ISS Evaluates First Co. Proposal Under New Equity Plan Scorecard

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By Michael Greene

Feb. 10 — Institutional Shareholder Services Inc. has begun applying its new Equity Plan Scorecard approach to U.S. companies, beginning with Ferguson, Mo.-based Emerson Electric Co.

At the electrical equipment manufacturer's annual meeting, shareholders overwhelmingly approved the 2015 Incentive Share Plan proposal, according to the company's Feb. 3 Form 8-K.

ISS stated in its 2015 updated benchmark voting policies that its new scorecard approach provides a “more nuanced consideration of equity plan proposals.” ISS also stated in its update that feedback from institutional investors and corporate issuers in recent years has shown “strong support for the new approach.”

The scorecard approach is based on a combination of factors related to costs, plan features and grant practices, with weights of 45 percent, 20 percent and 35 percent given to each factor, respectively.

One of Three Companies

Subodh Mishra, a spokesman for ISS, stated in an e-mail to Bloomberg BNA that “about one-third of companies we cover (e.g., ca. 1000 of the Russell 3000 in any given year) submit equity plan resolutions that would be subject to the new EPSC policy.”

According to a blog post from McGuireWoods LLP, Emerson’s proposal to approve the plan seemed “drafted with an eye to the Equity Plan Scorecard.”

To contact the reporter on this story: Michael Greene in Washington at mgreene@bna.com

To contact the editor responsible for this story: Ryan Tuck at rtuck@bna.com

Emerson's proposal is available at http://www.sec.gov/Archives/edgar/data/32604/000003260414000052/emersonproxystatement2015a.htm#sa0e2ec5152cb4564a1bd424f2bb7feff.