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Joseph E. Bachelder III Joseph E. Bachelder III

One of the methodologies used to assess the reasonableness of CEO pay is a comparison of the growth rate in CEO pay with the company’s total shareholder return (TSR) over a period of time. TSR generally represents (a) the change in stock price of the company over the period of time being measured plus dividends paid during such period divided by (b) the stock price at the beginning of the period. In 2015 the SEC proposed a new rule that would require each issuer to disclose in its proxy statements over a period of five years (initially, over three years) (a) the levels of CEO pay (as well as that of the other NEOs) and (b) the TSR of the issuer (as well as the TSR of a peer group of companies). See Pay Versus Performance, SEC Release No. 34-74835; File No. S7-07-15 (April 29, 2015), 80 Fed. Reg. 26329 (May 7, 2015).

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