On Oct. 27, 2016, ISS released for public comment its draft voting policy changes for 2017. Comments on the draft policies must be provided by Nov. 10, 2016. Final policies will be released the week of November 14, 2016. The draft U.S. policy includes the following proposed key changes:
Election of Directors/Committee Members
- ISS would recommend a vote against, or withhold from, members of the governance committee where companies have placed "undue" restrictions (e.g. outright prohibition or share ownership or time holding requirements in excess of SEC Rule 14a-8) on shareholders’ ability to amend the company’s bylaws.
- ISS would issue adverse director vote recommendations when a company completes its IPO with a multi-class capital structure with unequal voting rights among classes. ISS would no longer consider the results of shareholder votes on adverse governance features when issuing a vote recommendation. Instead, ISS would consider the inclusion of a reasonable sunset provision on the adverse capital structure or governance provisions.
U.S-Listed Companies Incorporated Abroad
- ISS would recommend a vote in favor of general share issuance authorities (i.e., those without a specified purpose) up to 20 percent of currently issued capital, if the duration of the authority is clearly disclosed and reasonable.
- ISS would consider on a case-by-case assessment, under U.S. policy, all compensation proposals on a ballot (whether included per U.S. or foreign requirements) pertaining to the same executive pay program, including aligned voting recommendations on all such proposals. If there is no applicable U.S. policy, then the policy of the country that requires it to be on the ballot would apply. As a result, most markets’ say-on-pay proposals would be evaluated under the U.S. Management Say-on-Pay voting policy.