RiskMetrics to apply updated proxy voting guidelines beginning Feb. 1

By Lisa Kerner

Charlotte, N.C., Nov. 20 - RiskMetrics Group, Inc. released its 2010 updates to its benchmark proxy voting guidelines on Friday.

Key policy updates address topics surrounding board accountability and executive compensation, including poison pills, director independence, long-term pay-for-performance alignment and management say-on-pay, said RiskMetrics.

According to RiskMetrics, its analysts will begin applying the updated policies to all companies with shareholder meeting dates on or after Feb. 1.

RiskMetrics said that of the investors who participated in the 2010 policy survey, 43% view non-approved shareholder rights plans as "the most highly problematic takeover defense."

As a result, RiskMetrics is adding vote recommendations on one-year poison pills and will review long-term pills every three years.

Of the survey participants, 52% believe "the management say-on-pay proposal should be the primary vehicle to initially address problematic pay practices," a RiskMetrics news release said.

RiskMetrics said it may recommend withhold or against votes on compensation committee members if concerns raised in management say-on-pay proposals are not sufficiently addressed in the subsequent year.

"Executive compensation is still a hot button issue for shareholders, and the global financial crisis raised new concerns about incentives that influence executive behavior," Dr. Martha Carter, head of governance research and chair of the global policy board at RiskMetrics, said in the release.

"To better align with investors' needs, we will evaluate additional factors such as aligning long-term pay-for-performance and risk-motivating incentive practices as part of overall executive compensation practices."

Other policy updates focus on issues such as slate ballots and management say-on-pay in Canada, combined chairman and chief executive officer roles in Europe and board independence in Japan and Israel.

RiskMetrics is a New York-based provider of risk management and corporate governance products and services to participants in the financial markets.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.