ISS Proposes 2015 Policy Updates: No Proposal on Unilateral Bylaw Amendments; U.S. Policy Changes Would Introduce Uncertainty for Independent Chair Shareholder Proposals and Implement a Scorecard for Equity Plan Proposals

Sullivan & Cromwell LLP - October 16, 2014

Yesterday, Institutional Shareholder Services, the proxy advisory firm, published proposed changes to its proxy voting guidelines for the 2015 proxy season.  The proposals applicable to U.S. companies are limited and do not include any proposed change relating to unilateral bylaw amendments.  ISS had recently surveyed institutional investors and public companies and reported receiving strong responses from investors against boards that unilaterally adopt bylaw amendments that reduce shareholder rights.

As U.S. issuers plan for the 2015 proxy season, they should take into account the proposed changes to ISS's voting polices on independent chair and equity plan proposals.  Comments on the proposed changes are due by October 29, 2014.