Some issuers will learn in the upcoming proxy season that ISS is recommending a “No Vote” on their say-on-pay proposal. An outline of a contingency plan is set forth below.

STEP 1: Understand the reason for the ISS recommendation and pinpoint any flaws or errors in their logic.

STEP 2: Issuers, after consultation with legal counsel, should emphasize their position by filing addional solicitation materials like Tyco International.

STEP 3: Contact your large shareholders personally and explain your position. Consult with your legal counsel about what is permissible under the proxy rules.

STEP 4: Prepare for the meeting. The vote is likely to be close, so review your proxy materials to see what disclosures were made about when a vote passes. Understand the treatment of abstentions and broker non-votes.

STEP 5: Prepare for post-meeting public relations. Perhaps consider drafting two press releases, one addressing a vote where a majority supports the executive compensation program and one where there is no majority support.

STEP 6: It is still likely that even if a majority of shares voted support the executive compensation program, there will still be a significant “No Vote.” After the meeting consider means to address and implement any perceived shortcomings and disclose those steps in the next CD&A.

Check frequently for updates on the Dodd-Frank Act and other important securities law matters.