Exequity's recent briefing provides an instructive overview of ISS's Equity Plan Scorecard model that ISS uses to evaluate equity compensation plan proposals for those companies whose shareholders tend to follow ISS. Notably, the firm comments: "The EPSC model is a lot like the Terminator—it doesn't care what your company does, if it runs afoul of the EPSC model by not getting enough points to achieve or exceed the threshold score, ISS will recommend against the equity compensation plan proposal, and there is very little you can do about it."
Notwithstanding a potentially negative ISS recommendation, Exequity notes that relatively few equity plan proposals fail (see also the equity proposal voting stats in this recent Semler Brossy report); rather, failing the ISS model should prompt the company's active engagement with shareholders to secure their support for the plan as proposed.
|
Access additional resources on our Proxy Advisors page. This post first appeared in the weekly Society Alert!
|