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How ISS is Encouraging Continued 162(m) Practices


February 19, 2019


Thanks to Liz Dunshee and Broc Romanek


In December, Broc Romanek reported that ISS had released its “Equity Compensation Plan” FAQs – and its final “Executive Compensation Policies” FAQs. As part of those updates, the proxy advisor confirmed that it wants companies to continue some practices that initially became common because of the now-repealed Section 162(m) performance-based compensation exemption.
Specifically, it’s encouraging companies to continue frequently submitting equity plans for approval (by increasing the weighting of the plan duration factor in its Equity Plan Scorecard) and discouraging any shifts away from performance-based pay to discretionary or fixed-pay elements (by defining that behavior as a “problematic pay practice”). 
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