ISS 2026 Policy Updates

Environmental & Social Shareholder Proposals – ISS has adopted a fully case-by-case approach for proposals on diversity, political contributions, human rights, and climate change, reflecting varied proposal scope, shifting investor sentiment, regulatory changes, and evolving company practices.

Unequal Voting Rights – ISS has clarified that moving forward, all capital structures with unequal voting rights will be considered problematic regardless of whether superior voting shares are classified as ‘common’ or ‘preferred’.

Company Responsiveness – ISS is offering flexibility for companies to demonstrate responsiveness to low say-on-pay support, in light of recent SEC guidance on 13G vs. 13D filing status that may limit shareholder engagement. Specifically, ISS states that if the company discloses meaningful engagement efforts, but states it was unable to obtain specific feedback, ISS will assess company actions taken in response to the say-on-pay vote as well as the company’s explanation regarding why such actions are beneficial for shareholders.

High Director Pay – The existing policy addressing high NED pay practices has been expanded, allowing for adverse recommendations in the first year of occurrence if considered highly problematic, or when a pattern emerges across non-consecutive years.

Time-Based Equity Awards – This policy update reflects the importance of longer-term time horizons for time-based equity awards and provides a more flexible approach in evaluating the equity pay mix in qualitative pay-for performance qualitative reviews.

Equity Plan Scorecard – ISS added a new scoring factor under the Plan Features pillar to assess whether plans that include nonemployee directors disclose cash-denominated award limits and introduces a new negative overriding factor for equity plans found to be lacking sufficient positive features under the Plan Features pillar despite an overall passing score.