Does your company have a double trigger change-in-control agreement? Great!
Did you already look to see how your GRId score came out, i.e., went through the pre-scoring process? Do you think that score will be the one your shareholders will see? Well, as it turns out, it might not be because your company’s GRId compensation score will drop a bit as a result of a May 1 change to GRId by RiskMetrics Group.
RMG decided to revise the scoring for double-trigger change-in-control agreements as of May 1 so that instead of receiving 3 points they would only receive 0 points. The RMG explanation for this is, “[d]ouble trigger change-in-control agreements are standard practice and do not exceed best practices; therefore, the score should be a neutral 0 rather than a 3.”
The net effect of this change will be that companies with double-trigger change-in-control agreements will see their GRId compensation score drop by about 8% (estimate from RMG’s Corporate Service Group). RMG Research should release a more formal communication about this change and will communicate with impacted companies who went through the pre-scoring process.
The latest version of the GRId technical document is available at http://www.riskmetrics.com/sites/default/files/GRId_Tech_Doc.pdf . The changes made to GRId as of May 1 are detailed on page 192.
