Institutional Shareholder Services
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 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.[3]
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.[4]
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 CEO's of major corporations in the United States with ramifications for the U.S. economy.[5]
Notes
- ↑ James R. Copland (Fall 2012), A Report on Corporate Governance and Shareholder Activism, Proxymonitor.org
- ↑ "Vestar Capital Partners Completes Acquisition of Institutional Shareholder Services". ISS press release. April 30, 2014.
- ↑ "SEC Charges Institutional Shareholder Services in Breach of Clients' Confidential Proxy Voting Information". SEC. 2013-05-23.
- ↑ "Forest Labs shareholders elect 1 of 4 board nominees from investor Carl Icahn". August 15, 2012.
- ↑ Lynn Stout (September 14, 2014), To Increase Investment, Change the Definition of ‘Shareholder Value’