On September 20, 2018, ISS issued a series of FAQs concerning Global Industry Classification Standard (GICS) Code 5020 Implementation (available at: https://www.issgovernance.com/file/policy/active/americas/GICS-5020-FAQ.pdf). This change caused a number of companies to be moved from the GICS 2540, Media, group to the new GICS 5020, Media & Entertainment, group.
The key points from these FAQs are:
- Companies in the new GICS 5020 group should see higher Burn Rate Thresholds than in the old GICS 2540 group.
- ISS peer groups being constructed for shareholder meetings starting September 15, 2018 have been updated to reflect the new GICS group.
- ISS will continue to use a company’s legacy GICS group to assess non-employee director pay (under ISS’ excessive NED pay policy) until February 1, 2019. At that date, ISS will switch over to utilizing the new GICS group in assessing NED pay.
- ISS will update the GICS groupings used to determine median 1-, 3- and 5-year TSR starting September 30, 2018.
- ISS will evaluate equity plan proposals using the updated GICS group for burn rate information starting with meetings on February 1, 2019.