2019 Proxy Season Review Part 2—ISS Negative Recommendations Against Directors

ISS recommendations continue to correlate with lower director support levels:

  • Directors average 97% shareholder support with ISS in favor and 79% if not (level with 2018), although almost all directors win over 50% shareholder support

  • S&P 500 directors identified for excessive non-audit fees or poor attendance receive the lowest average shareholder support (55% and 63%, respectively)

  • Outside of the S&P 500, Russell 3000 directors receive the lowest average shareholder support for non-responsiveness to shareholder concerns or excessive non-audit fees (58% and 60%, respectively)

ISS focus areas diverge between S&P 500 and broader Russell 3000:

  • No S&P 500 directors identified for non-responsiveness (either to low say-on-pay vote or other shareholder concerns), poison pill or unilateral action, although a meaningful number of Russell 3000 directors was cited for each, as broader Russell 3000 falls behind in adopting some corporate standards

  • Most common negative recommendation among Russell 3000 relates to adverse governance provisions at newly public companies (369 outside S&P 500, compared to three within)

ISS launches 2019 policy survey, including questions regarding overboarding, independent chair, board diversity and climate disclosure