A Practical Guide to the SEC’s Executive Compensation ...

1 Executive Compensation Disclosure Handbook: A Practical Guide to the SEC's Executive Compensation Disclosure Rules Revised October 2016. elizabeth A. ising , Gibson, Dunn & Crutcher LLP. Ronald O. Mueller, Gibson, Dunn & Crutcher LLP. Krista P. Hanvey, Gibson, Dunn & Crutcher LLP. James Kroll, Willis Towers Watson Heather Marshall, Willis Towers Watson Executive Compensation . DISCLOSURE HANDBOOK: A Practical Guide TO THE. SEC'S Executive . Compensation DISCLOSURE. RULES. Revised October 2016. elizabeth A. ising , Gibson, Dunn & Crutcher LLP.

2 Ronald O. Mueller, Gibson, Dunn & Crutcher LLP. Krista P. Hanvey, Gibson, Dunn & Crutcher LLP. James Kroll, Willis Towers Watson Heather Marshall, Willis Towers Watson ABOUT GIBSON, DUNN & CRUTCHER LLP. Gibson, Dunn & Crutcher has over 1,200 lawyers in 19 offices located in major cities throughout the United States, Europe, Asia, the Middle East and Latin America. We are committed to providing the highest quality legal services to our clients in a personal, responsive manner. Our firm is a recognized leader in representing companies ranging from start-up ventures to multinational corpo- rations across diverse industries from high-technology to manufacturing, finan- cial institutions and other service companies to government entities.

3 On behalf of its clients, the firm handles every aspect of litigation, crisis management, corporate transactions and counseling, corporate governance, regulatory law, antitrust law, business restructurings and reorganizations, tax, employment and labor law, intellectual property and real estate law, and many related practice areas. Our lawyers have extensive Securities and Exchange Commission, Executive Compensation and corporate governance experience. We advise many Fortune 500 and other companies concerning disclosure, accounting and regulatory issues domestic and foreign regulatory bodies.

4 We also advise senior manage- ment, boards of directors and their audit, Compensation , governance and spe- cial committees on a wide range of issues relating to board and committee structure and operation, fiduciary duties, and relationships with institutional shareholders. Please visit our website at Attorney Advertising: This publication has been prepared for general informa- tional purposes only and is not intended as legal advice. Many thanks to Gibson Dunn associates Krista P. Hanvey, Dina R. Bernstein, Allison Balick, Julia Lapitskaya, Sarah Fortt, Kasey L.

5 Robinson and Needhi Vasavada for their valuable contributions to this publication. ABOUT WILLIS TOWERS WATSON. Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 employ- ees in more than 120 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals.

6 Our unique perspective allows us to see the critical intersections between talent, assets and ideas the dynamic formula that drives business performance. Together, we unlock poten- tial. Learn more at ABOUT DONNELLEY FINANCIAL SOLUTIONS. Donnelley Financial Solutions provides technology and expertise to help compa- nies deliver accurate and timely business communications to shareholders, regulators, and investors. A single point of contact helps you stay on top of the dynamic regulatory landscape and manage the logistics of your critical commu- nications.

7 Of course, we adhere to strict security protocols to protect your sensitive data. With 3,500 employees in 61 locations across 18 countries, we provide thousands of clients with innovative tools for content creation, secure storage, manage- ment and distribution, as well as data analytics and multi-lingual translations services. For more information, contact your sales representative or visit TABLE OF CONTENTS. INTRODUCTION 1. Compensation DISCUSSION AND ANALYSIS 2. Format and Presentation 3. Identification of Named Executive Officers 4.

8 Required CD&A Topics 6. Additional and Voluntary CD&A Topics 7. Taking Your CD&A to the Next Level 11. Executive Compensation TABLES AND RELATED NARRATIVE. DISCLOSURES 21. Summary Compensation Table 21. Salary and Bonus Columns 24. Stock Awards and Option Awards Columns 26. Non-Equity Incentive Plan Compensation Column 29. Change in Pension Value and Nonqualified Deferred Com- pensation Earnings Column 31. Perquisites and the All Other Compensation Column 32. Grants of Plan-Based Awards Table 37. Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table 42.

9 Outstanding Equity Awards at Fiscal Year-End Table 43. Option Exercises and Stock Vested Table 46. Pension Benefits Table 47. Nonqualified Deferred Compensation Table 50. Potential Payments Upon Termination or Change in Control 52. Golden Parachute Compensation 54. DIRECTOR Compensation DISCLOSURE 58. Director Compensation Table 58. Narrative to Director Compensation Table 60. ANALYSIS OF RISKS RELATED TO Compensation FOR ALL. EMPLOYEES 61. Compensation COMMITTEE & Compensation CONSULTANTS 63. Compensation Committee Independence 63.

10 Compensation Adviser Conflicts of Interest 65. Disclosure of Compensation Consultant Fees 66. Compensation Committee Practices and Procedures 67. Compensation Committee Report 68. SHAREHOLDER APPROVAL OF Executive Compensation &. EQUITY PLAN PROPOSALS 70. Say-On-Pay Proposals 70. Say-On-Frequency Proposals 71. Say-On-Golden Parachute Proposals 72. Compensation Plan Proposals 72. Equity Plan Information Table 76. Voting Standards 78. Proxy Advisory Firm Recommendations 79. REPORTING Compensation ON FORM 8-K 84. Item of Form 8-K 84.