Former ISS marketing manager turns corporate governance consultant

By Svea Herbst-Bayliss

(Reuters) - A former Institutional Shareholder Services Inc (ISS) marketing manager who was not directly involved in making the influential advisory firm's voting recommendations is now working as a consultant advising clients on how ISS is likely to vote.

Anna Bryan, who worked at ISS until last year, advised Loop Capital Markets last month that activist hedge fund Starboard Value LP would likely win a proxy contest at retailer Dollar Tree Inc (NASDAQ:DLTR), where it sought to replace a majority of directors.

Loop Capital, a Chicago brokerage, wrote in a client note that, following a discussion with Bryan, it reiterated its Dollar Tree "buy" rating and raised its price target to $115 per share. The note, which was disseminated to Loop Capital clients, was seen by Reuters.

"We left the call (with Bryan) feeling confident that Starboard Value would likely prevail in a proxy contest," Loop Capital wrote in the March 8 note, noting that Bryan has "extensive proxy advisory experience."

The prediction did not pan out. Starboard dropped its board challenge against Dollar Tree on Friday, saying that it was pleased with the company's decision to test multiple price points at its stores. Dollar Tree shares on Monday closed down 3.3 percent at $102.44.

Bryan never served as a research analyst producing ISS recommendations. Instead, she worked in the global marketing and communications department between 2014 and 2018, according to her LinkedIn (NYSE:LNKD) profile and ISS sources.

Bryan, who describes herself on her Linkedin page as an investor relations consultant and sustainability expert, declined to comment on her involvement in the Loop Capital recommendation. Loop Capital Markets managing director Anthony Chukumba did not respond to requests for comment.

Bryan's case illustrates the strong appetite among investors for insight into ISS's thinking, turning former employees who were even tangentially involved in ISS's recommendations into sought-after experts.

It also underscores the sway of Rockville, Maryland-based ISS, which informs the votes of roughly 1,400 institutional investors. Its influence was on display two weeks ago, when Starboard abandoned its campaign to urge investors to block drug maker Bristol-Myers Squibb (NYSE:BMY) Co's $74 billion deal to buy Celgene Corp (NASDAQ:CELG) hours after ISS came out in support of the merger.

As a result, ISS staffers have become coveted recruitment targets. Two former heads of ISS's special situations research group for example, Chris Young and Chris Cernich, moved to Wall Street long ago.

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