Last Thursday, proxy advisory firm Glass Lewis released its 2025 Proxy Voting Policy Guidelines 2025 U.S. Benchmark Policy Guidelines, including guidelines for shareholder proposals and ESG-related issues. The guidelines detail Glass Lewis’ approach to assessing ballot items at annual general meetings for the upcoming 2025 proxy season.

The guidelines for the U.S. include added or updated sections on board oversight of artificial intelligence, board responsiveness to shareholder proposals, and change-in-control provisions for executive compensation. They also include clarifications to Glass Lewis’ policy approach on reincorporation proposals and executive pay programs. The changes are briefly summarized below.

Board Oversight of AI

In the absence of material incidents related to a company’s use or management of AI-related issues, Glass Lewis will generally not make voting recommendations on the basis of a company’s oversight of, or disclosure concerning, AI-related issues. However, in instances where there is evidence that insufficient oversight and/or management of AI technologies has resulted in material harm to shareholders, Glass Lewis will review a company’s overall governance practices and identify which directors or board-level committees have been charged with oversight of AI-related risks. It will also closely evaluate the board’s response to, and management of, this issue as well as any associated disclosures and the benchmark policy may recommend against appropriate directors should it find the board’s oversight, response or disclosure concerning AI-related issues to be insufficient.

Change-in-Control Provisions

The 2025 guidelines emphasize that companies that allow for committee discretion over the treatment of unvested awards should commit to providing clear rationale for how such awards are treated in the event a change in control occurs.

Board Responsiveness to Shareholder Proposals

The 2025 guidelines clarify that when shareholder proposals receive significant shareholder support (generally more than 30% but less than majority of votes cast), Glass Lewis generally takes the view that boards should engage with shareholders on the issue and provide disclosure addressing shareholder concerns and outreach initiatives.

Reincorporation

The 2025 guidelines reflect that proposals to reincorporate to a different state or country will be reviewed by Glass Lewis on a case-by-case basis. The review will include the changes in corporate governance provisions, especially those relating to shareholder rights, material differences in corporate statutes and legal precedents, and relevant financial benefits, among other factors, resulting from the change in domicile.

Approach to Executive Pay Program

Changes to the 2025 guidelines emphasize Glass Lewis’ holistic approach to analyzing executive compensation programs. Glass Lewis notes that there are few program features that, on their own, lead to an unfavorable recommendation from Glass Lewis for a say-on-pay proposal. Unfavorable factors in a pay program are reviewed in the context of rationale, overall structure, overall disclosure quality, the program’s ability to align executive pay with performance and the shareholder experience and the trajectory of the pay program resulting from changes introduced by the compensation committee.