Archive July 31, 2020

ISS Launches Annual Global Policy Survey

ISS has launched its annual Global Policy Survey. The results inform ISS policy updates for the 2021 proxy season (likely to be effective for meetings on or after February 1, 2021).

While there are compensation-related questions, they appear in the context of COVID-19. Specifically, ISS is asking about expectations generally regarding compensation adjustments as well as adjustments to short-term/annual incentive programs. No questions about adjustments of long-term incentive programs/awards were included. We will need to see how shareholders respond and what ISS does with this for its 2021 policy updates.

The survey is open through August 21, 2020. ISS expects a public comment period on its proposed 2021 policy updates in October 2020.

Link to ISS Announcement, which contains a link to the survey:

SEC Issues Final Rules on Proxy Voting Advice

On July 22, 2020, the U.S. Securities and Exchange Commission met and adopted final rules, Exemptions from the Proxy Rules for Proxy Voting Advice, SEC. Rel. 34-89732, in a 3-1 vote. These final rules will become effective 60 days after publication in the Federal Register. Of course, that presumes that a lawsuit isn’t filed against the SEC and these final rules by an interested party (such as ISS which filed such a lawsuit with the SEC’s earlier guidance affecting proxy voting advisory firms).

The final rules codify the SEC’s view that proxy voting advice generally constitutes a solicitation under the proxy rules. The SEC Press Release clarifies that the availability of two exemptions often used by proxy voting advice businesses to the proxy rules depends on compliance with tailored and comprehensive conflicts of interest disclosure requirements. The exemptions also require compliance with two principles-based requirements designed to ensure that:

(1) companies that are the subject of proxy voting advice have such advice made available to them in a timely manner, and

(2) clients of proxy voting advice businesses are provided with an efficient and timely means of becoming aware of any written responses by companies to such proxy voting advice.