EQUITY RESIDENTIAL (EQR)

BOARD STATEMENT OPPOSING SHAREHOLDER PROPOSAL

After careful consideration, your Board and its Corporate Governance Committee, consisting entirely of independent trustees, believe that the above-described shareholder proposal to change the voting standard for our trustees is not in the best interests of the Company and its shareholders. Accordingly, the Board recommends a vote “AGAINST” adoption of this shareholder proposal for the following reasons.

Opposing Statement: Currently, our trustees are elected by a plurality standard in accordance with Maryland law and our Bylaws, meaning the nominees who receive the most affirmative votes are elected. Although the shareholder proponent states that under the plurality standard, a nominee can be elected with as little as a single affirmative vote, as a practical matter, the Company’s trustees have consistently received broad shareholder support, on average well over ninety percent of the votes cast. In other words, the proposal would have had no effect whatsoever on the outcome of any Board election to date. In no instance has plurality voting prevented our shareholders from either electing the trustees they wanted to elect or otherwise expressing their dissatisfaction with any particular trustee or the Board as a whole.

The Board is cognizant of recent developments with respect to majority voting in the election of directors generally and believes that adherence to sound corporate governance policies and practices is important to ensure the Company is governed and managed to high standards of responsibility, ethics and integrity. The Company also believes that shareholders should have a meaningful role in the trustee election process. In response to these developments, the Board adopted a policy in 2007 (the “Trustee Resignation Policy”) that gives real meaning to a majority “withheld” vote, while avoiding the unintended consequences inherent in majority voting under current Maryland law.

The Trustee Resignation Policy provides that in an uncontested election, any Trustee nominee who receives a greater number of votes “withheld” from than votes “for” his or her election must promptly tender his or her resignation to the Board. The Board would then decide within 90 days following certification of the shareholder vote, through a process managed by the Corporate Governance Committee and excluding the nominee in question, whether to accept or reject the tendered resignation, or whether other action is recommended. The Board would promptly disclose its decision and rationale in a Form 8-K furnished to the SEC. The full Trustee Resignation Policy is set forth in the Company’s Guidelines on Governance, available in the Investor Information section of our website at www.equityresidential.com.

Not only does the Board believe that the Trustee Resignation Policy gives the shareholders a meaningful voice in the trustee election process, it also is concerned that the majority vote standard suggested by the proponent, while simple in concept, raises complications in practice that could result in unintended consequences.

First, the Board is concerned that the majority vote requirement sought by the proposal could result in undue influence of certain activist shareholders whose interests and agenda may differ from those of our shareholders generally and who may use their votes to forward their own particular agenda. In the current challenging times, the trustees may need to take actions that are in the best interests of the Company, but which may be unpopular with special interests or activists groups with short-term agendas, and which could lead to “withhold” vote campaigns against qualified trustees, as well as potential distractions to the Board’s oversight of the Company’s business and affairs. Such “withhold” campaigns could result in board vacancies jeopardizing the Company’s ability to comply with the trustee independence requirements of the SEC and the New York Stock Exchange, or a destabilization of the Board through the loss of seasoned individuals or those with the expertise necessary to satisfy other SEC requirements and NYSE listing standards (for example, our Chairman, CEO, or audit committee financial expert).

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Second, plurality voting, which the shareholder proposal seeks to replace, was developed many years ago as a reform to eliminate the possibility of “failed elections,” where no nominee or slate of nominees was able to achieve a majority vote. Plurality voting is currently the default standard under Maryland law. Under a majority vote standard, in the event some but not all nominees receive a majority vote, Maryland law is not clear whether the nominees who did not receive the requisite vote would “hold over,” which could result in a “failed election” and the board vacancies discussed above.

Finally, the Board has demonstrated that it is committed to strong corporate governance and is accountable to the shareholders, as evidenced by its prior actions, including the declassification of the Board to provide for the annual election of trustees, eliminating a potential anti-takeover defense in its Declaration of Trust and, most recently, adopting guidelines that give shareholders a more meaningful role in electing trustees. Our shareholders have been highly successful in electing responsible, well regarded trustees who have protected the best interests of the Company’s shareholders.

The Board will continue to monitor the majority vote issue, but believes that, at this time, the Trustee Resignation Policy is the most appropriate way to address the primary concerns raised by the proposal, without the many drawbacks of majority voting. For all these reasons, the Board believes it would not be in the best interests of our shareholders to change the method by which trustees are elected at this time.

     After careful consideration, your Board and its Corporate Governance Committee, consisting entirely of independent trustees, believe that the above-described proposal to change the voting standard for Equity Residential trustees would not serve the best interests of the Company and its shareholders.

     Accordingly, the Board recommends a vote “AGAINST” adoption of this proposal for the following reasons:

     Opposing Statement: The Company believes that adherence to sound corporate governance policies and practices is important in ensuring that it is governed and managed to high standards of responsibility, ethics and integrity and in the best interests of shareholders. The Company also believes that shareholders should have a meaningful role in the trustee election process. As an alternative to the above-described proposal, earlier this year the Board amended the Company’s Guidelines on Governance to give shareholders influence in the trustee election process similar to majority voting while avoiding the legal problems inherent in majority voting under current Maryland law.

     In accordance with Maryland law and our Bylaws, our trustees are elected by a plurality standard, meaning that the nominees who receive the most affirmative votes are elected. Plurality voting, which the proposal seeks to replace, was developed many years ago as a reform to eliminate the possibility of “failed elections,” where no nominee or slate of nominees was able to achieve a “majority.” The rules governing plurality voting are well understood and have served the Company well for years. In fact, in no instance has plurality voting prevented our shareholders from either electing the trustees they wanted to elect or otherwise expressing their dissatisfaction with any particular trustee or the Board as a whole, and it also avoids the possibility and consequences of a failed election. For the reasons described more fully below, the Board believes it would not be in the best interests of our shareholders to change the method by which trustees are elected at this time.

     First, our new Guidelines on Governance give real meaning to a majority “withhold” vote while avoiding the unintended consequences noted above. In an uncontested election, any nominee for Trustee who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election is required to promptly tender his or her resignation to the Board for consideration. The Corporate Governance Committee will make a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other action is recommended, taking into account any factors or other information they consider appropriate and relevant, including the circumstances that led to the majority withheld vote, if known. The Board will act on the tendered resignation within 90 days after the vote is certified. The affected trustee cannot participate in the Corporate Governance Committee’s recommendation or Board action. However, in the event that each nominee for Trustee receives a majority withheld vote, the Corporate Governance Committee shall make a final determination as to whether the Company shall accept any or all resignations, including those resignations from the members of the Corporate Governance Committee. The Company will promptly disclose the Board’s decision in a Form 8-K furnished to the Securities and Exchange Commission promptly after the decision and rationale as to whether to accept the resignation (or the reason(s) for rejecting the resignation, if applicable) in a Form 8-K furnished to the SEC. The revised Guidelines on Governance are available in the Investor Information section of our website at www.equityresidential.com.

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