The Advisors' Blog

Late last week, ISS released 33 pages of proposed benchmark policy changes. Companies, investors and others can submit comments on the proposals until 5pm ET next Tuesday, November 16th, by emailing policy@issgovernance.com. ISS expects to release the final changes to its voting policies within the next month – and those will generally apply to meetings held on or after February 1st.

Dave Lynn blogged this morning about the other voting policy changes that are most likely to affect US companies if they come into effect. Those cover the topics of:

– Board gender diversity at smaller companies

– Unequal voting rights (including multi-class share structures)

– Board accountability for greenhouse gas emissions

– Say-on-climate proposals

Even though the policy survey results that ISS posted last month indicated some interest in ESG metrics in executive pay and a longer-term perspective on the pay-for-performance screen, ISS didn’t highlight any proposed changes to executive pay policies for US companies in these draft policies. That doesn’t mean that ISS won’t change any of its pay policies – just that it isn’t seeking comments on those topics as part of this “proposed policy” stage. In addition, ISS is proposing a few pay-related changes for other countries that are worth watching:

1. Canada – proposing to raise the support threshold that triggers a “responsiveness” analysis on say-on-pay from 70% to 80% (as we note in our “Say-on-Pay Solicitation Strategies” chapter of our Executive Compensation Disclosure Treatise, the responsiveness threshold is 70% for US companies)

2. Continental Europe – proposing a policy that would take into account whether there is clear disclosure about limits to deviations from stated pay programs

3. Continental Europe, UK & Ireland – proposing to add language to clarify that the relevance and stringency of non-financial ESG metrics in compensation plans will be assessed similarly to financial metrics

– Liz Dunshee