Tag Archives: ISS

SEC Takes Back Comfort Letters Provided to Two Proxy Advisory Firms

In 2004, the Securities and Exchange Commission’s (SEC) Division of Investment Management issued letters to two proxy advisory firms, Egan-Jones Proxy Services and Institutional Shareholder Services (ISS), that assured mutual fund managers they could rely on the vote recommendations of the two firms. On September 13, 2018, the SEC Investment Management staff decided to rescind the two letters. Continue reading

ISS Releases Additional Guidance on its 2018 Voting Policy Changes

Last month, Institutional Shareholder Services (ISS) released its 2018 voting policy updates for companies that have shareholder meetings on or after February 1, 2018. More recently, ISS revised its “Pay-for-Performance Mechanics” white paper, providing additional details on its 2018 policy changes, and updated its Frequently Asked Questions documents for both U.S. Compensation Policies and U.S. Compensation Plans. As many companies prepare for the upcoming proxy season, we are providing insight and additional guidance in navigating the latest ISS policy developments. Continue reading

Assessing ISS’ Newly Selected GAAP Financial Metrics for CEO P4P Alignment: How Can Companies Respond?

Say on Pay (SOP) and shareholder advisor vote recommendations have caused a dramatic increase in the use of relative total shareholder return (TSR) as a long-term incentive (LTI) plan performance metric. Continue reading

Over the Long Term, Companies with Problematic Pay Practices Generally Perform Worse than Companies that Avoid Problematic Pay Practices

Since advisory Say on Pay (“SOP”) votes became effective in 2011, ISS and Glass Lewis have exerted significant influence over the vote outcomes for these proposals. These advisors use quantitative tests to assess CEO Pay for Performance (“P4P”) alignment and supplement those quantitative assessments with a qualitative review of pay practices/program design. Continue reading

ISS Announces Changes to 2017 Pay-for-Performance Qualitative Test

ISS recently announced important updates to its pay-for-performance tests used for evaluating U.S. companies. In addition to total shareholder return (TSR), ISS will use financial metrics to evaluate company performance relative to the ISS-defined peer group. This is the same peer group that ISS uses for the Relative Degree of Alignment (RDA) and Multiple of Median (MOM) quantitative tests. Continue reading

CEO Pay Well Aligned with Company Performance

The number of methods for defining “CEO pay” when analyzing executive compensation continues to grow. From total pay suggested by the summary compensation table to the definitions used by Glass Lewis or Institutional Shareholder Services (ISS) in their proxy review reports, there is no universal standard for measuring pay, especially in comparison to performance. Continue reading

2016 ISS Policy Survey

On August 4, 2015, Institutional Shareholder Services (ISS) released its annual policy survey for the 2016 proxy voting season. The survey encompasses its global proxy voting policies across all potential topic areas. The responses elicited from the survey are used … Continue reading

ISS Releases 2016 Annual Policy Survey

On August 4, 2015, Institutional Shareholder Services (ISS) released its annual policy survey for the 2016 proxy voting season. The survey encompasses its global proxy voting policies across all potential topic areas. Continue reading

When ISS Recommends Against Pay, TSR Tends to Drop

Ira Kay and Blaine Martin authored an opinion piece in this week’s Agenda. The article highlights our research on ISS recommendations and TSR. Click here to read the article.

Are ISS and Glass Lewis Say on Pay Voting Policies Correlated with Improved Total Shareholder Returns?

The vast majority—98%—of companies have passed their annual say on pay votes (SOP) over the past four years. Proxy advisor voting recommendations remain highly influential on these votes, and many companies, perhaps hundreds, have changed the structure of their executive pay programs to try to comply with proxy advisor policies and to obtain a “FOR” SOP vote recommendation from proxy advisors. Continue reading

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