Many readers refer to and rely on QuickScores issued by Institutional Shareholder Services (ISS). It is in our interest to have those scores calculated using the best available data. Issuers have until Friday, 11/13/2015, 8 pm ET to submit updates and corrections through the ISS verification process. New scores are expected to be released on 11/23/2015, and will then appear in ISS research reports available on profile pages at Yahoo! Finance and elsewhere.
The following is primarily based on a recent Wilson Sonsini Goodrich & Rosati alert (with similar advice coming from many law firms). I am in no way offering legal advice but am simply passing on information to help ensure ISS has the best available data possible.
Issuers concerned about whether ISS determines their QuickScore accurately should promptly review the underlying raw data and submit updates and corrections to ISS before the close of the verification period. When appropriate, issuers should reference public filings that show the correct raw data.
The data verification tool can be accessed under the ISS “Data Verification” tab. Issuers may request login information by sending an email to ISS Corporate Solutions and can download a PDF of the ISS data verification help guide.
ISS policy limits use of the verification process to issuers.
Updates to the QuickScore methodology include clarifications in the following areas:
- Proxy Access: ISS will track the following practices related to proxy access:
- the ownership and holding period required to be a nominator;
- the number of shareholders that may aggregate holdings to meet ownership and holding period thresholds; and
- the number of proxy access candidates that may be put forward.
- Director Tenure: A small number of long-tenured directors (inclusive of affiliated and outside directors) will not negatively impact a company’s governance risk rating.
- Stock Ownership Guidelines for Outside Directors: ISS clarified that when calculating the stock ownership guidelines for outside directors, a multiplier should be applied to the cash portion of the annual retainer instead of the annual retainer in its entirety.
- Investigations by a Regulatory Body:
- Material Penalty in Regulatory Investigation. Any penalty against an individual will be considered material for purposes of determining the materiality of a penalty assessed in a regulatory investigation.
- Routine and Non-Routine Investigations. ISS will categorize investigations as either routine or non-routine unless a company states that it does not expect the outcome to have a material adverse effect on the company. FCPA-related investigations and Wells Notices will generally be considered non-routine, instead of being considered non-routine in all circumstances.
For additional details, download the QuickScore 3.0 overview and updates.