Institutional Shareholder Services Inc.
("ISS") has published the updates to its
UK benchmark proxy voting policies for 2017, which includes changes
to the following policies:
definition. The policy has been
amended to clarify potentially ambiguous language as to the
acceptable number of directorships. Under the revised policy, where
directors have multiple board appointments, ISS may recommend a
vote against directors who appear to hold an excessive number of
board roles at publicly listed companies.
An adverse vote recommendation will
not be applied to a director within a company where they serve as
CEO. Rather, it would apply to their additional seats on other
The same applies to chairs, except
where they exclusively hold other chair and/or executive positions
or where they are elected as chair for the first time.
will be amended to reflect developments in UK market practice and
investor expectations, including the introduction of:
A direct reference to companies that
seek to implement pay structures (for example non-performance
related restricted shares) which sit outside of the typical UK
model; a greater level of certainty of reward should be matched by
lower award levels.
A reference to a potential
recommendation against the chair of the remuneration committee when
serious issues are identified.
For the remuneration report
resolution, a reference to the use of ISS' Pay-for-Performance
methodology (defined), and clarification that appropriate
pro-rating on outstanding share awards should be applied in
Board and Committee
Composition—UK Smaller Companies. The policy
for AIM companies also applies to certain other companies. ISS has
also brought the policy into line with the Quoted Companies
Alliance Code by specifying that audit and remuneration committees
should be fully independent.
The policies will be applied to shareholder meetings taking
place on or after 1 February 2017, other than the policy with
respect to the board and committee composition of smaller
companies, which will apply with effect from February 2018 to give
small companies time to comply with this significant change.
The EMEA Proxy Voting Guidelines Updates can be accessed
An assignment of rights under a contract is normally restricted to the benefit of the contract. Where a party wishes to transfer both the benefit and burden of the contract this generally needs to be done by way of a novation.
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