Corporate Governance

2018 Corporate Governance & Execution Compensation Survey

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COMPENSATION- RELATED PROXY DISCLOSURES Shearman & Sterling LLP Compensation-Related Proxy Disclosures | 83 In light of say-on-pay and heightened scrutiny of compensation practices, the need for companies to "sell their compensation story" has become paramount. The following are common disclosures that the Top 100 Companies provide their shareholders as a means of garnering support for their compensation programs: CD&A EXECUTIVE SUMMARIES COMPENSATION- RELATED PROXY DISCLOSURES COMMON PROXY DISCLOSURES INCLUDE:* 77 of the Top 100 Companies included an executive summary in their CD&A highlighting company performance, pay versus performance and strong corporate governance policies 80 of the Top 100 Companies provided a summary section highlighting key "selling" points from the entire proxy, including executive compensation disclosures As proxy statements grow in length, many Top 100 Companies utilize a proxy summary and/or a CD&A Executive Summary to highlight key components of their compensation program. Proxy summary CD&A executive summary CD&A generally Total companies * Companies will often repeat in the CD&A information that has been provided in the proxy summary or CD&A executive summary. 17 17 16 38 27 31 25 46 46 24 27 14 72 34 16 54 33 12 Significant changes to the compensation and compensation governance practices made in 2017 Shareholder engagement efforts Compensation elements (often including the reasons for paying each element) Summary of good compensation and governance practices (often provided through a "what we do" and "what we don't do" chart) Company performance highlights CEO and/or NEO pay mix 37* 75 80 82 75 56

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