Summary of ISS Compensation Policy Updates for 2011

Summary of ISS Compensation Policy Updates for 2011

November 22 2010

On November 19, 2010, ISS released their U.S. Corporate Governance Policy updates for 2011.  While this alert focuses on the updates related to compensation policy, the complete 2011 policy update is also attached.  The 2011 policies are effective for Annual Shareholder Meetings that take place on or after February 1, 2011.  The following five compensation policies were updated for the 2011 proxy season:

  1. Problematic Pay Practices
  2. Problematic Pay Practices‐ Commitments
  3. Frequency of Advisory Vote on Executive Compensation (Management “Say on Pay”)
  4. Voting on Golden Parachutes in an Acquisition, Merger, Consolidation, or Proposed Sale
  5. Equity Compensation Plans: Burn Rate

The first two policy updates represent important modifications to current ISS methodology.  Items three and four are additional policies due to the new shareholder voting items required under The Dodd‐Frank Wall Street Reform and Consumer Protection Act.  The fifth update is a slight tweak to the current calculation of burn rate cap.

Full Summary:  Summary of ISS’ US Compensation Policy Updates for 2011