What is ISS policy on shareholder proposals requesting clawbacks or recoupment of unearned management bonuses or equity?
A.) In voting shareholder proposals requesting clawbacks or recoupment of bonuses or equity, ISS generally considers the following, but not limited to the following factors, on a case-by-case basis: – the coverage of employees, whether it applies to all employees, senior executives or only employees committing fraud which resulted in the restatement; – the nature of the proposal where financial restatement is due to fraud; – whether or not the company has had material financial problems resulting in chronic restatements; – the adoption of a robust and formal bonus/equity recoupment policy. If a company’s bonus recoupment policy provides overly broad discretion to the board in recovering compensation, generally vote FOR the proposal. If the proposal seeks bonus recoupment from senior executives or employees committing fraud, generally vote FOR the proposal.
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