ISS launched today its Annual Benchmark Policy Survey (pdf version) for the 2022 proxy season, as well as a separate climate-focused survey (pdf version) that will inform its benchmark and specialty climate policies. As in prior years, the benchmark policy survey includes a series of global-level and regional-specific questions.
Global-level topics in the Benchmark Policy Survey include the use of non-financial ESG performance metrics in executive compensation, racial equity audits, and the continued use of virtual-only shareholder meetings (absent COVID-19-related health and social restrictions).
US-specific coverage includes:
- CEO pay quantum over a multi-year period
- Mid-cycle changes to long-term incentive programs for companies experiencing long-term negative impacts from the pandemic
- Enumerated “poor governance structures” implemented before 2015 that ISS has previously grandfathered
- Recurring adverse director vote recommendations for maintaining supermajority vote requirements subsequent to an IPO if a company fails to receive the requisite level of shareholder support for a management proposal to eliminate such requirements
- SPAC transactions
- Management transaction proposals conditioned on “poor governance provisions”
The climate survey’s coverage is global. Benchmark climate policy development questions address minimum criteria for boards in managing climate-related risks for companies whose operations, products, or services are strong contributors to climate change, as well as for other companies (e.g., companies in service industries that do not finance, develop, or operate products or facilities with high GHG emissions) and management- and shareholder-sponsored say-on-climate proposals. Notably, ISS’s release indicates that the benchmark policy questions are seeking to understand minimum expectations about board oversight (not “management”) of climate change risk, which presumably is how ISS intended the corresponding survey questions be interpreted. Although anyone can also respond to the specialty policy development questions, they are specifically designed for investors that subscribe to ISS’s Specialty Climate Voting Policy.
Both surveys close on August 20, 2021, at 5 pm ET. Institutional investors, companies, corporate directors and other market stakeholders are all encouraged to participate in the survey. The Society plans to comment. Members interested in participating in this important effort should email Ted Allen at tallen@societycorpgov.org or Randi Val Morrison at rmorrison@societycorpgov.org.
Access additional resources on our Proxy Advisors page.
This post first appeared in today's Society Alert!