Institutional Shareholder Services

Institutional Shareholder Services
Industry Investments
Key people
 Gary Retelny (CEO)
Ulrika Hasselgren (ISS-Ethix CEO)
Services proxy advisory
SRI advising
Subsidiaries ISS-Ethix
Website issgovernance.com

Institutional Shareholder Services, Inc. (ISS) is a proxy advisory firm. Hedge funds, mutual funds and similar organizations that own shares of multiple companies pay ISS to advise (and often vote their shares) regarding share holder votes. It is the largest such firm, with over 61 percent of the business.[1] It was owned by MSCI until April 30, 2014 when it was purchased by Vestar Capital Partners.[2] In 2017, ownership of ISS switched to Genstar Capital.[3]

History

With Disney announcing the combination of the CEO and chairman positions on October 6, 2011, past the date of shareholder proposal deadline, and increase CEO/chair pay, ISS called for a no vote against the four Nominating and Governance Committee board members at the 2012 annual meeting.[4] ISS recommended to clients two candidates nominated by billionaire investor Carl Icahn to the drugmaker Forest Laboratories’ board of directors in a 2012 proxy contest.[5]

In 2013 ISS agreed to pay the SEC a fine of $300,000 and retain an independent compliance consultant to settle charges that it failed to safeguard the confidential proxy voting information of clients.[6] ISS was highlighted in a 2014 opinion piece in the New York Times by Cornell University law professor Lynn Stout as having an outsized power in the selection of CEOs of major corporations in the United States with ramifications for the U.S. economy.[7]

Ethix SRI Advisors was purchased by ISS in September 2015 to help ISS expand in Europe. Ethix was renamed with the acquisition to ISS-Ethix and would lead ISS's sustainable and responsible investment activities.[8] In March 2018, ISS also acquired the German ESG rating agency oekom research AG.[9]

Notes

  1. ↑ James R. Copland (Fall 2012), A Report on Corporate Governance and Shareholder Activism, Proxymonitor.org
  2. ↑ "Vestar Capital Partners Completes Acquisition of Institutional Shareholder Services". ISS press release. April 30, 2014.
  3. ↑ "Genstar Capital, in Partnership with Management, Announces Acquisition of Institutional Shareholder Services from Vestar Capital Partners". ISS press release. September 7, 2017.
  4. ↑ Chmielewski, Dawn C. (March 2, 2012). "Proxy advisor criticizes Disney CEO Iger's new chairman title". Los Angeles Times. Retrieved February 18, 2016.
  5. ↑ "Forest Labs shareholders elect 1 of 4 board nominees from investor Carl Icahn". August 15, 2012.
  6. ↑ "SEC Charges Institutional Shareholder Services in Breach of Clients' Confidential Proxy Voting Information". SEC. 2013-05-23.
  7. ↑ Lynn Stout (September 14, 2014), To Increase Investment, Change the Definition of ‘Shareholder Value’
  8. ↑ Brown, Adam (September 15, 2015). "ISS acquires Scandinavia-based SRI adviser Ethix". IR Magazine. Cross Border Ltd. Retrieved February 18, 2016.
  9. ↑ "oekom research AG to Join Institutional Shareholder Services". ISS press release. March 15, 2018.


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