Brief Summary of 2015 Proxy Items

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  • Still pending SEC actions based on Dodd-Frank:
    • Claw backs – Discovery’s implementation of a claw back policy in 2011 anticipated increased requirements
    • Hedging
    • Pay for performance
    • Pay Ratio – Set to be effective in 2016.  Requires comparison of CEO pay to median employee pay.
  • If use non-GAAP incentive measures, consult with counsel on disclosure and Reg G compliance
  • Shareholder lawsuits gaining limited traction.  Make sure what is disclosed is followed
  • Nasdaq director independence rules now in effect
  • ISS has revised its corporate governance scorecard—nothing major, but should review
  • ISS has revised its equity plan approval guidance, now employing a scorecard rather than pass/fail options:
    • Plan cost (45% weighting)
    • Plan features (35% weighting):
      • –Single trigger vesting
      • –Discretionary vesting
      • –Liberal share recycling
      • –Minimum vesting

 

  • Grant practices (20% weighting)
    • –Burn rate
    • –CEO vesting over three years
    • –Life of plan (shares remaining divided by three year usage
    • –Portion of CEO awards subject to performance
    • –Clawback policy
    • –Post exercise holding requirements
  • No vote if on balance plan not in shareholder interest or has egregious features, such as repricing

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