Yesterday, Glass Lewis released its Benchmark Policy changes for 2026, which are included in this 90-page document. The primary changes include:
- Guidelines merely contain one view: Glass Lewis now notes that its Benchmark Policy represents just one of Glass Lewis’ policy offerings, which falls in line with its prior announcement that Glass Lewis is transitioning away from a “House View” policy to four distinct sets.
- Mandatory arbitration provisions to be evaluated: Glass Lewis now has an approach to mandatory arbitration provisions, so that when evaluating governing documents following completion of an IPO, spin-off or direct listing, it will review any mandatory arbitration provision and may recommend that shareholders oppose the election of the governance committee chair, or, in certain circumstances, the entire committee. Glass Lewis will generally recommend a vote against any mandatory arbitration provision bylaw or charter amendment unless there is sufficient rationale and disclosure.
- Pay-for-performance methodology includes a scoreboard: Glass Lewis has enhanced its proprietary pay-for-performance model so that rather than a single letter grade of “A” through “F”, the model will use a scorecard-based approach, consisting of up to six tests. Each test will receive a rating, which will be aggregated on a weighted basis to determine an overall score ranging from 0 to 100.
- Board amendments limiting shareholder rights may be challenged more: Glass Lewis has expanded its criteria for recommending votes against governance committee chairs (or the whole committee) if the board unilaterally amends governing documents to limit shareholder rights. Examples include: restricting shareholder proposals; blocking derivative lawsuits; replacing majority voting with plurality voting.
- Director election voting standards cleaned up: Glass Lewis clarified its policy language about voting standards for electing directors, but no actual policy changes occurred. This is a cleanup – not a strategic shift.
- Amendments to governance documents evaluated on case-by-case basis: Glass Lewis will evaluate changes to a certificate of incorporation and/or bylaws on a case-by-case basis. It strongly opposes “bundled” proposals (multiple amendments in one vote) and supports those that don’t materially harm shareholder interests.
- Supermajority vote requirements might be supported: Glass Lewis clarified that while proposals to eliminate supermajority vote requirements are reviewed case-by-case, such protections may be justified, particularly if a large or controlling shareholder exists. In these cases, it might support keeping supermajority provisions to safeguard minority shareholders.
- Shareholder proposals relating to “materially important matters” should be voted upon by shareholders: Now that the SEC has changed how it will process no-action requests related to shareholder proposals next year, Glass Lewis now takes a broader stance in its general approach to shareholder proposals and believes that shareholders should vote on materially important matters. This policy may evolve further as regulatory updates unfold through the 2026 season.
Authored by
Broc Romanek