April 16, 2013
Assessment of ISS QuickScore Results
– Broc Romanek, CompensationStandards.com
ISS Governance QuickScore, which is designed to identify governance risk, replaced the GRId database on February 25th. With the first wave of QuickScore results now out, ClearBridge Compensation Group conducted an analysis of these results as well as the prior proxy season’s say-on-pay vote recommendations and vote results. Key findings include:
– Of the four governance pillars, Compensation is the most highly correlated with the Overall QuickScore, by a significant margin
– While QuickScore is not a direct input to ISS’ Say on Pay evaluation process, Compensation QuickScores demonstrate a strong link with ISS’ Say on Pay vote recommendations
– 97% of companies that scored a “6” or better on Compensation QuickScore received a “for” vote recommendation in 2012
– 71% of companies that scored a “10” on Compensation QuickScore received an “against” vote recommendation in 2012
– ISS has significant influence on the vote outcome. When ClearBridge 100 companies received an “against” recommendation from ISS on Say on Pay, median Say on Pay vote results were only 59%, vs. 95% when ISS recommended “for” Say on Pay