As noted in our December 7, 2012 alert, Institutional Shareholder Services (ISS) has announced that beginning in 2013, it will consider a company's self-selected peers when constructing the peer group that ISS will use to evaluate pay-for-performance. ISS is requesting that companies notify it by December 21, 2012 of any changes to a company's self-selected peer companies for purposes of benchmarking CEO compensation. ISS has now clarified in FAQs that it is seeking updated peer groups used for 2012 compensation decisions; however, if a company anticipates making changes to its peer group for 2013, an updated peer group would be helpful for ISS "if the anticipated 2013 changes are due to business events that have made companies in the 2012 peer group no longer relevant (e.g., significant business changes, mergers, spinoffs, or bankruptcies)." Please note, however, that even though ISS has said that it will take into consideration a company's self-selected peers, the FAQs clarify that a company’s self-selected peers may not always appear in the ISS peer group, even if they meet ISS' size constraints (for example, if inclusion would lead to over-representation of a particular industry in the ISS peer group). Companies can provide updated information about peer companies to ISS via its web form, available at www.issgovernance.com/PeerFeedbackUS.

ISS has announced that it will release comprehensive FAQs relating to its 2013 proxy voting policies on or around December 15, 2012. At that time, we will provide guidance on understanding and addressing ISS and Glass Lewis proxy voting policies applicable to 2013 shareholder meetings.