Simon 2018 Proxy Statement

SHAREHOLDER PROPOSAL

THE BOARD’S STATEMENT IN OPPOSITION TO PROPOSAL 4

THE PROPOSAL IS NOT CONSISTENT WITH ‘‘BEST PRACTICES’’

Providing severance benefits, including a change-in-control arrangement such as the one targeted by the proposal, is a very common practice among public companies. In 2017, compensation consulting firm Meridian Compensation Partners performed a study of 160 S&P 500 companies chosen to represent a reasonable cross-section of the industries that comprise the S&P 500. The Meridian study found that among those 160 companies, 98% accelerate the vesting of at least one type of equity award for NEOs in connection with a change-in-control. Further, it should be noted that the change-in-control provision in our CEO’s employment contract has a ‘‘double trigger’’ (i.e. our CEO must be terminated without ‘‘cause’’ or resign for ‘‘good reason’’ in connection with a change-in-control as described in ‘‘Termination-related provisions of employment agreement with David Simon’’ in the section of this Proxy Statement titled ‘‘Employment Agreements’’). This design is consistent with current corporate governance ‘‘best practices’’. The Company’s shareholders are faced with this unusual and unprecedented proposal which the Board believes could negatively impact the negotiation of any future employment agreement with our CEO. We are unaware of any public company receiving a proposal which is substantially similar to the present proposal. We believe that the absence of such is because it is improper for a shareholder to make such a proposal that contravenes the exclusive authority of the Board. Determinations regarding the terms of any future employment agreement with our CEO require context-specific judgement that is not possessed by a shareholder. It is counter-productive for an individual shareholder to micro-manage the future negotiation of our CEO’s employment agreement. THIS SHAREHOLDER PROPOSAL IS AN INAPPROPRIATE AND IMPROPER METHOD TO NEGOTIATE A SINGLE PROVISION OF A FUTURE AGREEMENT THAT IS TO BE NEGOTIATED WITH OUR CEO A vote against the proposal will give the Board and the Compensation Committee the flexibility they need when negotiating any employment agreement with our CEO. In order for the Board and the Compensation Committee to be most effective they must not be limited by the perspective of an individual shareholder who is not experienced with respect to the myriad of complex issues associated with any future negotiation of our CEO’s employment contract. THE BOARD’S SOLE AND EXCLUSIVE POWER AND AUTHORITY TO NEGOTIATE AN EMPLOYMENT AGREEMENT WITH ITS CURRENT CEO SHOULD NOT BE LIMITED The amount that the proposal asserts that Mr. Simon would receive ‘‘following his termination by the Company without cause or his resignation with good reason following a change in control’’ is outdated. This number is no longer accurate. Please refer to the ‘‘Estimated Post Employment Payments Under Alternative Termination Scenarios’’ table for the current amount to which Mr. Simon would be entitled following his termination by the Company without cause or his resignation with good reason following a change in control. Shareholders will have the opportunity to vote on any proposed transaction that would trigger the change-in-control arrangement that is the subject of the proposal. In addition, each year, shareholders have the opportunity to vote on the compensation of the Company’s NEOs and the Company’s compensation policies and practices through the ‘‘say-on-pay’’ advisory vote. At our 2017 annual meeting, over 88% of the shares voting approved our ‘‘say-on-pay’’ resolution. This vote demonstrated our shareholders’ strong support for our existing named executive officer compensation program. THE BOARD RECOMMENDS A VOTE ‘‘AGAINST’’ THIS PROPOSAL BASED ON THE REASONS DISCUSSED ABOVE. PROXIES SOLICITED BY THE BOARD WILL BE VOTED ‘‘AGAINST’’ THIS PROPOSAL UNLESS A SHAREHOLDER INDICATES OTHERWISE IN VOTING THE PROXY. SHAREHOLDERS HAVE HAD AND WILL CONTINUE TO HAVE OPPORTUNITIES TO VOICE THEIR OPINION ON EXECUTIVE COMPENSATION AND ANY CHANGE IN CONTROL OF THE COMPANY THIS SHAREHOLDER PROPOSAL CONTAINS OUTDATED INFORMATION

SIMON PROPERTY GROUP 2018 PROXY STATEMENT 47