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Proxy Voting Guidelines Benchmark Policy Recommendations TITLE UNITED STATES Proxy Voting Guidelines Benchmark Policy Recommendations TITLE Effective for Meetings on or after February 1, 2021 Published November 19, 2020 ISS GOVERNANCE .COM © 2020 | Institutional Shareholder Services and/or its affiliates UNITED STATES PROXY VOTING GUIDELINES TABLE OF CONTENTS Coverage ................................................................................................................................................................ 7 1. Board of Directors ......................................................................................................................................... 8 Voting on Director Nominees in Uncontested Elections ........................................................................................... 8 Independence ....................................................................................................................................................... 8 ISS Classification of Directors – U.S. ................................................................................................................. 9 Composition ........................................................................................................................................................ 11 Responsiveness ................................................................................................................................................... 12 Accountability ..................................................................................................................................................... 13 Voting on Director Nominees in Contested Elections ............................................................................................. 16 Vote-No Campaigns ............................................................................................................................................ 16 Proxy Contests/Proxy Access .............................................................................................................................. 17 Other Board-Related Proposals ............................................................................................................................... 17 Adopt Anti-Hedging/Pledging/Speculative Investments Policy .......................................................................... 17 Board Refreshment ............................................................................................................................................. 17 Term/Tenure Limits ........................................................................................................................................ 17 Age Limits ....................................................................................................................................................... 17 Board Size ........................................................................................................................................................... 18 Classification/Declassification of the Board ....................................................................................................... 18 CEO Succession Planning .................................................................................................................................... 18 Cumulative Voting .............................................................................................................................................. 18 Director and Officer Indemnification and Liability Protection ............................................................................ 18 Establish/Amend Nominee Qualifications .......................................................................................................... 19 Establish Other Board Committee Proposals...................................................................................................... 19 Filling Vacancies/Removal of Directors .............................................................................................................. 19 Independent Board Chair.................................................................................................................................... 19 Majority of Independent Directors/Establishment of Independent Committees .............................................. 20 Majority Vote Standard for the Election of Directors ......................................................................................... 20 Proxy Access ....................................................................................................................................................... 20 Require More Nominees than Open Seats ......................................................................................................... 20 Shareholder Engagement Policy (Shareholder Advisory Committee) ................................................................ 21 2. Audit-Related .............................................................................................................................................. 22 Auditor Indemnification and Limitation of Liability ............................................................................................ 22 Auditor Ratification ............................................................................................................................................. 22 Shareholder Proposals Limiting Non-Audit Services ........................................................................................... 22 Shareholder Proposals on Audit Firm Rotation .................................................................................................. 22 3. Shareholder Rights & Defenses ................................................................................................................... 24 Advance Notice Requirements for Shareholder Proposals/Nominations .......................................................... 24 Amend Bylaws without Shareholder Consent .................................................................................................... 24 Control Share Acquisition Provisions .................................................................................................................. 24 Control Share Cash-Out Provisions ..................................................................................................................... 24 Disgorgement Provisions .................................................................................................................................... 25 Fair Price Provisions ............................................................................................................................................ 25 Freeze-Out Provisions ......................................................................................................................................... 25 Greenmail ........................................................................................................................................................... 25 Shareholder Litigation Rights .............................................................................................................................. 25 Federal Forum Selection Provisions ............................................................................................................... 25 Exclusive Forum Provisions for State Law Matters ......................................................................................... 26 ISSGOVERNANCE.COM 2 o f 72 UNITED STATES PROXY VOTING GUIDELINES Fee shifting ..................................................................................................................................................... 26 Net Operating Loss (NOL) Protective Amendments ........................................................................................... 26 Poison Pills (Shareholder Rights Plans) ................................................................................................................... 27 Shareholder Proposals to Put Pill to a Vote and/or Adopt a Pill Policy .............................................................. 27 Management Proposals to Ratify a Poison Pill ................................................................................................... 27 Management Proposals to Ratify a Pill to Preserve Net Operating Losses (NOLs) ............................................. 27 Proxy Voting Disclosure, Confidentiality, and Tabulation................................................................................... 28 Ratification Proposals: Management Proposals to Ratify Existing Charter or Bylaw Provisions ........................ 28 Reimbursing Proxy Solicitation Expenses ........................................................................................................... 28 Reincorporation Proposals ................................................................................................................................. 29 Shareholder Ability to Act by Written Consent .................................................................................................. 29 Shareholder Ability to Call Special Meetings ...................................................................................................... 29 Stakeholder Provisions ....................................................................................................................................... 30 State Antitakeover Statutes ...............................................................................................................................
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