Corporate Governance

Shearman & Sterling LLP Introduction | 3 Introduction This, our seventh Annual Survey of Selected Corporate Governance Practices of the Top 100 Companies *, reveals the effects of the continued pressures brought to bear on the corporate governance policies and practices of public companies since implementation of the 2002 Sarbanes-Oxley Act. For example, since we began tracking majority voting three years ago, more than half of the Top 100 Companies have abandoned the plurality voting standard in favor of a majority voting standard, and as this year's Survey reveals, 75 of the Top 100 Companies now implement a majority voting standard. While majority voting continues to be an area of interest, other areas that during the past year have gained heightened interest with regulators, Congress, and the investor community include proxy access, shareholder say-on-pay, broker discretionary voting authority, independent board chairs, compensation clawback policies, compensation consultant conflicts of interest, employee compensation structures and packages, enterprise risk management, declassified boards, and enhancements to corporate governance-related disclosures in proxy statements. Numerous initiatives covering many of the same areas mentioned above are pending in Congress. These initiatives include the "Shareholder Bill of Rights Act of 2009," the "Shareholder Empowerment Act of 2009," the Obama administration's legislation contained in Subtitle D–Executive Compensation to the administration's "Investor Protection Act of 2009," and the "Corporate * See "Survey Methodology" on page 38 for the list of the Top 100 Companies.

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