On December 22, 2014, ISS released Frequently Asked Questions on its 2015 U.S. Equity Plan Scorecard Policy (FAQs) just in time for Christmas. Sadly, it looks like the Grinch may have gotten to the FAQs before release because some of the terms that ISS suggested were going to be covered were given short shrift by the explanations. This Client Alert analyzes the FAQs and provides commentary on potential implications.
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Both Institutional Shareholder Services Inc. (ISS) and Glass, Lewis & Co., LLC (Glass Lewis) have issued their policy updates for the 2015 proxy season. This Client Alert focuses on their policy updates concerning compensation matters. ISS has introduced changes to its policy for evaluating equity plan proposals and has also revised certain thresholds used in the quantitative tests for the pay-for-performance evaluation of say-on-pay proposals. Glass Lewis provided more context regarding its say-on-pay policy and also provided more details regarding how it evaluates employee stock purchase plan proposals. This Client Alert also provides details on how companies can provide updated peer group information to Equilar so it gets utilized by Glass Lewis in its pay-for-performance evaluations.
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On January 31, 2014, Bloomberg BNA's Pension & Benefits Daily published this article by Exequity's Ed Hauder. The article looks at companies whose say-on-pay (SOP) votes failed in 2012 (and 2011) and who have reported their SOP votes for 2013, and some of the actions these and other companies with failed SOP votes can take to turn things around, as well as the success this group of companies had with their 2013 SOP votes. Charts looking at 2011, 2012 and 2013 SOP votes, change in CEO total compensation, and total shareholder return (TSR) for the 1-, 3- and 5-year period as of the most recent fiscal year-end to 2011, 2012 and 2013 are also included.
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This white paper looks at equity plan proposals that have failed during 2007-2012, how Institutional Shareholder Services Inc. viewed the proposals, and key takeaways from these votes.
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Ed Hauder will join Scott Witz of W. W. Grainger and Reid Pearson of Alliance Advisors LLC to present "A Successful Journey: Creating a State-of-the-Art Equity Plan" at the National Association of Stock Plan Professional's 2010 Annual Conference in Chicago, IL on September 22, 2010 at 1:30 pm
In this Special Report, Ed Hauder of Exequity and Reid Pearson of The Altman Group examine the 38 equity plan proposals that failed out of approximately 2,200 total proposals put forward by Russell 3,000 companies from 2007 through 2009. The authors detail several lessons for companies to consider when requesting shares, the most significant of which are to ensure that both dilution and burn rate are not excessive.
The Special Report also looks at the success rates of RiskMetrics/ISS' against vote recommendations for equity plan proposals and finds that they vary, sometimes significantly, based on the industry group. Similarly, the percent of equity plan proposals that failed varies based on industry group. Companies that are considering requesting shareholders to approve additional shares for their equity compensation plans will have a better idea of the challenges they face after reading this Special Report.
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