On Dec. 19, Institutional Shareholder Services (ISS) published its 2024 benchmark policy updates which take effect for annual meetings on or after Feb. 1, 2024.¹ This year’s edition includes no revisions to its U.S. voting guidelines other than a clarification to its case-by-case approach to shareholder proposals seeking shareholder ratification of executive severance arrangements or payments. ISS indicated that it has harmonized the factors used to analyze both regular termination severance as well as change-in-control-related severance (golden parachutes).
In its fall policy survey, ISS raised only one question specific to the U.S. market, namely, whether companies should disclose a line-item reconciliation of non-GAAP to GAAP financial measures used to determine executive incentive pay. Although ISS did not follow through with this change, beginning in 2024 Glass Lewis will expect companies to provide a detailed discussion in their proxy statements of adjustments akin to GAAP-to-non-GAAP reconciliation and their impact on incentive payouts. The lack of such disclosure may impact Glass Lewis’s say-on-pay recommendations.²
¹ See ISS’s executive summary of its 2024 policy changes
² See Glass Lewis’s 2024 U.S. proxy voting policies
