ISS released its 2019 Benchmark Policy Updates applicable to meetings on or after February 1, 2019. As anticipated, new US-specific voting policies encompass board gender diversity and changes to its pay-for-performance model.
The new board gender diversity policy will be implemented for Russell 3000 and S&P 1500 meetings on or after February 1, 2020. In 2019, ISS's proxy voting reports will include Economic Value Added (EVA) data as a supplement to GAAP-based measures; in 2020, ISS will consider the inclusion of EVA-based measurements as part of its Financial Performance Assessment (FPA) screen in connection with its quantitative pay-for-performance analysis.
Additional noteworthy policy updates include:
- Board Accountability – Management Proposals to Ratify Existing Charter or Bylaw Provisions/ Board Responsiveness – Ratification proposals
- Director Attendance at Board & Committee Meetings (provides for votes against Nom/Gov Committee or full board members - in addition to the specific director - in cases of director's chronic poor attendance w/o reasonable justification)
- E&S Proposals (additional factor - whether there are significant controversies, fines, penalties, or litigation associated with the company's environmental or social practices - added for consideration in connection with case-by-case vote recommendation)
See the Executive Summary of 2019 Proxy Voting Guidelines Updates - including the full list of technical policy updates on page 15, the policy changes redlined and explained in these Voting Guideline Updates, select publicly-disclosed benchmark policy comments, this Sullivan & Cromwell memo, and additional information & resources on our Proxy Advisors page.