November 20, 2024
Glass Lewis Issues ’25 Voting Guidelines
Late last week, shortly after releasing the results from its second annual global policy survey, Glass Lewis announced the publication of its 2025 Voting Policy Guidelines (U.S.) and the Shareholder Proposals & ESG-Related Issues Guidelines (global) that apply to shareholder meetings held after January 1. Two updates relate to executive compensation matters. Here is the description from the Summary of Changes for 2025:
Change-In-Control Provisions. We have updated our discussion of change-in-control provisions in the section “The Link Between Compensation and Performance” to define our benchmark policy view that companies that allow for committee discretion over the treatment of unvested awards should commit to providing clear rationale for how such awards are treated in the event a change in control occurs.
Approach to Executive Pay Program. We have provided some clarifying statements to the discussion in the section titled “The Link Between Compensation and Performance” to emphasize Glass Lewis’ holistic approach to analyzing executive compensation programs. There are few program features that, on their own, lead to an unfavorable recommendation from Glass Lewis for a say-on-pay proposal. Our analysis reviews pay programs on a case-by-case basis. We do not utilize a pre-determined scorecard approach when considering individual features such as the allocation of the long-term incentive between performance-based awards and time-based awards. Unfavorable factors in a pay program are reviewed in the context of rationale, overall structure, overall disclosure quality, the program’s ability to align executive pay with performance and the shareholder experience and the trajectory of the pay program resulting from changes introduced by the compensation committee.
Yesterday on TheCorporateCounsel.net, I blogged about the other (non-compensation-related) proposed changes. For more commentary and insight, we’ll be posting memos in our “Proxy Advisors” Practice Area, and Glass Lewis is planning a webinar on December 11 to share additional context.
– Meredith Ervine