Frequently Asked Questions on US Policy Interpretation and Research
Display allUpdated: August 28, 2012
- Which U.S. companies does ISS cover?
The US research team generally provides proxy analyses and voting recommendations for common shareholder meetings of publicly-traded U.S. companies that are held in our institutional investor clients' portfolios. This generally includes publicly traded limited partnerships (“LPs”) and limited liability companies (“LLCs”). We also generally cover corporate actions for common equity holders, such as written consents and bankruptcies. We cover investment companies (including open-end funds, closed-end funds, exchange-traded funds, and unit investment trusts), and business development companies. ISS reviews its universe of coverage on an annual basis, and the coverage is subject to change based on client need and industry trends.
We do not provide broad-based coverage of meetings or corporate actions for debt holders, bond holders, preferred shareholders, and private companies, but we do generally cover auction rate preferred shares of closed-end funds.
The US research team also covers companies incorporated in non-US countries if they file Def14As, 10-Qs, and 10-Ks, and are thus considered domestic filers by the SEC.
- When are proxy analyses issued?
U.S. proxy analyses are generally issued 13-25 calendar days before the shareholder meeting. The timing will depend on: the volume of meetings requiring coverage (e.g., during the U.S. proxy season of February to early June, delivery is closer to 13 days); complexity of the proxy and agenda items; contentiousness of the issues; engagement required; and how close to the meeting the proxy materials were issued. Proxy contest or contested merger analyses are often issued closer to the meeting than these general guidelines.
- How can a company get a copy of its proxy analysis?
All issuers may obtain a free copy of their proxy analysis after it has been distributed to our institutional investor clients. Issuers may receive a free login and password to Governance Analytics by contacting our Corporate Support Group at: 301-556-0570. This free site allows companies to see the current proxy analyses, previous years' analyses, and to check the Governance Risk Indicators (GRId) data used to arrive at their Governance Risk score. This is the best way to ensure timely receipt of the analysis, as an email notification is sent as soon as the analysis is made available.
Companies can also obtain their proxy analysis by emailing the Research Helpdesk.
For other parties who wish to purchase a proxy analysis, please contact our Sales group.
- Can a company send the ISS proxy analysis to its shareholders or other parties?
No. The information contained in any ISS Proxy Analysis or Proxy Alert may not be republished, broadcast, or redistributed without the prior written consent of ISS.
- What happens if the proxy analysis contains a factual error?
ISS strives to be as accurate as possible in our research and publications. Please check our Policy Guidelines and the FAQs concerning the issue; it generally is a matter of policy application rather than an error. If you do believe a report contains an error, please notify us as soon as possible at the Research Helpdesk (301-556-0576). If we agree that there is a material change required, we issue a "Proxy Alert" to our clients.
- ISS has issued a negative vote recommendation on an agenda items. What can the company do to reverse it?
See the FAQs related to the agenda item. In them, ISS is providing the minimum disclosures needed to address issues raised in an analysis. ISS will not negotiate these minimum requirements needed to meet our voting policies.
This additional information must be publicly disclosed for ISS to respond: either in a filing with the SEC, or, if the company is not an SEC filer, a press release will substitute. The language filed does not need to follow the examples exactly; however, these examples specify the points that need to be covered in the disclosure, which may be phrased as each issuer sees fit. Although these "cures" have generally been accepted by ISS as sufficient solutions to the underlying issues, there may be circumstances, such as egregious actions, in which the indicated cures would not result in a vote recommendation change. Therefore, these are not guarantees of positive vote recommendations or reversals of negative vote recommendations.
ISS will, in its sole discretion, determine if new or materially changed publicly available information warrants an update to our analysis consistent with our policy. We do not proactively contact issuers seeking remediation of problematic governance practices; the onus is on issuers to take action in the best interests of their shareholders.
Please note that ISS does not review all documents as they are filed on Edgar. Companies should notify us when they have filed additional information if it is prior to the meeting date - please send a link to the filing to the Research Helpdesk.
- How are corrections/changes to proxy analyses communicated and distributed to ISS clients?
ISS sends "Proxy Alerts" to communicate corrections, updates, and vote recommendation changes to our clients. A proxy alert is structured as an overlay on top of the original analysis; the first few pages show the updated information and any related vote recommendation change, but the original analysis lies underneath, and will continue to reflect the original information. This allows our clients to see the original report and the changes in one document. Any subsequent alerts will be layered on top of the previous alert(s).
Proxy alerts are distributed to our institutional clients the same way our regular proxy analyses are distributed - through our ProxyExchange platform. Most of our clients give us their portfolio holdings so we can "attach" them to the company meeting. They will then receive through this platform all analyses and alerts on companies that are in their portfolios or that they have requested. Thus, the same clients who received the original analysis will receive the proxy alert.
- How close to the meeting can ISS issue a proxy alert and vote recommendation change?
To ensure that all our institutional clients are able to review a change in our vote recommendation and act upon this information if they so choose, we generally will not issue a change to a vote recommendation closer than 5 business days before the meeting. This means that if a company is filing additional information with the SEC (or issuing a press release for non-SEC filers), ISS must be informed of this filing at least 5 business days before the meeting. For example, for a Thursday meeting, we will need to know of the filing no closer to the meeting than 5PM Eastern the Thursday before (assuming no national holiday during that week.) Please send the link to the filing to the Research Helpdesk. A voicemail left concerning the filing is not sufficient.
Any new information received closer than 5 business days before the meeting will be discussed in an informational alert if we deem it material to the analysis, but will not result in revised voting recommendations.
Under highly extraordinary circumstances, we may issue an alert to change a vote recommendation closer than 5 business days before the meeting.
Engagement with U.S. Research
Please see the general Engagement Section of our website for more details.
- With whom does U.S. Research engage?
ISS analysts engage with shareholders, corporate issuers, dissident shareholders, solicitors, sponsors of shareholder proposals, and other external parties when we believe that doing so will result in a higher quality research report for our clients. The purpose of such engagement is for ISS to obtain, or communicate, clarification about governance and voting issues, in order to ensure that our research and policy-driven recommendations are based on the most comprehensive and accurate information available. Sometimes these conversations are initiated by ISS, and sometimes they are initiated by the issuer or shareholder.
In contested situations, we consider it an important step in our research process to engage with both sides. (Occasionally, one side is unable or unwilling to speak with us.) Conversations may be held in person or via teleconference. Please contact Marc Goldstein (301-556-0447) if your company is facing a contentious situation (such as a proxy contest, or a "Vote-no" campaign), or you are a third party representing a company in a contentious situation, so conversations can be set up in as soon as possible.
ISS will not engage for the purpose of lobbying for a favorable vote recommendation by the issuer.
- Can a company discuss its proxy, once filed, with the analyst?
For non-contentious situations, it is the analysts' discretion whether they want to engage further with the company, and generally only do so to clarify points on which they have questions. So, we cannot guarantee that such a conversation will result. ISS analyses are based only on publicly-disclosed information, and all the information needed for shareholders and analysts to make their decisions should be in the proxy.
Providing the Research Helpdesk with company contact information is very useful, so that, if the analysts have questions, they can quickly contact the company.
If there are particular points you want to be sure the analysts are aware of (for example, information relevant to a equity compensation plan that may be buried in a footnote, or corporate governance changes the company has undertaken), please send an email to the Research Helpdesk with the points outlined and the proxy page or other source noted - it will be put in the appropriate meeting folder so the analysts can review it when they are ready to do so.
Please note that any information presented as factual must be public, in the proxy statement or other filing, in order to be included in our research reports. To maintain the integrity of our firewall, the Research Central staff will remove all references to the purchase of Corporate Services products and services before forwarding emails to the Research analysts.
Drafts of Proxy Analyses
- Can my company review the ISS analysis prior to publication?
In the United States, only companies in the S&P 500 index will receive a draft report for fact-checking; however, within this group, ISS does not normally allow preliminary reviews of any analysis relating to any special meeting or any meeting where the agenda includes a merger or acquisition proposal, proxy fight, or any item that ISS, in its sole discretion, considers to be of a controversial nature (for example, a "vote no" campaign). This policy is intended to ensure the independence of our process and recommendations.
Drafts are sent only to S&P500 companies who elect to receive them, and sign up to do so in advance of proxy season. Please sign up using our online form.
- My company was recently added to the S&P 500. Are we eligible for the draft review process?
For annual meetings occurring during US proxy season (February through June), ISS uses the S&P 500 component list as of December 31 of the previous year. Following June 30 of each year, ISS updates its list to reflect changes to the index in real time. Companies added to the index after December 31 that hold their meetings prior to June 30 will be eligible for a draft review beginning the following year.
General Policy Questions
- Whom should I contact with questions on U.S. policies?
Please contact the Research Helpdesk, 301-556-0576, with your questions.
- What can ISS tell us and not tell us about policies?
ISS will try to clarify policy questions as much as possible. We cannot answer questions on hypothetical scenarios, and we cannot give definitive answers on how we will recommend on proxy items before we analyze the situation as presented in the proxy. If it is a question we cannot answer, we will let you know. If the question is of widespread interest, we will add it to these FAQs.