe it would be premature to adopt at this time a policy to expense employee stock options. We believe this position is consistent with the practices of other companies. A recent survey conducted by the Human Resources and Investor Solutions Department of Mellon Financial Corporation showed that of 167 companies in various industries only 7% had thus far elected to expense employee stock options.

The proponent of this proposal argues that the failure to expense employee stock options could result in the excessive use of options. We believe the Company has been a conservative and responsible grantor of employee stock options with demonstrated ability to use them to increase share value. In addition, we continue to believe that expensing stock options is not the way to address concerns about stock option abuses. Employee stock options are not an accounting issue, but a corporate governance issue better addressed by holding directors accountable for the compensation paid to corporate executives.

Furthermore, we believe to record a transaction that increases or does not change capital as an expense would be inconsistent with principles-based accounting. An expense to the Company is a payment, an outflow or other consumption of corporate assets that reduces the Company’s capital by the amount of the payment. Stock option grants do not reduce the Company’s capital. There is no outflow or other consumption of corporate assets. In fact, when the exercise price is paid to the Company in cash, stock options not only do not reduce capital, they increase it.

Expensing employee stock options would require the Company to predict at the time of grant the actual gain that will be realized by the employee when – and if – the options are exercised one to ten years into the future. Existing option valuation models such as Black-Scholes and binomial models were designed to value short-term, freely tradable options, not employee stock options. We believe these models fail to adequately reflect that employee stock options have long lives, vest over time, are not freely tradable and are subject to forfeiture. They also require a number of assumptions about conditions and events up to ten years into the future, including stock price volatility, the continued

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employment of the option holders and the timing of decisions to exercise the options. We believe these deficiencies mean that valuation estimates derived from the models have little chance of accurately predicting future value. Moreover, under current accounting rules, there is no ability to adjust the estimates to reflect options that expire unexercised or to reconcile the estimates with the actual gains received upon exercise.

There is empirical evidence which shows there is little or no correlation between the “value” of an employee stock option at the time of grant, as estimated under existing option valuation models, and the actual option gain realized by the employee at the time of exercise. Sibson Consulting, a division of The Segal Company, a benefits, compensation, and human resources consulting firm, studied the predictive power of the Black-Scholes model, the most widely accepted method to estimate the value of employee stock options. Sibson tested a broad sample of 1,445 companies during six periods between 1972 and 2002, comparing for each company the value of a hypothetical stock option, as estimated using Black-Scholes, with the present value of the actual gain that would have been realized on the option based on subsequent stock price movements. Sibson found that Black-Scholes was generally unable to accurately predict the future value of employee stock options. In fact, for the vast majority of the companies, Sibsen found that the Black-Scholes estimates differed significantly from the actual gains realized on the options.

We believe the real cost of employee stock options is to stockholders if and when the options are exercised. This potential cost is accounted for promptly and accurately and reported to stockholders in the form of diluted earnings per share. Diluted earnings per share show what earnings would have been if all vested and unvested “in-the-money” employee stock options had been exercised and shares had been issued. The Company reports diluted earnings per share in its annual and quarterly financial statements.

The Board of Directors believes the method of reporting employee stock option grants currently used by the Company more fairly presents the economic effect of the grants on the Company and its stockholders and further believes it would be premature to change this method prior to resolution of the issue by the FASB. Accordingly, the Board recommends that stockholders vote AGAINST this proposal.

ITEM 5—STOCKHOLDER PROPOSAL

REGARDING RESTRICTED STOCK

The Massachusetts Laborers’ Pension Fund (the “Pension Fund”), 14 New England Executive Park, Suite 200, P.O. Box 4000, Burlington, Massachusetts 01803-0900, which held 15,300 shares of common stock on November 5, 2003, intends to submit a resolution to stockholders for approval at the 2004 annual meeting. The Pension Fund’s resolution and supporting statement are printed below.

Resolution

Resolved:    That the shareholders of Wells Fargo & Company (“Company”) hereby request that the Board of Directors’ Compensation Committee, in developing future senior executive equity compensation plans, utilize performance and time-based restricted share programs in lieu of stock options. Restricted shares issued by the Company should include the following features:

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The Board and Compensation Committee should implement this restricted share program in a manner that does not violate any existing employment agreement or equity compensation plan.

Supporting Statement

As long-term shareholders of the Company, we support executive compensation policies and practices that provide challenging performance objectives and serve to motivate executives to achieve long-term corporate value creation goals. The Company’s executive compensation program should include a long-term equity compensation component with clearly defined operational performance criteria and challenging performance benchmarks.

We believe that performance and time-based restricted shares are a preferred mechanism for providing senior executives long-term equity compensation. We believe that stock option plans, as generally constituted, all too often provide extraordinary pay for ordinary performance. In our opinion, performance and time-based restricted shares provide a better means to tie the levels of equity compensation to meaningful financial performance beyond stock price performance and to condition equity compensation on performance above that of peer companies.

Our proposal recognizes that the Compensation Committee is in the best position to determine the appropriate performance measures and benchmarks. It is requested that detailed disclosure of the criteria be made so that shareholders may assess whether, in their opinion, the equity compensation system provides challenging targets for senior executives to meet. In addition, the restricted share program prohibits the receipt of dividends and the exercise of voting rights until shares vest.

We believe that a performance and time-based restricted share program with the features described above offers senior executives the opportunity to acquire significant levels of equity commensurate with their long-term contributions. We believe such a system best advances the long-term interests of our Company, its shareholders, employees and other important constituents. We urge shareholders to support this reform.

Position of the Board of Directors

The Board of Directors recommends a vote AGAINST this proposal, which is identified as Item 5 on the enclosed proxy card. The essence of this proposal is that the Company use restricted stock grants instead of stock options to compensate senior executives. We disagree with this proposal for two reasons. First, we believe stock options are an indispensable part of an overall compensation

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strategy because they align the interests of our senior executives and other team members with those of our stockholders. Second, we believe restricted stock grants are not as effective in ensuring this alignment and, in any event, are equally susceptible to abuse.

The primary interest of our stockholders is increased share value. To be effective, then, our compensation strategy must align the interests of our senior executives and other team members with that interest. This means motivating them to work as hard as they can to increase share value over the long-term by giving them the opportunity to benefit if our stock price rises. Stock options provide this motivation in a straightforward and efficient manner. They have value only to the extent the price of our stock rises above the price at the time the options were granted.

We believe the Company has been a conservative and responsible grantor of employee stock options with demonstrated ability to use them to increase share value. The Company’s stock option program includes share retention, or ownership targets that encourage senior executives to retain, while they remain actively employed, shares of the Company’s stock equal to at least 50% of the after-tax profit shares (assuming a 50% tax rate) acquired through option exercises. This helps ensure continued alignment of the interests of our senior executives with those of stockholders after the options are exercised.

Although restricted stock grants would also reward the recipients if our stock price rises, we do not believe they would be as effective as stock options in motivating our senior executives and other team members to increase share value. Unlike stock options, restricted stock grants can have value to the recipient even if the stock price drops or remains the same. For example, let’s assume an employee of a corporation receives a restricted stock grant of 100 shares when the corporation’s stock price is $50. Let’s also assume any performance-based conditions are satisfied and the employee remains with the corporation long enough for the grant to vest. Finally, let’s assume the price of the corporation’s stock has fallen to $45 by the time the grant fully vests. The result: the employee has stock worth $4,500, even though an investor who bought the stock on the open market at the time of grant would have a loss of $500. This fact has led compensation consultants to refer to time-based restricted stock grants as “pay to stay” since to profit the recipient need only remain employed long enough for the stock to vest.

The proponent argues that performance- and time-based restricted share grants provide a better means to tie the level of equity compensation to measures of financial performance other than stock price. By definition, however, performance-based measures other than those tied to stock price can be achieved even if the stock price drops or remains the same. This means recipients of performance- based restricted stock grants can still profit even when there has been no increase in share value. By contrast, recipients of stock option grants profit only if the stock price rises.

The proponent also argues that stock option grants all too often provide extraordinary pay for ordinary performance. We share the proponent’s concern that stock option abuses have led to excessive executive compensation in some egregious and widely publicized cases. However, this has not been true of Wells Fargo and never will be. Moreover, restricted stock grants are equally susceptible to abuse. Irresponsible boards of directors can grant an excessive amount of restricted stock, just as they can grant an excessive number of stock options. This is why excessive compensation is ultimately a corporate governance issue, better addressed by holding directors accountable for the compensation paid to senior executives, than by putting a corporation at a competitive disadvantage by restricting its ability to use stock options as a form of compensation.

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The Board believes stock options are the most effective equity-based form of compensation to attract and retain talented executives and other team members and to fully align their interests with those of stockholders in increasing share value over the long-term. Accordingly, the Board recommends a vote AGAINST this proposal.

ITEM 6—STOCKHOLDER PROPOSAL REGARDING

EXECUTIVE COMPENSATION AND PREDATORY LENDING

Northstar Asset Management, Inc., P.O. Box 1860, Boston, Massachusetts 02130, which held 5,100 shares of common stock on November 12, 2003; Samuel O. Mills, P.O. Box 774, Diablo, California 94528, who held 2,500 shares of common stock on November 14, 2003; Martha R. Thompson, 712 South Elam Avenue, Greensboro, North Carolina 27403, who held 55 shares of common stock on November 11, 2003; and Leonora Morrison Fishbach, 455 East 86^th Street, Apartment 34A, New York, New York 10028, who held 329 shares of common stock on November 13, 2003 (collectively, the “Proponents”), intend to submit jointly a resolution to stockholders for approval at the 2004 annual meeting. The Proponents’ resolution is printed below.

Supporting Statement Resolution

Whereas,

Wells Fargo is one of America’s largest sub-prime lenders, making real estate and consumer finance loans to borrowers with less than perfect credit.

Historically, sub-prime lending has been fraught with predatory lending abuses. Predatory lending has stripped billions of dollars from borrowers who are often low-income, elderly or people of color, through inflated fees, loans made at rates higher than warranted by customers’ credit scores, poor disclosure of loan terms, and in some cases, outright fraud. Engaging in these practices can be extremely costly to companies and their shareholders. Within the last two years, Citigroup paid $200 million and Household International paid $484 million to settle predatory lending complaints.

Wells Fargo, a relative newcomer to the sub-prime lending industry, has already run afoul of state regulators. In 2003, California regulators filed suit against Wells Fargo Financial California seeking approximately $38 million in penalties for failing to meet state disclosure standards when mailing draft loans (also known as “live checks”) to prospective borrowers. After Wells Fargo represented that it had corrected the disclosure problem, regulators alleged that they found evidence of continued violation and brought “willful disregard” charges in the matter, which is still pending.

In a separate incident, Washington’s top banking regulator approved Wells Fargo’s merger with Pacific Northwest Bancorp in July, 2003, but warned: “public allegations of predatory lending practices and underreporting of Home Mortgage Disclosure Act data by [Wells Fargo’s] non-bank affiliates and operating subsidiaries will be considered…in future examinations.” She also called on federal regulators to investigate these concerns.

Wells Fargo lags other major industry players in developing policies protecting borrowers and shareholders from predatory lending abuses:

Unlike other lenders, Wells Fargo has no clear and public commitment that customers will not be discriminated against or charged higher prices on the basis of which part of the company they do business with.

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Wells Fargo has not established policies requiring that all mortgage refinancings provide net benefits to borrowers, as is the current industry best practice.

Wells Fargo has not adjusted compensation policies to discourage abusive sales practices, nor has the company established comprehensive audit procedures to ensure compliance with fair lending laws and company policies.

Wells Fargo continues to charge pre-payment penalties as long as five years, while the best practice within the industry is two years. Pre-payment penalties make it more difficult for borrowers to save money by refinancing.

Resolved,

Shareholders request that the Board conduct a special executive compensation review to study ways of linking executive compensation to successfully addressing predatory lending practices. Among the factors to be considered in this review are: implementation of policies to prevent predatory lending; evaluation of sub-prime loans by outside auditors for compliance with laws and company policies; constructive meetings with concerned community groups; and reductions in predatory lending complaints filed with government bodies. A summary of this review, prepared at reasonable cost and omitting proprietary information, shall be made available to shareholders, upon request, no later than October 1, 2004.

Position of the Board of Directors

The Board of Directors recommends a vote AGAINST this proposal, which is identified as Item 6 on the enclosed proxy card, because the Company does not engage in predatory lending, has implemented numerous policies and procedures designed to permit consumers to make informed and appropriate borrowing decisions, and the Company’s compensation practices require all executives to adhere to the Company’s stated policies, including those regarding lending practices.

The Company strives to meet the credit needs of, and build long-term relationships with all its customers so we can earn all their business and help them succeed financially. Given this philosophy, the Company offers a range of prime and non-prime loan products and terms, including sub-prime and other non-prime loan products offered by Wells Fargo Home Mortgage and Wells Fargo Financial to customers who do not qualify for prime loans or who have selected loans with features that do not qualify for prime pricing. The Proponents have attempted to equate sub-prime lending with predatory lending. However, “predatory lending,” as defined by the Office of the Comptroller of the Currency (the primary regulator of Wells Fargo Bank, National Association and its subsidiary, Wells Fargo Home Mortgage), means making consumer loans (loans for personal, family or household purposes) based predominantly on the value of the collateral for the loan and the lender’s reliance on foreclosure of that collateral as the primary source of repayment, without taking into account the borrower’s ability to repay the loan in accordance with its terms. The Company strongly opposes any such predatory lending practices and has an excellent track record of treating its customers fairly.

Wells Fargo Home Mortgage passes all mortgage loan applications through a filter that ensures that any borrower who qualifies for prime pricing receives a prime loan and requires that all consumers with lower credit scores have a documented ability to repay a loan. Wells Fargo Financial uses risk-based pricing to assure appropriate pricing to each of its customers and requires ability to repay on all loans. In addition, the Company has adopted an industry-best practice which requires that every real estate refinance made through Wells Fargo Home Mortgage’s non-prime lending channels or Wells Fargo Financial pass a borrower benefit test. Loans that do not pass the test are not originated.

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The Company’s compensation and commission policies are designed to encourage appropriate sales practices. Wells Fargo Financial does not pay commissions based on loan pricing, and Wells Fargo Home Mortgage equalizes commissions between the prime and non-prime units of Wells Fargo Home Mortgage to eliminate compensation as a factor in the selection of products. The Company also maintains comprehensive monitoring and audit procedures to ensure compliance with fair lending laws and corporate policy. All residential real estate lending employees of the Company are required to complete, on an annual basis, training on these laws and policies.

Finally, contrary to Proponents’ assertion, the Company does not originate loans with prepayment penalty periods of five years. Both Wells Fargo Home Mortgage and Wells Fargo Financial have capped the length of prepayment periods at the lesser of 36 months or, for an adjustable rate loan, the period of time until the first interest rate adjustment. Wells Fargo Financial offers borrowers a choice of a mortgage with or without a prepayment charge, with a corresponding differential in rate.

The Board of Directors believes that the type of executive compensation review that is the stated goal of the proposal is unnecessary, given that the Company does not engage in predatory lending, has embodied its customer-centered philosophy in its consumer lending policies and procedures, and has established compensation practices that do not reward executives for deviation from its stated policies.

Accordingly, the Board of Directors recommends that stockholders vote AGAINST this proposal.

ITEM 7—STOCKHOLDER PROPOSAL

REGARDING POLITICAL CONTRIBUTIONS

The International Brotherhood of Teamsters General Fund (the “Teamsters”), 25 Louisiana Avenue, N.W., Washington, D.C. 20001-2198, which held 3,900 shares of common stock on November 14, 2003, intends to submit a resolution to stockholders for approval at the 2004 annual meeting. The Teamsters’ resolution and statement of support are printed below.

Resolution

RESOLVED: That the shareholders of Wells Fargo Corporation (“Wells Fargo” or “Company”) hereby request that the Company prepare and submit to the shareholders of the Company: