Institutional Shareholder Services (ISS) recently published proposed updates to its benchmark proxy voting guidelines for 2013. Of particular interest are the proposed changes to the Canadian pay for performance guidelines.
Specifically, ISS is proposing a new methodology that would measure long-term pay for performance alignment based on certain quantitative and qualitative factors. Under the proposal, factors would include the CEO pay-to-total shareholder return alignment over the prior five years, the ratio of performance to time based equity grants and the overall mix of performance-based compensation relative to total compensation, the trend in other financial metrics, and the quality of disclosure and appropriateness of the performance measures and goals utilized. As we discussed back in January, ISS introduced a new methodology for evaluating U.S. pay-for-performance last year.
Meanwhile, proposed changes have been released with respect to the U.S. policies concerning Board Response to Majority-Supported Shareholder Proposals, Management Say-On-Pay Proposals, Say on Golden Parachute Proposals and Environmental and Social Non-Financial Performance Compensation-Related Proposals. Further, the global policy on Board nominee Disclosure would recommend against the election of directors if nominee names were not disclosed in a timely manner prior to the meeting.
ISS is accepting comments on its proposals until November 9.