With the advent of mandatory “say on pay” votes this year for all public companies as required by the Dodd-Frank Act, institutional shareholders must consider not only whether to support a company’s executive compensation arrangements, but also, more broadly, how to ensure that their decision-making process will take into account the particular circumstances of the company, the impact that a negative vote could have on the company, the institutional shareholder’s fiduciary and other duties to its own investors, and the extent to which voting decisions should be dictated or influenced by recommendations of proxy advisory firms. In this regard, institutional shareholders may find it useful to bear in mind the following questions:

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