2018 Guide to Effective Proxies

1. INTRODUCTION.......................................................... 1 1.1 Optimize shareholder communications............. 1 2. PROXY LAYOUT, DESIGN AND CONTENT............... 2 2.1 Document cover........................................................ 2 2.2 Board/CEO letter ...................................................29 2.3 Table of contents (TOC).........................................48 2.4 Proxy summary....................................................... 67 2.5 Checklists............................................................... 101 2.6 Timelines................................................................ 110 2.7 Frequently asked questions (FAQs).................. 114 2.8 Election of directors............................................ 122 2.9 Board diversity graphics......................................141 2.10 Board skills matrix................................................157 2.11 Board committee grids....................................... 174 2.12 Environmental & social disclosure..................185 2.13 CEO succession.....................................................198 2.14 Board and director evaluation..........................204 2.15 Director recruitment & succession.................. 210 2.16 Risk oversight........................................................ 215 2.17 Compensation discussion & analysis..............233 2.17.1 CD&A Table of contents or “roadmap”..233 2.17.2 Executive summary...................................258 2.17.3 Business strategy....................................... 279 2.17.4 Compensation mix..................................... 316 2.17.5 Elements of pay tables............................. 347 2.17.6 CEO to median employee pay ratio.......386 2.17.7 Alternative pay calculations ....................411 2.17.8 Pay for performance alignment..............417 2.17.9 Performance metrics.................................439 2.17.10 Peer groups................................................454 2.17.11 Shareholder engagement.......................483 2.18 Summary compensation table..........................499 3. ENHANCED ONLINE PROXY.................................507 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES