November 13, 2019
ISS’ New Policy Updates: EVA Added to “Financial Performance Assessment” Screen
– Broc Romanek
Yesterday, ISS announced its new policy updates for next year. The policy updates for the US that impact executive pay relate to its pay-for-performance model by incorporating the use of ‘Economic Value Added’ (EVA) metrics in the model’s secondary ‘Financial Performance Assessment’ (FPA) screen.
The European policy updates deal with pay in this way: as many EU member states are implementing the EU Shareholder Rights Directive II that prescribes a shareholder vote on remuneration policies and reports, policy updates are being introduced that consider the responsiveness of companies to significant shareholder dissent on pay-related votes, and how remuneration committees use and explain their use of discretion in managing executive pay, including how relevant environmental, social, and governance (ESG) matters have been taken into account when determining executive remuneration outcomes.