2021 ESG Annual Report


COMPANY: The Sherwin-Williams Company MEETING DATE: April 21, 2021 PROPOSAL: Executive Compensation OUR VOTE: For VOTE RESULT: 92.8%

OUR RATIONALE: The company responded prudently to the impact of the COVID-19 pandemic by rescinding 2020 base salary increases for top executives and named officers, having the CEO voluntarily forego a previously approved increase to target and maximum payout opportunities, and adjusting the achievement level for sales targets. Although we are wary of discretionary adjustments, we find that the company’s decision to do so was informed by thoughtful analysis that involved various parts of the business, management and the compensation committee. The adjustment was made with front-line workers in mind to reflect sales-related targets more fairly in the context of store closures and industrial/commercial customers that were shut down for lengthy periods because of the pandemic. As such, the adjustment particularly benefitted store-level associates whose compensation is meaningfully impacted by sales. Further, we believe the adjustment was not material in the context of overall sales representing approximately 1.25% of reported sales. For these reasons, we are voting in favor to signal our support for the company’s sound judgement and mindfulness of employees beyond senior leadership when adapting its executive compensation program to unprecedented circumstances caused by COVID-19. OUTLOOK AND OUTCOMES: We believe the adjustments made to the compensation plan in response to the COVID-19 pandemic were appropriate. However, we do not expect adjustments to be made on a regular basis and will closely review any future ones. OUR RATIONALE: Neuberger Berman believes that companies should adopt, formulate and communicate value-enhancing long-term strategies. Here, we have engaged with the company over the last three years on increasing the independence of the board and adding directors with international experience to improve the company’s overall governance practices and strategy. As a result, the company is seeking to nominate six new independent directors, many of whom are industry veterans with international expertise. With the addition of these new members, Accton will be a leader in the Taiwanese market in terms of board independence with greater than 66% board independence, well above the market requirement of 20% board independence. While we note that none of the independent director nominees are female, the company has committed to identifying a female nominee in the near term. For these reasons, we intend to support the reelection and election of all director nominees. OUTLOOK AND OUTCOMES: We would also like the board to increase its gender diversity. We have shared this expectation with the board and will monitor progress.

COMPANY: Accton Technology Corporation MEETING DATE: July 14, 2021 PROPOSAL: Election of Directors OUR VOTE: For VOTE RESULT: 84.7%


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