As we look forward to the 2023 proxy season, Institutional Shareholder Services (ISS) and Glass Lewis & Co. (Glass Lewis), two prominent proxy advisory firms, each recently published their latest voting guidelines for the upcoming proxy season. In our Client Alert, we provided a detailed look at updates to those policies. A summary of the coverage of the key updates in ISS’s and Glass Lewis’s voting policies is provided below.
Key updates to ISS’s United States Proxy Voting Guidelines Benchmark Policy Recommendations covered voting recommendations relating to, among other things, (1) director nominees in uncontested elections including updates to (or, in some cases, the expiration of transition periods for) policies relating to gender diversity, poison pills, unequal voting rights, problematic governance structures, unilateral bylaw/charter amendments and problematic capital structures, and climate accountability, (2) officer exculpation charter amendment proposals, (3) proposals requesting the company conduct an independent racial equity and/or civil rights audits, (4) proposals seeking more disclosure on the company’s approach to incorporating environmental and social (E&S) criteria into its executive compensation strategy, and (5) proposals seeking more disclosure of alignment between the company’s political spending and its stated values and policies. ISS also codified its current approach to evaluating certain problematic pay practices and noted the expiration of the transition to its “Value-Adjusted Burn Rate” (VABR) methodology for reviewing company stock plans.
Key updates to Glass Lewis’s 2023 U.S. Policy Guidelines covered voting guidelines relating to, among other things, (1) gender and underrepresented community board diversity, (2) board oversight of E&S issues, (3) overboarding limits for executive chairs, (4) board oversight of cyber risk, (5) board accountability for climate-related issues, (6) officer exculpation charter amendment proposals, and (7) long-term incentives.
In addition, key updates to Glass Lewis’s 2023 ESG Initiatives Policy Guidelines covered Glass Lewis’s approach to (1) the disclosure of shareholder proponents, (2) proposals requesting the company conduct a racial equity or civil rights audit, and (3) proposals requesting the company adopt a policy requiring shareholder approval of certain severance payments.