I have resisted the temptation to blog during the holidays (indeed, for most of December). However, in previous blogs I observed that ISS had promised to include additional information about policy updates in December, which it did. On December 16, 2016, ISS released FAQs on: U.S. Equity Compensation Plans and U.S. Executive Compensation Policies. Helpfully, both sets of FAQs highlight new and materially updated questions.

In this final blog of 2016, I will only mention two of the new/updated questions, one from each set of FAQs, and each of which I will quote in full. From the EPSC FAQs:

32. How does ISS view a plan amendment to increase the tax withholding rate applicable upon award settlement?

ISS generally views a plan amendment to increase the tax withholding rate as an administrative change neutral to shareholders’ interests. However, if the plan in question contains a liberal share recycling feature (see FAQ #22), then the amendment would be viewed negatively since it would exacerbate concerns regarding diminished transparency of share usage inherent to liberal share recycling. However, this concern would be mitigated if the plan stipulates that only the number of shares withheld at the minimum statutory rate may be recycled, even if the tax withholding is at a higher rate. [Emphasis added]

From the Compensation Policies FAQs:

61. What is ISS’ policy on say-on-pay frequency?

Based on feedback from investors, ISS will generally recommend in favor of annual say-on-pay votes, which provide the highest level of accountability and clearest channel for shareholder communication. In the 2016 ISS Policy Survey, two-thirds of investor respondents indicated they preferred annual say-on-pay frequency. Holding a say-on-pay vote every year enables the vote to correspond to the majority of the information presented in the accompanying proxy statement, and allows investors to comment upon issues in annual incentive programs (which have come up more frequently in recent years) in a more timely fashion. [Emphasis added]

Happy New Year!