2019 Annual Corporate Governance Review > Shareholder Proposals > Director Elections > Say-on-Pay > CEO Pay Ratio > M&A and Activism 2019 Annual Corporate Governance Review > Shareholder Proposals > Director Elections > Say-on-Pay > CEO Pay Ratio > M&A and Activism Contents Executive Summary and Acknowledgements ........................................................................................................................................................ 4 Methodology ...................................................................................................................................................................................................................... 6 SECTION 1 – SHAREHOLDER PROPOSAL VOTING RESULTS – GOVERNANCE ............................................................ 7 Figure 1 Corporate Governance Proposals Submitted – 2015 to 2019 (Chart) ...........................................................................12 Figure 2 Corporate Governance Proposals Voted On – 2015 to 2019 (Chart) .............................................................................12 Figure 3 Corporate Governance Proposals Voted On – 2015 to 2019 (Table) .............................................................................12 Figure 4 Corporate Governance Proposals – Summary Average Voting Results for Selected Proposals – 2019 (Table) ................................................................................................................................................13 Figure 5 Proposals Relating to Board Issues – 2015 to 2019 (Chart and Table) ..........................................................................14 Figure 6 Proposals Relating to Shareholder Rights – 2015 to 2019 (Chart and Table) ............................................................14 Figure 7 Proposals Relating to Proxy Access – 2016 to 2019 (Chart and Table) .........................................................................15 Figure 8 Sponsorship of Governance Proposals – 2017 to 2019 (Table) ........................................................................................16 Figure 9.1 Governance Shareholder Proposal Voting Results Sorted by Company – 2019 (Table) ....................................... 17 Figure 9.2 Governance Shareholder Proposal Voting Results Sorted by Proposal – 2019 (Table) .......................................23 Figure 9.3 Governance Shareholder Proposal Voting Results Sorted by Sponsor – 2019 (Table) ........................................29 SECTION 2 – SHAREHOLDER PROPOSAL VOTING RESULTS – ENVIRONMENTAL AND SOCIAL .........................35 Figure 10 Number of Environmental and Social Proposals Submitted and Voted On – 2017 to 2019 (Chart) ...............42 Figure 11 Sponsorship of Environmental and Social Proposals – 2017 to 2019 (Table) ...........................................................43 Figure 12 Shareholder Proposals – Board/Employment Diversity, Voting Results – 2019 (Table) ...................................... 44 Figure 13 Shareholder Proposals – Report on Political Contributions, Voting Results – 2019 (Table) .............................. 44 Figure 14 Shareholder Proposals – Report on Lobbying Payment and Policy, Voting Results – 2019 (Table) ................45 Figure 15 Shareholder Proposals – Gender Pay Gap/Pay Disparity, Voting Results – 2019 (Table) .................................... 46 Figure 16 Shareholder Proposals – Sustainability, Voting Results – 2019 (Table) ...................................................................... 46 Figure 17 Shareholder Proposals – Environmental/Reporting, Voting Results – 2019 (Table) ..............................................47 Figure 18 Shareholder Proposals – Environmental/GHG & Methane Emissions, Voting Results – 2019 (Table) ............47 Figure 19 Shareholder Proposals – Climate Change/2-Degree Scenario, Voting Results – 2019 (Table) ..........................47 Figure 20 Shareholder Proposals – New Trending Social Proposals – Report on Governance Measures Implemented Related to Opioids, Voting Results – 2019 (Table) ................................................................................... 48 2 > Georgeson | Proxy Insight Figure 21 Shareholder Proposals – New Trending Social Proposals – Human Rights, Voting Results – 2019 (Table) ........................................................................................................................................................ 48 Figure 22 Shareholder Proposals – New Trending Social Proposals – Prison Labor, Voting Results – 2019 (Table) ........................................................................................................................................................ 48 Figure 23 Shareholder Proposals – New Trending Social Proposals – Sexual Harassment, Voting Results – 2019 (Table) .........................................................................................................................................................49 Figure 24 Shareholder Proposals – New Trending Social Proposals – Content Enforcement, Voting Results – 2019 (Table) .........................................................................................................................................................49 Figure 25 Shareholder Proposals – Other E&S Topics, Voting Results – 2019 (Table) ...............................................................49 Figure 26 Institutional Investor Voting Data, Lobbying/Political Contributions – 2019 (Table) ............................................ 50 Figure 27 Institutional Investor Voting Data, Public Health and Welfare – 2019 (Table) ...........................................................52 SECTION 3 – DIRECTOR ELECTIONS .................................................................................................................................53 Figure 28 Historical Institutional Investor Vote Support for U.S. Director Elections Russell 3000 – 2015 to 2019 (Table) ..........................................................................................................................................................................55 SECTION 4 – EXECUTIVE COMPENSATION ......................................................................................................................57 Figure 29 Historical Institutional Investor Vote Support for Say-on-Pay S&P 1500 – 2015 to 2019 (Table) .....................59 Figure 30 Management Proposal – Advisory Vote on Executive Compensation, Voting Results S&P 1500 – 2019 ......61 SECTION 5 – CEO PAY RATIO ..............................................................................................................................................87 Figure 31 CEO Pay Ratio Results by Sector Russell 3000 – 2018 and 2019 (Table) .................................................................. 89 SECTION 6 – M&A AND ACTIVISM ......................................................................................................................................91 Figure 32 M&A Activity – 2015 to 2019 (Chart) .......................................................................................................................................... 94 Figure 33 Number of U.S. Companies Publicly Subjected to Activist Demands – 2015 to 2019 (Chart)........................... 94 Figure 34 Outcomes of Activist Demands for Board Representation at U.S. Companies – 2015 to 2019 (Chart) ........ 95 Figure 35 Industry Sectors of U.S. Companies Publicly Subjected to Activist Demands – 2015 to 2019 (Chart) ......... 95 Figure 36 Market Caps of U.S. Companies Publicly Subjected to Activist Demands – 2015 to 2019 (Chart) .................. 96 Figure 37 U.S. Public Activist Demands by Type – 2015 to 2019 ........................................................................................................ 96 Figure 38 Definition Guide for Activist Demands ......................................................................................................................................97 Figure 39 U.S. Companies Subjected to M&A-Related Activist Demands by Type – 2015 to 2019 ...................................... 98 2019 Annual Corporate Governance Review > 3 Executive Summary and Acknowledgements We are pleased to present the 2019 Annual Corporate We have expanded our review of environmental, social Governance Review. and governance shareholder proposals that were subject to a vote during the period July 1, 2018 through June 30, For the third year in a row, Georgeson partnered with 2019. This year we are providing additional information Proxy Insight to coordinate voting data and analytics. detailing voting decisions by institutional investors related Proxy Insight was instrumental in sourcing the annual to two significant shareholder proposal topics from the meeting and proxy voting data contained in this report. 2019 proxy season – public health-related and political The 2019 report provides a comprehensive review lobbying/contributions. of relevant corporate governance issues including: We have expanded our review of say-on-pay voting to shareholder proposals on governance issues, shareholder include companies in the S&P 1500 index. proposals on environmental and social issues, director elections, say-on-pay proposals, CEO pay ratio disclosure, Finally, based on reader feedback, we have added a new M&A and activism. section on M&A and activism trends in 2019. Please see Section 6 for a summary of historical M&A and activism