Dealing With Proxy Advisers In 2013: Peer Groups And More

The two leading proxy advisers, Institutional Shareholder Services Inc. ("ISS") and Glass Lewis & Co., LLC ("Glass Lewis"), have recently announced updates to their proxy voting policies that will apply to the upcoming 2013 proxy season (the "ISS Update" and the "GL Update," respectively). While ISS is generally regarded as the more influential of the two, many large institutional investors subscribe to both advisers. Also, some investors are more willing to depart from an ISS recommendation if Glass Lewis takes a different position. Accordingly, we advise becoming familiar with both advisers' policies. We also recommend that companies identify the extent to which their major shareholders rely on ISS and/or Glass Lewis.