Costs and practices regarding equity plans of particular interest in the US
ISS, the world’s largest proxy advisory firm, will focus on equity plans, board diversity, pay for performance and others issues in its annual policy formulation process, which kicks off this year with an open-comment survey.
The firm will also review policies related to companies’ environmental and social goals when creating its strategy for 2015 guidance. ISS is inviting comment from any interested party until the end of August, and will release the results in mid-September.
‘Survey questions this year cover a range of issues, globally, including those related to board diversity, reporting on environmental and social performance goals, and the relationship between goal setting and award values when evaluating pay for performance,’ says Martha Carter, ISS head of global research and policy, in a press release.
ISS will also hold a series of roundtable discussions on specific topics in various regions as it seeks to update benchmark policy guidelines. The survey results will be open for comment through November. The updates will take effect in February next year and apply to voting recommendations throughout the year.
In its policy formulation for 2014, conducted last year, ISS changed its method for assessing the relationship between CEO pay and performance in North America, altered analysis of whether directors in Canada serve on too many boards, and intensified scrutiny of board independence in Europe. It also increased the attention paid to directors’ response to majority-supported shareholder proposals.
In the US the survey this year will ‘also gauge views on the importance of company practices, costs and features relative to ISS’ evaluation of equity plans, which is timely given the sharper focus on such resolutions at US companies this proxy season,’ Carter says. ‘Market input on this particular issue will facilitate plans to implement a balanced scorecard approach for ISS’ assessment of stock plan proposals.’
