Glass Lewis Announces Updates to 2026 Pay-for-Performance Model: What Boards and Practitioners Need to Know

Glass Lewis, a leading proxy advisory firm, recently released a preview of changes to its pay-for-performance model that will take effect for the 2026 proxy season. Glass Lewis’ announcement, which is modest in terms of detail, reflects a continued evolution in the firm’s approach to executive compensation alignment and is intended to “deliver more comprehensive insights into pay alignment.” The preview notes imply that Glass Lewis intends to publish additional details and assessment tools covering more aspects of its compensation modeling programs.

Taken together, the announced modifications merit attention by compensation committees and governance professionals alike, particularly those at public companies and private equity-backed portfolio companies preparing for exit.

Key Takeaways:

• New Grading System: Glass Lewis will be replacing its legacy A through F grading system for U.S.- and Canadian-based companies with a new 0-100 numerical-based scoring framework.
• Extended Evaluation Period: The evaluation period for core pay-for-performance tests will be extended from three (3) years to five (5) years.
• Expanded Jurisdictional Coverage: Glass Lewis will expand its compensation analytical services, making them available to listed companies in the United Kingdom (U.K.), European Union (EU) and Australia.
• New Performance Metrics: While Glass Lewis’ announcement does not include detail with respect to its new assessment criteria, we glean from the brief video accompanying the announcement that the new framework is likely to include updated, expanded criteria for assessing compensation alignment, including longer time horizons and “additional facets of compensation.”

Implications for Boards and Compensation Committees

While these changes will not affect Glass Lewis’ 2025 voting recommendations, they signal an increasingly granular approach to assessing pay alignment. In practice, this means:

• Boards and compensation committees should revisit the metrics used in short- and long-term incentive plans, especially if return-on-equity and/or return on invested capital are relevant measures of value creation in your industry.
• Companies anticipating IPOs or public exits in the next 12–24 months should consider how compensation structures will be viewed under the revised Glass Lewis framework.
• Peer group design is expected to remain critical, as relative metrics continue to drive outcomes under both Glass Lewis and ISS models.

Looking Ahead

In the coming weeks, Glass Lewis is expected to publish more specific details regarding its approach to pay-for-performance modeling for the 2026 proxy season. In addition, as is typically the case, Glass Lewis is expected to release its full 2026 proxy voting guidelines in the fall, including further details on the implementation of these changes. Companies may want to take this opportunity to undertake a dry run of their most recent compensation outcomes under the draft framework to identify potential vulnerabilities

We are closely monitoring proxy advisor developments and can assist in modeling Glass Lewis and ISS assessments as part of year-end compensation planning or pre-IPO readiness. Please contact us if you would like to discuss how these changes may affect your company’s executive compensation or proxy disclosure strategy.