PRESENTATION TO LOS ANGELES DEPARTMENT OF WATER & POWER

PROXY RESEARCH AND VOTING SERVICES

JANUARY 11, 2017

AGENDA

I. Glass Lewis Overview

II. Summary of Services Provided

1. Proxy Research – Proxy Paper

2. Proxy Voting Platform– Viewpoint

3. Custom Policy Review

III. Voting Statistics and Reports

IV. 2016 Proxy Season Review

1. Say on Pay

2. Proxy Access

3. Shareholder Proposals – Environmental & Social (E&S) Trends

4. Shareholder Proposals - Trends

V. 2017 Proxy Season Preview

VI. Q & A

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I. GLASS LEWIS OVERVIEW

COMPANY PROFILE

The leading independent provider of global governance services, helping institutional investors understand and connect with the companies they invest in.

Glass Lewis offers a complete suite of governance-related services:

Proxy Paper – In-depth research on 20,000+ company meetings every year

Viewpoint – Leading-edge proxy vote management platform

Right Claim – Class action settlement recovery service

E&S – Complete spectrum of E&S data, monitoring, and screening tools

Meetyl – The leading global web-based platform for corporate access

Glass Lewis is a portfolio company of the Ontario Teachers’ Pension Plan Board (80%) and Alberta Investment Management Corp. (AIMCo) (20%)

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CURRENT SNAPSHOT

Clients

1,200+ globally, representing over $25 trillion in AUM

Employees

350+ employees, more than half of whom are dedicated to research

Locations

Full-service offices in U.S. (SF, NY), Ireland, Germany and Australia

Subsidiaries

Glass Lewis Europe, IVOX Glass Lewis, CGI Glass Lewis, Washington Analysis, Meetyl

Notable Milestones During Last 3 Years

2012: Opened European center in Ireland; formed partnership with Equilar

2013: AIMCo acquired 20% of Glass Lewis

2014: Acquired Meetyl, ground breaking web-based engagement platform

2015: Acquired IVOX, leading independent proxy advisor in Germany

2016: Partnership with Sustainalytics, leading provider of Environmental, Social & Governance (ESG) research, ratings & analysis

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GLASS LEWIS OWNERSHIP

Ontario Teachers’ Pension Plan Board(OTPP)

80%

Alberta Investment Management Corp.(AIMCo)

20%

GLC Holding Co., LLC100%

Glass, Lewis & Co., LLC100%

Glass Lewis Europe, Ltd.(Ireland)

100%

IVOX GmbH(Germany)

100%

Meetyl, LLC100%

CGI Glass Lewis, Pty. Ltd.(Australia)

100%

Washington Analysis, LLC100%

Meetyl Europe, Ltd.(Ireland)

100%

September 2016

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SIGNIFICANT CHANGES: 2015-2016

Steve Gray – Chief Financial Officer

Hired in September 2016

Kathy Appuhn – Chief Administration Officer

Departed in September 2016

Michael Vogele – Senior Director of European Engagement

Promoted in June 2016

Kern McPherson – Senior Director of Research

Promoted in June 2016

Aaron Bertinetti – Vice President, Research and Engagement

Promoted in December 2015

Jason McCandless – Senior Director of M&A Research

Promoted in December 2015

Warren Chen – Managing Director of M&A Research

Departed in December 2015

Dave Eaton – VP of Research

Departed in August 2015 (Role divided into Sr. Director and VP positions)

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II. SUMMARY OF SERVICES PROVIDED

1. PROXY RESEARCH

Proxy Paper®

Guaranteed global coverage; complete report for all companies

More than 20,000 meetings across 100 markets

Independent and contextual analysis with a focus on economic impact

Equilar market peers in Pay-For-Performance (P4P) model for US and Canada

Direct access to research team

Board presentations, white papers, Proxy Talks, data feeds

Issuer Engagement Policy:

Designed to empower clients and investors

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PROXY RESEARCH PROCESS

Team Approach

Analysis varies based upon market, issue, complexity and company size

All reports reviewed by two or more people; varies by report profile

Accuracy and lead times are monitored to ensure client satisfaction

Executive Compensation

Analyze executive compensation quantitatively and qualitatively

Exclusive rights to incorporate Equilar market-based peers in P4P model

Incorporate multiple performance factors into P4P analysis

Mergers & Acquisitions / Proxy Contests

Specialized team and experience

Proposed offers are evaluated versus the returns to shareholders

Approach to proxy contests aligns well with most institutional investors

ESG / Shareholder Proposals

Viewpoint’s proprietary rules engine interprets complex policies

Unmatched nuance and cascading rules minimize noise and focus your attention on the most important issues

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2. PROXY VOTING PLATFORM

Viewpoint®

Flexible, configurable user interface

Responsive search; workflow updates dynamically

In-application user collaboration; also streamlines communication between non-users

Nuanced custom policy implementation

Transparent and compliant; audits, reconciliation and activity logs

Extensive permissioning controls

Myriad reporting options

Secure and reliable:

99.9%+ uptime; round the clock support

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VOTE AGENCY SERVICE

Service Level Flexible service model and configurable technology supports tailored client workflow

Dedicated client service rep with limited client load; less than 15 clients per rep

Service culture built on integrity and accountability, and rewarding responsiveness

North American, European, and Asia-Pacific offices provide support for client’s global offices, as well as nearly 24/7 backup support for urgent operational requests

Technology and Operations Modern platform architecture supports sophisticated and evolving workflow

Continued investment and agile development process ensures rapid innovation

Client-centric product development and software update processes

Unrivaled 10-year track record of reliability, security, and performance

Reporting and Compliance Multi-faceted account and ballot reconciliation process

Complete and reportable logging of user activities

GL business model minimizes risk to clients

Proactive, transparent disclosure of potential conflicts which cannot be eliminated (e.g., research on a public investment company which is also a client)

Scheduled and ad-hoc reporting; public vote disclosure hosting

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3. CUSTOM POLICY REVIEW

While consulting with LADWP, reviewed and updated LADWP’s policy guidelines. New policy guidelines were approved during the April 2016 Board meetings.

Plan to bring updates to proxy guidelines back to the Board in 2Q 2017.

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III. VOTING STATISTICS AND REPORTS

VOTING STATISTICS FOR LADWP

December 1, 2015 to November 30, 2016

Total number of meetings: 807

Number of US: 368

Number of non-US: 439

Total number of ballots cast: 1768

Number of US: 875

Number of non-US: 893

Total number of proposals: 9225

Number of Management Proposals: 8917

Number of Shareholder Proposals: 308

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Proxy Voting Report – Example 1

1616

Hormel Foods Corp.

Proxy Voting Report – Example 2

1717

Stingray Digital Group Inc.

Proxy Voting Report – Example 3

1818

VOTING ACTIVITY REPORT – VOTING SUMMARY FOR LADWP

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VOTING ACTIVITY REPORT– PROPOSAL STATISTICS FOR LADWP

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IV. 2016 PROXY SEASON REVIEW

2016 PROXY SEASON REVIEW: SAY ON PAY

Non-binding shareholder vote on executive compensation

44 companies lost vote (<2%)

78 lost in 2015, 75 companies lost in 2014, 81 in 2013, 65 in 2012 (Equilar)

Mid-size companies more likely to have vote against than larger/smaller companies

Lowest support: 15% at Ultratech (semiconductor supplier)

Tutor Perini (general contractor) lost for 6th consecutive year

Notable non-US companies that had say-on-pay defeats: Canadian Pacific (50.1% against) and BP (59% against)

~91% average support in US

Slight uptick from prior years

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2016 PROXY SEASON REVIEW: PROXY ACCESS

In 2016, about 60 companies had shareholder proposals seeking proxy access rights; decline from 2015

Fewer from New York City’s pension funds went to vote; many withdrawn

36 from individual shareholders

Others tended to match NYC approach (3%/3 years/25%)

Some submitted at companies that had already adopted access (HR Block, Microsoft)

Dueling Proposals

Chipotle: management 5% (23.6% support), shareholder 3% (57.4%)

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2016 PROXY SEASON REVIEW

45.0%

25.0%

10.0%

15.0%

5.0%

SHAREHOLDER PROPOSALS BY CATEGORY

GOVERNANCE

SOCIAL

COMPENSATION

ENVIRONMENTAL

CAP ALLOCATION/EXPLORESALE

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2016 SHAREHOLDER PROPOSALS - E&S TRENDS

Environmental proposals

Sustainability report

• 11 proposals, increase from 2015

• 60% support at Clarcor (filter manufacturer)

Climate change related; average support 42%

• Same proposal supported by management at BP, Shell and other non-US companies

Composition of the board and director qualifications

Boards consider women and minorities when considering new board candidates (no recommendation at LinkedIn)

Gender pay equity report at tech firms

• EBay: 51% (v. 8% on 2015)

• Google and Facebook

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2016 SHAREHOLDER PROPOSALS - TRENDS

Report on compensation for executives leaving for public service

Large banks

Report on voting practices at investment firms

Compensation and climate change

Consolidated-Tomoka Land (real estate company)

74% support for a proposal asking the company's board to hire an independent adviser to evaluate ways to maximize shareholder value through the sale of the company or the liquidation of its assets

• Board took no position, had already had engaged Deutsche Bank to explore strategic alternatives

J.B. Hunt Transport Services (trucking)

55% support for proposal to amend company’s Equal Employment Opportunity Commission to explicitly prohibit discrimination based on sexual orientation, gender identity or gender expression

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V. 2017 PROXY SEASON PREVIEW

2017 PROXY SEASON REVIEW: DIRECTOR FOCUS

Executive Compensation

Shareholders look for long-term equity to be performance based

Seek disclosure of performance metrics and targets

Investors seeking diverse boards

Experience, background, skills

Greater focus on gender, ethnicity, age, background, home country, tenure

More companies using skills matrices

Directors involved in engagements

Meet with shareholders directly

Shareholder expectations

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THANK YOU AND Q & A