This summer, ISS conducted its annual policy survey, which involves capturing the opinions of academics, investors, corporate directors, market participants, and findings from relevant empirical research to inform the updates to ISS’ benchmark voting guidelines for the upcoming proxy season. There were two key updates that will impact US companies in 2014. First, ISS will more closely watch board responsiveness to shareholders, with the expectation that boards will respond to any shareholder proposal that garners a majority support. ISS has disclosed that they will be flexible with these situations, allowing for assessments to be made with a case-by-case approach. Second, ISS will begin measuring Relative Degree of Alignment by only accounting for 3-year pay and performance, rather than the previous calculation that combined 1- and 3-year measures. ISS believes that this will mitigate any problems that may arise from overweighting a single year and provide a better gauge for long-term pay and performance alignment. These policies will begin impacting any shareholder meetings held on or after February 1, 2014.
ISS Releases 2014 Policies, Opens New Consultation (ISS Governance Weekly - subscription required)
2014 ISS Policy Information (ISS Governance Weekly - subscription required)