Shield Master is a hard feat to take at its word. If you read the feat literally, it does seem pretty clear. Shield Master provides as follows: “You do not suffer [b]any penalties on attack rolls [/b] made with a shield while you are wielding another weapon.”
Shield Master comes partially from the chain of Two Weapon Fighting feats. Accordingly, this would make you believe that the intent is to allow you to get rid of two weapon fighting penalties. However, it says “all penalties on attack rolls”. The consequences of the words “all penalties on attack rolls” seems to be profound.
Nonetheless, by RAW, this means that a character with this feat would not suffer iterative attack penalties, condition penalties (i.e. shaken), power attack penalties, prone penalties, etc….
Other than the clear strength of the feat, the fact that the table text for the feat does not match up with the actual feat text causes many to believe the the true intent for Shield Master was for it to get rid of two weapon fighting penalties only. Also, some of the pre-made builds for Pathfinder only apply the feat to two weapon fighting penalties. For example see this Shield Master build.
I can’t say the the table text trumps the actual wording of the feat. Therefore, I would have to say that by RAW, Shield Master gets rid of all penalties. Good luck convincing you GM of this, however.
