As a follow up to our earlier Client Alerts dated March 24, 2020 and March 31, 2020, on April 8, 2020, the Institutional Shareholder Services group of companies (“ISS”) issued guidance with respect to the impact of COVID-19 on certain compensation and governance matters, including changes to board of directors or senior management, changes in performance metrics and targets, and option repricing.
ISS understands that many companies will likely materially adjust applicable performance metrics used in their short-term compensation plans as a result of recent drops in the markets and a potential recession. ISS is encouraging boards of directors of companies making material changes to short-term compensation plans to contemporaneously disclose the rationale for such changes in order to provide shareholders greater visibility during this uncertain time. This means that ISS will expect a company to include disclosure regarding changes made to its short-term programs for 2020 in its proxy statement for the general annual meeting being held in 2020.
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