In preparation for the 2017 proxy season, ISS and Glass Lewis have both released their updated policies. Changes to compensation and governance-related items had a strong director focus and included the following:
- Overboarding. As announced in last year's update, starting in 2017 both ISS and Glass Lewis will tighten their overboarding criteria and may vote against directors they deem to be overcommitted.
- For ISS, this is defined as serving on more than three public boards total if CEO, and more than five boards if not CEO.
- For Glass Lewis, this is defined as serving on more than two public boards if an executive, and more than five boards if not an executive.
- When considering whether an executive is overboarded, Glass Lewis says it will look at factors such as size and location of the boards, the nature of board duties, and the director's tenure and attendance record, and may refrain from voting against if the company provides sufficient rationale.
- Director Pay. ISS is "expanding its framework" for evaluating director pay, and will consider more factors such as magnitude of pay relative to peers and "meaningful limits" on director pay.
- Equity Plan Scorecard. ISS will now penalize companies that offer dividends on unvested awards (accrual of dividends payable upon vesting is acceptable).