On November 16, 2012, ISS released its final 2013 Policy Updates.
ISS did not make pledging of company shares a major problematic pay practice. Instead, ISS will take pledged shares into account on director votes:
“In determining vote recommendations for election of directors of companies who currently have executives or directors with pledged company stock, the following factors will be considered:
• Presence in the company’s proxy statement of an antipledging policy that prohibits future pledging activity;
• Magnitude of aggregate pledged shares in terms of total common shares outstanding or market value or trading volume;
• Disclosure of progress or lack thereof in reducing the magnitude of aggregate pledged shares over time;
• Disclosure in the proxy statement that shares subject to stock ownership and holding requirements do not include pledged company stock; and
• Any other relevant factors.”
The ISS Final 2013 Policy Updates can be found at: