Tag: multi-class capital structures

Corporate GovernanceESGExecutive Compensation

ISS issues benchmark policy updates for 2023

At the end of last week, ISS announced its benchmark policy updates for 2023. The policy changes will apply to shareholder meetings held on or after February 1, 2023, except for those with one-year transition periods.  The changes for U.S. companies relate to policies regarding, among other things, unequal voting rights, problematic governance structures, board gender diversity, exculpation of officers, poison pills, quorum requirements, racial equity audits, shareholder proposals on alignment between public commitments and political spending and board accountability for climate among the Climate Action 100+. The results are based in part on the results of ISS’s global benchmark surveys (see this PubCo post) as well as a series of roundtables.

/ December 7, 2022
Corporate Governance

ISS releases results of 2022 global benchmark policy survey

ISS has released the results of its annual global benchmark policy survey, a survey that is used every year as part of ISS’ policy development process.  This year, the survey included a number of questions on climate change risk management—including board accountability, management say-on-climate proposals, climate risk as a critical audit matter, financed emissions and climate expectations—and then addressed other governance issues such as potential policy exemptions for multi-class capital structures, handling of problematic governance structures and views on proposals calling for third-party racial equity and civil rights audits. ISS received 417 responses to this year’s survey, including 205 from institutional investors or investor-affiliated organizations (an increase of 29% over last year) and 202 responses from companies and corporate-affiliated organizations, with the remainder from academic and other responders. Not surprisingly, investor and non-investor respondents often had disparate views.

/ October 19, 2022
Corporate Governance

ISS releases benchmark policy updates for 2022

This week, ISS issued its benchmark policy updates for 2022. The policy changes will apply to shareholder meetings held on or after February 1, 2022. The key changes for U.S. companies relate to say-on-climate proposals, board diversity, board accountability for climate disclosure by high GHG emitters, board accountability for unequal voting rights and shareholder proposals for racial equity audits, as well as the decidedly less buzzy topics of capital stock authorizations and burn rate methodology in compensation plans.

/ December 9, 2021
Corporate Governance

ISS releases proposed benchmark policy changes for 2022

Last week, ISS released for public comment its proposed benchmark policy changes for 2022. If adopted, the proposed policy changes would apply to shareholder meetings held on or after February 1, 2022. The proposed changes for U.S. companies relate to board diversity, board accountability for unequal voting rights, board accountability for climate disclosure by high GHG emitters and say-on-climate proposals.

/ November 9, 2021
Corporate Governance

ISS seeks comment on potential 2020 voting policy changes

ISS has opened the comment period on potential changes to its voting policies for 2020.  In the U.S., ISS is seeking comment on proposed changes related to sunset provisions for multi-class stock structures, share buybacks and shareholder proposals on independent board chairs.  Responses are due by October 18 at 5 p.m., E.T.

/ October 10, 2019
Corporate GovernanceSecurities

CII petitions NYSE and Nasdaq regarding multi-class share structures

The Council of Institutional Investors has announced that it has filed petitions with the NYSE and Nasdaq requesting that each exchange amend its listing standards to address the issue of multi-class capital structures (i.e., share structures that have unequal voting rights for different classes of common stock).  As requested by the petition, the amendment would require that, going forward, companies seeking to list with multi-class share structures include provisions in their governing documents that would sunset the unequal voting at seven years following an IPO and return the structure to “one-share, one-vote” structures, “subject to extension by additional terms of no more than seven years each, by vote of a majority of outstanding shares of each share class, voting separately, on a one-share, one-vote basis.” According to CII, unequal voting rights impair the ability of shareholders “to hold executives and directors accountable.” But companies contend that these measures are being adopted for a valid reason: to protect the company from unwanted interventions by hedge-fund activists with short-term goals and perspectives. Accordingly, the debate has centered around whether these measures are a legitimate effort to protect companies from the pressures of short-termism exerted by hedge-fund activists and others or are a mechanism that causes shareholders to cede power without providing accountability.  Of course, the answer depends on where you sit.

/ October 26, 2018
Corporate GovernanceExecutive Compensation

Results of ISS global survey reveal strong opinions on board gender diversity and mixed views on multi-class capital structures, share buybacks and virtual annual meetings

ISS recently released the results of its 2017-2018 global policy survey. The respondents, mostly from the U.S., included 131 investors, 382 corporate issuers, 46 consultants/advisors, 28 corporate directors and 13 organizations that represent or provide services to issuers. Highlights of the survey are summarized below:

/ October 9, 2017