More Tightening

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As reported in the Schulte Roth & Zabel “Alert” dated December 6, 2017, the ISS and Glass-Lewis guidelines continue to expand shareholder influence.

Examples:

ISS will recommend a withhold vote for the entire board of directors of companies that are incorporated in states that, by law, require a classified board.

ISS will do the same for company boards that have a poison pill that is longer than one-year and was not approved by shareholders.

Glass-Lewis will recommend a vote against dual-class voting structures.  The presence of dual-class shares following an IPO or spin-off is a sign that shareholder rights are severely restricted.

Beginning this year, where 20% or more of shareholders vote against management, Glass-Lewis wants boards to demonstrate responsiveness to shareholder concerns.

Board diversity is also addressed by both ISS and Glass-Lewis.  There are other issues addressed in the article authored by Eleazer Klein and Brandon S. Gold.