ISS has announced a new program that allows companies to verify the data that ISS will use to evaluate a new or amended equity plan. The "Equity Plan Data Verification" should be a must-do for companies proposing a new plan or adding shares to an existing plan.
Under the program, ISS will show a company the data that ISS will use for its voting recommendation on the proxy before making the recommendation. The data includes both plan terms (such as change in control provisions and share recycling) and equity information (such as the number and type of outstanding grants and shares available for future grant).
While a company will have only two days to respond when ISS provides its initial data for review, the company can be ready. The verification program materials include the 27 data points that ISS will consider which allows the company to have its answers complete before the proxy is filed.
There does not appear to be any down side to participating in the verification program. As anyone who has gone through the ISS Compass process knows, the initial analysis of a plan may not be completely accurate. A company should not pass up this opportunity to make sure the inputs used by ISS in its proxy recommendation are accurate.
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