In this recent memo, Compensia describes changes to the GICS (Global Industry Classification Standard) structure that become effective September 28th, and potential ISS compensation-related voting recommendation implications for companies. The changes, which are summarized in this November 2017 S&P Dow Jones Indices/MSCI release, generally affect IT, communications, and media & entertainment companies.
Compensia anticipates that the GICS structure changes may impact ISS's review and analysis of company compensation-related proposals and other analytics in these areas:
- Summary of a company's TSR performance (on a one-, three-, and five-year basis) relative to companies with similar GICS classifications
- Construction of peer groups for purposes of pay benchmarking and relative "pay-for-performance" comparisons
- Review of the relative alignment of the compensation of a company's CEO as part of its quantitative screen for evaluating an executive compensation program in connection with formulating Say-on-Pay proposal voting recommendations
- Review of the compensation arrangements for the non-employee directors relative to the competitive market for purposes of identifying "excessive compensation" practices
- Review of new or amended employee stock plans to determine the shareholder value transfer and gross burn rate relative to companies with similar GICS classifications
- Calculation of a company's "QualityScore," which considers specific corporate governance and executive compensation-related policies and practices relative to GICS-based industry norms
Exhibit A to the memo includes Compensia's list of the most prominent tech companies known (to date) to be affected by the changes.
|
Access additional information and resources on our Proxy Advisors page. This post first appeared in this week's Society Alert!
|