Careful planning can help secure Institutional Shareholder Services (ISS) support for new or amended equity plans.
ISS uses a proprietary equity plan scorecard (EPSC) and qualitative assessments to evaluate equity plan proposals. Investors use the proxy adviser’s evaluations in different ways: Some strictly follow ISS voting recommendations, some use ISS analyses — particularly plan cost and burn rate — to make an independent voting decision, and others have their own voting guidelines.
This article reviews how equity plan proposals fared in 2020 and provides an overview of how ISS assesses equity plan proposals, including methodology updates for 2021. Appendices offer details on how ISS calculates burn rate and evaluates stand-alone director equity plans and plan amendments.
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