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)