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Institutional Shareholder Services Releases Updated FAQs Regarding 2014 US Compensation Policy
Practical Law Legal Update 9-553-0226 (Approx. 4 pages)
Institutional Shareholder Services Releases Updated FAQs Regarding 2014 US Compensation Policy
by Practical Law Employee Benefits & Executive Compensation
| Published on 20 Dec 2013 • USA (National/Federal) |
Institutional Shareholder Services (ISS) released an updated set of FAQs regarding its 2014 US compensation policy.
On December 16, 2013, Institutional Shareholder Services (ISS) published a set of updated FAQs regarding its 2014 US compensation policy. The updated FAQs cover:
- General executive pay questions.
- Financial data: total shareholder return and revenue.
- Management say on pay evaluation.
- Pay for performance evaluation.
- Problematic pay practices.
- Frequency of advisory vote on executive compensation.
- Advisory vote on golden parachutes.
- Equity-related questions.
Notably, the FAQs include:
- The impact of an adverse say-on-pay recommendation on equity plan proposals.
- The changes ISS made to its pay for performance quantitative screen (see, Legal Update, Institutional Shareholder Services Releases 2014 Proxy Voting Policies and Legal Update, Institutional Shareholder Services Releases 2014 US Proxy Voting Summary Guidelines).
- The calculation method for "granted pay" that is compared to a CEO's "realizable pay".
The questions and answers covered by the FAQs are intended to provide high-level guidance regarding how ISS will analyze certain issues in the context of preparing proxy analysis and vote recommendations for US companies. However, the FAQs are not a guarantee on how ISS will apply its benchmark policy in any particular situation.
For more information on proxy advisory firms and on ISS proxy voting recommendations, see Practice Note, Developing Relationships with Proxy Advisory Firms and Checklist, Handling ISS Proxy Voting Recommendations.