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Sustainable investing - defined as an investment approach that considers environmental, social, and governance (ESG) factors in the selection and management of investments - has seen significant growth in assets under management in the past several years. In the United States, an estimated 11% of total assets under management are now invested based on sustainable investment strategies. Similarly, shareholder proposals relating to environmental or social issues represented one-third of all shareholder proposals in 2014, representing an increase of nearly 40% since 2009. Some proposals are receiving shareholder support at or above 30%, generally driven by "for" vote recommendations from ISS. We find that ISS favors proposals that seek additional environmental or social reporting versus proposals that seek operational changes or restrictions. This finding contrasts with ISS's say-on-pay vote recommendation policies, which often seek changes to executive compensation designs.

Over the past 15 years, the methods of compensating non-employee directors have changed in tandem with the risk and workload of being a director. The catalyst for change over this time period includes a variety of regulatory requirements, such as Sarbanes-Oxley and Dodd Frank, enhanced proxy disclosure rules and increases in shareholder activism. By way of examples, Audit Committees meet more frequently and must have at least one qualified financial expert, and Compensation Committees have greater workloads. Today's corporate director needs to dedicate more time to the job, assume greater risk, and meet higher qualification standards.

The vast majority"98%"of companies have passed their annual say on pay votes (SOP) over the past four years. Proxy advisor voting recommendations remain highly influential on these votes, and many companies, perhaps hundreds, have changed the structure of their executive pay programs to try to comply with proxy advisor policies and to obtain a "FOR" SOP vote recommendation from proxy advisors.

The Securities and Exchange Commission (SEC) has just released its proposed rules regarding the requirement for companies to report as to whether employees and non-employee directors are allowed to hedge or offset the decrease in market value of equity securities. Proxy advisory firm Institutional Shareholder Services (ISS) has just released a new document explaining the firm's latest policies with respect to executive compensation, including its say on pay advisory voting services. Another proxy advisory firm, Glass, Lewis & Co. LLC (Glass Lewis), has implemented changes to its pay for performance and equity plan models.

Proxy advisory firm Glass, Lewis & Co. LLC ("Glass Lewis") has just published a new 45 page report which provides an overview to the Glass Lewis approach to advising its institutional investor clients regarding proxy matters. For the 2015 proxy season, Glass Lewis has noted six policy changes which are highlighted in the report. In order to keep our clients abreast of these changes in Glass Lewis policy, Pay Governance has summarized these policy changes

As companies approach the upcoming proxy season, Say on Pay (SOP) once again becomes top of mind for Compensation Committees and corporate management. Over the past 4 years since SOP proposals became mandatory under Dodd-Frank, shareholders have continued to show overwhelming support for executive pay packages despite continued criticism by media and other outlets.

Do companies set appropriately challenging goals in their incentive plans? How does a compensation committee determine whether management is recommending challenging goals? How important are earnings guidance and analyst expectations in goal setting?

At a recent Chief Human Resources Officer (CHRO) conference, two private equity firms' operating partners observed that executive compensation programs in each and every company in which they invested had to be completely overhauled. "Of course," quipped one CHRO, "all you need to do is grant large, upfront stock options as a one-time long-term incentive, and you don't worry about pay after that."

Virtually all large U.S. companies provide long-­‚Äêterm incentives (LTIs) through equity-­based awards, which provide economic alignment with the

Publicly traded companies are required by the SEC and the stock exchanges to obtain shareholder approval when such companies seek to implement a new long-term equity plan or increase the share reserve pursuant to such plans.