New York partner Doreen Lilienfeld (Compensation, Governance & ERISA) was quoted in Agenda, the Financial Times’ corporate governance publication, on the FAQs that the ISS released in December on evaluating equity plans under its new scorecard approach. The new approach will become effective for meetings on or after February 1, 2015.

In the article, titled “ISS Offers Guidance on Equity Plan Approach,” Lilienfeld observes that the FAQs fail to mention restricted stock units. “Oddly, when they talk about what plans this will apply to … they don’t mention restricted stock units, which are fairly common instruments,” she says. “I thought that was an interesting omission and I wonder if that is just an accident, but it is unclear.”

Lilienfeld says it is important for companies to note that ISS will still focus on egregious factors that will result in negative recommendations regardless of score. For example, according to the ISS, one of these egregious factors is a “liberal change-of-control definition that could result in vesting of awards by a trigger other than a full double trigger.” Lilienfeld remarks that this wording is interesting because “a modified single-trigger will be a single in their mind …. [This is] perhaps a clarification of their thinking, which hadn’t been clear before.” In addition, she says the new approach provides an opportunity for boards to revisit disclosures to see how equity plans stack up against each of the factors.