The two major proxy advisory firms, Glass Lewis and ISS, recently issued updates to their U.S. proxy voting guidelines for 2013. These are the yardsticks by which they measure corporate practices to determine how they should recommend institutional shareholders vote their ballots on a host of governance and shareholder proposal topics.
As has been the case for the last several years, compensation issues still dominate the discussion on the guidelines proxy advisory firms use to influence their vote recommendations. Last year, ISS caused a stir by shifting the way that it views executive pay plan comparisons to other companies. ISS decided it would compare the relationship between a company’s executive compensation and shareholder return over the short and long term, as well as how the company stacks up to its peers during those timeframes. ISS also decided it would select peer groups based on revenue levels and market capitalization, as well as by industry.
