Institutional Shareholder Services will toughen recommendations on executive compensation, CEOs who serve on boards of other companies and auditor ratification as part of the revised U.S. proxy-voting policies it will apply to companies with shareholder meetings after Feb. 14.
Among new policies, ISS will support non-qualified employee stock purchase plans, so long as they include all employees at a company except those with 5% or more beneficial ownership. ISS will also recommend withholding votes for the entire board when directors receive a no-confidence vote from at least 50% of shareholders; withholding votes when high levels of opposition in prior elections were not addressed; and opposing directors who are CEOs of publicly traded companies and serve on more than two public boards other than their own.
ISS will continue to hold board compensation committees responsible for linking executive pay to performance but will expand its compensation evaluation and improve its pay-for-performance metrics, while taking a tougher view on director pay.
