The first FAQ discusses how GICS Code 5020 will affect the evaluation of equity compensation plans under ISS's US Equity Plan Scorecard. ISS will immediately establish new burn rate thresholds for the companies in GICS Code 5020, which will be:

ISS also has performed new regressions for the SVT benchmarks for the companies in GICS Code 5020. The SVT benchmarks are effective for shareholder meetings starting December 1, 2018. For shareholder meetings before December 1, each company's SVT benchmarks will be calculated based on its legacy GICS.

The first FAQ explains how ISS burn rates of other GICS Codes will be affected, as well. The burn rate of GICS Code 4510 will not be updated on December 1, 2018, but will be updated as part of ISS's annual burn rate calculations in December 2018. As of December 1, 2018, ISS will no longer use GICS Code 2540 for equity compensation plan evaluation in the US. The burn rate change will affect all companies covered by GICS Code 50 and will have a substantially greater benchmark than the legacy GICS 50 benchmark.

An FAQ explains that ISS has updated the peer groups used for companies with annual meetings starting September 15, 2018, to reflect the updated GICS classifications, including the new GICS code. All subsequent peer group construction cycles will reflect the updated GICS groupings.

Another FAQ discusses the impact of the new GICS code on ISS's evaluation of director compensation. Director compensation will continue to be evaluated based on comparators in each company's legacy GICS code until meetings starting February 1, 2019, when it will be evaluated based on the company's newly assigned GICS code. To learn more about director compensation, see Director Compensation Toolkit.

ISS devotes an FAQ to companies that are both covered by GICS Code 5020 and ISS's Environmental & Social QualityScore (which measures the quality of corporate disclosures on environmental and social issues, including sustainability governance, and identifies key disclosure omissions). Certain companies will move from their current GICS codes to Code 5020 and will be given a QualityScore based on fewer factors than before. After these changes occur, companies will be able to log in to the E&S QualityScore Data Verification page to review scores and submit changes.

GICS Code 5020 will affect ISS policies that examine companies' TSR performance relative to their industries, such as the director performance evaluation policy. An FAQ explains ISS will update the GICS groupings used in determining median one-year, three-year, and five-year TSRs in each GICS industry group starting September 30, 2018. The updated GICS groupings with accompanying TSRs will be available on the ISS website.

The last FAQ announces that Question 130 in Governance QualityScore, which examines each covered company's burn rate relative to its industry group, will be updated in the annual Governance QualityScore methodology update (typically released in December), to reflect the new GICS structure with updated burn rate thresholds. To learn more about the ISS Governance QualityScore, see Practice Note, Drafting an Equity Incentive Plan for a Public Company: Preparing for Proxy Advisor Engagement: Evaluating Corpoate Governance: ISS: ISS Governance QualityScore Overview.