Institutional Shareholder Services Inc. (“ISS”) recently released the results of its annual global voting policy survey. Respondents include institutional investors, corporate issuers, as well as consultants and advisors to public companies. Survey responses provide helpful insight into the current views of influential institutional investors in addition to signaling changes to ISS voting policies. This year’s survey was light on executive compensation related questions but did provide helpful feedback on two topics. (1) Frequency of Say-on-Pay: 66 percent of institutional investors favor annual say on pay votes, consistent with current ISS policy. (2) Pay for Performance Metrics: 79 percent of institutional investors support the incorporation of financial metrics, in addition to total shareholder returns, into the ISS pay-for-performance models that identify potential misalignments between CEO pay and company performance. The three most popular alternatives were return on investment metrics (e.g., return on invested capital), return metrics (e.g., return on assets or return on equity), and earnings metrics (e.g., EPS or EBITDA).

View the survey results.