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Legal & Regulatory Executive compensation

ISS releases results of annual global policy survey 

  • Carol Silverman
    Partner, Senior Legal Consultant
  • Amy Knieriem
    Senior Principal, Senior Legal Consultant
  • David Thieke
    Partner & US and Canada Executive Solutions Leader
September 26, 2025

ISS releases results of annual global policy survey

ISS released the results of its annual global benchmark policy survey  September 22. The proxy advisor received 248 responses: 165 from institutional investors and 83 from companies and other non-investors. ISS will release draft policy updates for comment soon. Final updates are expected in late November and will be effective for meetings held on or after Feb. 1, 2026. The survey covered a range of topics, including executive and director pay, board diversity and ESG and DEI (see Proxy advisors gear up for 2026 for more information). 

The most popular responses from investors and non-investors to questions on these topics include:

Performance- vs. service-based equity

Currently, failure to apply performance conditions to a majority of an executive’s awards may trigger a negative SOP recommendation. The survey asked whether granting time-based equity with an extended time horizon is acceptable, how long the time horizon should be and the portion of net shares that should be retained. In response, 38% of investors and 45% of non-investors agreed that plans should be a mix of time- and performance-based awards. The next most popular response for investors was “it depends”, with 31% of investors believing that granting time-based equity with an extended time horizon may be acceptable in certain situations.

Modification of in-flight awards to eliminate ESG or DEI metrics

ISS generally takes a negative view of modifications to in-flight incentives without a compelling rationale. The survey asked if ISS should take a different position when the modifications relate to the ESG or DEI metrics. In response, 73% of investors said they prefer the current ISS approach, while 76% of non-investors said removal shouldn’t by itself be considered problematic absent other concerns.

SOP responsiveness

Recent SEC staff guidance on what could cause an otherwise passive investor to be considered an active investor (which comes with more onerous reporting requirements and scrutiny) may deter investors from engaging with companies or providing feedback. This runs up against ISS’s current policy to vote against the following year’s SOP proposal if a pay program receives low SOP support and the company doesn’t disclose shareholder engagement efforts in the proxy statement. The survey asked how ISS should view a company’s disclosure that it was unable to obtain shareholder feedback and whether pay program changes can be considered responsive without disclosed shareholder feedback. In response, both groups agreed that positive pay program changes can be sufficient without detailed disclosure of shareholder feedback (80% of investors and 91% of non-investors).

Excessive non-employee director pay

Currently, if ISS identifies outlier director pay, it provides cautionary language in proxy reports but doesn’t recommend against members of the committee that approves director pay unless there are issues for two consecutive years without a rationale. The survey asked if there are situations that might warrant an adverse recommendation in the first year. In response, Investors said ISS should recommend against committee members in the following situations:

  • Inadequate disclosure or lack of clearly disclosed rationale in the proxy: 34%
  • Performance-based awards, stock option grants, retirement benefits or excessive perks: 32%
  • Particularly large pay magnitude or pay that exceeds that of executive officers: 33%

Non-investor responses revealed a nuanced perspective, with 31% choosing inadequate disclosure, but 25% indicating they don’t believe any of these problematic practices should immediately trigger an adverse recommendation.

Board diversity, ESG and DEI

The survey sought feedback on board and workforce diversity and diversity disclosures, shareholder proposals on DEI and the corporate risks associated with DEI policies. Investors and non-investors generally recognized the importance of diversity and acknowledged that DEI-related practices are evolving. They also agreed that a mix of skills and experience is appropriate to a company’s business, and that gender and board tenure are important factors, with few respondents (about 1%) stating they don’t consider any measure of board diversity. However, there was less consensus on diversity targets and disclosure of a company’s approach to diversity.
About the author(s)
Carol Silverman

is a Partner and Senior Legal Consultant in Mercer's Law & Regulatory Group (L&R) based in New York. She specializes in technical legal and regulatory issues affecting executive compensation and corporate governance. She focuses on SEC disclosure, tax, employment and change in control agreements, equity programs, and employee benefit issues that arise in the context of corporate transactions and initial public offerings.  

Amy Knieriem

is a Senior Legal Consultant in Mercer's Law & Regulatory Group (L&R) based in Washington DC. She provides expert analyses on a variety of US and Canadian compliance and policy matters, and advises clients on securities and corporate governance issues affecting executive pay in North America. 

David Thieke

is a Parter and the Head of Mercer’s US & Canada Executive Rewards Practice. He advises US and Canadian companies’ Compensation Committees and senior leadership teams on a wide variety of executive compensation topics and Board of Director pay issues.  In addition, he leads the go-to-market strategies, as well as the development of intellectual capital and technical solutions, for Mercer’s Executive Rewards Practice in the US and Canada.  

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