While ISS made relatively few changes to its 2014 compensation and governance policies, particularly on the compensation side, revisions to the quantitative analysis used for PFP calculations and Say on Pay votes may have a significant impact on some companies. The new policy will be generally effective for shareholder meetings held on or after February 1, 2014.
Among the key 2014 updates:
- Pay-for-Performance Test (PFP): ISS's quantitative assessment going forward will only look at three-year TSR alignment, eliminating its review of one-year alignment, and will expand the reporting of realizable pay to the S&P 1500.
- Board Responsiveness: Recommendations for Directors and Boards will be predicated on how members responded to proxy proposals that were approved by shareholders the previous year.