On December 14, 2018, Institutional Shareholder Services (ISS)
issued updated Frequently Asked Questions (FAQ) related to its U.S.
Compensation Policies effective for shareholder meetings occurring
on or after February 1, 2019. The more notable updates are
summarized below.
Nonemployee Director Pay
In 2017, ISS introduced a policy providing for potential adverse
vote recommendations for the members of a company's board of
directors responsible for approving/setting nonemployee director
(NED) pay in the event that ISS determines that there is an
established pattern (two or more consecutive years) of excessive
pay levels without a compelling rationale or other clearly
explained mitigating factors. In November 2018, ISS announced that
it would revise its methodology for identifying NED pay outliers
and delay the first possible adverse vote recommendations under the
policy until 2020 (
see our previous alert here), which was confirmed in the
FAQ.