What is ISS pay-for-performance policy?
A.) ISS implemented a pay-for-performance policy in 2004. Specifically, if a company has negative one- and three-year fiscal total shareholder returns, and its CEO also had an increase in total direct compensation from the prior year, it would require closer scrutiny. If more than half of the increase in total direct compensation is attributable to the equity compensation, ISS may recommend a vote against the equity plan in which the CEO participates. The pay for performance policy requires a careful examination of the situation and does not result in an automatic withhold from the compensation committee members and/or an against vote on the equity plan proposal as detailed below. The pay-for-performance policy first identifies companies with negative stock performance for the one- and three-year fiscal periods, coupled with an increase in total pay for the CEO. The policy then compares the company’s stock performance against its industry group (which is the four-digit GICS and six-dig
