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ISS 2017–2018 Policy Survey Summary of Key Items

ISS’s recent Policy Survey previews potential changes in its 2018 proxy voting policies.

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Each year, Institutional Shareholder Services (ISS) surveys institutional investors, public companies (“issuers”) and the consulting and legal community on emerging corporate governance and executive compensation issues as part of its annual policy formulation process. Issuers and their advisors are collectively…

President Trump Proposal on Tax Reform

President Trump’s proposed tax plan is largely similar to the plan outlined by the White House in July – large cut in corporate tax rate, reduction in individual tax rates with consolidation of tax brackets, elimination of most deductions and increase in the standard deduction.

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The White House issued President Trump’s proposal on tax reform entitled “Unified Framework for Fixing Our Broken Tax Code.” The tax proposal provides slightly more details than the one issued in July, but remains a work in progress. The President…

SEC Issues New Guidance on CEO Pay Ratio Disclosure Rule

Last Thursday, the Securities and Exchange Commission (SEC) and the Division of Corporation Finance issued new guidance on the CEO pay ratio disclosure rule. The issuance of the new guidance lays to rest any remaining hope that the SEC will delay or significantly modify the CEO pay ratio disclosure requirement.

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Public companies and practitioners who were hoping for a comprehensive set of new guidance to address many of the vexing issues underlying the pay ratio rule generally will be disappointed by the limited nature of the guidance. However, the guidance…

NYC Pension Fund Launches Campaign for Enhanced Board Diversity Disclosure

The New York City Comptroller’s Office recently announced that it launched the next phase of the Boardroom Accountablity Project, in which the Comptroller, on behalf of New York City Pension Funds, is seeking enhanced disclosure and engagement with 151 major public companies on board composition, diversity and refreshment.

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In November 2014, the Boardroom Accountability Project initiated the first phase of its campaign, in which the New York City Pension Funds petitioned for public companies to adopt proxy access. The initial campaign successfully resulted in widespread adoption of proxy…

SEC Official Confirms that the SEC Will Not Delay CEO Pay Ratio Disclosure

Last Friday, an official of the Securities and Exchange Commission (SEC) confirmed that the SEC will not delay the effective date of the CEO pay ratio disclosure rule and that the SEC staff will be issuing additional guidance on the rule.

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At the American Bar Association Annual Meeting, Bill Hinman, SEC Director of the Division of Corporation Finance said that the SEC would not delay the implementation of CEO pay ratio rule. In addition, Mr. Hinman stated that SEC staff would…

White House Nixes Proposal to Expand Employer Reporting to Include Pay Data

The Trump administration recently informed the Equal Employment Opportunity Commission (EEOC) that it is reviewing and immediately staying the effectiveness of employer requirements to report extensive pay data.

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Currently, private sector employers with 100 or more employees and federal contractors with 50 or more employees are required each year to submit to the EEOC on Form EEO-1 the number of individuals employed by job category and by race,…

Institutional Shareholder Services Releases its 2018 Policy Survey Questionnaire

Institutional Shareholder Services (ISS) recently issued its policy survey questionnaire, which previews potential changes in ISS’s 2018 proxy voting policies.

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Through its annual policy survey, ISS seeks feedback from institutional investors, public companies, corporate directors and the consulting and legal communities on emerging trends in corporate governance, executive compensation and other matters as part of its policy formulation process. The…

House Approves Financial CHOICE Act

On June 8, 2017, the U.S. House of Representative approved the Financial CHOICE Act (“CHOICE Act”), which, if approved by the Senate and signed by President Trump, would repeal and roll back significant portions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). The House vote was 233 to 186, with one Republican opposing and not a single Democrat supporting the CHOICE Act.

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As reported in Meridian Client Update of May 12, 2017, the principal focus of the CHOICE Act is the banking provisions of Dodd-Frank and the Consumer Financial Protection Bureau. However, the CHOICE Act, if enacted, would make the following changes…

House Committee Approves Bill to Repeal Key Provisions of Dodd-Frank

On May 4, 2017, the House Financial Services Committee approved the Financial CHOICE Act (“CHOICE Act”) to repeal and roll back significant pieces of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). The Committee voted to send the CHOICE Act to the House floor, 34-26, along party lines.

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The principal focus of the CHOICE Act is the banking provisions of Dodd-Frank and the Consumer Financial Protection Bureau. In addition, the CHOICE Act includes provisions relating to agency rulemaking requirements, judicial review of agency actions and capital formation. In…

President Trump Unveils Proposed Tax Plan

President Trump’s proposed tax plan is largely similar to the plan he proposed during the presidential campaign—large cut in corporate tax rate, reduction in individual tax rates with consolidation of tax brackets, elimination of most deductions and increase in the standard deduction.

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The proposed tax plan represents a broad-brush proposal rather than a detailed tax plan. Significant work lies ahead for the Trump administration to iron out the key points of the tax proposal so that it will be acceptable to the…

Jay Clayton Confirmed as SEC Chair

President Trump’s nominee for Chair of the Securities and Exchange Commission (SEC), Jay Clayton, has been confirmed by the Senate.

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Jay Clayton, a Wall Street securities attorney, will be sworn in this week as the Chair of the SEC. The Senate confirmed Mr. Clayton’s nomination on May 2, 2017. After Mr. Clayton is sworn in, the SEC will have three…

States and Municipalities Propose CEO Pay Ratio Tax

Looking to raise taxes or to make political statements, several states and municipalities have proposed tax revenue schemes tied to a public company’s proxy-disclosed CEO pay ratio.

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Although the fate of the CEO pay ratio disclosure may be uncertain, this has not deterred certain states and municipalities from proposing new taxes on public companies tied to a company’s disclosed CEO pay ratio (or some variant). In fact,…

Acting SEC Chair Signals Possible Delay in Implementation of Pay Ratio Rule

Chair Piwowar has called for public comment on rule compliance issues.

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Yesterday, Acting Securities and Exchange Commission (SEC) Chair Michael Piwowar issued a public statement in which he has asked for comments about delaying the implementation of the CEO pay ratio rule. Under current rules, the CEO pay ratio rule became…

ISS Issues Technical Document on Financial Performance Assessment

The technical document provides insight into how ISS will perform its analysis.

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Institutional Shareholder Services (ISS) for the first time will be evaluating a company’s performance relative to peer group performance against a broad spectrum of financial metrics. ISS will compare how a company’s CEO pay stacks up against the company’s relative…

ISS Releases New Corporate Governance Scoring Tool

The tool, QualityScore, could help investors identify corporate governance risk in portfolio companies.

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Institutional Shareholder Services (ISS) recently announced the release of ISS QualityScore, the fourth generation of its governance-scoring tool, which replaces ISS Governance QuickScore. According to ISS, QualityScore is intended to assist investors in identifying corporate governance risk within portfolio companies.…

ISS Modifies CEO Pay for Performance Assessment

Learn about the implications this modification has for the 2017 proxy season.

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Institutional Shareholder Services (ISS) recently announced a material change in its U.S. pay for performance assessment that will take effect for the 2017 proxy season. The modified U.S. pay for performance assessment will include a new qualitative component in its…

The Election of Donald J. Trump—What it Means for Executive Pay

Our predictions and analysis on how a new administration could affect executive pay programs.

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The election of Donald J. Trump as the next President of the United States will likely have far reaching effects on the statutory and regulatory regimes covering executive compensation and related corporate governance matters. What exactly the effect will be…

ISS Issues Proposed Policy Updates for 2017

Learn which policies have been modified and which are staying the same.

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Last week, Institutional Shareholder Services (ISS) issued proposed policy updates. For the first time in many years, the proposed updates do not modify U.S. policy on compensation matters (e.g., policies relating to Say on Pay and equity plan proposals). However,…

SEC Issues Interpretative Guidance on the CEO Pay Ratio Rule

Meridian explains how this guidance should inform companies' calculation of the CEO pay ratio.

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The Securities and Exchange Commission (“SEC”) staff has issued interpretive guidance on the final CEO pay ratio rule (“Final Rule”). The Final Rule requires public companies to disclose the ratio of CEO pay to the median employee pay (“Pay Ratio”).…

Beyond the Proxy

Meridian Partners weigh in on 2016 CEO pay trends in this article from Equilar's C-Suite magazine.

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A Chief Executive Officer (CEO) is both the managerial leader and the figurehead of his or her company, representing it to its employees, shareholders and the general public. In times of growth and success, but also in turmoil and failure, a…