Data Verification

Friday, November 13, 2015, is the deadline for issuers to verify the underlying raw data used to determine the upcoming QuickScore 3.0 results from Institutional Shareholder Services (ISS). Issuers have until 8 p.m. ET on November 13 to submit updates and corrections through the ISS verification tool. New scores are expected to be released on November 23, 2015, and will then appear in ISS research reports.

Issuers concerned about whether ISS determines their QuickScore accurately should promptly review the underlying raw data and submit updates and corrections to ISS before the close of the verification period. When appropriate, issuers should reference public filings that show the correct raw data.

The data verification tool can be accessed under the "Data Verification" tab at the following link: http://www.issgovernance.com/governance-solutions/investment-tools-data/quickscore/. Issuers may request login information by sending an email to contactus@isscorporatesolutions.com and can access the ISS data verification help guide at the following link: http://www.isscorporatesolutions.com/sites/default/files/images/QuickScore_DV_HelpGuide.pdf.

ISS has specified that only issuers can conduct verification. Although law firms, compensation consultants, proxy solicitors, and other third parties are not allowed to complete the data verification process on behalf of an issuer, WSGR is happy to assist clients with determining the appropriate approach to any question.

QuickScore Methodology Update Related to Proxy Access

Beginning this year, for informational purposes only, ISS will track information related to proxy access. Proxy access is a process by which shareholders can place their director nominees in a company's proxy statement and on the company's proxy card, thereby avoiding the cost to the shareholder of sending out its own proxy statement. The monitored practices are: (1) the ownership and holding period required to be a nominator; (2) the number of shareholders that may aggregate holdings to meet ownership and holding period thresholds; and (3) the number of proxy access candidates that may be put forward.

Other updates to the QuickScore methodology include clarifications in the following areas:

• Director Tenure: A small number of long-tenured directors (inclusive of affiliated and outside directors) will not negatively impact a company's governance risk rating.
• Stock Ownership Guidelines for Outside Directors: ISS clarified that when calculating the stock ownership guidelines for outside directors, a multiplier should be applied to the cash portion of the annual retainer instead of the annual retainer in its entirety.
• Investigations by a Regulatory Body:
  • Material Penalty in Regulatory Investigation. Any penalty against an individual will be considered material for purposes of determining the materiality of a penalty assessed in a regulatory investigation.
  • Routine and Non-Routine Investigations. ISS will categorize investigations as either routine or non-routine unless a company states that it does not expect the outcome to have a material adverse effect on the company. FCPA-related investigations and Wells Notices will generally be considered non-routine, instead of being considered non-routine in all circumstances.

For additional details, please see the QuickScore 3.0 overview and updates at the following link: http://www.issgovernance.com/file/products/qs-technical-document-20151030.pdf.