On August 21, 2019, the Securities and Exchange Commission (SEC) issued guidance to proxy advisors regarding the applicability of the proxy rules to proxy voting advice. The SEC also issued separate guidance to investment advisers regarding their proxy voting responsibilities. Combined, this guidance likely will impact both proxy advisors and how investment advisers handle proxy voting, which, in turn, could significantly change the proxy voting landscape for public companies.

This Client Alert reviews this SEC guidance as well as some of the potential impacts.

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In December 2018, ISS released two documents covering frequently asked questions (FAQs) on final U.S. Compensation Policies and U.S. Equity Compensation Plans. The FAQs on Equity Compensation Plans also contained the ISS burn rate benchmarks applicable to meetings on or after February 1, 2019. This Client Alert reviews the changes in the FAQs and includes the 2019 ISS burn rate benchmarks.

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On November 19, 2018, ISS released its policy updates for the 2019 proxy season. Then on November 21, 2018, ISS issued a set of preliminary FAQs on Compensation Policies for 2019. These policy updates and FAQs will apply to shareholder meetings on and after February 1, 2019.

This Client Alert examines the compensation-related changes to ISS policies for 2019 as well as the preliminary Compensation FAQs.

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On November 21, 2017, ISS released a set of preliminary U.S. Compensation FAQs that make some significant changes to its Quantitative Pay-for-Performance (P4P) tests and its Equity Plan Scorecard (EPSC) Policy. While several of the proposed changes are significant, they were not treated as "policy changes" and released with ISS's policy updates for 2018.

These preliminary FAQs represent only the most common questions ISS received, and the final, comprehensive FAQs could alter these FAQs and contain changes to other ISS U.S. Compensation policies.

Exequity's Client Alert examines these preliminary FAQs and the changes they make to the Quantitative P4P tests and EPSC Policy.

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On November 16, 2017, ISS released its updated policies for 2018. The updated policies apply to shareholder meetings on and after February 1, 2018. Exequity's Client Alert examines the United States policy updates focused on compensation matters.

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On November 2, 2017, the House Ways and Means Committee released the GOP's Tax Proposal, also known as the Tax Cuts and Jobs Act and the potential harbinger of death for many current executive compensation programs. The Tax Proposal has already been amended by the Chairman of the House of Representatives' Ways and Means Committee, and is likely to undergo further changes as it winds its way through Congress. Also, the Senate released a summary of its plan late on November 9 and reconciliation between the House and Senate bills will need to occur. President Trump wants this signed into law by Christmas, so there is a lot to be done in a very short period of time. Thus, there could be many changes between now and then, including the possibility of no bill.

This Client Alert details the "worst-case scenario" key provisions that impact executive compensation directly and also discusses the immediate issues companies need to think through so they at least have some chance to take action before December 31, 2017 if they want to try and address some of the potential issues that this Tax Proposal would raise if it makes it into law in its current form before the end of the year.

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On September 21, 2017, the SEC released several items providing additional guidance regarding CEO Pay Ratio. The new guidance took the form of an SEC Release, guidance from the Division of Corporation Finance, and new, modified and withdrawn Compliance and Disclosure Interpretations. The Exequity Client Alert reviews all of this new guidance.

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This Client Alert examines the accounting changes wrought by Accounting Standards Update (ASU) No. 2016-09 to Accounting Standards Codification Topic 718, Compensation-Stock Compensation, including a change to the share withholding and forfeiture requirements.

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On April 29, 2015, the U.S. Securities and Exchange Commission (SEC) met and approved the issuance of proposed rules to implement Section 953(a) of the Dodd-Frank Act regarding the disclosure of pay versus performance. This Client Alert looks at the proposed rules based on an SEC Fact Sheet that was prepared for the meeting.

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On March 31, 2015, the Internal Revenue Service (IRS) published final regulations under Section 162(m) of the Internal Revenue Code. The IRS indicated that the regulations are not intended to embody substantive changes, but rather clarification of certain aspects of the application of Section 162(m).

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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 June 30, 2014, the U.S. Securities and Exchange Commission issued Staff Legal Bulletin No. 20 (SLB 20), which provides guidance for investment advisers concerning their proxy voting responsibilities as well as discusses the availability of exemptions from the proxy rules for proxy advisory firms, e.g., Institutional Shareholder Services, Inc. and Glass Lewis & Co., LLC. This Client Alert looks at the guidance provided by SLB 20, which does not represent a significant change from prior industry practice.

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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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On September 18, 2013, more than three years after the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) became effective, the Securities and Exchange Commission (SEC) issued a proposed rule to implement the mandate contained in Section 953(b) of the Dodd-Frank Act. This Client Alert looks at the proposed CEO Pay Disclosure Rule and discusses some of the rule's issues and implications.

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