Publications

Market Stock Unit Practices in the Technology Sector

While historically technology companies relied heavily on stock options to provide long-term incentives to their executives, in recent years an alternative vehicle – full-value awards with vesting tied to stock price performance – has gained broad acceptance. These awards – known as market stock units (“MSUs”) – avoid many of the perceived drawbacks of traditional stock options while, at the...Read More

Employee Stock Plan Proposals at the Tech 120

2016 was another busy year for employee stock plan proposals among the 120 largest publicly-traded technology companies primarily headquartered in the San Francisco Bay Area (the “Tech 120”). This Thoughtful Pay Alert summarizes the results of our review of the Tech 120 stock plan proposals, based on the information disclosed in the companies’ proxy statement filings with the Securities and...Read More

ISS Issues 2017 Policy Updates

Institutional Shareholder Services (“ISS”) has updated its U.S. corporate governance benchmark policy guidelines for 2017. Other than the addition of several relative financial metrics to its methodology for evaluating the link between pay and performance (see our recent Thoughtful Pay Alert, “ISS Updates ‘Pay for Performance’ Methodology” (Nov. 21, 2016), this year’s updates contain one...Read More

ISS Issues Reminder about Updating Peer Group Ahead of 2017 Proxy Season

Institutional Shareholder Services (“ISS”) is inviting companies to update their self-constructed compensation peer groups in connection with its review of their executive compensation program during the 2017 proxy season. ISS uses a company’s self-selected compensation peer group as a key input in developing the peer group that it uses to evaluate the alignment of the company’s CEO pay and...Read More

ISS Updates “Pay for Performance” Methodology

On November 8, 2016 Institutional Shareholder Services (“ISS”) announced several significant revisions to its methodology for evaluating the link between pay and performance for U.S. companies. As is well-understood, this evaluation is used by ISS to formulate the voting recommendation on companies’ shareholder advisory proposals on the compensation of their named executive officers (the...Read More

ISS Introduces “QualityScore” Corporate Governance Tool Ahead of 2017 Proxy Season

In what has become a seemingly biannual occurrence, Institutional Shareholder Services (“ISS”) has rebranded and reintroduced its global corporate governance scoring tool for institutional investors. Now known as “ISS QualityScore,” this tool was previously called “ISS QuickScore.” As you may know, QuickScore succeeded ISS’s Governance Risk Indicators (“GRId”) which was preceded by its...Read More

Many Companies Will Need to Conduct Say-on-Frequency Votes in 2017

As companies begin to prepare to draft their definitive proxy statements for the 2017 proxy season, it is important to remember that, for many companies, next year also marks the sixth anniversary of their initial shareholder advisory vote to determine the frequency with which they would conduct future shareholder advisory (non-binding) votes on the compensation of their named executive...Read More

SEC Staff Issues Guidance on CEO Pay Ratio Disclosure Rules

On October 18, 2016, the Staff of the Securities and Exchange Commission’s Division of Corporation Finance published guidance on Item 402(u) of Regulation S-K, the rule it adopted in 2015 to implement Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Section 953(b) requires public companies to disclose the relationship between the annual total compensation of...Read More

Congress Considers Legislation to Postpone Taxation of Private Company Equity Awards

On July 11th of this year, bills were introduced in the United States Senate and House of Representatives that seek to address an issue that has become a problem for many employees of privately-held companies who hold outstanding equity awards granted to them during their employment. The “Empowering Employees through Stock Ownership Act” (S. 3152, introduced by Senator Mark Warner (D-Virginia)...Read More

ISS Provides Peek at Possible Policy Updates for 2017 Proxy Season

As it does each summer, Institutional Shareholder Services (“ISS”) has published its annual policy survey soliciting input from interested parties on potential changes to its guideline policies for the 2017 proxy season. The survey is the initial step in its annual global benchmark policy formulation process. ISS will use the feedback received from the survey as one factor in determining...Read More

Director Compensation Litigation – A Mid-Year Update

Since last year’s decision in the Delaware Court of Chancery (Calma v. Templeton et al.) reaffirming the principle that director compensation may not be protected by the “business judgment” rule because directors are inherently conflicted when setting their own pay (see our Thoughtful Pay Alert, Protecting Your Director Compensation Decisions from Claims of “Excessive Pay”), much has happened...Read More

Disclosing Personal Security Arrangements

In recent years, the confluence of a growing global economy and turbulent geopolitical events has led many companies to provide extensive security arrangements for their executives. And while most organizations firmly believe that these arrangements serve a legitimate corporate purpose – ensuring the safety of their key decision-makers and their families, the SEC considers these expenditures...Read More