The Advisors' Blog

In our blogs on the recent big announcements by the proxy advisors — Glass Lewis moving away from “singularly-focused research and vote recommendations based on its house policy” and ISS now offering two new research services meant to support institutional investor proprietary investment stewardship programs — we’ve focused on the increasing uncertainty for companies. As this Compensia alert puts it, this “broad reorientation of the proxy advisor landscape centered on investor-specific customization” and the “resulting fragmentation of viewpoints and voting behavior will require more proactive, data-informed strategies.”

But, as the alert points out, there is also a silver lining for companies and compensation committees that feel like they’ve been constrained in their compensation program design by the proxy advisors’ historically standardized benchmark voting recommendations.

Increased Flexibility in Pay Design.  With proxy advisor benchmark policies becoming less influential, companies have greater flexibility to tailor incentive plan designs to meet their individual needs. However, this flexibility increases the importance of understanding and considering the specific priorities and policies of key investors when making and communicating design decisions.

But, yes, that may mean more work for compensation committees. Compensia suggests that committees:

– Map your top investors’ voting policies and identify where views diverge (e.g., preferred metrics, performance periods, equity mix).
– Pressure-test incentive design decisions against those investor perspectives before finalizing awards.
– Engage early and often, before you file your 2026 proxy statement to understand how key shareholders’ policies may be evolving.
– Know which investors already follow in-house policies. Track how and when shareholders transition to new ISS and/or Glass Lewis frameworks.
– Reassess vote forecasting tools. Move away from reliance on benchmark-based models toward more tailored approaches informed by shareholder engagement.
– Refresh governance and compensation messaging. Ensure CD&A and proxy statement summaries clearly articulate the “why” behind key pay decisions and governance practices.

– Meredith Ervine