This morning, ISS published its updated ISS QualityScore (f/k/a QuickScore) Technical Document, which contains details on the new factors incorporated into the methodology this year. The document includes 15 new governance factors, including one on compensation: Does the company employ at least one metric that compares its performance to a benchmark or peer group (relative performance)? We will be talking about ISS and other executive compensation consideration for your 2017 proxy statement during our upcoming Action Items to Prepare for 2017 Proxy Season eLunch on November 10, 2016.
ISS also announced that (1) its data verification period is and will remain open until November 11, 2016 at 7 p.m. CST, (2) it has “selectively updated” the QualityScore factor weighting and answer scoring, and (3) it will complete its annual governance ratings update, including changing the name to ISS QualityScore on November 21, 2016.
Outside of the compensation area, the ISS’ QualityScore changes include the following:
- What proportion of non-executive directors has been on the board less than six years?
- Does the board have any mechanisms to encourage director refreshment? (Non-scored)
- Does the company disclose the existence of a formal CEO and key executive officer succession plan?
- What is the proportion of women on the board?
- Has the board adequately responded to low support for a management proposal?
Shareholder Rights and Takeover Defenses
- Does the company have a fee shifting provision?
- Does the company have an exclusive venue/forum provision?
- Does the company have a representative claim limitation or other significant litigation rights limitations?
- Can the board materially modify the company's capital structure without shareholder approval?
- What is the ownership threshold for proxy access? (Now scored, previously incorporated in non-scored proxy access factor)
- What is the ownership duration threshold for proxy access? (Now scored, previously incorporated in non-scored proxy access factor)
- What is the cap on shareholder nominees to fill board seats from proxy access? (Now scored, previously incorporated in non-scored proxy access factor)
- What is the aggregation limit on shareholders to form a nominating group for proxy access? (Now scored, previously incorporated in non-scored proxy access factor)