ARTICLE
13 April 2015

Council Of Institutional Investors Adopts Policy Against Automatic Acceleration Of Unvested Equity Awards On A Change In Control

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On April 1, 2015, the Council of Institutional Investors (CII), a shareholder rights advocacy group, adopted a policy opposing the automatic vesting of unvested equity awards on a change in control at public companies.
United States Employment and HR

On April 1, 2015, the Council of Institutional Investors (CII), a shareholder rights advocacy group, adopted a policy opposing the automatic vesting of unvested equity awards on a change in control at public companies.  Companies have often provided for such "single-trigger" vesting to encourage executives and employees to work towards the completion of a sale without being concerned about the treatment of their equity awards when the deal is consummated.  The CII policy provides that a company's board should have discretion to permit full, partial or no accelerated vesting of awards on a change in control and, if it decides to accelerate vesting in full, should disclose in public filings a detailed rationale of the decision and how it relates to shareholder value.  CII follows Institutional Shareholder Services (ISS), a shareholder advisory firm, which treats single trigger vesting as a factor weighing against its positive recommendation of an equity award plan subject to shareholder approval.  ISS's policy is discussed in more detail here.

Council Of Institutional Investors Adopts Policy Against Automatic Acceleration Of Unvested Equity Awards On A Change In Control

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