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SCHEDULE 14A

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

Exchange Act of 1934 (Amendment No.      )

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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WELLS FARGO & COMPANY

March 17, 2008

Dear Stockholder:

The 2008 annual meeting of stockholders of Wells Fargo & Company will be held on Tuesday, April 29, 2008, at 1:00 p.m., Pacific time, in the Penthouse Boardroom, 420 Montgomery Street, San Francisco, California. Please read the notice of meeting and proxy statement accompanying this letter carefully so that you will know what you are being asked to vote on at the meeting and what you will need to do if you want to attend the meeting in person.

This year Wells Fargo is using a new Securities and Exchange Commission (SEC) rule to furnish its proxy statement, 2007 annual report, and proxy card or voting instruction form over the internet to stockholders. This means that most stockholders will not receive paper copies of these documents as in prior years. Instead, these stockholders will receive only a notice containing instructions on how to access the proxy materials over the internet and vote online. This new rule allows Wells Fargo to further its commitment to work toward a greener future by reducing the consumption of paper, energy, and other natural resources. If you received only the notice and would like to receive a copy of the printed proxy materials, the notice contains instructions on how you can request copies of these documents. Please visit www.wellsfargo.com (select “About Us,” then “Investor Relations—More—Annual Reports”) for more information about the SEC’s new rule and the expected benefits to Wells Fargo and its stockholders.

Your vote is important. Please vote as soon as possible even if you plan to attend the annual meeting. If you need help at the meeting because of a disability, 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.

Thank you for your interest in Wells Fargo.

		Sincerely,
Richard M. Kovacevich Chairman				John G. Stumpf President and Chief Executive Officer

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WELLS FARGO & COMPANY

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

By Order of the Board of Directors,

Laurel A. Holschuh Corporate Secretary

This notice and the accompanying proxy statement, 2007 annual report, and proxy card or voting instruction form were either made available to you over the internet or mailed to you on or about March 17, 2008.

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WELLS FARGO & COMPANY

420 Montgomery Street

San Francisco, California 94104

PROXY STATEMENT

GENERAL INFORMATION

Our stockholders are invited to attend the annual meeting and are entitled and requested to vote on the items of business described in this proxy statement. Please read this proxy statement carefully. You should consider the information contained in this proxy statement when deciding how to vote your shares at the annual meeting. In this proxy statement, we refer to the notice of the 2008 annual meeting of stockholders, this proxy statement, our annual report to stockholders for the fiscal year ended December 31, 2007, and the proxy card or voting instruction form as our “proxy materials.”

Some information in this proxy statement reflects that in November 1998, Norwest Corporation changed its name to “Wells Fargo & Company” upon the merger of the former Wells Fargo & Company into a wholly owned subsidiary of Norwest Corporation. Norwest Corporation as it existed before this merger is referred to in this proxy statement as the “former Norwest.” In this proxy statement the “Company,” “Wells Fargo,” “we,” “our,” or “us” all refer to the company now named Wells Fargo & Company and its subsidiaries. We also refer to the Board of Directors of Wells Fargo & Company as the “Board.” Please refer to the Glossary of Commonly Used Terms beginning on page G-1 of this proxy statement for other definitions of terms or abbreviations frequently used in this proxy statement.

INFORMATION ABOUT THE PROXY MATERIALS

Why did I receive the proxy materials?

You received the proxy materials because the Board is soliciting your proxy to vote your shares at the annual meeting on Tuesday, April 29, 2008 or at any adjournment or postponement of this meeting. On or about March 17, 2008, we mailed to most stockholders only a “Notice of Internet Availability of Proxy Materials” (Notice) containing instructions on how to access the proxy materials over the internet and mailed printed copies of proxy materials to the rest of our stockholders. If you own shares of common stock in more than one account—for example, in a joint account with your spouse and in your individual brokerage account—you may receive more than one Notice or more than one set of printed proxy materials. Please help save money and reduce the environmental impact of delivering printed proxy materials to stockholders by signing up to receive all your proxy materials electronically as described under “If I received a printed copy of the proxy materials in the mail, can I receive my proxy materials electronically in the future?” below.

What is a proxy?

The Board is asking you to give us your proxy. Giving us your proxy means that you authorize another person or persons to vote your shares of common stock at the annual meeting in the manner

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you direct. The written document you sign to designate someone as your proxy is usually called a “proxy card” or a “voting instruction form” depending on how the ownership of your shares is reflected in our records. If you are the record holder of your shares, a “proxy card” is the document used to designate your proxy to vote your shares. If you hold your shares in street name, a “voting instruction form” is the document used to designate your proxy to vote your shares. If your shares are held through either the Company’s 401(k) Plan or Stock Purchase Plan, then Broadridge Financial Solutions, Inc. (Broadridge) will send you a “voting instruction form and proxy card” to designate your proxy to vote your shares. In this proxy statement, the term “proxy card” means the proxy card, voting instruction form, and the voting instruction form and proxy card unless otherwise indicated.

What is the difference between holding shares as a “record” holder and in “street name”?

Who pays the cost of soliciting proxies?

We pay the cost of soliciting proxies. We have retained Georgeson Inc. to help the Board solicit proxies. We expect to pay Georgeson $15,500 plus out-of-pocket expenses for its help. Members of the Board and our team members may also solicit proxies for us by mail, telephone, fax, e-mail, or in person. We will not pay our directors or team members any extra amounts for soliciting proxies.

Why did I receive a Notice regarding the internet availability of proxy materials this year instead of a printed copy of the proxy materials?

We have decided to use the new Notice and Access rule recently adopted by the Securities and Exchange Commission (SEC) to provide access to our proxy materials over the internet instead of mailing a printed copy of the proxy materials to each stockholder. As a result, on or about March 17, 2008, we mailed to most stockholders only a “Notice of Internet Availability of Proxy Materials” that tells them how to access and review the information contained in the proxy materials and how to vote their proxies over the internet. If you received only this Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you request the materials by following the instructions included in the Notice.

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If I received a printed copy of the proxy materials in the mail, can I receive my proxy materials electronically in the future?

Although the new SEC rule allows us to continue to provide printed copies of the proxy materials to stockholders, we would prefer to send proxy materials to stockholders electronically. Stockholders who sign up to receive proxy materials electronically will receive an e-mail with links to the proxy materials, which may give them faster delivery of the materials and will help save printing and mailing costs and conserve natural resources. If we sent you a printed copy of the proxy materials and you would like to sign up to receive these materials electronically in the future, please have your proxy card available and register using one of the following choices:

If you have previously agreed to electronic delivery of these materials, but wish to receive paper copies of the proxy materials, please follow the instructions provided in the Notice you received.

Where can I find more information about how the SEC’s new Notice and Access rule works and the expected benefits to Wells Fargo and its stockholders?

We have more information about how the SEC’s new rule works and the expected benefits to Wells Fargo and its stockholders on our website, www.wellsfargo.com (select “About Us,” then “Investor Relations—More—Annual Reports”).

What is “householding”?

SEC rules allow a single copy of the proxy materials or the Notice to be delivered to multiple stockholders sharing the same address and last name, or who we reasonably believe are members of the same family and who consent to receive a single copy of these materials in a manner provided by these rules. This practice is referred to as “householding” and can result in significant savings of paper and mailing costs.

Because we are using the SEC’s new Notice and Access rule, we will not household our proxy materials or Notices to stockholders of record sharing an address as in prior years. This means that stockholders of record who share an address will each be mailed a separate Notice or a printed copy of the proxy materials. However, we have been notified that certain brokerage firms, banks, or other similar entities holding common stock for their customers will household proxy materials or Notices. Stockholders sharing an address whose shares of common stock are held by such entities, who now receive multiple copies of our proxy materials and who wish to receive only one copy of these materials per household, should contact their brokerage firm, bank, or other similar entity to request that only one set of these materials be delivered in the future. Stockholders who hold shares in street name should also contact their brokerage firm, bank, or other similar entity to revoke any previously given consent to household proxy materials.

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We will promptly deliver a separate paper copy of the proxy materials or Notice, as applicable, to a stockholder at a shared address to which a single copy of these materials was delivered by his or her brokerage firm, bank, or similar entity if we receive an oral or written request from the stockholder. If a householded stockholder makes this request, it will also apply to future meetings. Householded stockholders may make this request by contacting:

Wells Fargo & Company

Wells Fargo Center

MAC #N9305-173

Sixth and Marquette

Minneapolis, Minnesota 55479

Attention: Corporate Secretary

1-651-552-6974 or 1-800-689-8788

INFORMATION ABOUT THE ANNUAL MEETING

What will I be voting on at the annual meeting?

This year you will be asked to vote on the following items of business:

As far as we know, stockholders will vote at the annual meeting only on the items listed above. However, if any other business properly comes before the meeting, the persons named as proxies for stockholders will vote on those matters in a manner they consider appropriate.

How does the Board recommend I vote?

For the reasons set forth in more detail later in this proxy statement, the Board recommends you vote:

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Who can vote at the annual meeting?

We are required under Delaware law to establish a record date for the annual meeting so we can determine which stockholders are entitled to notice of, and to vote at the meeting. The Board has determined that the record date for the annual meeting is February 29, 2008. Stockholders who owned shares of common stock as of the close of business on that date can vote at the meeting. On that date, we had 3,297,073,688 shares of common stock outstanding and entitled to vote. Each share of common stock outstanding on the record date is entitled to one vote on each of the 16 director nominees and one vote on each other item to be voted on at the meeting. There is no cumulative voting.

Do I have to attend the annual meeting to vote?

No. The Board is soliciting proxies so that you can vote before the annual meeting. Even if you currently plan to attend the meeting, we recommend that you vote by proxy before the meeting so that your vote will be counted if you later decide not to attend. If you are the record holder of your shares, there are three ways you can vote by proxy:

If your shares are held in street name, you may vote your shares before the meeting over the internet by following the instructions on the Notice you received or, if you received a voting instruction form from your brokerage firm, bank, or other similar entity by mail, by completing, signing, and returning the form you received. You should check your voting instruction form to see if telephone voting is available to you.

If you received more than one Notice or proxy card, this means you hold shares of common stock in more than one account. You must complete, sign, date, and return each proxy card or vote all shares over the internet or by telephone. If you vote over the internet or by telephone, you should not mail back any proxy card you received.

If you vote using one of the methods indicated above, you will be designating Michael J. Loughlin, James M. Strother, and Julie M. White, each of whom is an executive officer, as your proxies to vote your shares as you instruct. If you sign and return your proxy card but do not give any voting instructions on your proxy card, these individuals will vote your shares by following the Board’s recommendations above. If any other business properly comes before the meeting, these individuals will vote on those matters in a manner they consider appropriate.

Can I vote in person at the annual meeting?

Yes. If you are a stockholder of record on the record date, you can vote your shares of common stock in person at the annual meeting. If your shares are held in street name, you may vote your shares

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in person only if you have a legal proxy from the entity that holds your shares giving you the right to vote the shares. A legal proxy is a written document from your brokerage firm or bank authorizing you to vote the shares it holds in its name. If you attend the meeting and vote your shares by ballot, your vote at the meeting will revoke any vote you submitted over the internet, by telephone or by mail. Even if you currently plan to attend the meeting, we recommend that you also vote by proxy as described above so that your vote will be counted if you later decide not to attend the meeting.

How do I vote the shares I hold in the Company’s 401(k) Plan or Stock Purchase Plan?

If you hold shares of common stock in the 401(k) Plan or Stock Purchase Plan, Broadridge will send you a voting instruction form and proxy card with your proxy materials. This voting instruction form and proxy card reflects all shares of common stock you may vote under these plans as of the record date. If you participate in the 401(k) Plan and/or Stock Purchase Plan and you have a Company e-mail address, you will receive the instruction and proxy card after you are notified by e-mail that you can review a copy of the proxy materials over the internet. Under the terms of the 401(k) Plan, your 401(k) Plan shares are voted by the trustee of the 401(k) Plan, but you have the right to instruct the trustee how to vote these shares. Wells Fargo Bank, National Association (Wells Fargo Bank) is the trustee of the 401(k) Plan and is the custodian of the Stock Purchase Plan. Under the Stock Purchase Plan, you can vote all your Stock Purchase Plan shares directly. You can instruct the 401(k) Plan trustee how to vote your 401(k) Plan shares, and direct the Stock Purchase Plan custodian to vote your Stock Purchase Plan shares by completing, signing, and returning your voting instruction form and proxy card. You can also give your voting instructions over the internet, or by telephone by following the instructions on the voting instruction form and proxy card. Broadridge will tabulate all voting instructions and votes given by participants in these plans and provide the voting results for each plan to the 401(k) Plan trustee and Stock Purchase Plan custodian. The trustee of the 401(k) Plan will determine the ratio of votes for and against and abstentions on each item and vote all shares held in the 401(k) Plan according to these ratios. If you do not instruct the trustee how to vote your 401(k) Plan shares, the trustee will vote them in proportion to the voting instructions the trustee actually receives from all other 401(k) Plan participants. The custodian of the Stock Purchase Plan will vote your Stock Purchase Plan shares at the annual meeting as each participant directs. If you do not provide voting directions for your Stock Purchase Plan shares, these shares will not be voted.

May I change my vote?

Yes. If you are the record holder of the shares, you may change your vote by:

If your shares are held in the 401(k) Plan or Stock Purchase Plan, you may change your vote as indicated above, except that any changes to your voting instructions must be provided by the applicable deadline shown below. If your shares are held in street name, you may change your vote by submitting new voting instructions to your brokerage firm, bank, or other similar entity.

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What is the deadline for voting?

Are there any rules regarding admission to the annual meeting?

Yes. You are entitled to attend the annual meeting only if you were, or you hold a valid legal proxy naming you to act for, one of our stockholders on the record date. Before we will admit you to the meeting, we must be able to confirm:

If you do not have a valid picture identification and proof that you owned, or are legally authorized to act for someone who owned, shares of common stock on February 29, 2008, you will not be admitted to the meeting.

At the entrance to the meeting, we will verify that your name appears in our stock records or will inspect your brokerage or bank statement as your proof of ownership and any written proxy you present as the representative of a stockholder. We will decide whether the documentation you present for admission to the meeting meets the requirements described above. The annual meeting will begin at 1:00 p.m., Pacific time. Please allow ample time for the admission procedures described above.

What is a broker non-vote?

The New York Stock Exchange (NYSE) allows its member-brokers to vote shares held by them for their customers on matters the NYSE determines are routine, even though the brokers have not received voting instructions from their customers. The NYSE currently considers the election of directors, the ratification of independent auditors and the proposal to approve the Performance Policy as routine matters. Your broker, therefore, may vote your shares in its discretion on these routine matters if you do not instruct your broker how to vote on these matters. If the NYSE does not consider a matter routine, then your broker is prohibited from voting your shares on the matter unless you have given voting instructions to your broker. The NYSE does not consider the proposal to approve the

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Amended and Restated LTICP (Item 4) or the six stockholder proposals being presented at the annual meeting (Items 5 through 10) routine matters, so your broker may not vote on these matters in its discretion. Your broker, therefore, will need to return a proxy card without voting on these non-routine matters if you do not give voting instructions with respect to these matters. This is referred to as a “broker non-vote.”

How many votes must be present to hold the annual meeting?

A quorum must be present before we can conduct any business at the meeting. This means we need the holders of a majority of the outstanding shares of common stock entitled to vote at the meeting as of the record date to be present in person or represented by proxy at the meeting. We urge you to vote promptly by proxy even if you plan to attend the annual meeting so that we will know as soon as possible that enough shares will be present for us to hold the meeting. Solely for purposes of determining whether we have a quorum, we will count as present at the meeting:

What vote is required to approve each item?

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How are votes counted?

Is my vote confidential?

Yes. It is our policy that documents identifying your vote are confidential. The vote of any stockholder will not be disclosed to any third party before the final vote count at the annual meeting except:

The Inspector of Election and those who count stockholder votes may not be team members of Wells Fargo & Company but may be team members of one of our affiliated banks who have been instructed to comply with this policy. Broadridge, which is not affiliated with the Company, will count the votes of participants in the 401(k) Plan and Stock Purchase Plan.

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OWNERSHIP OF OUR COMMON STOCK

Directors and Executive Officers

To align the interests of our directors and executive officers with your interests as stockholders, we require our non-employee directors and our executive officers to own shares of our common stock. Under our stock ownership guidelines, non-employee directors are expected to own, within five years of joining the Board, stock equal to five times the cash portion of the annual retainer we pay them. We expect our executive officers to hold shares equal to at least 50% of the after-tax profit shares (assuming a 50% tax rate) each time they exercise an option under the LTICP. For purposes of these guidelines, shares counted towards ownership include shares a non-employee director has deferred pursuant to our Directors Stock Compensation and Deferral Plan (Directors Plan) and shares an executive officer holds, or is deemed to hold, in the 401(k) Plan, Supplemental 401(k) Plan, Deferred Compensation Plan, Stock Purchase Plan, the Direct Purchase Plan administered by our transfer agent, and shares owned by an executive officer’s spouse.

The following table shows how many shares of common stock our current directors and nominees for director, our executive officers named in the Summary Compensation Table in this proxy statement (named executives), and all directors and executive officers as a group owned on February 29, 2008 and the number of shares they had the right to acquire within 60 days of that date through the exercise of stock options. This table also shows, as of February 29, 2008, the number of common stock units credited to the accounts of our non-employee directors, named executives, and all directors and executive officers as a group under the terms of the various benefit and deferral plans available to them. None of our directors or executive officers, individually or as a group, beneficially own more than 1% of our outstanding common stock.

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Common Stock Units under Employee Benefit Plans

Principal Stockholders

The following table contains information regarding the only person and group we know of that beneficially owns 5% or more of our common stock as of December 31, 2007.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 (Exchange Act) and related regulations require our directors, executive officers, and anyone holding more than 10% of our common stock to report their initial ownership of common stock and any changes in that ownership to the SEC and the NYSE. We assist our directors and executive officers in complying with these requirements. We are required to disclose in this proxy statement the failure by any reporting person to file these reports when due. All reporting persons of the Company satisfied these filing requirements during 2007. In making these disclosures, we are relying on written representations of each reporting person and copies of the reports filed with the SEC.

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ITEM 1—ELECTION OF DIRECTORS

Director Nominees for Election

The Board has set 16 directors as the number to be elected at the annual meeting and has nominated the individuals named below. All nominees are currently directors of Wells Fargo & Company and have been previously elected by the stockholders. The Board has determined that except for Richard M. Kovacevich and John G. Stumpf, each nominee for election as a director at the 2008 annual meeting is independent from Wells Fargo as discussed below under “Director Independence.”

Directors are elected to hold office until the next annual meeting and until their successors are elected and qualified. All nominees have told us 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. In addition, as described below under “Director Election Standard,” each of the nominees has tendered his or her resignation as a director in accordance with our Corporate Governance Guidelines to be effective if he or she fails to receive the required vote for election and the Board accepts the tendered resignation.

The Board recommends you vote FOR each of the following nominees:

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Board and Committee Meetings; Annual Meeting Attendance

Directors are expected to attend all Board meetings and meetings of committees on which they serve. Directors are also expected to attend each annual stockholders meeting. All nominees for director in 2007 attended last year’s annual stockholders meeting.

The Board of Directors held seven regular meetings during 2007. Director attendance at meetings of the Board and its committees averaged 97% during 2007. Each director attended at least 75% of the total number of meetings of the Board and committees on which he or she served. The Board met in executive session without management present during five of its 2007 meetings. During executive sessions, the Chair of the Board’s Governance and Nominating Committee serves as the “lead” director and the committee chair who is most familiar with the subject matter being discussed leads the discussion. For example, the Chair of the Board’s Human Resources Committee leads the discussions regarding executive compensation, the CEO’s performance evaluation, and management succession.

Committees of the Board

The Board has established five standing committees: Audit and Examination, Credit, Finance, Governance and Nominating, and Human Resources. These committees act on behalf of the Board and report on their activities to the entire Board. The Board appoints all of the members of the committees on the recommendation of the Governance and Nominating Committee and adopts each committee’s charter.

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The following table provides membership information for each of the Board’s standing committees as of the date of this proxy statement.

Each committee’s charter addresses its purpose, authority, and responsibilities and contains other provisions relating to, among other matters, membership and meetings. In its discretion each committee may form and delegate all or a portion of its authority to subcommittees of one or more of its members. As required by its charter, each committee annually reviews and assesses its charter’s adequacy, but it may recommend amendments at any time. The Board must approve any recommended amendments. In addition, each committee charter requires the committee to review its performance annually. Stockholders and other interested persons may view a copy of each committee’s charter on our website, www.wellsfargo.com (select “About Us,” then “Corporate Governance”). A copy of each committee’s charter is also available in printed form to any stockholder who requests it by contacting our Corporate Secretary.

Audit and Examination Committee

Authority and Responsibilities.    The purpose of the Audit and Examination Committee (AEC) is to:

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In carrying out its oversight function, the AEC is responsible for, among other things:

Membership and Meetings.    Under its charter, the AEC must have a minimum of three members. No AEC member may serve on the audit committee of more than two other public companies. Each member of the AEC is independent, as independence for audit committee members is defined by NYSE rules discussed below under “Director Independence.” The Board has determined, in its business judgment, that each member of the AEC (Lloyd H. Dean, Enrique Hernandez, Jr., Robert L. Joss, Cynthia H. Milligan, Nicholas G. Moore, Philip J. Quigley, and Susan G. Swenson) is financially literate as required by NYSE rules, and that each member qualifies as an “audit committee financial expert” as defined by SEC regulations.

The AEC holds at least seven regular meetings a year, and may call special meetings. In 2007, the AEC met 11 times. As permitted by its charter, the AEC has delegated pre-approval authority for audit and permissible non-audit services to each of three designated AEC members for time-sensitive engagements as discussed on page 84 of this proxy statement.

Audit and Examination Committee Report.    The 2007 report of the AEC begins on page 84 of this proxy statement.

Credit Committee

Authority and Responsibilities.    The purpose of the Credit Committee is to:

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Within this broad framework, the Credit Committee is responsible for, among other things:

Membership and Meetings.    Under its charter, the Credit Committee must have a minimum of three members. The Credit Committee holds at least three regular meetings a year, and may call special meetings. In 2007, the Credit Committee met three times.

Finance Committee

Authority and Responsibilities.    The purpose of the Finance Committee is to:

Within this broad framework, the Finance Committee is responsible for, among other things:

Membership and Meetings.    Under its charter, the Finance Committee must have a minimum of three members. The Finance Committee holds at least three regular meetings a year, and may call special meetings. In 2007, the Finance Committee met three times.

Governance and Nominating Committee

Authority and Responsibilities.    The purpose of the Governance and Nominating Committee (GNC) is to:

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Within this broad framework, the GNC is responsible for, among other things:

Membership and Meetings.    Under its charter, the GNC must have a minimum of three members. Each member of the GNC is independent, as independence is defined by NYSE rules, as discussed below under “Director Independence.” The GNC holds at least two regular meetings a year, and may call special meetings. In 2007, the GNC met three times.

Director Compensation Process and Procedures.    Information about the GNC’s process and procedures for establishing director compensation appears below under “Director Compensation.”

Human Resources Committee

Authority and Responsibilities.    The purpose of the Human Resources Committee (HRC) is to:

Within this broad framework, the HRC is responsible for, among other things:

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The HRC may, in its discretion, form and delegate all or a portion of its authority to subcommittees of one or more of its members.

Membership and Meetings.    Under its charter, the HRC must have a minimum of three members. All HRC members must meet the definition of a “non-employee director” under Rule 16b-3 of the Exchange Act and be an independent director under NYSE rules. The Board has determined that each current HRC member is independent under these rules, as discussed below under “Director Independence.” The HRC holds at least three regular meetings a year, and may call special meetings. In 2007, the HRC met four times.

Executive Compensation Process and Procedures.    Information about the HRC’s process and procedures for establishing executive compensation appears below under “Human Resources Committee—Executive Compensation Process and Procedures” beginning on page 33 of this proxy statement and its Compensation Committee Report on our CD&A appears on page 35.

HRC and GNC Use of Compensation Consultant

The HRC and GNC are authorized to obtain advice and assistance from legal, accounting, or other advisors at our expense without prior permission of management or the Board. The HRC and GNC use a consultant to assist them in the evaluation of executive compensation and non-employee director compensation, respectively. Under its charter, the HRC has sole authority to retain and terminate any consultant to be used to assist in the evaluation of executive compensation, replace the consultant or hire additional consultants at any time, and approve the consultant’s fees and other retention terms. The HRC and GNC charters may be viewed on our website, www.wellsfargo.com (select “About Us,” then “Corporate Governance”).

The HRC and GNC have hired Frederic W. Cook & Co., Inc., a nationally recognized executive compensation consulting firm, to provide independent advice on matters related to executive and non-employee director compensation. Unlike many other executive compensation consulting firms that provide a diverse array of compensation, benefits and human resources related consulting services, the business of Frederic W. Cook & Co., Inc. is limited to providing independent executive compensation consulting services to its clients. It does not provide any other management or human resources related services. It is 100% owned by its senior consultants and has no outside equity or reciprocal financial relationships. In this proxy statement, the term “F.W. Cook” refers to Frederic W. Cook & Co., Inc. and George B. Paulin, F.W. Cook’s designated representative to the HRC and GNC.

The HRC’s and GNC’s agreement with F.W. Cook provides that F.W. Cook works directly on behalf of the HRC and GNC, as the case may be, and prohibits F.W. Cook from performing other services for Wells Fargo without the prior consent of the Chair of the HRC or GNC. To ensure the independence of any consultant retained by the HRC, the HRC charter was also recently amended to require the HRC to pre-approve all services performed by any executive compensation consultant used by the HRC other than services performed for the GNC relating to non-employee director compensation.

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F.W. Cook compiles compensation data for the financial services organizations the HRC considers our peers (Peer Group), and reviews with the HRC the Company’s executive compensation programs generally and in comparison to those of the Peer Group. F.W. Cook also advises the HRC on the reasonableness of compensation levels in comparison with those of the Peer Group, and on the appropriateness of compensation program structure in supporting the Company’s business objectives. F.W. Cook provides services to the GNC with respect to non-employee director compensation similar to those it provides to the HRC with respect to executive compensation. The HRC annually reviews the services performed by and the fees paid to F.W. Cook. The total amount of fees the Company paid F.W. Cook in 2007 was $111,207, which included the fees paid for services provided as the independent compensation consultant to the HRC and GNC, reimbursement of F.W. Cook’s reasonable travel and business expenses, and a fee of less than $5,000 for a survey of long-term incentives which is used for benchmarking for other positions throughout Wells Fargo.

Compensation Committee Interlocks and Insider Participation

Susan E. Engel, Richard D. McCormick, Donald B. Rice, Stephen W. Sanger, and Michael W. Wright served as members of the HRC in 2007. During 2007, no member of the HRC was an employee, officer, or former officer of the Company. None of our executive officers served on the board of directors or compensation committee (or other committee serving an equivalent function) of any entity in 2007 that had an executive officer serving as a member of our Board or the HRC. As described under “Related Person Transactions” on page 79 of this proxy statement, Mr. Rice has a family member who is employed by Wells Fargo and earned more than $120,000 in 2007.

Other Matters Relating to Directors

Susan G. Swenson, one of our directors, served as a director and as president and chief operating officer of Leap Wireless International, Inc., a wireless communications carrier, from July 1999 until January 2004, and served as chief operating officer of Amp’d Mobile, Inc., a mobile technology provider, from October 2006 until July 2007. In April 2003 Leap Wireless filed voluntary petitions for relief under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of California, and in August 2004 Leap Wireless completed its financial restructuring and emerged from Chapter 11. In June 2007 Amp’d Mobile filed a voluntary petition for relief under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware, and in July 2007 Amp’d Mobile ceased operations. Amp’d Mobile is in the process of selling all of its assets.

Director Compensation

The table below provides information on 2007 compensation for our non-employee directors. Messrs. Kovacevich and Stumpf are employee directors and do not receive compensation for their Board service.

We paid to each non-employee director who served on the Board during 2007 a cash retainer of $75,000, plus $2,000 for each Board or committee meeting attended. We paid additional fees of $25,000 to Mr. Quigley for serving as the Chair of the Audit and Examination Committee, $20,000 to Mr. Sanger for serving as the Chair of the Human Resources Committee, and $15,000 to each of Messrs. Joss, McCormick, and Rice for serving as the Chairs of the Credit, Finance, and Governance and Nominating Committees, respectively.

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On April 24, 2007, under the Directors Plan, we granted to each non-employee director a formula stock award of 1,957 shares of our common stock and an option to purchase 7,394 shares of common stock at an exercise price per share of $35.78, the NYSE closing price of Company common stock on the date of grant. The formula stock award vested in full on April 24, 2007. The option grant vested in full on October 24, 2007.

The narrative following the table provides additional information on director compensation, including the process for determining the amount and form of compensation.

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Determination of Director Compensation.    The GNC reviews the individual components and total amount of director compensation at least annually. The GNC generally recommends changes in director compensation to the Board for its approval every two years, based on its review of competitive pay data for non-employee directors of financial services companies in the Company’s Peer Group. It may recommend changes to director compensation more frequently based on its analysis of this competitive data. The GNC uses the same Peer Group used by the HRC to determine competitive pay for named executives. For a list of Peer Group companies, refer to “Peer Group for Compensation and Performance” in the CD&A below. As discussed above under “HRC and GNC Use of Compensation Consultant,” the GNC has retained F.W. Cook to act as the GNC’s independent compensation consultant. The GNC most recently revised director compensation effective January 1, 2007, except for the fee paid to the Chair of the AEC, which the GNC increased from $25,000 to $30,000 effective January 1, 2008.

Equity Compensation.    We currently grant formula stock awards and stock options to non-employee directors under the Directors Plan. As described under “Item 4—Approve the Amended and Restated Long-Term Incentive Compensation Plan” on page 88 of this proxy statement, the Board is proposing to amend the LTICP to permit grants of equity awards to non-employee directors. If stockholders approve the proposal, the Directors Plan will continue only as to the deferral program described below.

Formula Stock Awards.    Under the Directors Plan, each non-employee director who has served on the Board for at least the month of April in any year and is elected as a director at the annual

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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 common stock based on a specified award dollar value. Non-employee directors who are elected to the Board after September 30 and before April 1 in any year will receive, as of the date of the next annual meeting of stockholders, an award of common stock for the partial year. The GNC is authorized under the Directors Plan to determine the dollar value of the annual stock award, up to a maximum of $150,000. The GNC has set the dollar value of the full-year stock award at $70,000 and the dollar value of the partial-year award at $35,000.

Stock Options.    Also under the Directors Plan, each non-employee director elected at the annual meeting of stockholders receives, as of the date of the annual meeting, an option to purchase our common stock at an option exercise price equal to the NYSE closing price per share of common stock on the date of grant. A non-employee director who joins the Board at another time receives a stock option with a prorated value and an option exercise price equal to the NYSE closing price per share of common stock on the date of grant. The GNC is authorized under the Directors Plan to determine the dollar value of the annual option grant, up to a maximum of $150,000. The GNC has set the dollar value at $60,000. The Company uses a Black-Scholes option model to determine the number of option shares to be awarded based on the specified dollar value of the award. The award value under the Directors Plan is higher than the value assigned to the award under generally accepted accounting principles for option expensing purposes (the FAS 123R value) because the Black-Scholes model uses the stated option term for valuation purposes rather than the lower “expected term” allowed by the accounting standards.

The options are exercisable six months after grant and remain exercisable for ten years from the date of grant. Directors who exercise an option granted under the Directors Plan before September 28, 2004 by delivering shares of previously owned common stock or shares purchased in the open market will be granted a reload option to purchase the same number of whole shares of common stock, at the NYSE closing price per share of common stock on the date the reload option is granted, 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. No reload stock option will be granted with respect to an option granted on or after September 28, 2004.

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 Directors Plan deferral program. The annual retainer and meeting fees may be deferred into either an interest-bearing account or common stock units with dividends reinvested. The interest rate paid in 2007 on interest-bearing accounts was 4.8%. Formula stock awards may be deferred only into common stock units 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.

Stock Ownership Guidelines.    Within five years after joining the Board, directors are expected to own shares of our common stock having a value equal to five times the cash portion of the annual retainer. Each director has met, or any director who has served fewer than five years is on track to meet, these ownership requirements.

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CORPORATE GOVERNANCE

Corporate Governance Guidelines; Codes of Ethics

The Board of Directors is committed to sound and effective corporate governance principles and practices. The Board has adopted Corporate Governance Guidelines to provide the framework for the governance of the Company. These Guidelines, among other matters, set forth Board membership criteria, our director resignation policy, our Director Independence Standards, and information about the committees of the Board.

The Board has also adopted a Director Code of Ethics that states our policy and standards for ethical conduct by our directors and our expectation that directors will act in a manner that serves the best interests of the Company. We expect that all of our team members will also adhere to the highest possible standards of ethics and business conduct with other team members, customers, stockholders, and the communities we serve, and comply with all applicable laws, rules, and regulations that govern our businesses. Accordingly, we have had in effect for over 100 years a code of ethics for all team members.

Stockholders and other interested persons may view our Corporate Governance Guidelines and our Codes of Ethics on our website, www.wellsfargo.com (select “About Us,” then “Corporate Governance”). We will also provide this information in printed form to any stockholder who requests it by contacting our Corporate Secretary.

Director Election Standard

In November 2006, the Board amended our By-Laws to adopt a majority vote standard for uncontested director elections. Under this standard, a nominee for director will be elected to the Board if the votes cast for the nominee exceed the votes cast against the nominee. However, directors will be elected by a plurality of the votes cast in a contested election.

Our Corporate Governance Guidelines provide that the Board will nominate for election and appoint to Board vacancies only those candidates who have tendered or agreed to tender an advance, irrevocable resignation that would become effective upon the failure to receive the required vote for election and Board acceptance of the tendered resignation. A director who fails to receive the required number of votes for election and who has not already tendered an advance resignation is expected to tender, promptly following certification of the voting results, his or her resignation from the Board, which resignation may be conditioned upon Board acceptance of the resignation.

The Corporate Governance Guidelines also provide that the GNC will consider the tendered resignation of a director who fails to receive the required number of votes for election, as well as any other offer to resign that is conditioned upon Board acceptance, and recommend to the Board whether or not to accept such resignation. The GNC, in deciding what action to recommend, and the Board, in deciding what action to take, may consider any factors they deem relevant. The director whose resignation is under consideration will abstain from participating in any decision of the GNC or the Board regarding such resignation. If the Board does not accept the resignation, the director will continue to serve until his or her successor is elected and qualified. The Board will publicly disclose its decision on the resignation within 90 days after certification of the voting results.

Each director nominee named in this proxy statement has tendered an irrevocable resignation as a director in accordance with our Corporate Governance Guidelines, which resignation will become effective if he or she fails to receive the required vote for election at the annual meeting and the Board accepts his or her resignation.

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Director Independence

Under our Corporate Governance Guidelines, at least a majority of the directors on our Board, and all members of the AEC, GNC, and HRC must be independent. Each year the Board affirmatively determines the independence of each director and each nominee for election as a director. In order for a director to be considered independent, the Board must determine that the director has no direct or indirect material relationship with the Company, as explained below. To assist the Board in making its independence determinations, the Board adopted the Director Independence Standards appended to our Corporate Governance Guidelines, which are available on our website, www.wellsfargo.com (select “About Us,” then “Corporate Governance”). These Director Independence Standards consist of the NYSE’s “bright line” standards of independence and the Board’s categorical standards of independence. For relationships not covered by these NYSE and categorical standards, the Board (excluding the director with the relationship under consideration) will determine whether the relationship is material or not and, therefore, whether the director is independent.

Based on these Director Independence Standards, the Board considered information in January 2008 regarding the relationships between each director and/or his or her immediate family members or affiliated entities, on the one hand, and the Company, on the other, to determine the director’s independence from the Company. After reviewing the information presented to it, the Board determined, upon the recommendation of the GNC, that all current non-employee directors and director nominees (John S. Chen, Lloyd H. Dean, Susan E. Engel, Enrique Hernandez, Jr., Robert L. Joss, Richard D. McCormick, Cynthia H. Milligan, Nicholas G. Moore, Philip J. Quigley, Donald B. Rice, Judith M. Runstad, Stephen W. Sanger, Susan G. Swenson, and Michael W. Wright) are independent under our Director Independence Standards. Richard M. Kovacevich and John G. Stumpf are not independent because they are Wells Fargo employees. The Board determined, therefore, that 14 of the Board’s 16 director nominees are independent directors.

For purposes of the following discussion, an “immediate family member” of a director means his or her spouse, parents, stepparents, children, stepchildren, brothers, sisters, mother- and father-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and any person (other than a tenant or domestic employee) who shares the director’s home. Generally, under the NYSE “bright line” standards of independence, a director is not independent if the director:

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All of the relationships between a director and/or his or her immediate family members or affiliated entities and the Company that the Board considered in connection with making its independence determinations met the criteria for independence required by the NYSE.

Under the categorical standards of independence adopted by the Board, the Board has considered and determined that the following relationships between a director and/or his or her immediate family members or affiliated entities, on the one hand, and the Company, on the other, are not material relationships for purposes of determining whether a director is independent:

In connection with making its director independence determinations, the Board considered financial services, commercial, charitable, familial, and other relationships between each director, his or her immediate family members, or affiliated entities and the Company. In addition to those

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relationships described under “Related Person Transactions” beginning on page 79 of this proxy statement, the Board specifically considered the following relationships, each of which satisfied the NYSE “bright line” standards and was immaterial pursuant to the Board’s categorical standards of independence:

Communications with Directors

Stockholders and other interested parties who wish to communicate with the Board of Directors, including non-employee directors, should refer to the information provided on our website, www.wellsfargo.com (select “About Us,” then “Corporate Governance,” and then “How to Contact the Board of Directors”). We will also provide this information in printed form to any stockholder who requests it by contacting our Corporate Secretary.

Director Nomination Process

The GNC is responsible for, among other things, managing the new director nomination process, which includes identifying, evaluating, and recommending for nomination candidates for election as new directors. The goal of the GNC’s nominating process is to assist the Board 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 its stockholders. The GNC regularly reviews the composition of the Board in light of its understanding of the backgrounds, industry, professional experience, and various geographic and demographic communities represented by current members. The GNC also 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. 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.

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The GNC identifies potential candidates for first-time nomination as a director primarily through recommendations it receives from our current Board members, our Chairman, our Chief Executive Officer (CEO), and our contacts in the communities we serve. The GNC also has the authority to conduct a formal search using an outside search firm selected and engaged by the GNC to identify potential candidates. If the GNC identifies a potential new director nominee, it obtains publicly available information on the background of the potential nominee to make an initial assessment of the candidate in light of the following factors:

The Board requires that all nominees for service as a first-time director have the following minimum qualifications:

The GNC will determine, in its sole discretion after considering all factors it considers appropriate, whether a potential nominee meets these minimum qualifications. In addition, the GNC will 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 we serve and the interplay of the candidate’s experience with the experience of the other Board members.

If a candidate passes this initial review, the GNC will arrange an introductory meeting with the candidate and our Chairman and/or CEO, and the GNC Chair and/or another director to determine the candidate’s interest in serving on our Board. If the candidate is interested in serving on our Board, members of the GNC, together with several members of the Board, our CEO, and, if appropriate, other key executives of the Company, then conduct an interview with the candidate. If the Board and the candidate are both still interested in proceeding, the candidate provides us additional information for use in determining whether the candidate satisfies the applicable requirements of our Corporate Governance Guidelines, Director Code of Ethics, and any other rule, regulation, or policy applicable to members of the Board and its committees and for any required disclosures in our proxy statement.

Assuming a satisfactory conclusion to the process outlined above, the GNC then presents the candidate’s name for approval by the Board or for nomination for approval by the stockholders at the next stockholders meeting, as applicable.

The GNC will consider an individual recommended by one of our stockholders for nomination as a new director if the stockholder making the recommendation follows the procedures for submitting a

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proposed nominee’s name required by our By-Laws and as described under “Advance Notice Procedures” on page 110 of this proxy statement. In order for the GNC to consider a stockholder-proposed nominee for election as a director, the stockholder must submit the name of the proposed nominee, in writing, to our Corporate Secretary at: Wells Fargo & Company, MAC #N9305-173, Sixth & Marquette, Minneapolis, Minnesota 55479. All such submissions must include the following information:

Our Corporate Secretary will present all stockholder-proposed nominees received to the GNC for its consideration. The GNC has the right to request, and the stockholder will be required to provide, such additional information with respect to the stockholder nominee as the GNC may deem appropriate or desirable to evaluate the proposed nominee in accordance with the nomination process described above.

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EXECUTIVE COMPENSATION

This section presents information about the Company’s executive compensation philosophy, procedures, and programs, and compensation paid to our named executives, including:

Human Resources Committee—Executive Compensation Process and Procedures

Because the HRC plays a central role in formulating our compensation philosophy and programs and in making pay decisions for our named executives, we include certain information about the HRC’s process in our CD&A to help you better understand how and why these decisions are made. Our CD&A can be found beginning on page 36 of this proxy statement. Additional information about the HRC’s process appears below.

Compensation Decision Timelines.    The HRC plans for, discusses, and makes its executive compensation decisions over a period that spans approximately 18 months, beginning with its June, July, and November meetings prior to the fiscal year for which the compensation will be earned, and almost two years before any annual or long-term incentive compensation for a given year is actually awarded. At these meetings, the HRC considers competitive pay data from the most recent proxy statements for the financial services organizations the HRC considers our peers and any other pay information it considers relevant for purposes of the upcoming year’s stock option grants and compensation planning. At its meeting in February of the following year, the HRC certifies the Company’s achievement of one or more of the alternative performance goals set at the prior year’s February meeting, and also approves the new performance goals for the upcoming fiscal year under our Performance Policy. The HRC then makes its final annual and long-term compensation decisions for all named executives, including the CEO, based on the Company’s and the individual named executive’s performance for the just completed fiscal year.

To illustrate, for purposes of 2007 executive compensation, the HRC first reviewed and discussed at its June and November 2006 meetings publicly available competitive pay data for the financial services companies the HRC considered our peers. At its February 2007 meeting, it:

At its meetings for the balance of 2007, the HRC continued to review updated competitive compensation data and stock option grants for purposes of 2007 compensation. At its June 2007 meeting, the HRC approved an increase in the annual salary and a stock option award for John G. Stumpf in connection with his election as CEO, and a stock option award for Carrie L. Tolstedt in connection with her promotion to Senior Executive Vice President. At its February 2008 meeting, it

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certified achievement of one of the alternative performance goals for 2007, made final 2007 incentive awards, and took the actions listed above for purposes of 2008 compensation.

Use of Consultant.    As discussed above under “HRC and GNC Use of Compensation Consultant,” the HRC has retained F.W. Cook to act as the HRC’s independent compensation consultant for purposes of compiling Peer Group data and otherwise advising the HRC on compensation matters. For its June 2007 meeting, the HRC asked F.W. Cook’s designated representative, George B. Paulin, to report on, and respond to HRC members’ questions regarding a range of executive compensation matters, including the Company’s compensation program and current trends, a comparison of Company and Peer Group compensation amounts and structures, including stock option and restricted stock grant practices, recent stockholder initiatives on compensation, compensation committee procedures, the role of consultants, and regulatory activity.

Competitive Pay Analyses.    For purposes of making its annual compensation decisions for our executive officers, the HRC considers, at meetings in June, July, and November each year as described above, competitive pay data from a group of financial services companies that it regards as the Company’s peers (Peer Group). It selects the members of this Peer Group based on prominence in the financial services market, total market capitalization, and whether the organization competes directly with us for senior management. The HRC may adjust the companies included in our Peer Group periodically to reflect any changes to this group using these same factors. At its June 2007 meeting, the HRC approved changes to the Peer Group for purposes of 2007 compensation. The factors the HRC considered in making this change and the companies included in the revised Peer Group are described below in the CD&A under “Peer Group for Compensation and Performance.”

Role of Executive Officers in Compensation Decisions.    For 2007 and prior years, Richard M. Kovacevich, who served as Chairman and CEO until June 2007, and currently serves as Chairman, made recommendations to the HRC as to appropriate threshold, target, and maximum business line performance objectives for all named executives other than John G. Stumpf, who served as President and Chief Operating Officer until June 2007, when he was elected as CEO. Mr. Kovacevich also recommended 2007 base salaries and proposed annual cash incentive compensation opportunities at each of the performance levels. John G. Stumpf assumed this responsibility for 2008 compensation and for making final 2007 compensation recommendations for Howard I. Atkins, David A. Hoyt, Mark C. Oman, and Carrie L. Tolstedt, each of whom is a named executive. The Chairman or CEO, as applicable, recommends to the HRC compensation for the Company’s other executive officers who report directly to them using the same process. In making a recommendation for any executive officer who does not report directly to the Chairman or CEO, the Chairman or CEO will consider compensation recommendations made by the executive officer’s manager. In approving these awards at its February meeting, the HRC considers the Chairman’s or CEO’s recommendations on the final amounts of executive officers’ annual cash incentive awards. The Chairman and CEO participate in the portion of this meeting at which these awards are considered. The HRC makes its own determinations regarding our Chairman and our CEO, which are reviewed and ratified by the Board. In addition, as described in the CD&A under “Pay for Performance—Company Performance,” management prepares an analysis of Wells Fargo’s financial performance on a one-, three-, and five-year basis compared to that of its Peer Group over the same time periods using the financial measures listed under that heading. The HRC reviews this analysis for purposes of evaluating the Company’s performance compared to that of its Peer Group in connection with the HRC’s determination of the annual incentive awards for our named executives.

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Compensation Committee Report

The HRC, in its capacity as the compensation committee of the Board, has reviewed and discussed with management the CD&A required by Item 402(b) of Regulation S-K beginning on the following page. Based on this review and these discussions, the HRC has recommended to the Board that the CD&A be included in this proxy statement and incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 2007 for filing with the SEC.

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Compensation Discussion and Analysis

Introduction

This Compensation Discussion and Analysis (CD&A) describes our executive compensation philosophy and objectives. It also explains why the Human Resources Committee (HRC) decided to pay each element of 2007 executive compensation shown in the Summary Compensation Table on page 50 of this proxy statement based on these objectives. This table and the related tables that follow present the compensation paid for 2007 to Richard M. Kovacevich, Chairman (who also served as CEO until June 2007); John G. Stumpf, President and, since June 2007, CEO; Howard I. Atkins, Senior Executive Vice President and Chief Financial Officer (CFO); and the next three highest paid executive officers named in these tables: David A. Hoyt, Senior Executive Vice President, Wholesale Banking; Mark C. Oman, Senior Executive Vice President, Home and Consumer Finance; and Carrie L. Tolstedt, Senior Executive Vice President, Community Banking. When we refer to the “named executives” in this proxy statement, we mean these six individuals.

Sustainable Long-Term Growth and the Strategic Role of Executive Compensation

Achieving sustainable profitable growth with high stockholder returns over the long term has been the objective in developing the Company’s strategies for more than two decades. We believe that consistent long-term, high quality revenue and EPS growth will lead to consistent stock price growth. Our executive compensation philosophy and programs play an important role in achieving our objective of sustainable long-term growth in stockholder value. As a guiding principle, we design our compensation programs to reward our named executives for recent performance and to motivate them to achieve strong future performance for the Company and long-term value for our stockholders. The compensation policies, programs, and specific compensation decisions for 2007 discussed in this CD&A reflect this principle.

Executive Compensation Objectives

Superior execution by highly competent senior management is critical to achieving and maintaining consistent, outstanding annual and long-term financial performance. To attract and retain talented management with proven skills and experience, we must offer a compensation program that compares favorably with those offered by other large financial services and non-financial companies with which we compete for a limited pool of highly qualified senior executive talent. To sustain our financial performance, we believe that we should closely link compensation to our long-term performance and, for those named executives responsible for significant business groups, to the performance of their business group.

Given our philosophy to link compensation to Company, business, and individual performance, our compensation programs for our named executives are built on three objectives:

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Executive Compensation Components

To meet our compensation objectives, we structure executive officer compensation to include the following elements:

We explain the process the HRC used and the reasons for its 2007 pay decisions with respect to each of these pay elements in this CD&A and provide information about the named executives’ 2007 compensation in the compensation tables.

Peer Group for Compensation and Performance Comparisons

The HRC uses compensation and financial performance data from a group of large, publicly traded financial services companies to help establish competitively relevant and reasonable pay levels for our named executives. These companies, referred to as our “Peer Group,” make up the competitive compensation benchmarks we consider for attracting and retaining top management talent. The HRC periodically reviews and may adjust the companies included in the Peer Group. For 2006 compensation purposes, the Peer Group consisted of nine financial services companies (the 2006 Peer Group), including American Express Company and Bank of New York, Inc. At the HRC’s meeting in June 2007, the HRC removed these two companies and added six regional financial services companies after considering management’s recommendation and the views of F.W. Cook, the HRC’s outside compensation consultant. In making these changes, the HRC concluded that, due to changes in their business models, American Express Company and Bank of New York, Inc. were no longer appropriate for inclusion in our Peer Group, and that the additional six regional financial services companies compete both for our business and executive talent. As a result of these changes, our Peer Group for 2007 compensation and performance purposes consists of the following 13 financial services companies:

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Bank of America Corporation

BB&T Corporation

Capital One Corporation

Citigroup, Inc.

Fifth Third Bancorp

JPMorgan Chase & Co.

National City Corporation

The PNC Financial Services Group, Inc.

Regions Financial Corporation

SunTrust Banks, Inc.

U.S. Bancorp

Wachovia Corporation

Washington Mutual, Inc.

Achieving Compensation Objectives

Determine Competitive Pay.    To set approximate competitive benchmarks for 2007 annual and long-term compensation for our named executives, the HRC reviewed data compiled by F.W. Cook. This data presented Peer Group annual cash, long-term incentive, and total compensation amounts as reported in 2006 proxy statements for those companies’ chairmen and/or chief executive officers and other named executives whose positions and responsibilities most closely match those of our named executives. For each proxy statement position, this compensation data was ranked from highest to lowest by the combined total amount of annual cash plus the annualized value of long-term incentive awards. The HRC also reviewed the consultant’s calculations (excluding any Company pay data) of the average, median, and top quartile amounts for each of these pay components as well as for total compensation. The HRC used this information, together with changes in Peer Group compensation gathered by its outside consultant from Form 8-K filings throughout the year, to help develop competitive benchmarks for the 2007 salary and annual cash incentive awards and long-term compensation awards for our named executives. We discuss the role of F.W. Cook in our compensation process under “HRC and GNC Use of Compensation Consultant” and “Human Resources Committee—Executive Compensation Process and Procedures–Use of Consultant.”

Pay for Performance.    Our objective to “pay for performance” means we offer our named executives the opportunity to earn superior pay, from a competitive standpoint, in exchange for superior Company and individual performance. To motivate our named executives to perform at superior levels, we weight their total compensation opportunity more heavily in favor of annual cash incentives and long-term equity awards, which are “at risk” if Company and individual performance objectives are not met, rather than through salary, perquisites, and benefits, which do not change as a result of performance. Using the Peer Group compensation benchmarks described above, we target competitive pay in the top quartile of Peer Group pay for Company financial performance corresponding to the top quartile of Peer Group financial performance, at median competitive pay for median performance, and below median pay for below median performance. Determination of the incentive compensation awards to our named executives depends in whole or in part on the HRC’s subjective, after-the-fact evaluation of a mix of objective compensation and corporate performance data and subjective qualitative information, including whether named executives achieved their individual qualitative objectives. We explain the elements of financial and individual performance we consider below.

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At the beginning of each fiscal year, the HRC establishes one or more alternative financial goals under the Performance-Based Compensation Policy (Performance Policy). We designed the Performance Policy so that annual cash incentive compensation awards paid to “covered executive officers” as defined in IRC Section 162(m) should meet the regulatory criteria for “performance-based” compensation. Annual cash incentive compensation paid to our Chairman, our CEO, and the next three highest paid named executives is subject to the Performance Policy. Stock options are generally considered “performance-based compensation” under IRC Section 162(m) and are not subject to the provisions of our Performance Policy. No named executive covered by this policy will qualify for, and the HRC has no discretion to make any such award, unless the Company achieves at least one of these alternative financial goals as defined in the Performance Policy. The Performance Policy also establishes the maximum annual cash incentive award each covered executive officer may receive if he or she meets one or more of the alternative performance goals. We describe in more detail the business criteria contained in the Performance Policy used to set the alternative performance goals and how the maximum award payable for 2007 under the Policy was calculated in the narrative following the Grants of Plan-Based Awards table below. The Performance Policy is being presented to stockholders for re-approval at the 2008 annual meeting in accordance with IRC Section 162(m) regulations, which require stockholder approval every five years. A discussion of the requirements of IRC Section 162(m) and the terms of the Performance Policy appears under “Item 3—Approve the Performance-Based Compensation Policy.” A copy of the Performance Policy as proposed to be approved by stockholders is attached to this proxy statement as Exhibit A.

For 2007 cash incentive compensation, the HRC established as the alternative goals under the Performance Policy the achievement of (1) EPS of $2.49 (2006 EPS, as originally reported) or (2) return on realized common equity of 15%, in each case as determined under the Performance Policy. Last year, for purposes of 2006 compensation, the HRC also set a separate threshold EPS goal that could operate as a “knockout”—meaning that if this goal had not been met, incentive compensation would have been paid only at the discretion of the HRC. For purposes of 2007 compensation, the HRC concluded that the alternative goals set under the Performance Policy were sufficient and did not set a separate EPS knockout goal.

The HRC does not establish specific compensation opportunities for our Chairman and CEO, but does review and consider competitive Peer Group pay data for comparable positions and financial performance. To determine the incentive awards for our Chairman and our CEO, the HRC relies on its subjective evaluation of the Company’s performance on a stand-alone basis and as compared to our Peer Group. For named executives other than our Chairman and our CEO, the HRC sets annual cash incentive compensation opportunities at specified percentages of salary payable at threshold performance, target performance, and maximum performance, based on competitive information from our Peer Group, as discussed under “Determine Competitive Pay,” and based on our CEO’s recommendations. The HRC also considers the degree to which each named executive achieved his or her individual qualitative objectives and may consider the relative level of awards earned for prior year’s performance and the relative level of awards earned by other named executives. We show the amount of the threshold, target, and maximum opportunities for 2007 for Messrs. Atkins, Hoyt, Oman, and Ms. Tolstedt in columns (c), (d), and (e) in the Grants of Plan-Based Awards table. These compensation opportunities correspond to threshold, target, and maximum financial performance goals and individual objectives. These goals and objectives are assigned weights that total 100%. The HRC considers whether these performance goals and objectives have been achieved in determining the annual cash incentive compensation awards to these named executives. For 2007, for Mr. Atkins, our CFO, the Company’s financial performance results had an 80% weight and his individual qualitative

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objectives had a 20% weight. For Messrs. Hoyt and Oman and Ms. Tolstedt, the Company’s financial performance results had a 40% weight; their individual business line financial goals had a 50% weight; and individual qualitative objectives had a 10% weight.

Company Performance.    At the end of each fiscal year, the HRC reviews the Company’s financial performance by comparing our financial results over one-, three-, and five-year periods to those of our Peer Group using the quantitative performance measures listed below, as part of its evaluation of the Company’s annual performance and its determination of the annual incentive awards to our named executives:

These quantitative measures are shown to the HRC as reported publicly, adjusted for the elimination of goodwill for all years prior to 2002 for accounting consistency, and as adjusted for the impact of significant acquisitions and divestitures. The HRC also considers management’s analysis of the Company’s performance for its most recently completed fiscal year that identifies and discusses the impact of any special circumstances or one-time events in that year or previous years such as one-time gains or losses, discretionary investments, or external events that may affect the financial performance of the Company or that of our Peer Group. This analysis presents the Company’s financial performance and the Peer Group’s financial performance on a comparable basis and also describes key accomplishments by the Company’s business lines. For purposes of evaluating the Company’s performance, the HRC may also consider the views of approximately 20 investment analysts who issue reports on the Company’s performance, all of which are forwarded to the entire Board throughout the year. The HRC does not have a pre-established framework to determine which items of financial data may be more or less important in evaluating the Company’s performance. Rather, the HRC relies on its own judgment as to which financial measures, if any, to emphasize in evaluating the Company’s performance compared to that of its Peer Group. The HRC then makes its own judgment as to whether

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the Company’s actual performance taken as a whole, when compared to its Peer Group, was in the top quartile, at the median, or below the median performance of its Peer Group.

Business Line Performance.    Messrs. Hoyt and Oman and Ms. Tolstedt have business line earnings threshold, target, and maximum financial performance goals for the businesses they manage. These goals are established based on the Company’s internal management reporting system, rather than on the Company’s reported GAAP financial results. These goals reflect the projected contribution of their business groups to the Company’s internally derived profit plan that we prepare and review annually with our Board. Our profit plan is based on our objective of achieving sustainable profitable growth and high stockholder returns over the long term, and establishes the current year’s earnings growth objectives over the prior year’s earnings.

Specifically, if our named executives achieve their business line goals at target level, this achievement, when aggregated with the financial performance goals achieved by other areas of the Company, should result in meeting the Company’s annual earnings growth objective. If they achieve their goals at their threshold or maximum or greater levels, the Company’s earnings may be correspondingly affected. These performance levels are typically set around relatively narrow ranges in order to drive the consistent earnings growth objectives described above. As a result, missing the threshold level business line goal may significantly impact the affected named executive’s incentive compensation. Because of differences in organizational structure and external business segment reporting, our business lines would rarely correspond to the business lines of our Peer Group. However, we believe, and experience has shown, that if the business groups managed by these named executives perform at their individual target or maximum levels, this performance will likely result in overall Company performance at the median to top quartile of our Peer Group.

The performance goals for our individual business lines are designed to implement our product and pricing proprietary strategies and reward collaboration across multiple business lines so we can meet more of our customers’ financial needs. The table below shows the relationship between the threshold, target, and maximum performance levels for the business line goals for Messrs. Hoyt and Oman and Ms. Tolstedt expressed as percentages of each of their business line’s projected contribution to the Company’s internal profit plan for 2007.

We may further adjust each of these named executive’s projected contribution to our profit plan and related earnings objective to reflect acquisitions, divestitures, internal reorganizations or other changes in reporting relationships, and changes in internal revenue and expense allocations outside of the businesses for which the named executive has management responsibility.

The threshold, target, and maximum percentage business line goals shown for the named executives listed in the table above were derived using certain assumptions for 2007 with respect to the general economic, interest rate, credit, and regulatory environment in which we operate and certain assumptions as to the outlook for the businesses each of them managed. These goals, especially at the

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target and maximum levels, assumed, for Mr. Hoyt’s Wholesale Banking Group, continued double-digit loan growth and favorable credit quality; for Mr. Oman’s Home and Consumer Finance Group, improvement in the home mortgage business due to cost control and expected improvements in the yield curve favorably affecting earnings from hedging activities; and for Ms. Tolstedt’s Community Banking Group, growth in deposits, especially low or no-cost core deposits, continued loan growth, and stable credit loss rates. Achievement of these goals was considered by the HRC as very challenging, even aggressive, given the expected modest economic growth for 2007 for the financial services industry, the impact and duration of the on-going flat/inverted yield curve (meaning short-term interest rates that are virtually equal to or exceed long-term interest rates, thus lowering profit margins for financial services companies that borrow cash at short-term rates and lend at long-term rates), potentially higher credit losses, fewer available high-quality, high-yielding loans and investment opportunities, and a consumer shift from non-interest to interest-bearing deposits.

Individual Qualitative Objectives.    We establish individual “qualitative” objectives for our named executives in addition to individual business line financial goals. These objectives include compliance with our policies on information security, regulatory compliance, risk management, and team member ethnic and gender diversity objectives. We also establish other qualitative objectives appropriate for each named executive’s position and responsibilities. We make it clear to our named executives that the HRC may adjust or eliminate incentive compensation awards, regardless of their achieving their financial performance goals or qualitative objectives, if the HRC determines that a named executive has failed to comply with our Code of Ethics and Business Conduct or with our policies on information security, regulatory compliance, and risk management.

For 2007, the individual qualitative objectives for Mr. Kovacevich included continuing the Company’s progress on succession at the senior management level, strengthening the Company’s business model and culture, regulatory compliance and information security, and the Company’s reputation in its business and local communities, and implementing team member diversity, management, and talent development initiatives to maintain the Company’s strategic direction and financial performance. For Mr. Stumpf, the qualitative goals included his broadened role as CEO and goals similar to those for Mr. Kovacevich.

For each of Messrs. Atkins, Hoyt, Oman and Ms. Tolstedt, individual qualitative objectives for 2007 were established by Mr. Stumpf and included:

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HRC Discretion in Incentive Compensation Decisions.    As previously explained, under our stockholder-approved Performance Policy the HRC has no discretion to award cash incentive compensation to our named executives unless they have met at least one of the alternative performance goals established under the Performance Policy. Subject to this limitation, the HRC reserves the right to exercise its discretion under the Performance Policy to reduce the maximum incentive compensation award whether or not individual business line or qualitative objectives have been met, based on its evaluation of, among other factors, Company performance compared to Peer Group performance at prevailing economic conditions. A discussion of how the HRC exercised its “negative” discretion under the Performance Policy for purposes of 2007 incentive compensation appears under “2007 Compensation Decisions—Annual Compensation–2007 Performance Policy Conclusions.”

In exercising its negative discretion under the Performance Policy, the HRC may consider any of the factors discussed above. While the HRC believes that linking compensation opportunities to Company and individual performance objectives generally provides a reliable and disciplined framework for making pay decisions, it also believes that rigid adherence to formulas could be counter-productive for the Company in the long run. Because we are a diversified financial services company whose business model is based on selling more products to existing customers to earn more of our customers’ business, the success of any particular business line depends on all of our business lines collaborating effectively and performing together as a whole. Although diversification of our revenue stream across multiple segments of the financial services industry is good for the Company and its stockholders, it means that at any given time the individual performance of a business group may lag the Company’s performance as a whole simply because of the cyclical impact of business or economic conditions on that group. Given the paramount goal of superior Company performance, the HRC may use its discretion, where appropriate, to pay an incentive award to a named executive at or near his or her target or maximum, even if his or her particular business group has not achieved its target or maximum financial performance goals, provided the Company overall has performed at the median or in the top quartile of Peer Group performance. Conversely, the HRC may use its discretion, where appropriate, to reduce an incentive award to a named executive whose business line has significantly underperformed on its objectives, despite the Company’s overall performance at its target or maximum levels. The HRC may also consider changes in economic conditions during the fiscal year that may have affected Company or business line performance in determining incentive awards.

Use Long-Term Compensation to Align the Interests of Our Named Executives and Our Stockholders.    We believe stock options, coupled with stock ownership retention guidelines, are the most effective form of equity-based compensation to reward our named executives for their contributions to our long-term performance. Because the primary interest of our stockholders is increased share value, stock options—which produce value as compensation only if our stock price increases—most directly align the interests of our named executives with those of our stockholders. At this time we believe stock options better align our named executives’ interests with our stockholders’ interests to increase share value over the long term, although we may grant restricted stock or restricted share rights (RSRs) that vest over time for specific employment, retention, or competitive pay purposes. Through stock options, our named executives will be rewarded for their contributions to our long-term performance only if our stockholders are being similarly rewarded.

Under stock ownership guidelines established and monitored by the HRC, we expect each executive officer to hold shares of our 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

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owned under these guidelines continues to increase each time an executive officer exercises a stock option. Each named executive officer has satisfied and, in most cases, significantly exceeded these ownership guidelines. We prohibit named executives, as well as all team members, from engaging in options (other than employee stock options), puts, calls, short sales, or other derivative or hedging activity involving Company common stock.