Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

ISS has opened its annual benchmark policy survey.  The survey usually foreshadows upcoming changes to its policies.

Areas addressed in this year’s survey include:

  • Should non-financial Environmental, Social, and/or Governance-related metrics be incorporated into executive compensation programs?
  • Opinions regarding third-party racial equity audits.
  • Detrimental and/or problematic practices for virtual only shareholder meetings.
  • Should ISS’ pay-for-performance screen include a longer-term perspective (for example, a three-year assessment) of CEO pay quantum beyond the one-year horizon currently utilized in the ISS pay-for-performance quantitative screen?
  • Views on mid-cycle changes to long-term incentive programs for companies incurring long-term negative impacts.
  • For companies with poor governance structures that were previously grandfathered, should ISS revisit these problematic provisions and consider issuing adverse voting recommendations in the future where they still exist?
  • If a company has sought shareholder approval to eliminate supermajority vote requirements, but the management proposal failed to receive the requisite level of shareholder support needed for approval, should ISS continue to make recurring adverse director vote recommendations for maintaining the supermajority vote requirements?
  • Does it make sense for investors to generally vote in favor of SPAC transactions, irrespective of the merits of the target company combination or any governance concerns?

In tandem, ISS is launching a separate Climate Survey for feedback relevant to both ISS’ benchmark and specialty climate policy evolvement, in order to determine views on minimum criteria for boards in overseeing climate-related risks, plus market sentiment on shareholders having the right to regularly vote on a company’s climate transition plans.

Both surveys are slated to close on August 20, 2021.

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