On December 22, 2014, Institutional Shareholder Services Inc. ("ISS") released a set of Frequently Asked Questions ("FAQs") that explain ISS's new approach to evaluating management equity compensation plan proposals. ISS believes that its new approach—the Equity Plan Scorecard ("EPSC")—allows for more nuanced consideration of equity incentive programs than did its prior method for evaluating equity plan proposals. The EPSC considers a range of positive and negative factors related to such proposals as opposed to ISS's prior approach which used a series of pass/fail tests focused on the plan's estimated cost to shareholders. Under the EPSC, ISS will continue to provide a negative recommendation for plans that contain certain features that are viewed as "egregious" (such as the right to reprice stock options without shareholder approval). The EPSC is applicable to all shareholder meetings on and after February 1, 2015.
View full memo, ISS Publishes FAQs on Equity Plan Scorecard
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