Among Russell 3000 companies, there were a total of 412 proposals seeking shareholder approval of equity plan amendments and 191 proposals requesting shareholder approval of new equity plans. With the exception of three proposals, all received majority shareholder support.
Of the 412 plan amendments and 191 new plan approvals, ISS opposed approximately 18% (as presented below) because they failed to receive a passing score under the Equity Plan Scorecard or exhibited negative overriding factors, such as single-trigger vesting risk on a potentially “liberal” change-of-control definition.
The average passing vote in the aggregate was 90% for both amendments and new plan approvals. With a favorable ISS vote recommendation, both types of proposals passed with 93% shareholder support, on average. Without ISS’ support, the passing rate dipped slightly below 80% for both types of proposals, which suggests average ISS influence of approximately 15% with regard to equity plan proposals.
Bindu M. Culas
Bindu Culas has over 15 years of experience advising clients on the US and international legal, tax and regulatory aspects of designing and structuring equity incentive programs, employment agreement, and severance and change-of control plans. Bindu has worked with both domestic and foreign publicly traded and privately held companies as well as pre-IPO companies.
Samantha Nussbaum has consulted on behalf of public and private companies, compensation committees, and senior management on all aspects of executive compensation. Samantha’s consulting and legal background includes advising on executive compensation in the context of mergers and acquisitions, spin-offs, and initial public offerings; executive employment, severance, and change in control agreements; equity incentive plans; deferred compensation; and securities laws, including reporting and disclosure implications.