Institutional Shareholder Services, or ISS, invites U.S. companies to verify the data it uses to evaluate proxy statement equity plan proposals.  ISS previously announced a move to a “balanced scorecard” approach for its evaluation of equity plan proposals.  Data verification is included as a key feature of this approach.

Data verification allows companies to preview, and if necessary update, the data used by ISS in its vote recommendation.  Some companies have been frustrated when reviewing ISS vote recommendations that include inaccurate or misconstrued data.  This program is designed to improve the quality of information used by ISS.  See “FAQs:  Equity Plan Data Verification” for details about the program.  Below is a summary of some key features:

How to Participate

  • The data verification program is optional.
  • It is open to U.S. companies who have filed definitive proxy materials after September 8th, 2014 with an equity plan proposal (new or amendment) on the ballot.
  • The data verification program does not apply to other compensation plan proposals such as cash and bonus plan proposals.
  • To participate in the program, the company’s proxy materials must be filed at least 30 days in advance of the meeting date.
  • Data verification is only available to company contacts who register in advance to participate in the data verification program with ISS.


  • Companies will have only a short period to verify their equity plan data – approximately two business days to review and respond.
  • The window period is expected to open within 12 business days following the filing of the company’s definitive proxy materials.

What Data

  • ISS reviews definitive proxy filings, 10-Ks, 10-Qs, and 8-Ks, “among other documents” to gather data for its vote recommendation.
  • Data submitted for the program must be consistent with relevant publicly-disclosed filings.
  • ISS includes a list of data verification questions for companies to use in advance.  The questions are helpful insight into the ISS “balanced scorecard” approach.  The questions cover four areas:

1.      Equity Plan Provisions – includes definitions and provisions covering stock option repricing, cash buyouts of underwater stock options, share recycling, limits on full value awards, fungible share counting provisions, evergreen share reserves, dividend/dividend equivalent rights, change in control definitions, triggers and effect on time-based and performance-based awards, and tax gross-ups.

2.      Outstanding Stock and Convertibles – includes data covering the number of common shares outstanding, shares issuable upon exercise of outstanding warrants, conversion of debt, and outstanding weighted average common shares in the past 3 fiscal years in the computation of basic EPS.

3.      Equity Grant Activity – includes data regarding time-vesting options, stock appreciation rights, full value and performance-based awards granted or earned in the past 3 fiscal years.

4.      Shares Reserved and Outstanding Under Equity Compensation Program – includes number of shares reserved under the proposal, shares remaining available under all equity compensation plans, and shares subject to outstanding awards.


460326385If your company is a publicly-traded U.S. company, or a company covered under ISS’ U.S. policy, with an upcoming equity plan proposal, consider participating in the ISS equity plan data verification program.  Remember that contacts at your company will need to register in advance (multiple contacts are permitted) and be prepared to act quickly to verify, and make any necessary corrections, to your company data.

In advance of filing your definitive proxy statement, consider reviewing the ISS verification questions and include the data, where appropriate, in clear and concise proxy statement disclosures.