ISS Contemplates Changes To Canadian Pay For Performance Guidelines

Institutional Shareholder Services (ISS) recently published proposed updates to its benchmark proxy voting guidelines for 2013. Of particular interest are the proposed changes to the Canadian pay for performance guidelines.

Specifically, ISS is proposing a new methodology that would measure long-term pay for performance alignment based on certain quantitative and qualitative factors.  Under the proposal, factors would include the CEO pay-to-total shareholder return alignment over the prior five years, the ratio of performance to time based equity grants and the overall mix of performance-based compensation relative to total compensation, the trend in other financial metrics, and the quality of disclosure and appropriateness of the performance measures and goals utilized. As we discussed back in January, ISS introduced a new methodology for evaluating U.S. pay-for-performance last year.