For many companies, the difference between strong and average performance can be traced to capital efficiency. This paper examines two key sectors that are known to be capital intensive and cyclical: chemicals and semiconductors.
Materiality serves as a core guide for strategic planning by enabling companies to understand and execute on relevant goals associated with environmental and social impact for its business and stakeholders. This paper identifies how Materiality Assessments allow companies to fully examine the environmental and social impacts to their unique business model and operations.
The year 2020 presented uncertainties due to COVID-19. Many companies made their equity plans right on the cusp of stock prices plummeting in response to the pandemic. Analyzing equity plan data from 2020 and earlier, this paper identifies recent trends and considers what the 2021 proxy season may look like.
With the increased volatility of the stock market, many companies are facing a similar question to what survivors of the 1990’s Dot Com Bubble had to face, “How do we keep our employees around now that their equity is down and their options are worthless?”
“Realizable” pay assessments are often included in the Compensation Discussion & Analysis (“CD&A”) section of the proxy filing to provide a more accurate view of the actual value of compensation delivered to an executive, as opposed to the pay data disclosed in the Summary Compensation Table which does not take into account the impact of recent share price movements on an executive’s compensation package.
This report discusses the current state of equity compensation plans as well as the trends and different practices in different industries.
One topic on comp committee agendas may be something that has not traditionally been an element of executive compensation: Diversity. With many companies asking us about how to measure diversity, given the heightened awareness around diversity and its impact on company and shareholders, our advisory team wrote a paper outlining how some companies are thinking about it.
Interest in ESG is growing rapidly and has gained traction amongst corporations, individuals, investors, and institutions. This paper is intended to provide corporate issuers with some background regarding the imminent regulatory changes in Hong Kong (HK) and an overview of the recent trends in responsible investment and strategies focusing on ESG risks.
COVID-19 will markedly change business. It’s an unprecedented force of economic disruption that is slashing demand and imposing new workplace habits, sourcing strategies, and consumer behaviors. Companies are only beginning to size up and respond to the new world we are facing.
Given the market volatility caused by the COVID-19 pandemic, this paper examines the Economic Value Added (EVA) fundamentals of companies within the S&P 500, S&P 1500, and Russell 3000 indices to identify if there are certain fundamental characteristics or indicators that separate companies that are delivering stronger total shareholder returns compared to peers.
The governance playbook is undergoing a major revision. Download the report to know the three corporate governance trends to follow inside Europe’s publicly-listed companies in 2020.
Companies are facing unprecedented disruption and novel challenges because of COVID 19. This is evolving on a weekly if not daily basis, but here is how we see this global pandemic impacting incentive compensation in EMEA and what companies can do about it.
The COVID-19 crisis has upended companies’ pay programs and forced many to re-evaluate decisions on executive and director compensation. A key tool used in executive pay decisions, the compensation peer group, takes on additional importance during this time. ISS Corporate Solutions (ICS) has identified key peer group strategies to consider in these challenging times.
In the wake of a dramatic slump in equities which witnessed the S&P 500 fall from an all-time high into bear market territory (>20% decline) in a record 16 trading days, this white paper takes a look at profit expectations through the Economic Value Added (“EVA”) lens.
As the COVID-19 pandemic wreaks havoc on incentive plans, ISS Corporate Solutions (ICS) took a closer look at existing relative total shareholder return (TSR) metrics at S&P 500 companies to review how companies’ relative performance has been impacted over the first quarter of 2020.
Companies are facing unprecedented disruption and novel challenges because of COVID 19. This is evolving on a weekly if not daily basis, but here is how we see this global pandemic impacting Australian issuers and how ICS can help through these uncertain times.
In response to the COVID-19 pandemic, securities regulators in several countries have published guidance that affords publicly listed companies greater flexibility regarding the type of annual general meeting (AGM) they can hold as well as when it can be held.
Companies are facing unprecedented disruption and novel challenges because of COVID 19 and we wanted to let you know what we’re hearing from many of our clients. This is evolving on a weekly if not daily basis, but here is how we see this global pandemic impacting incentive compensation as of today – March 27, 2020 – and what companies can do about it.
This 2019 Canadian Post-Season Summary reviews:
Companies use equity compensation plans to pay their employees, officers, non-employee directors, and other service providers by giving them equity ownership at the company. Equity compensation is common in both public and private companies. Companies view equity compensation as an effective way of incentivizing plan participants while attracting high-quality employees, encouraging retention, motivating sustained performance, and aligning employees’ interests with those of shareholders.
In the 2019 proxy season, “overboarding” became a center-stage issue for many companies and investors. Several large asset managers, including Vanguard, BlackRock, and LGIM, enhanced their voting guidelines to apply stricter criteria, while some directors serving on multiple public company boards faced significant opposition to their elections. The idea that directors should not serve on too many boards has been a key consideration for investors for many years.
As the busiest part of the 2019 U.S. proxy season is behind us, we take an early look at the vote results of annual general meetings convened from January to May. As of this report, approximately 70 percent of Russell 3000 annual general meetings expected during the calendar year have already taken place, and the figure will rise to close to 90 percent of all calendar-year annual meetings by the end of June. In our review of the vote results for the 1,812 Russell 3000 2019 annual general meetings that took place from January to May and are available in the ISS database, this paper identifies major trends.
Compensation disclosures have grown significantly over the last decade (mostly for the better), and they continue to evolve with the ongoing engagement between companies and shareholders. Certain compensation practices are known for raising investor concerns, leading to difficult conversations between investors and boards and higher levels of investor opposition of executive pay programs.
As we enter the peak of proxy season, we review executive compensation trends in the U.S. based on executive pay disclosures so far this year.
This document is an excerpted portion of ISS’ full report, “2019 U.S. Environmental and Social Issues Proxy Season Preview,” which provided the following early insights:
ISS Analytics recently published a white paper outlining how EVA may be able to help support Pay-for-Performance analysis. This article covers:
A board literate in economic value can gain an enormous advantage in moving beyond compliance and the accounting numbers to fulfill the greater duty of working with management to deliver shareholder value.
In March this year ISS Corporate Solutions partnered with the Taiwan Depositary & Clearing Corporation (TDCC) in the launch of their Investor Relations platform event. The theme explored how ESG and digital solutions transform investor relations and corporate sustainability practices. In this document, we highlight the upcoming ESG demands on Taiwan’s listed corporates and the capabilities of managing ESG risk through ICS’ dynamic platform solutions. Please contact us for further information.
Looking at some of the key takeaways from the ISS 2018 Proxy Season Review, 2018 was a year of increasing shareholder dissent shown in votes against directors. Shareholder votes against remuneration reports spiked to a historical high with 26 companies in the S&P ASX300 index recording a “strike.”
ISS compensation experts, Liz Williams and Rachel Hedrick provide insights on key compensation topics to watch in 2019. They share their perspectives on pay in an uncertain market, the impact of the repeal of 162(m) on equity compensation plans proposals, performance-metric selections, CEO pay ratio disclosures, new shareholder proposal types, and the ISS policy on director compensation.
In the U.S., shareholder proposal filings have historically played an important role in advancing corporate governance and in highlighting key risks related to environmental and social issues.
In this article, we explore the specific challenges market participants face when using traditional accounting metrics to assess performance, as well as the limitations those metrics place on corporate leadership in informing and guiding proper capital allocation and decision making. In addition, we present a potential solution and alternative framework called Economic Value Added (EVA.)
As the AGM season approaches and concerns over drafting remuneration disclosures increase, how do you improve the chances that your proposals will be well-received by shareholders?
Companies often say that shareholders just did not understand their pay disclosure well enough to vote in favor of the pay program, but a key purpose of the Compensation Discussion and Analysis (CD&A) is to have shareholders fully understand how the pay program works.
This paper outlines four common traps companies fall into when thinking about their compensation disclosures.
As the world greets the New Year, investors and companies may take a moment to reflect on key corporate governance priorities in light of a potentially more challenging business environment in the year ahead.
This primer on EVA (Economic Value Added) was designed to give you a better understanding of how EVA is calculated and what makes it different from other metrics.
AUGUST 10, 2018
In this article, data validates that good board renewal practices help companies better manage risk and performance.
As a preamble to ISS’s post-season review reports, we took a look at some of the key takeaways from the 2018 proxy season. Use this report to understand the trends in board election vote results, compensation, shareholder proposals, and environmental and social issues.
Peer groups form the bedrock of many company pay-setting exercises. Benchmarking CEO pay to a target value, typically the median pay of a group of “peer” companies, is a standard practice used by compensation committees; more than 97 percent of S&P 500 companies disclose benchmarking peer groups.
Institutional Shareholder Services Inc. (ISS) recently launched an Environmental & Social QualityScore, a data driven approach to measuring the quality of corporate disclosures on environmental and social issues. The trends outlined in this document highlight some interesting insights from the first six industries covered under the E&S QualityScore, as of February 27, 2018.
ISS Analytics analyzed pay data for “same-store” CEOs within the Russell 3000 to better understand the sentiment of compensation committees and how their thinking evolves year-over-year.
With the passage of the Tax Cuts and Jobs Act 2017, the provision of Section 162(m) of the Internal Revenue Code (IRC) that allowed companies to deduct certain “performance-based” compensation in excess of $1 million, has been eliminated.
As proxy season approaches and anxieties over drafting the proxy disclosures reach peak levels, how do you improve the chances that your performance-based compensation program will be well-received by shareholders and proxy advisors?
To many companies, these relative TSR metrics are a cure-all; they provide a relative performance measure with transparent measurement criteria, and it links back directly to shareholder value creation. After all, the more the shareholder benefits, the more the executives benefit, as well.
Presently, 40 percent of S&P 500 companies provide a proxy access right; by summer 2017, the majority of the companies in the S&P 500 may provide proxy access, along with 15-20 percent of the S&P 400 index. As of June 30, 2016, 252 U.S. companies in the Russell 3000 have adopted some form of proxy access; only 16 of these companies had adopted proxy access before 2015.
Volatility and a declining stock market – particularly near the time of year when most executive grants are made – bring a whole new level of complexity to compensation committees and equity plan administrators. Often, the number of shares that an executive team receives will increase (and sometimes substantially increase) in order to keep the dollar value of grants constant (or nearly so) from the previous year.