Institutional Investor Services (ISS) recently announced that it will be launching GRId 2.0 on February 20, 2012. GRId, or Governance Risk Indicators, is ISS’s rating system for publicly-traded companies’ corporate governance practices which ISS wants us to believe is designed to measure publicly-traded companies’ governance-related risk. GRId purports to be based upon ISS’s proxy voting policy guidelines.
Certain features of GRId will stay the same. ISS will continue to evaluate in the four categories of Audit, Board, Compensation and Shareholder Rights in metrics of “Low Concern,” “Medium Concern” and “High Concern.” However, ISS uses GRId 2.0 as an opportunity to change its scoring methodology. ISS is adding new questions on its pay-for-performance methodology based on its newly-published whitepaper, related-party transactions, board relationships and takeover defenses. Companies should expect to receive a numerical GRId score for each of the categories in addition to a level of concern.
ISS’s Pay-for-Performance Whitepaper outlines ISS’s latest approach effective February 1, 2012, to evaluating pay-for-performance. This is the primary method ISS uses in deciding whether to recommend for or against a company’s say-on-pay vote and for or against a proposal related to an equity compensation plan. The latest approach is based upon the alignment between CEO pay and one and three year total shareholder return (“TSR”) within a subject company’s peer group (as designated by ISS, not the company) and between CEO pay and five year TSR of the subject company.
If you have any questions about how GRId 2.0 will affect your company’s corporate governance rating or about ISS’s Pay-for-Performance methodology, please contact us.
This blog post was updated on December 21, 2011
- Partner
Mark Reuter advocates for business clients in transactions, proceedings and conflicts regulated by federal and state securities laws and stock exchange rules. A partner in the firm’s Business Representation & Transaction ...
Topics/Tags
Select- Securities Law
- SEC
- Coronavirus
- Securities Regulation
- Tax Planning
- Corporate Tax
- Nasdaq
- Corporate Law
- Taxation
- Paycheck Protection Program
- IRS
- Private Offerings
- Dodd-Frank
- Proxy Access Rules
- Securities Litigation
- FAST Act
- JOBS Act
- Cryptocurrency
- Cybersecurity and Privacy Law
- SEC Enforcement
- Hedging
- Crowdfunding
- Consumer Protection Act
- Corporate Governance
- Real Estate Law
- Ohio LLC Act
- Intellectual Property
- Technology
- Conflict Minerals
- Emerging Growth Companies
- Investors
- Opportunity Zone
- LIBOR
- Pay Ratio Disclosure
- Whistleblower
- Mergers & Acquisitions
- Accredited Investors
- Sales Tax
- United States Supreme Court
- Online Trading Platforms
- Litigation
- IPO
- Registration Statement
- Annual Reports
- Executive Compensation
- Health Care Act
- Ohio Foreclosure Reform
- Family-Controlled Entities
- Gift and Estate Transfers
- Director Compensation
- Wall Street Reform
- Board of Directors
- Director Independence
- Clawback Rules
- Total Shareholder Return
- Cyber Insurance
- Data Breach
- Lenders
- Receivership Statute
- Regulation A
- Regulation D
- Business Process Improvement
- Employer Policies
- Employment Litigation
- Labor & Employment Law
- Labor Law
- Sixth Circuit
- Compensation Committee Certification
- Government Shutdown
- CDEs
- CDFI Fund
- Community Development Entities
- Community Development Financial Institutions Fund
- New Markets Tax Credit
- NMTC
- NMTC Financing
- Regulation Fair Disclosure
- Social Media
- Benefits
- Healthcare Reform
- Marketing
- Public Company Transition Rules
- Employment Incentives
- HIRE Act
- Social Security Tax
- Tax Credit
Recent Posts
- Stimulus Package Reverses IRS’s Position on Deductibility of PPP Expenses and Other Loan Forgiveness Issues
- Nasdaq Proposes New Listing Rules to Advance Board Diversity: Comply or Explain
- More Disclosure Modernization: SEC Adopts Significant Amendments to Financial Disclosure Rules
- SEC Eases Limits and Rules on Private Offerings
- SEC Proposes Conditional Exemption for "Finders" Involved in Capital Raising
- Ohio Adopts Protections for Ohio Businesses from Coronavirus - Related Lawsuits
- SEC Scales Back Financial Disclosures for Business Combinations
- State of Ohio Issues Urgent Health Advisory and Partial Rescission of “Stay at Home” Order
- SEC Adopts Temporary Rules to Expedite Regulation Crowdfunding Offerings Amid COVID-19 Pandemic
- Treasury Releases PPP Loan Forgiveness Application