An ISS Holiday Gift Basket:  Technical Guidance on Pay-for-Performance Test, Updated GRId and New Burn Rate Tables for 2012 Proxies

December 29, 2011

Understanding and responding to revised compensation tests & new methodologies issued by proxy advisory firm Institutional Shareholder Services will be critical to garnering shareholder support in the 2012 proxy season.  These include updates to the proxy advisory firm's use of:

• Pay-for-Performance Test Implementation Guidance
• Updated Governance Risk Indicators (GRId) Methodology
• Updated Burn Rates for 2012

In particular, the technical details of the updated pay-for-performance evaluation will be a key factor in ISS's recommendations on Management Say on Pay proposals for companies with annual meetings on or after February 1, 2012. Companies should also be prepared to preview their new GRId scores in late February and evaluate anticipated new industry burn rate caps if they plan to seek shareholder approval for new equity plans in 2012.