ISS’ 2015 Draft Policy re: Evaluating Equity Compensation Plans

ISS recently released their draft 2015 voting policies for public comment. In particular, ISS is seeking feedback from interested parties on the proposed changes to its policies regarding equity plan shareholder proposals. In our experience, ISS' final policies generally follow the policies outlined in the drafts. Accordingly, to the extent companies are in the process of designing their equity compensation practices for the coming year, they should pay close attention to the changes that ISS is proposing.

The proposed policy changes regarding equity plans would move towards a more nuanced consideration of equity plan proposals. Instead of applying a series of tests which, if failed, would result in an "Against" recommendation, ISS will apply a "scorecard" model which will consider a wide range of factors, both positive and negative, in making an assessment. Key features of the scorecard will fall into three categories.