ROCKVILLE, Md. (October 10, 2024) — ISS Governance, a leading global provider of independent and objective shareholder meeting research and vote recommendations and a unit of ISS STOXX, today released the results of its annual global benchmark policy survey. ISS received 325 responses in sum, of which 199 came from institutional investors and investor-affiliated organizations, and 126 from companies, corporate-affiliated organizations, and other non-investor respondents.
This year’s survey covered several governance and sustainability topics at national, regional, and global levels, including poison pills and executive compensation in the U.S. A slight majority (52 percent) of investor respondents said a board’s adoption of a short-term poison pill to defend against an activist campaign is “generally not acceptable,” while, conversely, two-thirds of non-investor respondents said that it is “generally acceptable.” On executive compensation, 43 percent of investor respondents supported the continuation of ISS’ current policy regarding pay-for-performance at U.S. companies “which considers a predominance of time-based equity awards to be a negative factor”, while a smaller 31 percent of investor respondents favored a revision of the current approach. A significant majority (70 percent) of non-investor respondents favored a revised policy approach.
Other governance topics included virtual meetings and auditor rotation for companies in continental Europe. Twenty-nine percent of investor respondents said their virtual meeting experience has been “mixed, depending on company practice…,” and 25 percent viewed virtual-only meetings as “somewhat negative, that should be only permissible in extraordinary circumstances with authorization limited in time.” Forty-seven percent of non-investors said virtual-only meetings have been “positive” and “should always be allowed,” while 26 percent said such meetings are “somewhat positive, the decision is best left to the board.” Meanwhile, more than 70 percent of investor respondents would support the introduction of an ISS policy on auditor rotation for companies in continental Europe, that would cover companies that are not subject to mandatory auditor rotation under E.U. legislation.
The survey also sought views on some global sustainability topics, including the disclosure of Scope 3 GHG emissions targets and on climate-related shareholder proposals. Approximately 47 percent of investor respondents said companies should be setting and disclosing targets for their Scope 3 emissions reduction, with a further 22 percent agreeing but only for companies for which Scope 3 emissions are significant in their carbon footprint. Sixty-one percent of non-investor respondents said companies should not be required to set Scope 3 emission reduction targets.
Separately, the survey asked what market participants would consider the most relevant factors for addressing shareholder proposals regarding climate-related matters. Multiple responses were allowed to be chosen. Thirty-three percent of investor respondents stated that they “generally, do not view such requests as overly burdensome and […] tend to support them if shortcomings are identified in the company’s current approach.” Fifteen percent of investor respondents stated they were “less likely to support” shareholder proposals when “the technology necessary to achieve full value chain net-zero goals is not yet cost competitive.”
Download a copy of this year’s global benchmark policy survey results report here.
ISS will over the coming weeks release key draft policy updates and open a public comment period for all interested market participants on key proposed changes to its voting policies for next year. The open comment period is designed to elicit objective, specific feedback from investors, companies, and other market participants on implementing the proposed policy updates. Final policy updates are expected to be announced in late November or early December and take effect for shareholder meetings occurring on or after Feb. 1, 2025.
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About ISS Governance
Founded in 1985 as Institutional Shareholder Services (ISS) Inc., ISS Governance is a leading global provider of independent and objective shareholder meeting research and recommendations, providing multiple voting policy choices as well as end-to-end workflow solutions for institutional investors. More than 1,600 clients worldwide utilize ISS Governance’s actionable expertise to help them make informed investment stewardship decisions, and to help them manage their voting responsibilities. Covering over 50,000 meetings annually, ISS Governance leverages its extensive global footprint, deep experience, high quality data and analysis, unified client support, and technology infrastructure to continuously evolve and extend its innovative suite of solutions to meet clients’ evolving portfolio, fiduciary, and stewardship requirements. Learn more at: https://www.issgovernance.com/solutions/proxy-voting-services/
About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.
Media Contact:
Izabella Nagy, Communications Analyst
press@iss-stoxx.com
Institutional Shareholder Services Announces Results of Global Benchmark Policy Survey
ROCKVILLE, Md. (October 10, 2024) — ISS Governance, a leading global provider of independent and objective shareholder meeting research and vote recommendations and a unit of ISS STOXX, today released the results of its annual global benchmark policy survey. ISS received 325 responses in sum, of which 199 came from institutional investors and investor-affiliated organizations, and 126 from companies, corporate-affiliated organizations, and other non-investor respondents.
This year’s survey covered several governance and sustainability topics at national, regional, and global levels, including poison pills and executive compensation in the U.S. A slight majority (52 percent) of investor respondents said a board’s adoption of a short-term poison pill to defend against an activist campaign is “generally not acceptable,” while, conversely, two-thirds of non-investor respondents said that it is “generally acceptable.” On executive compensation, 43 percent of investor respondents supported the continuation of ISS’ current policy regarding pay-for-performance at U.S. companies “which considers a predominance of time-based equity awards to be a negative factor”, while a smaller 31 percent of investor respondents favored a revision of the current approach. A significant majority (70 percent) of non-investor respondents favored a revised policy approach.
Other governance topics included virtual meetings and auditor rotation for companies in continental Europe. Twenty-nine percent of investor respondents said their virtual meeting experience has been “mixed, depending on company practice…,” and 25 percent viewed virtual-only meetings as “somewhat negative, that should be only permissible in extraordinary circumstances with authorization limited in time.” Forty-seven percent of non-investors said virtual-only meetings have been “positive” and “should always be allowed,” while 26 percent said such meetings are “somewhat positive, the decision is best left to the board.” Meanwhile, more than 70 percent of investor respondents would support the introduction of an ISS policy on auditor rotation for companies in continental Europe, that would cover companies that are not subject to mandatory auditor rotation under E.U. legislation.
The survey also sought views on some global sustainability topics, including the disclosure of Scope 3 GHG emissions targets and on climate-related shareholder proposals. Approximately 47 percent of investor respondents said companies should be setting and disclosing targets for their Scope 3 emissions reduction, with a further 22 percent agreeing but only for companies for which Scope 3 emissions are significant in their carbon footprint. Sixty-one percent of non-investor respondents said companies should not be required to set Scope 3 emission reduction targets.
Separately, the survey asked what market participants would consider the most relevant factors for addressing shareholder proposals regarding climate-related matters. Multiple responses were allowed to be chosen. Thirty-three percent of investor respondents stated that they “generally, do not view such requests as overly burdensome and […] tend to support them if shortcomings are identified in the company’s current approach.” Fifteen percent of investor respondents stated they were “less likely to support” shareholder proposals when “the technology necessary to achieve full value chain net-zero goals is not yet cost competitive.”
Download a copy of this year’s global benchmark policy survey results report here.
ISS will over the coming weeks release key draft policy updates and open a public comment period for all interested market participants on key proposed changes to its voting policies for next year. The open comment period is designed to elicit objective, specific feedback from investors, companies, and other market participants on implementing the proposed policy updates. Final policy updates are expected to be announced in late November or early December and take effect for shareholder meetings occurring on or after Feb. 1, 2025.
###
About ISS Governance
Founded in 1985 as Institutional Shareholder Services (ISS) Inc., ISS Governance is a leading global provider of independent and objective shareholder meeting research and recommendations, providing multiple voting policy choices as well as end-to-end workflow solutions for institutional investors. More than 1,600 clients worldwide utilize ISS Governance’s actionable expertise to help them make informed investment stewardship decisions, and to help them manage their voting responsibilities. Covering over 50,000 meetings annually, ISS Governance leverages its extensive global footprint, deep experience, high quality data and analysis, unified client support, and technology infrastructure to continuously evolve and extend its innovative suite of solutions to meet clients’ evolving portfolio, fiduciary, and stewardship requirements. Learn more at: https://www.issgovernance.com/solutions/proxy-voting-services/
About ISS STOXX
ISS STOXX GmbH, through its group companies, is a leading provider of comprehensive and data-centric research and technology solutions that help capital market participants identify investment opportunities, detect qualitative and quantitative portfolio company risks, and meet evolving regulatory requirements. With roots dating back to 1985, we today deliver world-class benchmark and custom indices across asset classes and geographies and serve as a premier source of independent corporate governance, sustainability, cyber risk, and fund intelligence research, data, and related offerings. Our products and services give clients the scale and leverage they need to grow their business more effectively and efficiently. ISS STOXX, which is majority owned by Deutsche Börse Group, is comprised of more than 3,400 professionals operating across 33 global locations in 19 countries. Its approximately 6,400 clients include many of the world’s leading institutional investors who turn to ISS STOXX for its objective and varied offerings, as well as companies focused on ESG, cyber, and governance risk mitigation as a shareholder value enhancing measure. Clients rely on ISS STOXX’s expertise to help them make informed decisions to benefit their stakeholders.
Media Contact:
Izabella Nagy, Communications Analyst
press@iss-stoxx.com
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