ISS posted updated FAQs for its Executive Compensation Policies, Non-Compensation Procedures & Policies, Equity Compensation Plans, Peer Groups, and US Cross-Market Policies.
Notably in view of the SEC’s recent shift in approach in managing Rule 14a-8 no-action determinations, Question 91 of the Non-Compensation Procedures & Policies FAQs articulates ISS’s approach when a company excludes a shareholder proposal from its proxy, which, in addition to contextual language, provides:
Companies choosing to exclude a proposal on “ordinary business” grounds should clearly explain why they believe that to be the case, and when there is precedent from the SEC or a court that appears relevant to the proposal in question, why they believe such a precedent does or does not apply. Companies choosing to exclude a proposal on the basis that it has been substantially implemented or that it conflicts with a proposal being put forward by the company should clearly explain their reason(s) for any significant deviations of the company’s relevant implemented practice from the terms of the shareholder proposal, or how it conflicts with the relevant proposal being put forward by the company.
In certain cases, failure to present a clear and compelling argument for the exclusion of a proposal could be viewed as a governance failure, leading to ISS highlighting the exclusion for our clients’ information through direct reference in the report, contentious flag at the proposal level, or, in rare cases based on case-specific facts and circumstances, a recommendation to vote against one or more agenda items (which may be individual directors, certain committee members or the entire board).
New and materially updated FAQs in all of the foregoing resources are highlighted in yellow. Further to our earlier report, ISS’s benchmark policy recommendations for 2026 meetings are here.
See this post from Gunderson Dettmer and additional resources on our Proxy Advisors page.
This post first appeared in the weekly Society Alert!