United States:
ISS Opens Comment Period for Its 2011 Proxy Voting Policies
18 November 2010
by
Holland & Knight
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Kara MacCullough is a Partner in our
Miami office
Laurie Green is a Partner in our
Ft Lauderdale office
On October 27, 2010, Institutional Shareholder Services, Inc.
(ISS) announced the opening of its annual comment period for its
2011 proxy voting policies. The comment period, part of ISS'
policy development process, offers institutional investors,
corporate issuers and industry constituents the opportunity to
provide feedback on ISS draft policy updates. The comment period
runs through November 11, 2010, and solicits feedback on updates to
ISS' proxy voting policy guidelines in markets worldwide.
Topics covered include:
- Management say on pay frequency proposals. ISS is
proposing to adopt a new policy to vote in favor of companies
providing for annual management say on pay proposals.
- Vote on golden parachute proposals. ISS is proposing
to adopt a new policy under which it will vote on a case-by-case
basis on proposals to approve a company's golden parachute
compensation, and will consider a variety of features including
whether it includes potentially excessive severance payments and
recently adopted or amended agreements that include excise tax
gross-up provisions.
- Independent chair shareholder proposals. Beginning in
2011, ISS is proposing to recommend a vote for shareholder
proposals requiring that the chairman's position be filled by
an independent director absent compelling, company-specific
circumstances that challenge the efficacy of appointing an
independent chair and a robust counterbalancing governance
structure.
- Director attendance. To improve transparency for all
shareholders, ISS is proposing to only consider reasons for poor
attendance that are disclosed in the proxy or subsequent SEC filing
and if it is not clear from the disclosure whether the director
attended 75% of the aggregate of his or her board and committee
meetings, ISS will recommend withhold on that director. ISS will
limit the number of reasons it will find acceptable for attendance
below the 75% level to (i) medical issues/illness, (ii) family
emergencies, and (iii) if the director's total service was
three meetings or less and the director missed only one
meeting.
- Increase authorized capital proposals. ISS is
proposing a quantitative model with a threshold-based allowable
increase. For most issuers, the allowable increase would be 100% of
existing authorized shares, but the allowable could be only 50% or
25% of existing authorized shares for certain issuers.
http://www.issgovernance.com/press/20101027_PolicyComment
www.hklaw.com
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should be
sought about your specific circumstances.
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