Jeremy Garvey, John Ludlum, and Seth Popick discuss the significant executive compensation developments heading into the 2026 proxy season in Wolters Kluwer’s Executive Compensation Update. ISS and Glass Lewis, two proxy advisory firms, have both revised their compensation evaluation frameworks, with a greater emphasis on long-term performance. ISS has extended its pay-for-performance assessment period from three years to five years, adopted a more flexible approach toward time-based equity awards with extended vesting or retention periods, and revised its responsiveness standards for companies that receive low say-on-pay support. Additional updates address excessive non-employee director compensation and strengthen Equity Plan Scorecard requirements, including new plan feature standards and enhanced scrutiny of equity compensation plans. Glass Lewis has similarly overhauled its pay-for-performance methodology, replacing its traditional letter-grade system with a scorecard model that evaluates pay and performance across multiple quantitative and qualitative measures.

The publication also highlights broader executive compensation, governance, and regulatory developments. Jeremy, John, and Seth discuss SEC Commissioner Mark Uyeda’s support for expanding access to private investments within 401(k) plans, while noting the fiduciary, liquidity, fee, and litigation concerns that plan sponsors must weigh. The update reviews the Delaware Supreme Court’s decision in In re Tesla, Inc. derivative litigation, which reversed the rescission of Elon Musk’s 2018 compensation package on remedial grounds while leaving important governance and disclosure concerns intact. Finally, it examines President Trump’s executive order targeting ISS and Glass Lewis, which seeks increased oversight of proxy advisors and their role in shareholder voting, as well as new legislation requiring directors and officers of many foreign private issuers to comply with Section 16 insider reporting requirements beginning March 18, 2026.