2020 PROXY PAPER™ GUIDELINES AN OVERVIEW OF THE GLASS LEWIS APPROACH TO PROXY ADVICE CONTINENTAL EUROPE Table of Contents GUIDELINES INTRODUCTION ........................................................................................................................ 1 Shareholder Rights Directive II ............................................................................................................................................................................ 1 Voting Recommendations ................................................................................................................................................................2 Summary of Changes for the 2020 Continental Europe Policy Guidelines ..................................................................2 A BOARD OF DIRECTORS THAT SERVES THE INTEREST OF SHAREHOLDERS .................... 3 Election of Directors ...........................................................................................................................................................................3 Independence ........................................................................................................................................................................................3 Control-Enhancing Mechanisms ........................................................................................................................................................................6 Controlled Companies ...........................................................................................................................................................................................6 Other Considerations for Individual Directors ..........................................................................................................................6 Performance ..............................................................................................................................................................................................................6 Experience .................................................................................................................................................................................................................. 7 External Commitments .......................................................................................................................................................................................... 7 Conflicts of Interest ................................................................................................................................................................................................ 7 Board Responsiveness ...........................................................................................................................................................................................8 Board Structure and Composition ................................................................................................................................................9 Separation of the Roles of Chair and CEO ....................................................................................................................................................9 Size of the Board of Directors .......................................................................................................................................................................... 10 Board Skills ............................................................................................................................................................................................................... 10 Board Diversity ....................................................................................................................................................................................................... 10 Board-Level Risk Management Oversight .....................................................................................................................................................11 Environmental and Social Risk Oversight ......................................................................................................................................................11 Board Committees .............................................................................................................................................................................. 11 Audit Committee Performance .........................................................................................................................................................................12 Standards for Assessing the Audit Committee ..........................................................................................................................................12 Remuneration Committee Performance ........................................................................................................................................................13 Standards for Assessing the Remuneration Committee .........................................................................................................................13 Nominating Committee Performance............................................................................................................................................................ 14 Election Procedures ..........................................................................................................................................................................14 Classified/Staggered Boards and Term Limits ........................................................................................................................................... 14 Election of Directors as a Slate .........................................................................................................................................................................15 Ratification of the Co-Option of Board Members .....................................................................................................................................15 Board Evaluation and Refreshment .................................................................................................................................................................15 Lack of Adequate Director Disclosure ...........................................................................................................................................................16 I TRANSPARENCY AND INTEGRITY IN FINANCIAL REPORTING ....................................................17 Accounts and Reports/Consolidated Accounts and Reports .......................................................................................... 17 Non-Financial Reporting ......................................................................................................................................................................................17 Allocation of Profits/Dividends .................................................................................................................................................... 18 Capital Repayments ..............................................................................................................................................................................................18 Bonus Share Issues/ Dividends-in-Kind .........................................................................................................................................................18 Allocations to Reserves/Transfer of Reserves.............................................................................................................................................18 Appointment of Auditor and Authority to Set Fees ............................................................................................................ 18 THE LINK BETWEEN PAY AND PERFORMANCE ............................................................................... 20 Vote on Executive Remuneration (“Say-on-Pay”) ................................................................................................................20 Vote on Remuneration Policy .......................................................................................................................................................................... 20 Vote on Remuneration Report ..........................................................................................................................................................................21 Short-Term Incentives ..........................................................................................................................................................................................23 Long-Term Incentives ...........................................................................................................................................................................................23 Remuneration Relative to Peers ......................................................................................................................................................................24 Remuneration Relative to Ownership Structure .......................................................................................................................................24 Executive Remuneration at Financial Institutions .....................................................................................................................................25