On November 17, 2011, Institutional Shareholder Services (“ISS”), the leading proxy advisory firm, released 2012 updates to its U.S. proxy voting guidelines. The policy updates include revisions to ISS’s pay-for-performance policy and methodology. Other significant updates relate to the responsiveness of boards of directors to prior shareholder advisory votes on executive compensation, or “say-on-pay” votes, and the frequency of such votes, as well as revisions to the policy on proxy access in the wake of revisions to the Securities and Exchange Commission’s (“SEC”) shareholder proposal rules. The ISS policy changes will be effective for shareholder meetings on or after February 1, 2012.

PAY-FOR-PERFORMANCE

As part of its evaluation of a company’s say-on-pay proposal, ISS conducts a pay-for-performance evaluation that considers the alignment of the CEO’s pay with company performance over time. ISS has revised its approach to pay-for-performance in response to comments from both investors and issuers that pay-for-performance should be viewed in a long-term context rather than focusing only on the most recent year. As a result, ISS has made some changes to its pay-for-performance analysis to consider pay and performance over a longer time frame.