On April 1, 2015, the Council of Institutional Investors (CII), a shareholder rights advocacy group, adopted a policy opposing the automatic vesting of unvested equity awards on a change in control at public companies. Companies have often provided for such "single-trigger" vesting to encourage executives and employees to work towards the completion of a sale without being concerned about the treatment of their equity awards when the deal is consummated. The CII policy provides that a company's board should have discretion to permit full, partial or no accelerated vesting of awards on a change in control and, if it decides to accelerate vesting in full, should disclose in public filings a detailed rationale of the decision and how it relates to shareholder value. CII follows Institutional Shareholder Services (ISS), a shareholder advisory firm, which treats single trigger vesting as a factor weighing against its positive recommendation of an equity award plan subject to shareholder approval. ISS's policy is discussed in more detail here.
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