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The significant stock price declines of many companies over the past few months have raised the question of whether a company’s traditional approach to impending equity awards should be revised. The first widescale evidence of companies’ responses to this dynamic is unfolding in the context of 2020 director equity awards. This Client Alert analyzes the equity grant practices of 109 S&P 500 companies holding their annual meetings between April 1, 2020 and May 1, 2020 to identify trends in director equity grant policies resulting from the market impact of COVID-19.
Click here to download the Client Alert in PDF. This Client Briefing looks at the ISS policy regarding "excessive" non-employee director (NED) compensation. In a set of FAQs, ISS indicated that historically it has considered NED compensation at the top 5% of all comparable pay to be "excessive." Under the ISS policy, which ISS first started applying in 2018, if ISS finds a recurring pattern of excessive NED compensation magnitude in two or more years without a compelling rationale, ISS may recommend against those directors responsible for approving/setting NED compensation.
The Client Briefing provides the median and 95th percentiles for the S&P 500 and Russell 3000 (excluding the S&P 500) groups, in the aggregate and by industry. Companies can use these as a rough guideline to gauge whether they run any risk under the ISS "excessive" NED compensation policy. Click here to download the Client Briefing (PDF) |
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