Proxy advisory firm to give companies two days to contest data to be used in formulating a voting policy
ISS, the world’s biggest proxy advisory firm, has launched a new information portal that lets investors and companies analyze the firm’s recommendations related to equity-based compensation plans ahead of proxy ballots.
The new equity plan data verification portal, which will be open to all US companies receiving a proxy recommendation from the firm, will allow users to verify the data that ISS uses to evaluate a proposed compensation plan and issue a recommendation for voters.
‘This new verification process is designed to provide our clients with greater assurance of data integrity, giving investors important information for their engagements with portfolio companies on equity plans,’ Martha Carter, ISS’ global head of research, says in a press release. ‘This development also responds to requests from corporations for greater visibility into key datapoints underlying our analysis of equity plans and will apply to all US companies covered by ISS, regardless of size.’
ISS says companies planning to include an equity-based compensation plan on the proxy ballot will be given two days to review the data ISS uses to formulate its recommendation. Any filings contributed 30 days or less before the meeting date, however, will not be eligible for the service. The portal will open to companies starting on September 8, 2014.
The portal comes as proxy firms face increasing calls for transparency and concerns that their power is growing rapidly with too few checks and balances.
The SEC last month issued guidance telling asset managers to review their voting policies and their proxy advisory firms at least once a year, and told proxy advisory firms they must reveal potential conflicts of interest to their clients. Late last year, NASDAQ OMX accused proxy advisory firms of exerting ‘outsized influence from the shadows’ and called for increased transparency and greater disclosure by the firms.
