2024 ISS Policy Update: Severance Arrangements

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Stinson - Corporate & Securities Law Blog

It appears the lone ISS policy update for the US will be to Severance Agreements for Executives/Golden Parachutes.

ISS will vote on a case-by-case basis  on shareholder proposals requiring that executive severance (including change-in-control related) arrangements or payments be submitted for shareholder ratification.

Factors that will be considered include, but are not limited to:

  • The company’s severance or change-in-control agreements in place, and the presence of problematic features (such as excessive severance entitlements, single triggers, excise tax gross-ups, etc.);
  • Any existing limits on cash severance payouts or policies which require shareholder ratification of severance payments exceeding a certain level;
  • Any recent severance-related controversies; and
  • Whether the proposal is overly prescriptive, such as requiring shareholder approval of severance that does not exceed market norms.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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