RiskMetrics Group released its 2010 updates to its benchmark proxy voting guidelines. The global updates are part of an extensive process that includes broad-based outreach to financial market participants. RiskMetrics’ governance analysts will begin applying the updated policies to all companies with shareholder meeting dates on or after February 1, 2010.
“RiskMetrics’ uniquely transparent policy formulation process lays the groundwork for the broad range of proxy voting policies employed by our clients,” said Stephen Harvey, head of RiskMetrics’ governance business. “Investors are faced with ever more complex voting issues and we are pleased to provide them with expert guidance on critical issues plus unbiased analysis on thousands of company meetings.”
The 2010 policy updates address issues as a result of investor frustration and a changing regulatory landscape.
“Around the world, investors are focusing on increased accountability, improved transparency and more effective engagement,” said Martha Carter, head of governance research and chair of the global policy board at RiskMetrics. “This year’s policy updates are driven by a recognition that investors and boards share responsibility for value creation.”
Forty-three percent of investors who participated in the survey view non-approved shareholder rights plans as the most highly problematic takeover defense. Fifty-two percent of investors that participated in the survey indicated management say on pay proposals should be the primary vehicle to initially address problematic pay practices.
“Executive compensation is still a hot button issue for shareholders, and the global financial crisis raised new concerns about incentives that influence executive behavior,” added Carter. “To better align with investors’ needs, we will evaluate additional factors such as aligning long-term pay-for-performance and risk-motivating incentive practices as part of overall executive compensation practices.”