ISS Puts Out 2005 Proxy Policies

December 8, 2004 ( - Institutional Shareholder Services (ISS), a proxy voting advisor, on Wednesday released its new policies for 2005 US and international proxy voting.

An ISS news release said its analysts will start applying the new policies for all US and international companies with shareholder meeting dates on or after February 15, 2005.

Over the summer, more than 200 institutional clients were invited to weigh in on governance issues and share their views on key topics, including board structure, executive compensation, mergers & acquisitions and corporate accountability, according to the announcement.

ISS will continue to focus on boards and hold compensation committees responsible for linking executive pay to performance.   Based on feedback from its institutional client base, ISS will continue to apply its quantitative methodology to assess the cost of equity based compensation plans, butthis year will broaden its compensation evaluation to include analysis of burn rates, pay-for-performance metrics, director pay and various other qualitative factors, the company said in the news release.

Recognizing the increased responsibility of directors, ISS will also tighten its overboarding policy in 2005.   CEOs who serve on more than three boards (including their own) will draw a withhold recommendation from ISS, while the threshold for non-CEO directors will remain at six boards, the announcement said.   ISS will also scrutinize board responsiveness in cases where one or more directors receive a significant no confidence vote from shareholders.  

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