ISS and Glass Lewis Update Voting Guidelines for 2020 Proxy Season

November 15, 2019

On November 12, proxy advisory firm Institutional Shareholder Services Inc. (ISS) announced updates to its proxy voting guidelines for the 2020 proxy season, applicable to shareholder meetings on or after February 1, 2020.

Among other changes, ISS has updated its approach for newly-public companies by creating two distinct policies that address (1) problematic governance provisions (e.g., supermajority voting requirements and classified boards) and (2) multi-class capital structures with unequal voting rights, including providing a framework for addressing acceptable sunset requirements for problematic capital structures in newly-public companies. Other notable updates cover board gender diversity, share repurchase programs, evergreen provisions in equity incentive plans and shareholder proposals on independent board chairs.

Earlier this month, rival proxy advisory firm Glass, Lewis & Co. (Glass Lewis) announced updates to its proxy voting guidelines for the 2020 proxy season. Among other changes, notable updates include:

  • When the SEC has declined to state a view on whether a shareholder resolution should be excluded, Glass Lewis believes that such proposal should be included in a company’s proxy filings. A failure to do so will likely lead Glass Lewis to recommend that shareholders vote against the members of the governance committee.
  • Glass Lewis will generally recommend voting against the governance committee chair when: (i) directors’ records for board and committee meeting attendance are not disclosed; or (ii) when it is indicated that a director attended less than 75 percent of board and committee meetings but disclosure is sufficiently vague that it is not possible to determine which specific director’s attendance was lacking.

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