What is the role of proxy advisory firms such as Glass Lewis and ISS?

Proxy advisory firms provide institutional investors with research, data, and recommendations on management and shareholder proxy proposals that are voted on at a company’s annual meeting.

What do proxy firms do?

Proxy advisors provide investment advisors, institutional investors, and other clients with a suite of voting recommendations in line with benchmark voting recommendations (a “benchmark policy”), or specialty voting policies (a “specialty policy”) that include policies tailored to specific investor classes and issue …

What is meant by proxy advisors?

SEBI (Research Analysts) Regulations, 2014 (‘SEBI Regulations’), defines proxy advisors “as any person who provides advice, through any means, to institutional investor or shareholder of a company, in relation to exercise of their rights in the company including recommendations on public offer or voting recommendation …

What is a proxy solicitation firm?

Proxy advisory firms provide recommendations to their fee-paying clients on how to cast their votes at shareholder meetings. Their recommendations are usually accompanied by written analysis based on the firms’ research and benchmark voting guidelines.

Who owns ISS proxy?

Deutsche Börse
Institutional Shareholder Services/Parent organizations

Is ISS A proxy advisor?

Institutional Shareholder Services Inc. Institutional Shareholder Services Inc. (ISS) is a proxy advisory firm. Hedge funds, mutual funds and similar organizations that own shares of multiple companies pay ISS to advise (and often vote their shares) regarding share holder votes.

What is ISS Glass Lewis?

What are ISS and Glass Lewis? ISS and Glass Lewis are the two most prominent proxy advisory services, at least in North America. Because institutional investors sometimes hold hundreds or thousands of different stocks at a point in time, they tend to need assistance in voting their shares come annual meeting time.

What role do proxy advisors play in corporate governance and are they effective?

These independent analysts also called as proxy advisory firms, they provide advisory services to the investors recommending them the effect of their vote in their shareholding and other corporate decisions. A proxy advisory firm basically protects the shareholders right which leads to good corporate governance.

What is say on pay rules?

As included in the Dodd-Frank Act, Say on Pay is a mandatory, nonbinding shareholder resolution offered by company management which asks investors to approve the compensation package for a company’s named executive officers (the CEO, CFO and top three most other highly compensated executive officers).

Is proxy solicitation legal?

Regulation 14A of the 1934 Act governs any communication by a public company reasonably calculated to cause a shareholder to grant, withhold or revoke a proxy. Regulation 14A requires a public company to disclose material information and prohibits fraud in connection with a proxy solicitation.

How many clients does ISS have?

It’s approximately 3,100 clients include many of the world’s leading institutional investors who rely on ISS’ objective and impartial offerings, as well as public companies focused on ESG and governance risk mitigation as a shareholder value enhancing measure.

What is ISS quality score?

ISS QualityScore is a data-driven scoring and screening solution designed to help institutional investors review quality factors and assess risk in the areas of Board Structure, Compensation programs, Shareholder Rights, and Audit & Risk Oversight.

What do proxy advisory firms recommend?

The recommendations of the proxy advisory firms frequently relate to environmental, social, or governance demands that are likely at odds with the firm’s prime directive of returning value to shareholders.

What is ISS proxy advisory?

ISS is the largest proxy advisory firm in the United States and globally. Founded in 1985, ISS is based in Rockville, Md., and maintains offices in 13 countries. The firm employs approximately 1,000 individuals, serves 1,700 institutional clients, and provides proxy recommendations on 40,000 shareholder meetings in 117 countries.

Do proxy advisory firms have a fiduciary duty to institutional investors?

Institutional investors have a fiduciary duty to their clients, but the proxy advisory firms that act as a third party are not held to the same obligation. Therefore, the proxy advisory firms do not have to act in the best interest of the institutional investors they serve.

What is proxyvote plus?

ProxyVote Plus was established in 2002. Based in Northbrook, Il., it provides proxy voting services to 150 clients. Proxy advisory firms also exist that specialize in non-U.S. markets.

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