The memo includes an appropriately robust discussion of ISS's approach, as applied in 2024, to analyzing executive pay for purposes of its voting recommendations, with the pay-for-performance assessment remaining a key factor.
The most common qualitative factor cited by ISS for those S&P 500 companies receiving negative vote recommendations was above-target payouts; however, in context, S&C notes other factors likely weighing in on ISS’s “against” voting recommendation in these cases. Limited, opaque, or undisclosed performance goals were also often expressed as a concern for S&P 500 companies that received negative vote recommendations.
The data on equity compensation plan proposals generally reveals significant shareholder support, albeit with an approximately 20% swing in average support depending on the ISS vote recommendation.