ISS conducts an annual global survey on governance, board, and remuneration topics that will shape its 2026 voting policies. In last month’s newsletter we summarised results of the Glass Lewis survey (see HERE).

Two thirds of this year’s respondents were investors, most of them with a global market focus (62%), followed by a US focus (21%).

Investors and non-investors continue to disagree on almost everything, including on PSUs versus RSUs.

In the US, where “hybrid” plans (granting RSUs that vest based on service only and PSUs that vest based on performance hurdles) are common, companies face pressure to increase the proportion of PSUs versus RSUs. In the UK, many companies have put hybrid plans to vote following the release of new corporate governance principles enabling greater flexibility in remuneration frameworks (see HERE). The Australian market permitted RSUs to companies complying with prudential regulations, and subsequently allowed others to introduce them if the grants met certain conditions. Recently, however, pushback from proxy advisers ACSI and Ownership Matters which, combined with ISS’s consistent pushback, will likely limit further Australian adoption.

Yet, on a global basis, only a small proportion of investors expressed a hard ‘no’ to hybrid plans in this year’s ISS survey. How this translates for an ASX listed company will depend very much on who its investors are, their guidelines, and their source of proxy advice.

Time-based vs. performance-based long-term executive equity grants

Last year’s ISS survey asked whether a high proportion of time-vested equity versus performance-hurdled equity should continue to be a negative voting factor. Asked in this way it was unsurprising that a high proportion of investors wanted ISS’s voting recommendations to favour PSUs. This year’s survey line of questioning varied and focussed on when time-based equity might be ok.

Only a fifth of investors thought RSUs were never appropriate. The highest number of respondents among investors and non-investors accepted time-based equity only as part of a hybrid plan. Approximately a third of investors noted approval was industry and case specific.

Less than 5% of both investors and non-investors thought that other factors (such as grant size, underpins, clawback etc) were more important than whether the grants had performance measures.

Investors preferred longer vesting holding periods for RSUs (at least 5 years combined vesting and holding period).

In the UK, only 15% of investors said that long term equity awards should always be PSUs. Approximately a third of investors said hybrid plans were alright depending on the terms of the plan (including the mix of PSUS and RSUs), and approximately a third believed the plans were alright if not adopted in addition to increases in opportunity. Approximately 20% believed the plans should only see adoption for companies that strongly compete for talent in the US. This may reflect investor views if ASX listed companies were to shift towards having a higher proportion of hybrid plans.

Board executive and workforce diversity in the times of Trump

Approximately a third of investors remain focussed on diversity and diversity targets and continue to expect disclosure of diversity approaches from US companies. Another 15% remained focussed on board diversity.

Approximately 45% of investors recognised the changing landscape, with some considering changes on a case-by-case basis and others expecting disclosure as to how the company is changing its programs in the current environment.

NED pay

When asked about US NED practices, roughly equal numbers of investors and non-investors expressed concern about:

• Inadequate disclosure for unusual NED payments
• Excessive perquisites, performance awards, option grants or retirement benefits
• Large NED pay

The second category is a large bucket – hopefully next year will look at perks, option grants and retirement benefits separately.

The ISS 2025 Global Benchmark Policy Survey results can be found HERE.

© Guerdon Associates 2025 Back to all articles