Despite having previously reiterated its unwillingness to engage in company consulting, Glass Lewis has announced it will launch an equity plan advisory service for public companies. Notwithstanding criticisms that it presents a conflict of interest, ISS advises both investors and issuers through its consulting subsidiary, ISS Corporate Solutions. It appears Glass Lewis is now looking to crack into that market.
Like ISS, Glass Lewis has established a subsidiary corporate advising entity where companies can work with a “Glass Lewis Corporate” advisor to compare their equity compensation plan against the Glass Lewis model. Overall, the service sounds very similar to what ICS offers on equity plans, though tailored for Glass Lewis’s equity plan evaluation methodology. Corporate clients are keen to receive such advice on equity plan proposals as the vote result is binding and a failed vote has significant consequences, including the inability to continue to grant share-based compensation.
The proxy advisor market is in a state of regulatory flux currently. When the SEC finalized rules reforming the proxy advisory market, with the strong support of the Center, it required proxy advisors to substantially enhance disclosures on potential conflicts of interest in a proxy voting report. ISS sued the SEC to stop its implementation, and now that the SEC has paused implementation pending review, the National Association of Manufacturers has sued in return. The SEC listed spring 2022 as the timeline for publishing its findings from the review process.