1. Ten Ways to Restore Investor Confidence in Compensation Aaron Stiger Curt Shepherd John Pfeffenberger Rie Minajima

2. Over Paid Executives Securities and Exchange commission approved overhaul of executive compensation packages Securities and Exchange commission approved overhaul of executive compensation packages New rules give investors better understanding of pensions, deferred compensation and stock-option grants New rules give investors better understanding of pensions, deferred compensation and stock-option grants

3. Pay Consultants Don’t work for Management Creates conflict of interest if they work for management Creates conflict of interest if they work for management 23 Companies that responded to this idea complied with shareholders requests 23 Companies that responded to this idea complied with shareholders requests

4. CEO Hunts Set limits on projected compensation Set limits on projected compensation Hire Savvy negotiators Hire Savvy negotiators Find back-up candidates Find back-up candidates

5. Skip Severance Anyone with a sizable stock should not receive severance Anyone with a sizable stock should not receive severance Deferred-Compensation accounts should also not receive severance Deferred-Compensation accounts should also not receive severance CEO’s say severance isn’t necessary because of large amounts of compensation they already receive CEO’s say severance isn’t necessary because of large amounts of compensation they already receive

6. Make Easier to Fire for Cause Complaints about extravagant departure deals Complaints about extravagant departure deals CEO’s that don’t perform still receive large compensation packages when they leave CEO’s that don’t perform still receive large compensation packages when they leave

7. Peer Group Comparisons Take a skeptical view Take a skeptical view Use peer companies to gauge pay competitiveness Use peer companies to gauge pay competitiveness Create Compensation Plans Create Compensation Plans

8. Kill Unjustifiable Perquisites Companies trimmed extras Companies trimmed extras –Example: Personal flights, and financial counseling Revealing perks has been brought down to $10,000 rather than $50,000 Revealing perks has been brought down to $10,000 rather than $50,000

9. Link Long-Term Incentives Link with performance goals Link with performance goals Keep executives from making money on poorly performing businesses Keep executives from making money on poorly performing businesses GE replaced option and restricted shares GE replaced option and restricted shares

10. Divulge Performance Based Awards Set hurdles high Set hurdles high High investor recognition of performance High investor recognition of performance

11. Conduct Regular Checkups about Pay Practices Boards are trying different Approaches Boards are trying different Approaches Directors are considering rotating their pay consultants every five years Directors are considering rotating their pay consultants every five years

12. Give Investors a Voice Investors want to have a “say” in executive compensation Investors want to have a “say” in executive compensation Some companies are trying to block these votes so that investors will not have a say in the compensation Some companies are trying to block these votes so that investors will not have a say in the compensation