ISS Issues Off-Cycle Update to its FAQs on Executive Compensation Policies
ISS recently released an off-cycle update to its FAQs on U.S. executive compensation policies. This latest release introduces two new Q&As that address realizable pay methodology and criteria for recognizing “robust” clawback policies. ISS is expected to publish the full 2025 policy updates later in the year.
Provided below are summaries of the two ISS policy updates:
ISS’s Updated Policies:
| Policy |
Updates |
| Realizable Pay Methodology |
- Effective for meetings on or after February 1, 2025, ISS will not display a realizable pay chart for companies that have undergone multiple (two or more) CEO transitions within the relevant three-year period
- For all other companies, realizable pay charts will continue to be displayed as usual
|
| Clawback Policy |
- To receive credit for a “robust” clawback policy in the “Executive Compensation Analysis” section of the research report, a company’s clawback policy must go beyond the minimum Dodd-Frank requirements and explicitly include all timevesting equity awards
- Clawback policies that meet only the minimum Dodd-Frank requirements will not be deemed robust, as those standards typically do not cover all time-vesting equity awards
|
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This report was authored by Ken Foulks and Kalyanne Neel. To discuss this topic and any additional issues, please visit our website or call us at 212-886-1022.
