Of the 7% of Russell 3000 companies that received “against” vote recommendations from ISS on their say on pay proposals this 2017 proxy season, some of the cited reasons for the negative vote recommendations from ISS consisted of the following:
- Pay for failure (i.e., pay for performance disconnect).
- Lack of rigorous performance goals.
- A substantial portion of granted equity awards were not performance-based.
- Presence of an ISS “problematic pay practice” including:
- Abnormally large bonus payments without proper link to performance.
- Change in control payments exceed 3 times base salary/target bonus.
- Single trigger change in control or severance payments.
A full list of the ISS “problematic pay practices” can be found here.