In Depth
Glass Lewis is a leading proxy advisory firm that provides research, analysis, and voting recommendations to institutional investors on proxy ballot items including executive compensation, board elections, and shareholder proposals. Along with Institutional Shareholder Services (ISS), Glass Lewis is one of the two dominant proxy advisory firms, collectively influencing voting decisions on trillions of dollars in managed assets. Glass Lewis evaluates executive compensation programs using a proprietary Pay-for-Performance model that analyzes the alignment between CEO pay and company performance relative to peers. When Glass Lewis identifies a significant disconnect — high pay coupled with below-median performance, excessive severance provisions, or problematic pay practices — it may recommend a vote against the say-on-pay proposal or against compensation committee members. A negative recommendation from Glass Lewis can significantly reduce say-on-pay approval rates, particularly among index funds and passive investors that rely heavily on proxy advisor recommendations for their voting decisions. Glass Lewis also evaluates board quality, environmental and social proposals, and corporate governance structures. The firm publishes annual policy guidelines that outline the criteria and benchmarks it uses to evaluate proxy proposals, giving companies advance notice of the standards they will be measured against. Critics of proxy advisory firms argue that their recommendations carry outsized influence given the mechanical way some institutional investors follow them, while supporters contend they provide essential governance oversight that individual shareholders cannot practically perform on their own.