August 15, 2014

ISS’ New “Equity Compensation Plans” Data Verification Portal: 10 Things to Know

Perhaps as a reaction to the SEC’s SLB 20 – or Commissioner Gallagher’s continuing war of words against the current state of proxy advisors – yesterday, ISS announced the upcoming launch of a new “data verification portal” for equity-based compensation plans up for shareholder approval. ISS also released a set of 19 FAQs to help explain this new portal (pet peeve: if you create a set of FAQs, please number them).

Here are 10 things to know:

1. Portal officially launches September 8th
2. Data verification only for equity comp plan approval (in other words, this is different than what S&P 500 companies now enjoy for their entire ballot; see FAQ #14)
3. All US companies can participate
4. Companies have to register for the portal before they can use it (do so soon since it takes 5-7 business days for ISS to process and you might forget if you procrastinate)
5. Only companies can use the portal; not their advisors
6. Can’t verify data until after proxy statement is filed with the SEC
7. After proxy filed, ISS will send an alert saying the data verification window is open (alert will come roughly within 12 business days after the proxy filing)
8. Once alert is sent, companies only have 2 business days to verify the data and request changes. Repeat: just two business days!
9. ISS will send responses to request for changes within 5 business days of the request
10. Review list of 27 questions in Appendix A of the FAQs to comprehend what ISS is looking for in equity comp plans

Pay-for-Performance Disclosure: CII Sends Recommendations to SEC

Last week, CII sent this letter to Corp Fin Director Keith Higgins providing recommendations on the implementation of Section 953(a) of Dodd Frank. The letter provides these recommendations:

– Do not make changes to the existing Summary Compensation Table.
– Provide a graphic representation of pay for performance for the CEO individually and the named executive officers in the aggregate.
– Provide, at a minimum, a five-year comparison of executive compensation to performance.
– The required disclosure, at a minimum, should compare executive compensation to total shareholder return.
– Disclosure about executive compensation actually paid should not exclude any components of pay.

Also see the new comment letter from the AFL-CIO on this topic. It was the first comment letter posted regarding the 3 rulemakings the executive pay area that have not yet been proposed in 10 months. Here’s all of those comment letters

Transcript: “Executive Pay Basics: The In-House Perspective”

We have posted the transcript for the recent webcast: “Executive Pay Basics: The In-House Perspective.” This was a tremendous program – perfect for anyone who needs some comfort if they are relatively new to being in-house or isn’t very well steeped in a wide scope of pay issues…

– Broc Romanek