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UPDATE 1-Wells Fargo employees paid for first time using new pay scheme

(Adds details on compensation scheme and branch closures)

June 13 (Reuters) - Wells Fargo & Co paid its branch employees for the first time in May using new sales goals that focus on customer service, branch banking chief Mary Mack said at an investor conference on Tuesday.

The third-largest U.S. bank overhauled compensation practices in its branches in January following a scandal tied to a pay scheme that rewarded employees who sold multiple products to the same customer and punished those who did not. As a result of that system, low level employees created as many as 2.1 million accounts without customer authorization.

The new compensation system rewards teams rather than individuals in many cases, and is based on whether customers actually use the products they are sold.

Mack also discussed the bank's work to reduce the number of branches in its network, something it was slower to do than rivals such as Bank of America Corp.

Wells Fargo has lately accelerated branch closures, shuttering 80 in the fourth quarter of last year, Mack said. This year it is on track to close 200, she said, adding that the strategy varies greatly according to the region in which the closures are occurring.

"In Manhattan you probably dont want to go further than across the street to consolidate," she said. (Reporting by Dan Freed; Editing by Bernard Orr)