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Institutional Shareholder Services (ISS) — News & Alerts — Insights | Meridian Compensation Partners, LLC | Executive Compensation Consulting

Insights

Proxy Advisors Issue Policy Guidance on COVID-19

Institutional Shareholder Services (ISS) and Glass Lewis recently issued guidance on the application of their proxy voting policies in light of the COVID-19 pandemic.

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Since we are now in the heart of proxy season, corporate boards and management teams have raised questions regarding whether ISS and Glass Lewis would consider the impact of the COVID-19 pandemic in either their proxy voting policies or the…

ISS Issues Final Policy Updates for 2020

On November 11, 2019, Institutional Shareholder Services (ISS) issued final updates to its proxy voting policies for 2020 and on November 21, 2019, ISS issued further guidance in its preliminary FAQs for 2020 compensation policies. The updates represent an incremental change to existing ISS policies and the implementation of phased-in policies related to non-employee director compensation and board gender diversity.

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Final Policy/Process Updates for 2020 ISS has made the following modifications to its U.S. pay-for-performance assessment for 2020: ■ Easing the quantitative concern thresholds under its initial three-part comparative quantitative analysis of CEO pay and company performance, and ■ Using…

Summary of Key Results from ISS 2019 Annual Policy Survey

ISS’s recent Policy Survey previews potential changes in to 2020 proxy voting policies.

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

SEC Issues Guidance on Proxy Advisory Firms

On August 21, 2019, the Securities and Exchange Commission (“SEC”) issued guidance covering the role that proxy advisory firms play in the proxy voting process and the use of proxy advisory firms by investment advisers.

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Despite reports to the contrary, the guidance (which does not carry the weight of law) does not represent meaningful federal oversight of proxy advisory firms. In fact, Institutional Shareholder Services (ISS) and Glass Lewis already largely comply with the guidance.…

Institutional Shareholder Services Releases its 2019 Policy Survey Questionnaire

Institutional Shareholder Services (ISS) recently issued its 2019 policy survey questionnaire, which generally previews potential changes in ISS’s 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…

Economic Value Added—New Governance Considerations

Starting this proxy season, Institutional Shareholder Services (ISS) will be disclosing in U.S. and Canadian company proxy reports Economic Value Added (EVA) metrics. These metrics will be shown for informational purposes only. However, we believe it is likely that ISS will incorporate EVA metrics into its CEO pay-for-performance analysis within the next two proxy seasons, subject to investor feedback.

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ISS’s introduction of EVA metrics is likely to foster discussion among compensation committees about the nature, merit and implication of these metrics. EVA may also be of interest among institutional investors as an additional lens to assess pay and performance…

Will the New Year Bring Regulatory Oversight of the Proxy Advisory Firms?

The Senate and the SEC are operating on parallel paths toward the potential regulation of proxy advisory firms. However, the outcome remains uncertain.

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We have seen many false starts on the road to regulate proxy advisory firms. Several recent Congressional attempts to pass legislation to regulate the proxy advisory firms have failed. In 2017, the U.S. House of Representatives passed two bills (the…

ISS Updates QualityScore Methodology

Institutional Shareholder Services (ISS) recently announced that it has updated its Governance QualityScore (“QualityScore”) methodology, its governance-scoring tool. The key changes to the methodology include new factors related to board and C-Suite gender diversity and the levels of shareholder support for director elections and Say on Pay proposals.

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Overview of ISS Governance QualityScore ISS applies its QualityScore methodology solely to S&P 500 and Russell 3000 companies. According to ISS, QualityScore is intended to aid institutional investors in monitoring and evaluating portfolio company governance by providing such investors insights…

ISS Issues Final Policy Updates for 2019

On Monday, November 19, 2018, Institutional Shareholder Services (ISS) issued final updates to its proxy voting policies for 2019 – the most important of which relates to board gender diversity.

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ISS final policy updates cover four key areas: (i) board of directors, (ii) shareholders rights and defenses, (iii) capital/restructuring, and (iv) social and environmental issues. No updates specifically relate to executive compensation. Equally important, ISS chose not to issue a…

ISS Issues Proposed Policy Updates for 2019

Last week, Institutional Shareholder Services (ISS) issued proposed policy updates.

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These proposed updates would modify ISS proxy voting policies for U.S.-listed companies as follows: ■ The quantitative pay-for-performance assessment1 would replace the currently used GAAP-based metrics with Economic Value Added (“EVA”) metrics, and ■ A board gender diversity policy that…

Summary of Key Results from ISS 2019 Annual Policy Survey

ISS’s recent Policy Survey previews potential changes in its 2019 proxy voting policies.

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

Institutional Shareholder Services Releases its 2019 Policy Survey Questionnaire

Institutional Shareholder Services (ISS) recently issued its 2019 policy survey questionnaire, which previews potential changes in ISS’s 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…

Report on Say on Pay and Select Shareholder Proposals For the 2018 Proxy Season

Meridian Compensation Partners, LLC is pleased to provide this periodic report on key voting results for the 2018 proxy season.

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Executive Summary Meridian Compensation Partners, LLC is pleased to provide this periodic report on key voting results for the 2018 proxy season. Specifically, this report will cover the following areas: ■ Standard & Poor’s (S&P) 500 Say on Pay (SOP)…

ISS Evaluation of Director Pay Could Lead to Negative Vote Recommendation on Select Board Members in 2019

Beginning this proxy season, Institutional Shareholder Services (ISS) began to examine the reasonableness of non-employee director pay. The outcome of this examination could lead ISS to issue a negative vote recommendation on incumbent directors serving on the board committee responsible for setting director pay who are standing for election in 2019.

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Under its new proxy voting policy on non-employee director compensation, ISS will generally recommend shareholders vote AGAINST members of the board committee that are responsible for approving or setting non-employee director (NED) compensation if there is a pattern (i.e., 2…

Senate Banking Committee Requests Answers from Proxy Advisory Firms

Earlier this month, members of the U.S. Senate Banking, Housing, and Urban Affairs Committee sent letters to the two major proxy advisory firms, Institutional Shareholder Services (ISS) and Glass Lewis (GL), requesting answers about their business practices.

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In these letters, Senator Dean Heller (R-NV) and his colleagues raise questions related to each proxy advisory firm’s voting system, report inaccuracies and conflicts of interest. The letters also express concern about the proxy advisory firms’ market concentration and significantly…

ISS Guidance on Proxy Reports and Company Engagement

Institutional Shareholder Services (ISS) recently issued updated guidance related to the publication of its U.S. proxy research reports and the process for company engagements. These are timely topics for a company to consider with the 2018 Proxy Season well underway.

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Generally, ISS issues its U.S. proxy research reports between 13 and 18 calendar days prior to the shareholder meeting date during peak U.S. proxy season from April through June. At other times of the year, ISS aims to publish its…

ISS Issues 2018 Final Policy Updates and Additional Guidance on Pay-for-Performance Assessment and Equity Plan Evaluations

Institutional Shareholder Services (ISS) has issued final updates to its proxy voting policies for 2018 and significant guidance through a series of FAQs on certain U.S. compensation policies, including its methodologies for assessing pay for performance and equity plan proposals.

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Final Policy Updates for 2018 The policy updates and guidance revise ISS proxy voting policies and methodologies for U.S.-listed companies in the following areas relating to executive compensation and corporate governance: ■ ISS quantitative pay-for-performance assessment, ■ ISS Equity Plan…

Proxy Advisors and Investors Announce How They Will Use CEO Pay Ratios in 2018

The major proxy advisors and three large institutional shareholders announced that CEO pay ratios will have little to no impact on their vote recommendations and vote decisions, respectively, in 2018.

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At a recent conference hosted by CompensationStandards.com, David Kokell, Vice President of Institutional Shareholder Services (ISS), stated that CEO pay ratios will not have any impact on ISS’s analysis or vote recommendations in 2018. However, ISS will include the information…

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…