Investors remain concerned about the link between share buybacks and board stewardship, particularly as it may relate to executive incentive compensation. We understand that at least one public company recently received an AFL-CIO sponsored shareholder proposal requiring that shares repurchased by the company be excluded for purposes of calculating per share performance metrics used to calculate executive and director compensation.

In its 2016 proxy voting policy survey, ISS asked what types of five-year historical metrics would be helpful to investors in assessing capital allocation and share buyback decisions. ISS indicated that this query was intended to address concerns that “inappropriate buybacks may be value-destroying in the long term” and “potentially increase the value of executive compensation packages.” In response, a reported 85% to 96% of investors indicated they would like to see five-year historical data on share buybacks, dividends, capital expenditures, and cash balances. ISS did not propose related changes to its proxy voting guidelines for 2016.