2014 Proxy Season Preview and 2015 Preview NACD Atlanta

1. 2014 Proxy Season Preview and 2015 PreviewNACD Atlanta • Sept. 17, 2014

2. Engagements and Settlements Alter Meeting Landscape Contested Meetings Pick Up Steam in Q2 and Q3 Concerns Over Accountability, Responsiveness and CEO Pay Drive Opposition to Directors Record Say-on-Pay Volume Fails to Produce Wave of Negative Results Independent Chair, Political Spending and Lobbying Disclosure Top Shareholder Proposal List 2014 Proxy Season headlines

3. Top 10 Meetings for 2014

4. Fewer Fights Reach Votes, Battling Average Drops Contest Volume Surges in Q2 U.S. H1 Proxy Contests (‘09-’14) • Slow start/fast finish Two fights in Q1; 20 in Q2 • “Less” success at ballot box 59% in ‘14 vs. 68% in ’13 • Impact of settlements Boards shrink slates • Hydra-headed dissidents • Median market cap rises $260m in ‘14 vs. $141m in ‘13

5. 2014: US Director Support Hits New Heights 2014 Average Support for R3K* Nominees: 96.2% ISS Recommends Against/Withhold on 7.4% of 16,616 R3K nominees More than 90% of nominees have drawn support of 90% or more *Based on results for 16,175 nominees at meetings of Russell 3000 firms Data does not include abstentions

6. Vote No/Say Nay Campaigns

7. Triennials Create MSoP Tsunami in 2014 Number of MSoP Votes, Jan. 1 – June 30, 2012-2014

8. Say on Pay Support Remains High 2014 Average MSoP Support at R3K* Firms: 91.7% ISS Recommends Against 290 of 2,397 Proposals • Voting Dissent Nearly 8 of 10 proposals drew 90% support or higher *Based on vote results for 2,345 Russell 3000 firms Data does not include abstentions

9. P4P Concerns Drive Investor Dissent ISS Concern Levels at R3K Companies that Received <70% Support for MSoP

10. Qualitative Analysis Drives MSoP Advice 2. ISS Qualitative Analysis Quantitative Concern vs. Final Vote Recommendation Medium P4P Concern

11. Mix of CEO Equity Awards is Changing Russell 3000 CEO Equity Pay Mix by Value New Proxy Disclosure Rules Stock Option Expensing – 2006

12. Shareholder Proposal Headlines • Changing of shareholder proposal guard as E & S top G • E&S concerns account for 53% of resolutions • Record 460 E&S proposals • Three most prevalent proposals combines for 141 proposals, but just eight majority votes • Independent chair (4), political spending (1) and lobbying disclosure (3) • Breakout year for calls to limit accelerated vesting following a change in control • Big support numbers for annual elections (84% of votes cast) and majority voting (59%) • Six majority votes for proxy access

13. Leading Shareholder Proposal Topics

14. Coming Attractions for 2H 2014 and Beyond Contentious Fights Pack Pipeline as M&A Activity Soars Inversions and Other Tax Issues Drive Deal-making and Restructurings Board Refreshment Draws More Attention from Investors Accountability Battles Over Bylaws and Risk Oversight Trouble Building in the REIT Sector Low Tide Year for Say on Pay in 2015

15. Questions Pat McGurn Patrick.Mcgurn@issgovernance.com +1 301.556.0402 Service Expertise Coverage Quality Innovation

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