On November 19, 2018, ISS announced its policy updates for the 2019 proxy season. These updates will apply to shareholder meeting on and after February 1, 2019.
While ISS did not announce any changes to its pay policies for 2019, it did indicate that it will feature EVA metrics in its proxy reports for U.S. and Canadian companies on a phased-in basis over 2019. ISS will continue to use GAAP measures in its quantitative pay-for-performance (P4P) test’s Financial Performance Assessment (FPA) during 2019. However, the clear indication is that ISS will continue to study how to bring EVA metrics into its quantitative P4P assessment, as it received feedback from its clients that they agreed with the direction ISS was taking in this regard.
For director elections, ISS will make a change with respect to board gender diversity. For U.S. companies, ISS is announcing a new policy that will take effect February 1, 2020 with respect to companies in the Russell 3000 or S&P 1500 indexes that do not have any women on their boards may cause ISS to issue adverse voting recommendations with respect to nominating committee chairs, and, on a case-by-case basis, and with respect to other directors who are responsible for the board nomination process. The policy would allow the absence of board gender diversity to be temporarily explained and excused.
The 2019 policy updates can be found on ISS’ Latest Voting Policies Page: