Here’s an excerpt from this jam-packed Cooley Alert penned by Michael Mencher, Brad Goldberg, Vince Flynn, and Ali Murata:
“Institutional Shareholder Services (ISS) issued fewer adverse recommendations again this proxy season, opposing just 11.3% of director nominees, down from 12.7% in 2024 and 13.6% in 2023. Despite this reduced opposition, ISS’s influence remained stable. Directors receiving ISS support averaged 96.5% support, while those facing ISS opposition averaged 84.5%, sustaining the roughly 12-point gap seen in recent years.
Tech and life sciences companies experienced similar gains in director election outcomes, though shareholder scrutiny and proxy advisor opposition remained elevated relative to the broader index. Average support for director nominees climbed to 94.6% at tech companies (up from 94.5% in 2024 and 94.3% in 2023) and to 91.8% at life sciences companies (up from 91.3% in 2024 and 90.4% in 2023). The percentage of directors receiving under 70% support also declined in both sectors, falling to 1.9% at tech companies (from 2.2% in both 2024 and 2023) and to 4.2% at life sciences companies (from 6.5% in 2024 and 6.8% in 2023).
Despite these improvements, ISS continued to oppose director nominees at elevated rates in the tech and life sciences sectors. In the tech sector, 12% of nominees faced ISS opposition – an improvement from 15.2% in 2024 and 15.6% in 2023 – while 25.2% of life sciences nominees were opposed, largely consistent with historical levels. The influence of these recommendations varied between the two sectors. The impact appeared to ease in the life sciences sector, where the gap in average support between ISS-supported and ISS-opposed nominees narrowed to 13% (down from 14.9% in 2024 and 13.4% in 2023), but intensified in the tech sector, where the gap widened to 12.6% (up from 10% in 2024 and 10.4% in 2023), indicating increased sensitivity to proxy advisor guidance among tech investors this season.”
Authored by
Broc Romanek