Planning for the 2013 Annual Meeting and Reporting Season

As companies prepare for the 2013 annual meeting and reporting season, we have compiled an overview of the corporate governance and disclosure matters that companies should consider as they draft this season’s disclosure materials. Some of these matters are requirements of new Dodd-Frank Act rules and others are based on lessons gleaned from the 2012 annual meeting and reporting season. The items discussed below will not apply equally to all companies. Whether a particular item applies and how a company should address it will depend on, among other things, the company’s business, shareholder base and executive compensation plans and programs.

Incorporate lessons from 2012 say-on-pay results. In the 2012 proxy season, approximately:

• 69 percent of say-on-pay proposals passed with more than 90 percent support;

• 21 percent passed with between 70.1 and 90 percent support;

• 7 percent passed with between 50 and 70 percent support; and

• 3 percent (61 companies) obtained less than 50 percent support.

While the overall proportions generally are similar to last year’s results, it should be noted that in 2011 only 37 say-on-pay proposals obtained less than 50 percent support.

Based on the insights gleaned from the 2012 proxy season, we have a number of recommendations for companies to consider as they make compensation decisions and plan for the related disclosure. It is important to note, however, that while some of our recommendations are based on the views of Institutional Shareholder Services (ISS), Glass Lewis and other advisory firms, their views are not the only relevant factors (or perhaps not even one of the most relevant factors) in making these decisions. In some cases, the interests of the company and its shareholders may best be served by making a decision that is contrary to the views of the advisory services. This is a complex and nuanced area with a tremendous amount of media scrutiny, and we urge companies to consult with internal and external advisers as early in the process as possible in order to make the most appropriate and strategically intelligent decisions with respect to their executive compensation programs.

Please see full memorandum below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Skadden, Arps, Slate, Meagher & Flom LLP

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