Corporate Governance

2020_Corporate Governance and Executive Compensation

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Shearman & Sterling LLP Introduction | 1 Shearman & Sterling LLP is proud to present its 2020 Corporate Governance & Executive Compensation Survey. In last year's Survey, we noted that concern for environmental and social issues (the "E" and the "S" of "ESG") had reached an inflection point, having taken center stage from the more traditional governance issues (the "G" of ESG) that had been a staple of investor advocacy and discussion. Following the release of the 2019 Survey, this trend with respect to social issues not only continued, but accelerated, with some influential voices going so far as to question the long-standing shareholder primacy model of the corporation. Then came 2020. From the COVID-19 pandemic, to growing awareness of and large-scale protests against institutional racism, to the dangers of climate change manifesting in unprecedented wildfires on the west coast, the focus on the corporation's obligation to society at large has only intensified. In response to these developments, in the 2020 Corporate Governance & Executive Compensation Survey — our 18 th annual — we examine these themes and how they are impacting corporate governance and boardroom priorities, in addition to continuing to report on traditional governance topics. Throughout this Survey, we provide insights on specific environmental and social issues, including practical advice for Boards governing amid crisis, human capital management, green loans, ESG metrics in incentive compensation plans and recent shareholder activism trends. With respect to the traditional governance topics, we continue to cover shareholder engagement, shareholder Introduction activism, governance practices of newly public companies, CEO pay ratio, compensation clawback policies, cybersecurity and board diversity, among others. Across all topics, our goal is to provide an overview of the current corporate governance landscape and to identify best practices for Boards. In addition to Insights articles, the Survey consists of a review of key governance characteristics of the Top 100 Companies, which we define as the 100 largest U.S. public, noncontrolled companies that have equity securities listed on the NYSE or Nasdaq, measured by market capitalization and revenue. A list of the Top 100 Companies can be found in "The Survey" section at the end of this publication. The 2020 Survey was produced under the leadership of the following Shearman & Sterling attorneys: Richard B. Alsop George A. Casey Doreen E. Lilienfeld Gillian Emmett Moldowan Lona Nallengara Scott D. Petepiece Kristina L. Trauger Matthew H. Behrens Mark A. Dunham, Jr. Arielle L. Katzman Gina H. Lee Daniel Yao

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