Ning Chiu

Photo of Ning Chiu
Firm/Organization: Davis Polk & Wardwell LLP
Blogs: Briefing: Governance

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New ISS Policies.  For meetings on or after February 1, 2019, two new and fairly minimal ISS policies will be applied. As part of ISS’ client roundtables, one-to-one client discussions and public comment period on proposed policy changes, ISS discussed the potential use of Economic Value Added (EVA) metrics to assess company performance in executive compensation evaluations.  In its policy update, ISS explained that many institutional investors agreed with the notion of exploring the potential…
Nearly all shareholder proposals meet the current resubmission thresholds of 3%, 6% and 10%, according to a detailed CII report on the impact of potential modifications to those thresholds.  The possibility of raising the support levels of proposals before they can be resubmitted is likely to be a topic at the SEC Proxy Process Roundtable tomorrow. CII examined a dataset of the shareholder proposals voted on between 2011 and 2018, when 3,620 proposals went to…
In advance of Thursday’s SEC’s Roundtable on the Proxy Process*, it is worth considering the three-part posts by the Investment Company Institute (ICI) on funds and proxy voting, and CII’s FAQs on shareholder proposal data. CII explains that fewer than half of proposals submitted are voted on, based on data between 2004 and 2017.  The SEC generally allows about 15% to be excluded, and then others are withdrawn.  On average, 13% of Russell 3000 companies…
ISS QualityScore Data Verification opened on Monday, November 5.  Companies should be aware of the new Board Diversity Subcategory, which consists of four new factors and five existing factors that will take effect on November 29, 2018.  The four new factors are: How many women serve in leadership roles on the board?  The factor evaluates the number of women serving as board chair, chair of key committees or lead director. How many women are…
Spencer Stuart has released its annual report on S&P 500 board practices, a useful guide for benchmarking.  The overall trends demonstrate few changes from the prior year, leading the report to conclude that there is a “chronic low rate of director turnover,” bringing about “gradual shifts in the complexion of U.S. boards,” and a “continued incremental evolution.”  The key data is below, with the statistics largely similar to prior years. New directors added.  On average,…
Unlike S&P and FTSE, after an 18-month consultation period, MSCI has announced that equity securities with unequal voting structures will continue to be included in the MSCI Global Investable Market Indexes at their free float market capitalization weight. MSCI will instead launch a new index series to reflect the desire of some investors to take into account unequal voting structures in the indexes that they use. The company’s press release states that it “supports…
PwC’s annual corporate directors survey concludes that boards are evolving and seeking change, rather than primarily valuing collegiality and consensus.  The survey also shows some discontent among directors with their fellow members, and that they remain unconvinced about the importance of some key investor prerogatives. About 45% of directors think that a member of their board should be replaced, with 21% of them indicating that two or more directors are underperforming.  The types of issues…
Under its 2019 updated guidelines, Glass Lewis will typically recommend against the members of the nominating and governance committee when a company is able to exclude a shareholder proposal on the right to call special meetings by presenting the ratification of an existing provision through a management proposal.  That happened several times last season, with some controversy, when companies asked shareholders to ratify existing special meeting rights that had a higher ownership threshold than…
The SEC Division of Corporation Finance has issued a new Staff Legal Bulletin 14J to provide guidance on some of the issues that bedeviled us earlier this year as to when the staff would, or would not, permit companies to exclude proposals through the no-action letter process. Discussion of Board’s Analysis in No-Action Letters.  Last November, the Division issued SLB 14I, which indicated that companies could include, in their no-action letter requests arguing the…
The Business Roundtable (BRT) and the Council of Institutional Investors (CII) have found common ground in supporting the revised Commonsense Principles 2.0, updated from 2016 and led once again by Warren Buffett and Jamie Dimon, along with several new CEO signatories, including some of the largest asset managers. The open letter accompanying the principles acknowledges similar works by other groups, including the investor-led Investor Stewardship Group, the BRT’s Principles of Corporate Governance and The New…