Corporate Governance

Shearman & Sterling LLP 2 | Introduction The year 2012 marks the 10th anniversary of Shearman & Sterling's annual Survey of Corporate governance Practices of the largest uS Public Companies (the "Survey"). With the second full year under the mandatory say-on-pay regime of the dodd-Frank Wall Street reform and Consumer Protection act ("Dodd-Frank"), many of the Top 100 Companies 1 have reassessed how they are paying their executives and how they present this information to shareholders. say-on-pay votinG in 2012. Ninety-five of the Top 100 Companies held a say-on-pay vote during the 2012 proxy season. In each of 2011 and 2012, the say-on-pay vote failed at two Top 100 Companies, but no Top 100 Company received a negative vote two years in a row. The average levels of shareholder support for say-on-pay proposals at the Top 100 Companies remained fairly constant from 2011 to 2012 with 67% of the companies receiving approval levels in excess of 90% and 14% receiving approval levels below 70% in 2012 compared to 62% and 13%, respectively, in 2011. influenCe of sHareHolder advisors. The 2012 proxy season once again highlighted the influence of Institutional Shareholder Services ("ISS") and other proxy advisory firms on voting results. On average, there was an approximately 30% lower level of shareholder support if ISS recommended a vote against a company's say-on-pay proposal. ISS gave a negative recommendation to approximately 13% of the 2012 say-on-pay proposals, including each of the companies with a failed vote. Introduction 1 See "Survey Methodology" on page 64 of this Survey for the list of the top 100 Companies.

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