Category: Corporate Governance Committees, Policies and Practices

SEC Commissioner Addresses Prospects for CEO Pay Ratio

Cam C. Hoang

This week, during his opening remarks at the 2017 National Conference of the Society for Corporate Governance, SEC Commissioner Michael Piwowar remarked on prospects for repealing or delaying the CEO pay ratio rule. Under the rule, most public companies must disclose the median of the annual total compensation of all employees (including non-U.S., part-time, temporary and seasonal workers), except for the CEO; the annual total...

The House Financial Services Committee to Hold a Hearing on Financial CHOICE Act 2.0 this Wednesday – Here’s a Summary of Governance and Executive Compensation Provisions

Cam C. Hoang

While passage in the House seems likely, the Financial Choice Act may undergo significant changes before it may pass in the Senate. Here is a summary of certain governance and executive compensation provisions that are included in the discussion draft: Prohibit Universal Proxy Ballots. Currently, companies are not required to use a universal proxy ballot in the event of a proxy contest, so shareholders receive...

ISS Releases New and Updated FAQs on U.S. Equity Compensation Plans

Cam C. Hoang

Last Friday, ISS released new and updated FAQS on U.S. Equity Compensation Plans, as summarized below. These FAQs provide new and updated guidance on ISS’s evaluation of equity compensation plan proposals, including treatment of performance-based awards in burn rate calculations, bundling of plan amendment proposals, updates to ISS’s Equity Plan Scorecard (EPSC) policies, and the EPSC as it applies to newly public companies. Since 2015,...

Do Your Confidentiality Clauses Expressly Allow Whistleblowing?

Christopher L. Doerksen

Over the last few months, the SEC has obtained a string of cease and desist orders against SEC reporting companies, both domestic and foreign, to enforce an often overlooked rule adopted under Dodd-Frank.  Rule 21F-17 provides that “[n]o person may take any action to impede an individual from communicating directly with the [SEC] staff about a possible securities law violation, including enforcing, or threatening to...

ISS Releases Executive Summary of 2017 Proxy Voting Policies

Cam C. Hoang

ISS has published an executive summary of 2017 updates to its benchmark proxy voting policies for the Americas, EMEA, and Asia-Pacific regions.  The updated policies will generally be applied to shareholder meetings on or after February 1, 2017. U.S. policy changes are summarized below, and companies should keep them in mind as they consider policies on director compensation, dividend and vesting policies for stock awards,...

Glass Lewis Releases Its 2017 Policy Guidelines

Kimberley R. Anderson

Glass Lewis released its updated policy guidelines for the 2017 proxy season for several countries, including the United States and Canada.  The most significant change in the United States guidelines relates to director overboarding and was expected.  The changes to the United States guidelines include: Director Overboarding Policy As indicated in last year’s guidelines, in 2017, Glass Lewis will generally recommend voting against a director...

ISS Rebrands “QuickScore” to “QualityScore,” Adds and Updates Governance Factors

Cam C. Hoang

Institutional Shareholder Services (ISS) is rebranding its governance scoring solution “ISS QuickScore” to “ISS QualityScore,” though the underlying methodology appears very similar.  As in the past, covered companies can review, verify and provide feedback on the data used to determine their scores via a complimentary Data Verification tool accessed through the Governance Analytics platform.  See instructions for accessing the Data Verification tool here. Data verification...

A Call to Action: Leading Executives issue “Commonsense Principles of Corporate Governance”

Jonathan B. Abram

Citing the importance of publicly owned companies to the U.S. economy, a group of thirteen leading executives issued a set of principles, on July 21, 2016, outlining their vision for the critical elements of good corporate governance.  The report, entitled, Commonsense Principles of Corporate Governance, was signed by a diverse group of executives ranging from Jamie Dimon, JP Morgan Chase; Warren Buffett, Berkshire Hathaway, Inc.;...