Washington, D.C. 20549
Item 7. Disclosure of Proxy Voting Policies and Procedures
for Closed-End Management Investment Companies.
PROXY
VOTING PROCEDURES and GUIDELINES
VOYA FUNDS
VOYA
iNVESTMENTS, LLC
Date Last Revised: March
18, 2020
Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Introduction
The purpose of these Proxy Voting Procedures
and Guidelines (the “Procedures”, the “Guidelines”) is to set forth the Board of Directors/Trustees of
the Voya funds’ (the “Board”) instructions to Voya Investments, LLC (referred to as the “Advisor”)
for the voting of proxies for each fund the Board serves as Director/Trustee (the “Funds”).
The Board may elect to delegate proxy voting
to a sub-advisor of the Funds and also approve the sub-advisor’s proxy policies and procedures for implementation on behalf
of such Voya fund (a “Sub-Advisor-Voted Fund”). A Sub-Advisor-Voted Fund is not covered under these Procedures and
Guidelines, except as described in the Reporting and Record Retention section below with respect to vote reporting requirements.
However, they are covered by those sub-advisor’s proxy policies, provided that the Board has approved them.
These Procedures and Guidelines incorporate
principles and guidance set forth in relevant pronouncements of the Securities and Exchange Commission (“SEC”) and
its staff on the fiduciary duty of the Board to ensure that proxies are voted in a timely manner and that voting decisions are
in the Funds’ beneficial owners’ best interest.
The Board, through these instructions, delegates
to the Advisor’s Proxy Coordinator the responsibility to vote the Funds’ proxies in accordance with these Procedures
and Guidelines on behalf of the Board. The Board further delegates to the Compliance Committee of the Board certain oversight duties
regarding the Advisor’s functions as it pertains to the voting of the Funds’ proxies.
The Board directs the engagement of a Proxy
Advisory Firm to be initially appointed and annually reviewed and approved by the Board. The Proxy Coordinator is responsible for
overseeing the Proxy Advisory Firm and shall direct the Proxy Advisory Firm to vote proxies in accordance with the Guidelines.
These Procedures and Guidelines will be
reviewed by the Board’s Compliance Committee annually, and will be updated when appropriate. No change to these Procedures
and Guidelines will be made except pursuant to Board direction. Non-material amendments, however, may be approved for immediate
implementation by the Board’s Compliance Committee, subject to ratification by the full board at its next regularly scheduled
meeting.
Advisor’s Roles and Responsibilities
Proxy Coordinator
The Voya Proxy Coordinator shall direct
the Proxy Advisory Firm to vote proxies on behalf of the Funds and the Advisor in connection with annual and special meetings of
shareholders (except those regarding bankruptcy matters and/or related plans of reorganization).
The Proxy Coordinator is responsible for
overseeing the Proxy Advisory Firm (as defined in the Proxy Advisory Firm section below) and voting the Funds’ proxies
in accordance with the Procedures and Guidelines on behalf of the Funds and the Advisor. The Proxy Coordinator is authorized to
direct the Proxy Advisory Firm to vote a Fund’s proxy in accordance with the Procedures and Guidelines. Responsibilities
assigned to the Proxy Coordinator, or activities that support it, may be performed by such members of the Proxy Group (as defined
in the Proxy Group section below) or employees of the Advisor’s affiliates as the Proxy Group deems appropriate.
The Proxy Coordinator is also responsible
for identifying and informing Counsel (as defined in the Counsel section below) of potential conflicts between the proxy
issuer and the Proxy Advisory Firm, the Advisor, the Funds’ principal underwriters, or an affiliated person of the Funds.
The Proxy Coordinator will identify such potential conflicts of interest based on information the Proxy Advisory Firm periodically
provides; client analyses, distributor, broker-dealer, and vendor lists; and information derived from other sources, including
public filings.
Proxy Advisory Firm
The Proxy Advisory Firm is responsible for
coordinating with the Funds’ custodians to ensure that all proxy materials received by the custodians relating to the portfolio
securities are processed in a timely manner. To the extent applicable, the Proxy Advisory Firm is required to provide research,
analysis, and vote recommendations under its Proxy Voting guidelines. Additionally, the Proxy Advisory Firm is required to produce
custom vote recommendations in accordance with the Guidelines and their vote recommendations.
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Revision Date: March 18, 2020
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Proxy Group
The members of the Proxy Group, which may
include employees of the Advisor’s affiliates, are identified in Exhibit 1, and may be amended from time to time at
the Advisor’s discretion except that the Funds’ Chief Investment Risk Officer, the Funds’ Chief Compliance Officer,
and the Funds’ Proxy Coordinator shall be members unless the Board determines otherwise.
Investment Professionals
The Funds’ sub-advisors and/or portfolio
managers are each referred to herein as an “Investment Professional” and collectively, “Investment Professionals”.
The Board encourages the Funds’ Investment Professionals to submit a recommendation to the Proxy Group regarding any proxy-voting-related
proposal pertaining to the portfolio securities over which they have day-to-day portfolio management responsibility. Additionally,
when requested, Investment Professionals are responsible for submitting a recommendation to the Proxy Group regarding proxy voting
related proxy contests, proposals related to companies with dual class shares with superior voting rights, or mergers and acquisitions
involving the portfolio securities over which they have day-to-day portfolio management responsibility.
Counsel
A member of the mutual funds legal practice
group of the Advisor (“Counsel”) is responsible for determining if a potential conflict of interest involving a proxy
issuer is in fact a conflict of interest. If Counsel deems a proxy issuer to be a conflict of interest, the Counsel must notify
the Proxy Coordinator, who will in turn notify the Chair of the Compliance Committee of such conflict of interest.
Proxy Voting Procedures
Proxy Group Oversight
A minimum of four (4) members of the Proxy
Group (or three (3) if one member of the quorum is either the Funds’ Chief Investment Risk Officer or the Funds’ Chief
Compliance Officer) will constitute a quorum for purposes of taking action at any meeting of the Group.
The Proxy Group may meet in person or by
telephone. The Proxy Group also may take action via email in lieu of a meeting, provided that the Proxy Coordinator follows the
directions of a majority of a quorum responding via e-mail.
A Proxy Group meeting will be held whenever:
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The Proxy Coordinator receives a recommendation from an Investment Professional to vote a Fund’s proxy contrary to the Guidelines.
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The Proxy Advisory Firm has made no recommendation on a matter and the Procedures do not provide instruction.
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A matter requires case-by-case consideration, including those in which the Proxy Advisory Firm’s recommendation is deemed to be materially conflicted.
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The Proxy Coordinator requests the Proxy Group’s input and vote recommendation on a matter.
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At its discretion, the Proxy Group may provide
the Proxy Coordinator with standing instructions to perform responsibilities and related activities assigned to the Proxy Group,
on its behalf, provided that such instructions do not violate any requirements of these Procedures or the Guidelines.
If the Proxy Group has previously provided
the Proxy Coordinator with standing instructions to vote in accordance with the Proxy Advisory Firm’s recommendation, these
recommendations do not violate any requirements of these Procedures or the Guidelines, and no conflict of interest exists, the
Proxy Coordinator may implement the instructions without calling a Proxy Group meeting.
For each proposal referred to the Proxy
Group, it will review:
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The relevant Procedures and Guidelines,
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The recommendation of the Proxy Advisory Firm, if any,
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The recommendation of the Investment Professional(s), if any,
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Other resources that any Proxy Group member deems appropriate to aid in a determination of a recommendation.
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Revision Date: March 18, 2020
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Vote Instruction
While the vote of a simple majority of the
voting members present will determine any matter submitted to a vote, tie votes will be resolved by securing the vote of members
not present at the meeting. The Proxy Coordinator will ensure compliance with all applicable voting and conflict of interest procedures,
and will use best efforts to secure votes from as many absent members as may reasonably be accomplished, providing such members
with a substantially similar level of relevant information as that provided at the in-person meeting.
In the event a tie vote cannot be resolved,
or in the event that the vote remains a tie, the Proxy Coordinator will refer the vote to the Compliance Committee Chair for vote
determination.
In the event a tie vote cannot be timely
resolved in connection with a voting deadline, the Proxy Coordinator will abstain from voting on the proposal(s). However, the
Proxy Coordinator will vote in accordance with the Proxy Advisory Firm’s recommendation if abstaining on the vote is not
a valid option; i.e., can only vote For, Against, or Withhold.
A member of the Proxy Group may abstain
from voting on any given matter, provided that the member does not participate in the Proxy Group discussion(s) in connection with
the vote determination. If abstention results in the loss of quorum, the process for resolving tie votes will be observed.
If the Proxy Group recommends that a Fund
vote contrary to the Guidelines, as might be the case upon review of a recommendation from an Investment Professional, the Proxy
Coordinator will follow the procedures in the Out-of-Guidelines section below.
Vote Classification
These Procedures and Guidelines specify
how the Funds generally will vote with respect to the proposals indicated. Unless otherwise noted, the Proxy Group instructs the
Proxy Coordinator, on behalf of the Advisor, to vote in accordance with these Procedures and Guidelines.
Within-Guidelines Votes:
Votes in Accordance with the Guidelines
In the event the Proxy Group and, where
applicable, an Investment Professional participating in the voting process, recommend a vote Within Guidelines, the Proxy Group
will instruct the Proxy Advisory Firm, through the Proxy Coordinator, to vote in this manner.
Out-of-Guidelines Votes:
Votes Contrary to the Guidelines
A vote would be considered Out-of-Guidelines
if the:
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Vote is contrary to the Guidelines based on the Compliance Committee or Proxy Group determination that the application of the Guidelines is inapplicable or inappropriate under the circumstances. Such votes include, but are not limited to votes cast based on the recommendation of an Investment Professional.
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Vote is contrary to the Guidelines unless the Guidelines stipulate Case-by-Case consideration or that primary consideration will be given to input from an Investment Professional, notwithstanding that the vote appears contrary to these Procedures and Guidelines and/or the Proxy Advisory Firm’s recommendation.
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Routine Matters
Upon instruction from the Proxy Coordinator,
the Proxy Advisory Firm will submit a vote as described in these Procedures and Guidelines where there is a clear policy (e.g.,
“For,” “Against,” “Withhold,” or “Abstain”) on a proposal.
Matters Requiring Case-by-Case
Consideration
The Proxy Advisory Firm will refer proxy
proposals to the Proxy Coordinator when these Procedures and Guidelines indicate “Case-by-Case.” Additionally, the
Proxy Advisory Firm will refer any proxy proposal under circumstances where the application of these Procedures and Guidelines
is unclear, appears to involve unusual or controversial issues, or is silent regarding the proposal.
Upon receipt of a referral from the Proxy
Advisory Firm, the Proxy Coordinator may solicit additional research or clarification from the Proxy Advisory Firm, Investment
Professional(s), or other sources.
The Proxy Coordinator will review matters
requiring Case-by-Case consideration to determine if the Proxy Group had previously provided the Proxy Coordinator with standing
vote instructions, or a provision within the Guidelines is applicable based on prior voting history.
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Revision Date: March 18, 2020
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
If a matter requires input and a vote determination
from the Proxy Group, the Proxy Coordinator will forward the Proxy Advisory Firm’s analysis and recommendation, the Proxy
Coordinator’s recommendation and/or any research obtained from the Investment Professional(s), the Proxy Advisory Firm, or
any other source to the Proxy Group. The Proxy Group may consult with the Proxy Advisory Firm and/or Investment Professional(s)
as appropriate.
The Proxy Coordinator will use best efforts
to convene a Proxy Group meeting with respect to all matters requiring its consideration. In the event quorum requirements cannot
be timely met in connection with a voting deadline, it is the policy of the Funds and Advisor to vote in accordance with the Proxy
Advisory Firm’s recommendation.
Non-Votes: Votes in which
No Action is Taken
The Proxy Coordinator will make reasonable
efforts to secure and vote all proxies for the Funds, including markets where shareholders’ rights are limited. Nevertheless,
the Proxy Group may recommend that a Fund refrain from voting under certain circumstances including:
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The economic effect on shareholders’ interests or the value of the portfolio holding is indeterminable or insignificant, e.g., proxies in connection with fractional shares, securities no longer held in the portfolio of a Voya fund or proxies being considered on behalf of a Fund that is no longer in existence.
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The cost of voting a proxy outweighs the benefits, e.g., certain international proxies, particularly in cases when share blocking practices may impose trading restrictions on the relevant portfolio security.
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In such cases, the Proxy Group may instruct
the Proxy Advisory Firm, through the Proxy Coordinator, not to vote such proxy. The Proxy Group may provide the Proxy Coordinator
with standing instructions on parameters that would dictate a Non-Vote without the Proxy Group’s review of a specific proxy.
Further, Counsel may require the Proxy Coordinator
to abstain from voting any proposal that is subject to a material conflict of interest provided that abstaining has no effect on
the vote outcome.
Matters Requiring Further
Consideration
Referrals to the Compliance
Committee
If a vote is deemed Out-of-Guidelines and
Counsel has determined that a material conflict of interest appears to exist with respect to the party or parties (i.e.
Proxy Advisory Firm, the Advisor, underwriters, affiliates, any participating Proxy Group member, or any Investment Professional(s))
participating in the voting process, the Proxy Coordinator will refer the vote to the Compliance Committee Chair.
Further, if an Investment Professional discloses
a potential conflict of interest, and Counsel determines that the conflict of interest appears to exist, the proposal will also
be referred to the Compliance Committee for review, regardless of whether the vote is Within- or Out-of-Guidelines.
The Compliance Committee will be provided
all recommendations (including Investment Professional(s)), analyses, research, and Conflicts Reports and any other written materials
used to establish whether a conflict of interest exists, and will instruct the Proxy Coordinator how such referred proposals should
be voted.
The Proxy Coordinator will use best efforts
to refer matters to the Compliance Committee for its consideration in a timely manner. In the event any such matter cannot be referred
to or considered by the Compliance Committee in a timely manner, the Compliance Committee’s standing instruction is to vote
Within Guidelines.
The Compliance Committee will receive a
report detailing proposals that were voted Out-of-Guidelines, if the Investment Professional’s recommendation was not acted
on, or was referred to the Compliance Committee.
Consultation with Compliance
Committee
The Proxy Coordinator may consult the Compliance
Committee Chair for guidance on behalf of the Committee if application of these Procedures and Guidelines is unclear, or a recommendation
is received from an Investment Professional in connection with any unusual or controversial issue.
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Conflicts of Interest
The Advisor shall act in the Funds’
beneficial owners’ best interests and strive to avoid conflicts of interest.
Conflicts of interest can arise, for example, in situations where:
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The issuer is a vendor whose products or services are material to the Voya Funds, the Advisor or their affiliates;
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The issuer is an entity participating to a material extent in the distribution of the Voya Funds;
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The issuer is a significant executing broker dealer;
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Any individual that participates in the voting process for the Funds including an Investment Professional, a member of the Proxy Group, an employee of the Advisor, or Director/Trustee of the Board serves as a director or officer of the issuer; or
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The issuer is Voya Financial.
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Potential Conflicts with
a Proxy Issuer
The Proxy Coordinator is responsible for
identifying and informing Counsel of potential conflicts with the proxy issuer. In addition to obtaining potential conflict of
interest information described in the Roles and Responsibilities section above, members of the Proxy Group are required
to disclose to the Proxy Coordinator any potential conflicts of interests prior to discussing the Proxy Advisory Firms’ recommendation.
The Proxy Group member will advise the Proxy
Coordinator in the event he/she believes that a potential or perceived conflict of interest exists that may preclude him/her from
making a vote determination in the best interests of the Funds’ beneficial owners. The Proxy Group member may elect to recuse
himself/herself from consideration of the relevant proxy or have Counsel consider the matter, recusing him/herself only in the
event Counsel determines that a material conflict of interest exists. If recusal, whether voluntary or pursuant to Counsel’s
findings, does not occur prior to the member’s participation in any Proxy Group discussion of the relevant proxy, any Out-of-Guidelines
Vote determination is subject to the Compliance Committee referral process. Should members of the Proxy Group verbally disclose
a potential conflict of interest, they are required to complete a Conflict of Interest Report, which will be reviewed by Counsel.
Investment Professionals are also required
to complete a Conflict of Interest Report or confirm that they do not have any potential conflicts of interests when submitting
a vote recommendation to the Proxy Coordinator.
The Proxy Coordinator gathers and analyzes
the information provided by the Proxy Advisory Firm, the Advisor, the Funds’ principal underwriters, affiliates of the Funds,
Proxy Group members, Investment Professionals, and the Directors and Officers of the Funds. Counsel will document such potential
material conflicts of interest on a consolidated basis as appropriate.
The Proxy Coordinator will instruct the
Proxy Advisory Firm to vote the proxy as recommended by the Proxy Group if Counsel determines that a material conflict of interest
does not appear to exist with respect to a proxy issuer, any participating Proxy Group member, or any participating Investment
Professional(s).
Compliance Committee Oversight
The Proxy Coordinator will refer a proposal
to the Funds’ Compliance Committee if the Proxy Group recommends an Out-of-Guidelines Vote, and Counsel has determined that
a material conflict of interest appears to exist in order that the conflicted party(ies) have no opportunity to exercise voting
discretion over a Fund’s proxy.
The Proxy Coordinator will refer the proposal
to the Compliance Committee Chair, forwarding all information relevant to the Compliance Committee’s review, including the
following or a summary of its contents:
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The applicable Procedures and Guidelines
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The Proxy Advisory Firm recommendation
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The Investment Professional(s)’s recommendation, if available
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Any resources used by the Proxy Group in arriving at its recommendation
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Conflicts Report(s) and/or any other written materials establishing whether a conflict of interest exists.
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Revision Date: March 18, 2020
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
In the event a member of the Funds’
Compliance Committee believes he/she has a conflict of interest that would preclude him/her from making a vote determination in
the best interests of the applicable Fund’s beneficial owners, the Compliance Committee member will advise the Compliance
Committee Chair and recuse himself/herself with respect to the relevant proxy determinations.
Conflicts Reports
Investment Professionals, the Proxy Advisory
Firm, and members of the Compliance Committee, the Proxy Group, and the Proxy Coordinator are required to disclose any potential
conflicts of interest and/or confirm they do not have a conflict of interest in connection with their participation in the voting
process for portfolio securities. The Conflicts Report should describe any known relationships of either a business or personal
nature that Counsel has not previously assessed, which may include communications with respect to the referral item, but excluding
routine communications with or submitted to the Proxy Coordinator or Investment Professional(s) on behalf of the subject company
or a proponent of a shareholder proposal.
The Conflicts Report should also include
written confirmation that the Investment Professional based the recommendation in connection with an Out-of-Guidelines Vote or
under circumstances where a conflict of interest exists solely on the investment merits of the proposal and without regard to any
other consideration.
Completed Conflicts Reports should be provided
to the Proxy Coordinator as soon as possible and may be submitted to the Proxy Coordinator verbally, provided the Proxy Coordinator
completes the Conflicts Report, and the submitter reviews and approves the Conflict Report in writing.
The Proxy Coordinator will forward all Conflicts
Reports to Counsel for review. Upon review, Counsel will provide the Proxy Coordinator with a brief statement indicating if a material
conflict of interest is present.
Counsel will document such potential conflicts
of interest on a consolidated basis as appropriate rather than maintain individual Conflicts Reports.
Assessment of the Proxy Advisory Firm
The Proxy Coordinator, on behalf of the
Board and the Advisor, will assess if the Proxy Advisory Firm:
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Is independent from the Advisor
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Has resources that indicate it can competently provide analysis of proxy issues
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Can make recommendations in an impartial manner and in the best interests of the Funds and their beneficial owners
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Has adequate compliance policies and procedures to:
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Ensure that its proxy voting recommendations are based on current and accurate information
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Identify and address conflicts of interest.
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The Proxy Coordinator will utilize, and
the Proxy Advisory Firm will comply with, such methods for completing the assessment as the Proxy Coordinator may deem reasonably
appropriate. The Proxy Advisory Firm will also promptly notify the Proxy Coordinator in writing of any material change to information
previously provided to the Proxy Coordinator in connection with establishing the Proxy Advisory Firm’s independence, competence,
or impartiality.
Information provided in connection with
the Proxy Advisory Firm’s potential conflict of interest will be forwarded to Counsel for review. Counsel will review such
information and advise the Proxy Coordinator as to whether a material concern exists and if so, determine the most appropriate
course of action to eliminate such concern.
Voting Funds of Funds,
Investing Funds and Feeder Funds
Funds that are “Funds-of-Funds”
will “echo” vote their interests in underlying mutual funds, which may include mutual funds other than the Voya funds
indicated on Voya’s website (www.voyainvestments.com). Meaning that, if the Fund-of-Funds must vote on a proposal
with respect to an underlying investment company, the Fund-of-Funds will vote its interest in that underlying fund in the same
proportion all other shareholders in the underlying investment company voted their interests.
However, if the underlying fund has no other
shareholders, the Fund-of-Funds will vote as follows:
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If the Fund-of-Funds and the underlying fund are being solicited to vote on the same proposal (e.g., the election of fund directors/trustees), the Fund-of-Funds will vote the shares it holds in the underlying fund in the same proportion as all votes received from the holders of the Fund-of-Funds’ shares with respect to that proposal.
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If the Fund-of-Funds is being solicited to vote on a proposal for an underlying fund (e.g., a new Sub-Advisor to the underlying fund), and there is no corresponding proposal at the Fund-of-Funds level, the Board will determine the most appropriate method of voting with respect to the underlying fund proposal.
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Revision Date: March 18, 2020
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
An Investing Fund (e.g., any Voya
fund), while not a Fund-of-Funds will have the foregoing Fund-of-Funds procedure applied to any Investing Fund that invests in
one or more underlying funds. Accordingly:
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Each Investing Fund will “echo” vote its interests in an underlying fund, if the underlying fund has shareholders other than the Investing Fund.
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In the event an underlying fund has no other shareholders, and the Investing Fund and the underlying fund are being solicited to vote on the same proposal, the Investing Fund will vote its interests in the underlying fund in the same proportion as all votes received from the holders of its own shares on that proposal.
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In the event an underlying fund has no other shareholders, and there is no corresponding proposal at the Investing Fund level, the Board will determine the most appropriate method of voting with respect to the underlying fund proposal.
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A fund that is a “Feeder Fund”
in a master-feeder structure passes votes requested by the underlying master fund to its shareholders. Meaning that, if the master
fund solicits the Feeder Fund, the Feeder Fund will request instructions from its own shareholders, either directly or, in the
case of an insurance-dedicated Fund, through an insurance product or retirement plan, as to how it should vote its interest in
an underlying master fund.
When a Voya fund is a feeder in a master-feeder
structure, proxies for the portfolio securities owned by the master fund will be voted pursuant to the master fund’s proxy
voting policies and procedures. As such, except as described in the Reporting and Record Retention section below, Feeder
Funds will not be subject to these Procedures and Guidelines.
Securities Lending
Many of the Funds participate in securities
lending arrangements to generate additional revenue for the Fund. Accordingly, the Fund will not be able to vote securities that
are on loan under these arrangements. However, under certain circumstances, for voting issues that may have a significant impact
on the investment, the Proxy Group or Proxy Coordinator may request to recall securities that are on loan if they determine that
the benefit of voting outweighs the costs and lost revenue to the Fund and the administrative burden of retrieving the securities.
Investment Professionals may also deem a
vote is “material” in the context of the portfolio(s) they manage. Therefore, they may request that lending activity
on behalf of their portfolio(s) with respect to the relevant security be reviewed by the Proxy Group and considered for recall
and/or restriction. The Proxy Group will give primary consideration to relevant Investment Professional input in its determination
of whether a given proxy vote is material and the associated security accordingly restricted from lending. The determination that
a vote is material in the context of a Fund’s portfolio will not mean that such vote is considered material across all Funds
voting at that meeting. In order to recall or restrict shares on a timely basis for material voting purposes, the Proxy Coordinator,
on behalf of the Proxy Group, will use best efforts to consider, and when appropriate, to act upon, such requests on a timely basis.
Requests to review lending activity in connection with a potentially material vote may be initiated by any relevant Investment
Professional and submitted for the Proxy Group’s consideration at any time.
Reporting and Record Retention
Reporting by the Funds
Annually, as required, each Fund and each
Sub-Advisor-Voted Fund will post its proxy voting record, or a link to the prior one-year period ending on June 30th
on the Voya Funds’ website. The proxy voting record for each Fund and each Sub-Advisor-Voted Fund will also be available
on Form N-PX in the EDGAR database on the website of the Securities and Exchange Commission (“SEC”). For any Voya fund
that is a feeder in a master/feeder structure, no proxy voting record related to the portfolio securities owned by the master fund
will be posted on the Voya funds’ website or included in the Fund’s Form N-PX; however, a cross-reference to the master
fund’s proxy voting record as filed in the SEC’s EDGAR database will be included in the Fund’s Form N-PX and
posted on the Voya funds’ website. If an underlying master fund solicited any Feeder Fund for a vote during the reporting
period, a record of the votes cast by means of the pass-through process described above will be included on the Voya funds’
website and in the Feeder Fund’s Form N-PX.
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Proxy Voting Procedures and Guidelines for
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Reporting to the Compliance
Committee
At each regularly scheduled quarterly Compliance
Committee meeting, the Compliance Committee will receive a report from the Proxy Coordinator indicating each proxy proposal, or
a summary of such proposals, that was:
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Voted Out-of-Guidelines, including any proposals voted Out-of-Guidelines as a result of special circumstances raised by an Investment Professional;
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Voted Within-Guidelines in cases when the Proxy Group did not agree with an Investment Professional’s recommendation;
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Referred to the Compliance Committee for determination.
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The report will indicate the name of the
company, the substance of the proposal, a summary of the Investment Professional’s recommendation, where applicable, and
the reasons for voting, or recommending, an Out-of-Guidelines Vote or, in the case of (2) above, a Within-Guidelines Vote.
Reporting by the Proxy Coordinator
on behalf of the Advisor
The Advisor will maintain the records required
by Rule 204-2(c)(2), as may be amended from time to time, including the following:
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A copy of each proxy statement received regarding a Fund’s portfolio securities. Such proxy statements the issuers send are available either in the SEC’s EDGAR database or upon request from the Proxy Advisory Firm.
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A record of each vote cast on behalf of a Fund.
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A copy of any Advisor-created document that was material to making a proxy vote decision, or that memorializes the basis for that decision.
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A copy of written requests for Fund proxy voting information and any written response thereto or to any oral request for information on how the Advisor voted proxies on behalf of a Fund.
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A record of all recommendations from Investment Professionals to vote contrary to the Guidelines.
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All proxy questions/recommendations that have been referred to the Compliance Committee, and all applicable recommendations, analyses, research, Conflict Reports, and vote determinations.
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All proxy voting materials and supporting
documentation will be retained for a minimum of six years, the first two years in the Advisor’s office.
Records Maintained by the Proxy Advisory Firm
The Proxy Advisory Firm will retain a record
of all proxy votes handled by the Proxy Advisory Firm. Such record must reflect all the information required to be disclosed in
a Fund’s Form N-PX pursuant to Rule 30b1-4 under the Investment Company Act. In addition, the Proxy Advisory Firm is
responsible for maintaining copies of all proxy statements received by issuers and to promptly provide such materials to the Advisor
upon request.
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
PROXY
VOTING GUIDELINES
Introduction
Proxies must be voted in the best interest
of the Funds’ beneficial owners. The Guidelines summarize the Funds’ positions on various issues of concern to investors,
and give an indication of how the Funds’ ballots will be voted on proposals dealing with particular issues. Nevertheless,
the Guidelines are not exhaustive, do not include all potential voting issues, and proposals may be addressed, as necessary, on
a CASE-BY-CASE basis rather than according to the Guidelines, factoring in the merits of the rationale and disclosure provided.
These Guidelines apply to securities of
publicly traded companies and to those of privately held companies if publicly available disclosure permits such application. All
matters for which such disclosure is not available will be considered CASE-BY-CASE.
The Board encourages Investment Professionals
to submit a recommendation to the Proxy Group regarding proxy voting related to the portfolio securities over which they have day-to-day
portfolio management responsibility. Recommendations from the Investment Professionals may be submitted or requested in connection
with any proposal and are likely to be requested with respect to proxies for private equity or fixed income securities and/or proposals
related to merger transactions/corporate restructurings, proxy contests, or unusual or controversial issues.
These policies may be overridden in any
case as provided for in the Procedures. Similarly, the Procedures provide that proposals whose Guidelines prescribe a firm voting
position may instead be considered on a CASE-BY-CASE basis when unusual or controversial circumstances so dictate.
Interpretation and application of these
Guidelines is not intended to supersede any law, regulation, binding agreement, or other legal requirement to which an issuer may
be or become subject. No proposal will be supported whose implementation would contravene such requirements.
General Policies
The Funds’ policy is generally to
support the recommendation of the relevant company’s management when the Proxy Advisory Firm’s recommendation also
aligns with such recommendation and to vote in accordance with the Proxy Advisory Firm’s recommendation when management has
made no recommendation. However, this policy will not apply to CASE-BY-CASE proposals for which a contrary recommendation
from the relevant Investment Professional(s) is being utilized.
The rationale and vote recommendation from
Investment Professionals will be given primary consideration with respect to CASE-BY-CASE proposals being considered on
behalf of the relevant Fund.
The Fund’s policy is to not support
proposals that would negatively impact the existing rights of the Funds’ beneficial owners. Depending on the relevant market,
appropriate opposition may be expressed as an ABSTAIN, AGAINST, or WITHHOLD vote.
Consider on a CASE-BY-CASE basis
competing shareholder and board proposals that appear on the same agenda at uncontested proxies.
International Policies
Companies incorporated outside the U.S.
are subject to the foregoing U.S. Guidelines if they are listed on a U.S. exchange and treated as a U.S. domestic issuer by the
SEC. Where applicable, certain U.S. guidelines may also be applied to companies incorporated outside the U.S., e.g., companies
with a significant base of U.S. operations and employees.
However, given the differing regulatory
and legal requirements, market practices, and political and economic systems existing in various international markets, the Funds
will:
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Vote AGAINST international proxy proposals when the Proxy Advisory Firm recommends voting AGAINST such proposal because relevant disclosure by the company, or the time provided for consideration of such disclosure, is inadequate;
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Revision Date: March 18, 2020
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Proxy Voting Procedures and Guidelines for
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Consider proposals that are associated with a firm AGAINST vote on a CASE-BY-CASE basis if the Proxy Advisory Firm recommends their support when:
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The company or market transitions to better practices (e.g., having committed to new regulations or governance codes);
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The market standard is stricter than the Fund’s guidelines; or
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It is the more favorable choice when shareholders must choose between alternate proposals.
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Proposal Specific Policies
As mentioned above, these policies may be
overridden in any case as provided for in the Procedures. Similarly, the Procedures provide that proposals whose Guidelines prescribe
a firm voting position may instead be considered on a CASE-BY-CASE basis when unusual or controversial circumstances so
dictate.
Proxy Contests:
Consider votes in contested elections on
a CASE-BY-CASE basis, with primary consideration given to input from the relevant Investment Professional(s).
Uncontested Proxies:
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The Board of Directors
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Overview
The Funds may lodge disagreement with a
company’s policies or practices by withholding support from the relevant proposal rather than from the director nominee(s)
to which the Proxy Advisory Firm assigns a correlation.
In cases where the lodging of disagreement
by the Funds is assigned to the board of directors, support will be withheld from the director(s) deemed responsible. Responsibility
may be attributed to the entire board, a committee, or an individual, and the Funds will apply a vote accountability guideline
(“Vote Accountability Guideline”) specific to the concerns under review. For example:
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Relevant committee chair
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Relevant committee member(s)
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If director(s) to whom responsibility has
been attributed is not standing for election (e.g., the board is classified), support will typically not be withheld from
other directors in their stead. Additionally, the Funds will typically vote FOR a director in connection with issues raised
by the Proxy Advisory Firm if the director did not serve on the board or relevant committee during the majority of the time period
relevant to the concerns cited by the Proxy Advisory Firm.
Vote with the Proxy Advisory Firm’s
recommendation when more candidates are presented than available seats and no other provisions under these Guidelines apply.
In cases where a director holds more than
one board seat and corresponding votes, manifested as one seat as a physical person plus an additional seat as a representative
of a legal entity, generally vote with the Proxy Advisory Firm’s recommendation to withhold support from the legal entity
and vote on the physical person.
Bundled Director Slates
WITHHOLD support from directors or
slates of directors when they are presented in a manner not aligned with market best practice and/or regulation, irrespective of
complying with independence requirements, such as:
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Bundled slates of directors (e.g., Canada, France, Hong Kong, or Spain);
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In markets with term lengths capped by regulation or market practice, directors whose terms exceed the caps or are not disclosed; or
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Directors whose names are not disclosed in advance of the meeting or far enough in advance relative to voting deadlines to make an informed voting decision.
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Revision Date: March 18, 2020
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Proxy Voting Procedures and Guidelines for
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For companies with multiple slates in Italy,
follow the Proxy Advisory Firm’s standards for assessing which slate is best suited to represent shareholder interests.
Independence
Director and Board/Committee
Independence
The Funds will consider the relevant country
or market listing exchange and the Proxy Advisory Firm’s standards with respect to determining director independence and
Board/Committee independence levels. Note: Non-voting directors (e.g., director emeritus or advisory director) shall be
excluded from calculations with respect to board independence.
The Funds will consider non-independent
directors standing for election on a Case-by-Case basis when the full board
or committee does not meet the market independence requirements.
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WITHHOLD support from the non-independent nominating committee chair or non-independent board chair, and if necessary, fewest non-independent directors including the Founder, Chairman or CEO if their removal would achieve the independence requirements across the remaining board or key committee, except that support may be withheld from additional directors whose relative level of independence cannot be differentiated, or the number required to achieve the independence requirements is equal to or greater than the number of non-independent directors standing for election.
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WITHHOLD support from slates of directors if the board’s independence cannot be ascertained due to inadequate disclosure or when the board’s independence does not meet the applicable independence requirements of the relevant country or market listing exchange.
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WITHHOLD support from key committee slates if they contain non-independent directors in the election, unless the composition is acceptable under the relevant country or market listing exchange requirements.
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WITHHOLD support from non-independent nominating committee chair, board chair, and/or directors if the full board serves as a key committee, or the board has not established the committee, and relevant country or market listing exchange requires such establishment.
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Self-Nominated/Shareholder-Nominated
Director Candidates
Consider self-nominated or shareholder-nominated
director candidates on a CASE-BY-CASE basis. WITHHOLD support from the candidate when:
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Adequate disclosure has not been provided (e.g., rationale for candidacy and candidate’s qualifications relative to the company);
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The candidate’s agenda is not in line with the long-term best interests of the company; or
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Multiple self-nominated candidates are being considered as a proxy contest if similar issues are raised (e.g., potential change in control).
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Management Proposals Seeking
Non-Board Member Service on Key Committees
Vote AGAINST proposals that permit
non-board members to serve on the audit, remuneration (compensation), nominating and/or governance committee, provided that bundled
slates may be supported if no slate nominee serves on the relevant committee(s) except where best market practice otherwise dictates.
Consider other concerns regarding committee
members on a CASE-BY-CASE basis.
Shareholder Proposals Regarding
Board/Key Committee Independence
Vote AGAINST shareholder proposals
asking that the independence be greater than that required by the country or market listing exchange, or asking to redefine director
independence.
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Proxy Voting Procedures and Guidelines for
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Board Member Roles and
Responsibilities
Attendance
WITHHOLD support from a director
who, during both of the most recent two years, has served on the board during the two-year period but attended less than 75 percent
of the board and committee meetings without a valid reason for the absences or if the two-year attendance record cannot be ascertained
from available disclosure (e.g., the company did not disclose which director(s) attended less than 75 percent of the board
and committee meetings during the director’s period of service without a valid reason for the absences).
The two-year attendance policy shall be
applied to attendance of statutory auditors at Japanese companies.
Over-boarding
Consider on a CASE-BY-CASE basis
CEOs who sit on more than two public boards in addition to their own.
Vote FOR non-executive directors
without regard to “over-boarding” issues, unless when in conjunction with attendance issues during the most recent
year. Consider such circumstances on a Case-by-Case basis.
Vote AGAINST shareholder proposals
limiting the number of public company boards on which a director may serve.
Combined Chairman / CEO
Role
Vote FOR directors without regard
to recommendations that the position of chairman should be separate from that of CEO, or should otherwise require to be independent,
unless other concerns requiring Case-by-Case consideration are raised (e.g.,
former CEOs proposed as board chairmen in markets, such as the United Kingdom, for which best practice recommends
against such practice).
Vote AGAINST shareholder proposals
requiring that the positions of chairman and CEO be held separately, unless significant corporate governance concerns have been
cited. Consider such circumstances on a CASE-BY-CASE basis.
Cumulative/Net Voting Markets
(e.g., Russia)
When cumulative or net voting applies, generally
follow the Proxy Advisory Firm’s approach to vote FOR nominees, such as when asserted by the issuer to be independent,
irrespective of key committee membership, even if independence disclosure or criteria fall short of the Proxy Advisory Firm’s
standards.
Board Accountability
Diversity (excluding Japan)
Consider directors on a CASE-BY-CASE
basis according to the Vote Accountability Guideline if there is an absence of diversity on the board or the company fails to disclose
an adequate diversity policy or practice.
Consider shareholder proposals on a CASE-BY-CASE
basis that request the company to improve / promote diversity and/or diversity-related disclosure.
Return on Equity
Vote FOR the top executive at companies
in Japan if the only reason the Proxy Advisory Firm’s Withhold recommendation is due to the company underperforming
in terms of capital efficiency or company performance; e.g. net losses or low return on equity (ROE).
Compensation Practices
Support may be withheld from compensation
committee members whose actions or disclosure do not appear to support compensation practices aligned with the best interests of
the company and its shareholders.
Where applicable, votes on compensation
committee members in connection with compensation practices should be considered on a Case-by-Case
basis:
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Say
on Pay responsiveness. Compensation committee members may be opposed for failure to sufficiently address compensation concerns
prompting significant opposition to the most recent say on pay vote or continuing to maintain problematic pay practices will
be considered on a CASE-BY-CASE basis, factoring in considerations such as level of shareholder opposition, subsequent
actions taken by the compensation committee, and level of responsiveness disclosure.
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Proxy Voting Procedures and Guidelines for
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Say on Pay frequency. WITHHOLD support according to the Vote Accountability Guideline if the Proxy Advisory Firm opposes directors because the company has failed to include a Say on Pay proposal and/or a Frequency of Say on Pay proposal when required under SEC or market regulatory provisions; or implemented a say on pay schedule that is less frequent than the frequency most recently preferred by at least a plurality of shareholders; or is an externally-managed issuer (EMI) or externally-managed REIT (EMR) and has failed to include a Say on Pay proposal or adequate disclosure of the compensation structure.
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Commitments.
Vote FOR compensation committee members receiving an adverse recommendation by the Proxy Advisory Firm due to problematic
pay practices or thresholds (e.g. burn rate) if the company makes a public commitment (e.g., via a Form 8-K
filing) to rectify the practice on a going-forward basis. However, consider on a CASE-BY-CASE basis if the company
does not rectify the practice by the following year’s annual general meeting.
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For all other markets in which
the issuer has not followed market practice by submitting a resolution on executive compensation, consider remuneration committee
members on a CASE-BY-CASE basis.
Accounting Practices
Consider audit committee members and the
company’s CEO and CFO, if nominated as directors, on a CASE-BY-CASE basis if poor accounting practice concerns are
raised, factoring in considerations such as if the:
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Audit committee failed to remediate known on-going material weaknesses in the company’s internal controls for more than a year.
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Company has not yet had a full year to remediate the concerns since the time they were identified.
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Company has taken adequate steps to remediate the concerns cited, which would typically include removing or replacing the responsible executives, and if the concerns are not re-occurring.
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Vote FOR audit committee members,
or the company’s CEO or CFO if nominated as directors, who did not serve on the committee or did not have responsibility
over the relevant financial function, during the majority of the time period relevant to the concerns cited.
WITHHOLD support on audit committee
members according to the Vote Accountability Guideline if the company has failed to disclose auditors’ fees and has not provided
an auditor ratification or remuneration proposal for shareholder vote.
Problematic Actions
Consider directors on a CASE-BY-CASE
basis when the Proxy Advisory Firm cites them for problematic actions including a lack of due diligence in relation to a major
transaction (e.g. a merger or an acquisition), material failures, lack of risk oversight, scandals, malfeasance, or negligent
internal controls at the company or that of an affiliate, factoring in the merits of the director’s performance, rationale,
and disclosure when:
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Culpability can be attributed to the director (e.g., director manages or is responsible for the relevant function); or
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The director has been directly implicated, resulting in arrest, criminal charge, or regulatory sanction.
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Vote FOR directors when the above
factors are not present.
Vote FOR a director if the Proxy
Advisory Firm cites concerns regarding actions in connection with a director’s service on an unaffiliated board and
the company has provided adequate rationale regarding the appropriateness of the director to serve on the board under consideration.
Consider on a CASE-BY-CASE basis
when the Proxy Advisory Firm recommends withholding support from any director due to share pledging concerns, factoring
in the pledged amount, unwind time, and any historical concerns being raised. Responsibility will be assigned to the pledgor, where
the pledged amount and unwind time are deemed significant and, therefore, an unnecessary risk to the company.
WITHHOLD support from (a) all members
of the governance committee, or nominating committee if a formal governance committee has not been established, and (b) directors
holding shares with superior voting rights if the company is controlled by means of a dual class share with superior / exclusive
voting rights and does not have a reasonable sunset provision; i.e., fewer than five years.
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Proxy Voting Procedures and Guidelines for
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Consider on a CASE-BY-CASE basis
all directors if no governance or nominating committee directors are under consideration or if the company does not have governance
or nominating committees. Investment Professionals that have day-to-day portfolio management responsibility for such companies
may be requested to submit a recommendation to the Proxy Coordinator.
WITHHOLD support from directors according
to the Vote Accountability Guideline when the Proxy Advisory Firm recommends withholding support due to the board (a) unilaterally
adopting by-law amendments that have a negative impact on existing shareholder rights or functions as a diminution of shareholder
rights, and which are not specifically addressed under the Guidelines, or (b) failing to remove or subject to a reasonable sunset
provision such by-laws.
Anti-Takeover Measures
WITHHOLD support according to the
Vote Accountability Guideline if the company implements excessive anti-takeover measures.
WITHHOLD support according to the
Vote Accountability Guideline if the company fails to remove restrictive poison pill features, ensure a pill’s expiration,
or submit the poison pill in a timely manner to shareholders for vote, unless a company has implemented a policy that should reasonably
prevent abusive use of its poison pill.
Board Responsiveness
Vote FOR if the majority-supported
shareholder proposal has been reasonably addressed or the Funds’ Guidelines or voting record did not support the relevant
proposal or issue.
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Proposals seeking shareholder ratification of a poison pill may be deemed reasonably addressed if the company has implemented a policy that should reasonably prevent abusive use of the pill.
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WITHHOLD support according to the
Vote Accountability Guideline if the majority-supported shareholder proposal at issue is supported under these Guidelines and the
board has not disclosed a credible rationale for not implementing the proposal.
If the board has not acted upon a director
who did not receive shareholder support representing a majority of the votes cast at the previous annual meeting, consider directors
on a CASE-BY-CASE basis.
Vote FOR when:
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The issue relevant to the majority negative vote has been adequately addressed or cured, which may include disclosure of the board’s rationale; or
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The Funds’ Guidelines or voting record do not support the relevant proposal or issue causing the majority negative vote.
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WITHHOLD support according to the
Vote Accountability Guideline if the above provisions have not been satisfied.
Board–Related Proposals
Classified/Declassified
Board Structure
Vote AGAINST proposals to classify
the board unless the proposal represents an increased frequency of a director’s election in the staggered cycle (e.g.,
seeking to move from a three-year cycle to a two-year cycle).
Vote FOR proposals to repeal classified
boards and to elect all directors annually.
Board Structure
Vote FOR management proposals to
adopt or amend board structures or policies, except consider such proposals on a CASE-BY-CASE basis if the board does not
meet the country or market listing exchange independence requirements, corporate governance concerns have been identified, or the
proposal may result in a material reduction in shareholders’ rights.
For companies in Japan, generally
follow the Proxy Advisory Firm’s approach to proposals seeking a board structure that would provide greater independence
oversight of management and the board.
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Proxy Voting Procedures and Guidelines for
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Board Size
Vote FOR proposals seeking a board
range if the range is reasonable in the context of market practice and anti-takeover considerations; however, vote AGAINST
if seeking to remove shareholder approval rights or the board fails to meet market independence requirements.
Director and Officer Indemnification and Liability
Protection
Consider on a CASE-BY-CASE basis
proposals on director and officer indemnification and liability protection, using Delaware law as the standard.
Vote against
proposals to limit or eliminate entirely directors’ and officers’ liability in connection with monetary damages for
violating the duty of care.
Vote against
indemnification proposals that would expand coverage beyond legal expenses to acts that are more serious violations of fiduciary
obligation, such as negligence.
Director and Officer Indemnification and Liability
Protection
Vote in accordance with the Proxy Advisory
Firm’s standards (e.g. overly broad provisions).
Discharge of Management/Supervisory Board Members
Vote FOR management proposals seeking
the discharge of management and supervisory board members (including when the proposal is bundled), unless concerns are raised
about the past actions of the company’s auditors or directors, or legal or regulatory action is being taken against the board
by other shareholders.
Vote FOR such proposals in connection
with remuneration practices otherwise supported under these Guidelines or as a means of expressing disapproval of broader practices
of the company or its board.
Establish Board Committee
Vote FOR shareholder proposals that
seek creation of a key committee of the board, unless the company claims an exemption of the listing exchange or the committee
is not required under the listing exchange.
Vote AGAINST shareholder proposals
requesting creation of additional board committees or offices, except as otherwise provided for herein.
Filling Board Vacancies / Removal of Directors
Vote AGAINST proposals that allow
directors to be removed only for cause.
Vote FOR proposals to restore shareholder
ability to remove directors with or without cause.
Vote AGAINST proposals that allow
only continuing directors to elect replacements to fill board vacancies.
Vote FOR proposals that permit shareholders
to elect directors to fill board vacancies.
Stock Ownership Requirements
Vote AGAINST such shareholder proposals.
Term Limits / Retirement Age
Vote FOR management proposals and
AGAINST shareholder proposals limiting the tenure of outside directors or imposing a mandatory retirement age for outside
directors, unless the proposal seeks to relax existing standards.
Frequency of Advisory Votes on Executive Compensation
Vote FOR proposals seeking an annual
say on pay, and AGAINST those seeking less frequent.
Proposals to Provide an Advisory Vote on Executive
Compensation (Canada)
Vote FOR if it is an ANNUAL
vote, unless the company already provides shareholders with an annual vote.
Executive Pay Evaluation
Advisory Votes on Executive
Compensation (Say on Pay) and Remuneration Reports or Committee Members in Absence of Such Proposals
Vote FOR management proposals seeking
ratification of the company’s executive compensation structure, unless the program includes practices or features not supported
under these Guidelines and the proposal receives a negative recommendation from the Proxy Advisory Firm.
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Revision Date: March 18, 2020
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Proxy Voting Procedures and Guidelines for
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Listed below are examples of compensation
practices and provisions, and respective consideration and treatment under the Guidelines, factoring in whether the company has
provided reasonable rationale/disclosure for such factors or the proposal as a whole.
Consider on a CASE-BY-CASE basis:
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Short-Term Investment Plans where the board has exercised discretion to exclude extraordinary items.
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Retesting in connection with achievement of performance hurdles.
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Long-Term Incentive Plans where executives already hold significant equity positions.
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Long-Term Incentive Plans where the vesting or performance period is too short or stringency of the performance criteria is called into question.
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Pay Practices (or combination of practices) that appear to have created a misalignment between CEO pay and performance with regard to shareholder value.
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Long-Term Incentive Plans that lack an appropriate equity component (e.g., “cash-based only”).
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Excessive levels of discretionary bonuses, recruitment awards, retention awards, non-compete payments, severance/termination payments, perquisites (unreasonable levels in context of total compensation or purpose of the incentive awards or payouts).
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Vote AGAINST:
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Provisions that permit or give the Board sole discretion for repricing, replacement, buy back, exchange, or any other form of alternative options. (Note: cancellation of options would not be considered an exchange unless the cancelled options were re-granted or expressly returned to the plan reserve for reissuance.)
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Single Trigger Severance Provisions in new or materially amended plans, contracts, or payments that do not require an actual change in control in order to be triggered.
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Plans that allow named executive officers to have material input into setting their pay.
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Short-Term Incentive Plans where treatment of payout factors has been inconsistent (e.g., exclusion of losses but not gains).
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Company plans in international markets that provide for contract or notice periods or severance/termination payments that exceed market practices, e.g., relative to multiple of annual compensation.
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Compensation structures at externally-managed issuers (EMI) or externally-managed REITs (EMR) that lack adequate disclosure, based on the Proxy Advisory Firm’s assessment.
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Vote ABSTAIN:
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Legacy single trigger severance provisions in plans, contracts, or payments that do not require an actual change in control in order to be triggered, unless such provisions were previously opposed by a Fund.
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Golden Parachutes
Vote to ABSTAIN on golden parachutes
if it is determined that the Funds would not have an economic interest, such as the case in an all-cash transaction, regardless
of payout terms, amounts, thresholds, etc.
However, if an economic interest exists,
vote AGAINST due to single or modified-single trigger severance provisions; otherwise consider on a CASE-BY-CASE
basis taking into account if any of the following factors exist:
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Total NEO payout as a percentage of the total equity value.
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Aggregate of all single-triggered components (cash and equity) as a percentage of the total NEO payout.
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Recent material amendments or new agreements that incorporate problematic features.
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CEO/NEO remains employed by merged/acquired company.
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Proxy Voting Procedures and Guidelines for
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Equity-Based and Other Incentive Plans Including
OBRA
Equity Compensation
Consider on a CASE-BY-CASE basis
compensation and employee benefit plans, including those in connection with OBRA, or the issuance of shares in connection with
such plans. Vote the plan or issuance based on factors and related vote treatment under the Executive Pay Evaluation section above
or based on circumstances specific to such equity plans as follows:
Vote FOR the plan, if:
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Board independence is the only concern.
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Amendment places a cap on annual grants.
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Amendment adopts or changes administrative features to comply with Section 162(m) of OBRA.
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Amendment adds performance-based goals to comply with Section 162(m) of OBRA.
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Cash or cash-and-stock bonus components are being approved for exemption from taxes under Section 162(m) of OBRA.
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Give primary consideration to management’s assessment that such plan meets the requirements for exemption of performance-based compensation.
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Vote AGAINST if the plan:
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Exceeds recommended costs (U.S. or Canada).
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Incorporates share allocation disclosure methods that prevent a cost or dilution assessment.
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Exceeds recommended burn rates and/or dilution limits, including cases in which dilution cannot be fully assessed (e.g., due to inadequate disclosure).
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Allows deep or near-term discounts (or the equivalent, such as dividend equivalents on unexercised options) to executives or directors.
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Provides for retirement benefits or equity incentive awards to outside directors if not in line with market practice.
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Allows financial assistance to executives, directors, subsidiaries, affiliates, or related parties that is not in line with market practice.
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Allows plan administrators to benefit from the plan as potential recipients.
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Allows for an overly liberal change in control definition. (This refers to plans that would reward recipients even if the event does not result in an actual change in control or results in a change in control but does not terminate the employment relationship.)
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Allows for post-employment vesting or exercise of options if deemed inappropriate.
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Allows plan administrators to make material amendments without shareholder approval.
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Allows procedure amendments that do not preserve shareholder approval rights.
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Amendment Procedures for
Equity Compensation Plans and Employee Stock Purchase Plans (ESPPs) (Toronto Stock Exchange Issuers)
Vote AGAINST if the amendment procedures do not preserve
shareholder approval rights.
Stock Option Plans for Independent Internal Statutory
Auditors (Japan)
Vote AGAINST.
Matching Share Plans
Vote AGAINST if the matching share
plan does not meet recommended standards, considering holding period, discounts, dilution, participation, purchase price, or performance
criteria.
Employee Stock Purchase Plans or Capital Issuance
in Support Thereof
Voting decisions are generally based on
the Proxy Advisory Firm’s approach to evaluating such proposals.
Director Compensation
Non-Executive Director Compensation
Vote FOR cash-based proposals.
Consider on a CASE-BY-CASE basis
equity-based proposals and patterns of excessive pay.
Bonus Payments (Japan)
Vote FOR if all payments are for
directors or auditors who have served as executives of the company, and AGAINST if any payments are for outsiders.
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Revision Date: March 18, 2020
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Page | 18
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Bonus Payments – Scandals
Vote AGAINST bonus proposals for
a retiring director or continuing director or auditor when culpability can be attributed to the nominee.
Consider on a CASE-BY-CASE basis
bundled bonus proposals for retiring directors or continuing directors or auditors when culpability cannot be attributed to all
nominees.
Severance Agreements
Vesting of Equity Awards upon Change in Control
Vote FOR management proposals seeking
a specific treatment (e.g., double trigger or pro-rata) of equity that vests upon change in control, unless evidence exists
of abuse in historical compensation practices.
Vote AGAINST shareholder proposals
regarding the treatment of equity if:
|
|
·
|
The change in control cash severance provisions are double-triggered; and
|
|
|
·
|
The company has provided a reasonable rationale regarding the treatment of equity.
|
Executive Severance or Termination
Arrangements, including those Related to Executive Recruitment or Retention
Vote FOR such compensation arrangements
if:
|
|
·
|
The primary concerns raised would not result in a negative vote, under these Guidelines, on a management say on pay proposal, or the relevant board or committee member(s);
|
|
|
·
|
The company has provided adequate rationale and/or disclosure; or
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|
|
·
|
Support is recommended as a condition to a major transaction such as a merger.
|
Treatment of Cash Severance Provisions
Vote AGAINST new or materially amended
plans, contracts, or payments that include single trigger change in control cash severance provisions or do not require an actual
change in control in order to be triggered.
Vote FOR shareholder proposals seeking
double triggers on change in control cash severance provisions.
Compensation-Related Shareholder Proposals
Executive and Director Compensation
Vote AGAINST shareholder proposals
that seek to impose new compensation structures or policies; however, consider on a CASE-BY-CASE basis if evidence exists
of abuse in historical compensation practices.
Holding Periods
Vote AGAINST shareholder proposals
requiring mandatory periods for officers and directors to hold company stock.
Submit Severance and Termination Payments for
Shareholder Ratification
Vote FOR shareholder proposals to
submit executive severance agreements for shareholder ratification, if such proposals specify change in control events, supplemental
executive retirement plans, or deferred executive compensation plans, or if ratification is required by the listing exchange.
Auditor Ratification and/or Remuneration
Vote FOR management proposals except
in such cases as indicated below.
Consider on a CASE-BY-CASE basis
if:
|
|
·
|
The Proxy Advisory Firm raises questions of disclosure or auditor independence; or
|
|
|
·
|
Total fees for non-audit services exceed 50 percent of the total auditor fees (including audit-related fees, and tax compliance and preparation fees if applicable).
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|
|
·
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There is evidence of excessive compensation relative to the size and nature of the company.
|
Vote AGAINST if the company has failed
to disclose auditors’ fees.
Vote FOR shareholder proposals asking
the company to present its auditor annually for ratification.
Auditor Independence
Consider on a CASE-BY-CASE basis
shareholder proposals asking companies to prohibit their auditors from engaging in non-audit services (or capping the level of
non-audit services).
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Revision Date: March 18, 2020
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Page | 19
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Audit Firm Rotation
Vote AGAINST shareholder proposals asking for mandatory
audit firm rotation.
Indemnification of Auditors
Vote AGAINST the indemnification
of auditors.
Independent Statutory Auditors (Japan)
Vote AGAINST if the candidate is
or was affiliated with the company, its main bank, or one of its top shareholders.
Vote AGAINST incumbent directors
at companies implicated in scandals or exhibiting poor internal controls.
Vote FOR remuneration as long as
the amount is not excessive (e.g., significant increases should be supported by adequate rationale and disclosure), there
is no evidence of abuse, the recipient’s overall compensation appears reasonable, and the board and/or responsible committee
meet exchange or market standards for independence.
|
|
4-
|
Shareholder Rights and Defenses
|
Advance Notice for Shareholder Proposals
Vote FOR management proposals related to
advance notice period requirements, provided that the period requested is in accordance with applicable law and no material governance
concerns have been identified in connection with the company.
Corporate Documents / Article and Bylaw Amendments or
Related Director Actions
Vote FOR if the change or policy is editorial
in nature or if shareholder rights are protected.
Vote AGAINST if it seeks to impose a negative
impact on shareholder rights or diminishes accountability to shareholders, including where the company failed to opt out of a law
that affects shareholder rights (e.g., staggered board).
With respect to article amendments for Japanese
companies:
|
|
·
|
Vote FOR management proposals to amend a company’s articles to expand its business lines in line with its current industry.
|
|
|
·
|
Vote FOR management proposals to amend a company’s articles to provide for an expansion or reduction in the size of the board, unless the expansion/reduction is clearly disproportionate to the growth/decrease in the scale of the business or raises anti-takeover concerns.
|
|
|
·
|
If anti-takeover concerns exist, vote AGAINST management proposals, including bundled proposals, to amend a company’s articles to authorize the Board to vary the annual meeting record date or to otherwise align them with provisions of a takeover defense.
|
|
|
·
|
Follow the Proxy Advisory Firm’s guidelines with respect to management proposals regarding amendments to authorize share repurchases at the board’s discretion, voting AGAINST proposals unless there is little to no likelihood of a creeping takeover or constraints on liquidity (free float of shares is low), and where the company is trading at below book value or is facing a real likelihood of substantial share sales; or where this amendment is bundled with other amendments which are clearly in shareholders’ interest.
|
Majority Voting Standard
Vote FOR proposals seeking election
of directors by the affirmative vote of the majority of votes cast in connection with a meeting of shareholders, provided they
contain a plurality carve-out for contested elections, and provided such standard does not conflict with applicable law in the
country in which the company is incorporated.
Vote FOR amendments to corporate
documents or other actions promoting a majority standard.
Cumulative Voting
Vote FOR shareholder proposals to
restore or permit cumulative voting.
Vote AGAINST management proposals
to eliminate cumulative voting if the company:
|
|
·
|
Maintains a classified board of directors; or
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|
|
·
|
Maintains a dual class voting structure.
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|
Revision Date: March 18, 2020
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|
Page | 20
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Proposals may be supported irrespective
of classified board status if a company plans to declassify its board or adopt a majority voting standard.
Confidential Voting
Vote FOR management proposals to
adopt confidential voting.
Vote FOR shareholder proposals that
request companies to adopt confidential voting, use independent tabulators, and use independent inspectors of election as long
as the proposals include clauses for proxy contests as follows:
|
|
·
|
In the case of a contested election, management should be permitted to request that the dissident group honors its confidential voting policy.
|
|
|
·
|
If the dissidents agree, the policy remains in place.
|
|
|
·
|
If the dissidents do not agree, the confidential voting policy is waived.
|
Fair Price Provisions
Consider proposals to adopt fair price provisions
on a CASE-BY-CASE basis.
Vote AGAINST fair price provisions
with shareholder vote requirements greater than a majority of disinterested shares.
Poison Pills
Vote AGAINST management proposals
in connection with poison pills or anti-takeover activities (e.g., disclosure requirements or issuances, transfers, or repurchases)
that can be reasonably construed as an anti-takeover measure, based on the Proxy Advisory Firm’s approach to evaluating such
proposals.
DO NOT VOTE AGAINST director remuneration
in connection with poison pill considerations.
Vote FOR shareholder proposals that ask
a company to submit its poison pill for shareholder ratification, or to redeem its pill in lieu thereof, unless:
|
|
·
|
Shareholders have approved adoption of the plan;
|
|
|
·
|
A policy has already been implemented by the company that should reasonably prevent abusive use of the pill; or
|
|
|
·
|
The board had determined that it was in the best interest of shareholders to adopt a pill without delay, provided that such plan would be put to shareholder vote within twelve months of adoption or expire, and if not approved by a majority of the votes cast, would immediately terminate.
|
Consider on a CASE-BY-CASE basis
shareholder proposals to redeem a company’s poison pill.
Proxy Access
Vote FOR proposals to allow shareholders
to nominate directors and have those nominees listed in the company’s proxy statement and on the company’s proxy card,
provided that the criteria meet the Funds’ internal thresholds, provided such standard does not conflict with applicable
law in the country in which the company is incorporated. However, consider on a CASE-BY-CASE basis shareholder and management proposals
that appear on the same agenda.
Vote FOR management proposals also
supported by the Proxy Advisory Firm.
Quorum Requirements
Consider on a CASE-BY-CASE basis
proposals to lower quorum requirements for shareholder meetings below a majority of the shares outstanding.
Exclusive Forum
Vote FOR management proposals to designate Delaware or
New York as the exclusive forum for certain legal actions as defined by the company (“Exclusive Forum”) if the company’s
state of incorporation is the same as its proposed Exclusive Forum, otherwise consider on a CASE-BY-CASE basis.
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Revision Date: March 18, 2020
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Page | 21
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Reincorporation Proposals
Consider proposals to change a company’s
state of incorporation on a CASE-BY-CASE basis.
Vote FOR management proposals not
assessed as:
|
|
·
|
A potential takeover defense; or
|
|
|
·
|
A significant reduction of minority shareholder rights that outweigh the aggregate positive impact, but if so assessed, weighing management’s rationale for the change.
|
Vote FOR management reincorporation
proposals upon which another key proposal, such as a merger transaction, is contingent if the other key proposal is also supported.
Vote AGAINST shareholder reincorporation
proposals not also supported by the company.
Shareholder Advisory Committees
Consider on a CASE-BY-CASE basis
proposals to establish a shareholder advisory committee.
Right to Call Special Meetings
Consider management proposals to permit
shareholders to call special meetings on a CASE-BY-CASE basis.
Vote FOR shareholder proposals that
provide shareholders with the ability to call special meetings when any of the following applies:
|
|
·
|
Company does not currently permit shareholders to do so;
|
|
|
·
|
Existing ownership threshold is greater than 25 percent; or
|
|
|
·
|
Sole concern relates to a net-long position requirement.
|
Written Consent
Vote AGAINST shareholder proposals
seeking the right to act by written consent if the company:
|
|
·
|
Permits shareholders to call special meetings;
|
|
|
·
|
Does not impose supermajority vote requirements on business combinations/actions (e.g., a merger or acquisition) and on bylaw or charter amendments; and
|
|
|
·
|
Has otherwise demonstrated its accountability to shareholders (e.g., the company has reasonably addressed majority-supported shareholder proposals).
|
Consider management proposals to eliminate
the right to act by written consent on a CASE-BY-CASE basis, voting FOR if the above conditions are present.
Vote FOR shareholder proposals seeking
the right to act by written consent if the above conditions are not present.
State Takeover Statutes
Consider on a CASE-BY-CASE basis
proposals to opt-in or out of state takeover statutes (including control share acquisition statutes, control share cash-out statutes,
freeze-out provisions, fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions,
anti-greenmail provisions, and disgorgement provisions).
Supermajority Shareholder Vote Requirement
Vote AGAINST proposals to require
a supermajority shareholder vote and FOR proposals to lower supermajority shareholder vote requirements; except,
Consider on a CASE-BY-CASE basis
if the company has shareholder(s) with significant ownership levels and the retention of existing supermajority requirements would
protect minority shareholder interests.
Time-Phased Voting
Vote AGAINST proposals to implement,
and FOR proposals to eliminate, time-phased or other forms of voting that do not promote a one share, one vote standard.
|
|
5-
|
Capital and Restructuring
|
Consider management proposals to make changes
to the capital structure not otherwise addressed under these Guidelines on a CASE-BY-CASE basis, voting with the Proxy Advisory
Firm’s recommendation, unless a contrary recommendation from the relevant Investment Professional(s) is utilized.
Vote AGAINST proposals authorizing
excessive discretion to a board.
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Revision Date: March 18, 2020
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|
Page | 22
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Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Capital
Common Stock Authorization
Consider proposals to increase the number
of shares of common stock authorized for issuance on a CASE-BY-CASE basis. The Proxy Advisory Firm’s proprietary approach
of determining appropriate thresholds will be utilized in evaluating such proposals. In cases where the requests are above the
allowable threshold, a company-specific qualitative review (e.g., considering rationale and prudent historical usage) will
be utilized.
Vote FOR proposals within the Proxy
Advisory Firm’s allowable thresholds, or those in excess but meeting Proxy Advisory Firm’s qualitative standards, to
authorize capital increases, unless the company states that the stock may be used as a takeover defense.
Vote FOR proposals to authorize capital
increases exceeding the Proxy Advisory Firm’s thresholds when a company’s shares are in danger of being delisted.
Notwithstanding the above, vote AGAINST:
|
|
·
|
Proposals to increase the number of authorized shares of a class of stock if the issuance which the increase is intended to service is not supported under these Guidelines (e.g., merger or acquisition proposals).
|
Dual Class Capital Structures
Vote AGAINST:
|
|
·
|
Proposals to create or perpetuate dual class capital structures with unequal voting rights (e.g., exchange offers, conversions, and recapitalizations) unless supported by the Proxy Advisory Firm (e.g., utilize a one share, one vote standard, contains a sunset provision of five years or fewer, to avert bankruptcy or generate non-dilutive financing, or not designed to increase the voting power of an insider or significant shareholder).
|
|
|
·
|
Proposals to increase the number of authorized shares of the class of stock that has superior voting rights in companies that have dual class capital structures.
|
Vote FOR proposals to eliminate dual
class capital structures.
General Share Issuances / Increases in Authorized
Capital
Consider specific issuance requests on a
Case-by-Case basis based on the proposed use and the company’s rationale.
Voting decisions to determine support for
requests for general issuances (with or without preemptive rights), authorized capital increases, convertible bonds issuances,
warrants issuances, or related requests to repurchase and reissue shares, will be based on the Proxy Advisory Firm’s assessment.
Preemptive Rights
Consider on a CASE-BY-CASE basis
shareholder proposals that seek preemptive rights or management proposals that seek to eliminate them. In evaluating proposals
on preemptive rights, consider the size of a company and the characteristics of its shareholder base.
Adjustments to Par Value of Common Stock
Vote FOR management proposals to
reduce the par value of common stock, unless doing so raises other concerns not otherwise supported under these Guidelines.
Preferred Stock
Utilize the Proxy Advisory Firm's approach
for evaluating issuances or authorizations of preferred stock, taking into account the Proxy Advisory Firm's support of special
circumstances, such as mergers or acquisitions, as well as the following criteria:
Consider on a CASE-BY-CASE basis
proposals to increase the number of shares of blank check preferred shares or preferred stock authorized for issuance. This approach
incorporates both qualitative and quantitative measures, including a review of:
|
|
·
|
Past performance (e.g., board governance, shareholder returns, and historical share usage); and
|
|
|
·
|
The current request (e.g., rationale, whether shares are blank check and declawed, and dilutive impact as determined through the Proxy Advisory Firm’s model for assessing appropriate thresholds).
|
Vote AGAINST proposals authorizing
the issuance of preferred stock or creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution,
and other rights (“blank check” preferred stock).
|
Revision Date: March 18, 2020
|
|
Page | 23
|
Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Vote FOR proposals to issue or create
blank check preferred stock in cases when the company expressly states that the stock will not be used as a takeover defense or
not utilize a disparate voting rights structure.
Vote AGAINST where the company expressly
states that, or fails to disclose whether, the stock may be used as a takeover defense.
Vote FOR proposals to authorize or
issue preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and
the terms of the preferred stock appear reasonable.
Preferred Stock (International)
Voting decisions should generally be based
on the Proxy Advisory Firm’s approach, including:
|
|
·
|
Vote FOR the creation of a new class of preferred stock or issuances of preferred stock up to 50 percent of issued capital unless the terms of the preferred stock would adversely affect the rights of existing shareholders.
|
|
|
·
|
Vote FOR the creation/issuance of convertible preferred stock as long as the maximum number of common shares that could be issued upon conversion meets the Proxy Advisory Firm’s guidelines on equity issuance requests.
|
|
|
·
|
Vote AGAINST the creation of:
|
(1) A new class of preference
shares that would carry superior voting rights to the common shares, or
(2) Blank check preferred stock,
unless the board states that the authorization will not be used to thwart a takeover bid.
Shareholder Proposals Regarding Blank Check Preferred
Stock
Vote FOR shareholder proposals requesting
to have shareholder ratification of blank check preferred stock placements, other than those shares issued for the purpose of raising
capital or making acquisitions in the normal course of business.
Share Repurchase Programs
Vote FOR management proposals to
institute open-market share repurchase plans in which all shareholders may participate on equal terms, but vote AGAINST
plans with terms favoring selected parties.
Vote FOR management proposals to
cancel repurchased shares.
Vote AGAINST proposals for share
repurchase methods lacking adequate risk mitigation or exceeding appropriate volume or duration parameters for the market.
Consider shareholder proposals seeking share
repurchase programs on a CASE-BY-CASE basis, giving primary consideration to input from the relevant Investment Professional(s).
Stock Distributions: Splits and Dividends
Vote FOR management proposals to
increase common share authorization for a stock split, provided that the increase in authorized shares falls within the Proxy Advisory
Firm’s allowable thresholds.
Reverse Stock Splits
Consider on a CASE-BY-CASE basis
management proposals to implement a reverse stock split, taking into account management’s rationale and/or disclosure if
the split constitutes a capital increase effectively exceeding the Proxy Advisory Firm’s allowable threshold due to the lack
of a proportionate reduction in the number of shares authorized.
Allocation of Income and Dividends
With respect to Japanese and
South Korean companies, consider management proposals concerning allocation of income and the distribution of dividends,
including adjustments to reserves to make capital available for such purposes, on a CASE-BY-CASE basis, voting with the
Proxy Advisory Firm’s recommendations to oppose such proposals when:
|
|
·
|
The dividend payout ratio has been consistently below 30 percent without adequate explanation; or
|
|
|
·
|
The payout is excessive given the company’s financial position.
|
Vote FOR such management proposals
by companies in other markets.
|
Revision Date: March 18, 2020
|
|
Page | 24
|
Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Vote AGAINST proposals where companies
are seeking to establish or maintain disparate dividend distributions between stockholders of the same share class (e.g.,
long-term stockholders receiving a higher dividend ratio (“Loyalty Dividends”)).
In any market, in the event
multiple proposals regarding dividends are on the same agenda, consider on a CASE-BY-CASE basis.
Stock (Scrip) Dividend Alternatives
Vote FOR most stock (scrip) dividend
proposals, but vote AGAINST proposals that do not allow for a cash option unless management demonstrates that the cash option
is harmful to shareholder value.
Tracking Stock
Consider the creation of tracking stock
on a CASE-BY-CASE basis, giving primary consideration to the input from the relevant Investment Professional(s).
Capitalization of Reserves
Vote FOR proposals to capitalize
the company’s reserves for bonus issues of shares or to increase the par value of shares, unless concerns not otherwise supported
under these Guidelines are raised by the Proxy Advisory Firm.
Debt Instruments and Issuance Requests (International)
Vote AGAINST proposals authorizing
excessive discretion to a board to issue or set terms for debt instruments (e.g., commercial paper).
Vote FOR debt issuances for companies
when the gearing level (current debt-to-equity ratio) is not excessive as defined by the Proxy Advisory Firm’s thresholds.
Vote AGAINST proposals where the
issuance of debt will result in an excessive gearing level as defined by the Proxy Advisory Firm’s thresholds, or for which
inadequate disclosure precludes calculation of the gearing level, unless the Proxy Advisory Firm’s approach to evaluating
such requests results in support of the proposal.
Acceptance of Deposits (India)
Voting decisions generally are based on
the Proxy Advisory Firm’s approach to evaluating such proposals.
Debt Restructurings
Consider on a CASE-BY-CASE basis
proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan.
Financing Plans
Vote FOR the adoption of financing
plans if they are in the best economic interests of shareholders.
Investment of Company Reserves (International)
Consider proposals on a case-by-case
basis.
Restructuring
Mergers and Acquisitions, Special Purpose Acquisition
Corporations (SPACs) and Corporate Restructurings
Vote FOR a proposal not typically
supported under these Guidelines if a key proposal, such as a merger transaction, is contingent upon its support and a vote FOR
is recommended by the Proxy Advisory Firm or relevant Investment Professional(s).
Votes will be reviewed on a case-by-case
basis with voting decisions based on the Proxy Advisory Firm’s approach to evaluating such proposals if no input is provided
by the relevant Investment Professional(s).
Waiver on Tender-Bid Requirement
Consider proposals on a CASE-BY-CASE
basis if seeking a waiver for a major shareholder or concert party from the requirement to make a buyout offer to minority shareholders,
voting FOR when little concern of a creeping takeover exists and the company has provided a reasonable rationale for the
request.
|
Revision Date: March 18, 2020
|
|
Page | 25
|
Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Related Party Transactions
Vote FOR approval of such transactions,
unless the agreement requests a strategic move outside the company’s charter, contains unfavorable or high-risk terms (e.g.,
deposits without security interest or guaranty), or is deemed likely to have a negative impact on director or related party independence.
|
|
6-
|
Environmental, Social, and Governance Issues
|
Environmental and Social Proposals
Boards of directors
and company management are responsible for guiding the corporation in connection with matters that are most often the subject of
shareholder proposals on environmental and social issues. Such matters may include:
|
|
·
|
Ensuring that the companies they oversee comply with applicable legal, regulatory, and ethical standards;
|
|
|
·
|
Managing risk effectively; and
|
|
|
·
|
Assessing and addressing matters that may have a financial impact on shareholder value.
|
Vote AGAINST shareholder proposals
seeking to:
|
|
·
|
Dictate corporate conduct;
|
|
|
·
|
Impose excessive costs or restrictions; or
|
|
|
·
|
Duplicate policies already substantially in place.
|
Shareholder proposals will
be considered CASE-BY-CASE if it appears that the
|
|
·
|
Information requested would be helpful to shareholders, and is not duplicative to existing disclosed policies or practices;
|
|
|
·
|
Company has been subject to significant controversies, litigation, fines, or has suffered punitive damages, penalties, or reputational risk in connection with the relevant issue; or
|
|
|
·
|
Issue is material to the company.
|
Vote FOR shareholder proposals if
it appears that:
|
|
·
|
Stewardship has fallen short or disclosure practices / policy development lags that of its peers.
|
Approval of Donations
Vote FOR proposals if they are for
single- or multi-year authorities and prior disclosure of amounts is provided. Otherwise, vote AGAINST such proposals.
Routine Management Proposals
Consider proposals on a CASE-BY-CASE
basis when the Proxy Advisory Firm recommends voting AGAINST.
Authority to Call Shareholder Meetings on Less
than 21 Days’ Notice
For companies in the United Kingdom,
consider on a CASE-BY-CASE basis, factoring in whether the company has provided clear disclosure of its compliance with
any hurdle conditions for the authority imposed by applicable law and has historically limited its use of such authority to time-sensitive
matters.
Approval of Financial Statements and Director
and Auditor Reports
Vote AGAINST if there are concerns
regarding inadequate disclosure, remuneration arrangements (including severance/termination payments exceeding local standards
for multiples of annual compensation), or consulting agreements with non-executive directors.
Consider on a CASE-BY-CASE basis
if there are other concerns regarding severance/termination payments.
Vote AGAINST if there is concern
about the company’s financial accounts and reporting, including related party transactions.
Vote AGAINST board-issued reports
receiving a negative recommendation from the Proxy Advisory Firm due to concerns regarding independence of the board or the presence
of non-independent directors on the audit committee.
|
Revision Date: March 18, 2020
|
|
Page | 26
|
Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Vote FOR if the only reason for a
negative recommendation by the Proxy Advisory Firm is to express disapproval of broader practices of the company or its board.
Other Business
Vote AGAINST proposals for Other
Business.
Adjournment
|
|
·
|
Vote FOR when presented with a primary proposal such as a merger or corporate restructuring that is also supported.
|
|
|
·
|
Consider other circumstances on a CASE-BY-CASE basis.
|
Changing Corporate Name
Vote FOR management proposals requesting
a change in corporate name.
Multiple Proposals
Multiple proposals of a similar nature presented
as options to the course of action favored by management may all be voted FOR, provided that:
|
|
·
|
Support for a single proposal is not operationally required;
|
|
|
·
|
No one proposal is deemed superior in the interest of the Fund(s); and
|
|
|
·
|
Each proposal would otherwise be supported under these Guidelines.
|
Vote AGAINST any proposals that would
otherwise be opposed under these Guidelines.
Bundled Proposals
Vote FOR if all of the bundled items
are supported by these Guidelines.
Consider on a CASE-BY-CASE basis
if one or more items are not supported by these Guidelines and/or the Proxy Advisory Firm deems the negative impact, on balance,
to outweigh any positive impact.
Moot Proposals
This instruction is in regard to items for
which support has become moot (e.g., a director for whom support has become moot since the time the individual was nominated
(e.g., due to death, disqualification, or determination not to accept appointment)); WITHHOLD support if recommended
by the Proxy Advisory Firm.
Approving New Classes or Series of Shares
Vote FOR the establishment of new
classes or series of shares.
Hire and Terminate Sub-Advisors
Vote FOR management proposals that
authorize the board to hire and terminate sub-advisors.
Master-Feeder Structure
Vote FOR the establishment of a master-feeder
structure.
Establish Director Ownership Requirement
Vote AGAINST shareholder proposals
for the establishment of a director ownership requirement. All other matters should be examined on a CASE-BY-CASE basis.
|
Revision Date: March 18, 2020
|
|
Page | 27
|
Proxy Voting Procedures and Guidelines for
the Voya Funds and Advisor
Exhibit 1 – Voting
Members of the Proxy Group
|
Name
|
Title or Affiliation
|
|
Kevin M. Gleason
|
Senior Vice President and Chief Compliance Officer of the Voya Family of Funds
|
|
|
|
|
Jason Kadavy
|
Vice President, Reporting, Fund Accounting, Voya Investments, LLC
|
|
|
|
|
Todd Modic
|
Senior Vice President, Voya Funds Services, LLC and Voya Investments, LLC; and Chief Financial Officer of the Voya Family of Funds
|
|
|
|
|
Maria Anderson
|
Vice President, Fund Compliance, Voya Funds Services, LLC
|
|
|
|
|
Sara Donaldson
|
Proxy Coordinator for the Voya Family of Funds and Vice President, Investment Stewardship, Voya Funds Services, LLC
|
|
|
|
|
Harley Eisner
|
Vice President, Financial Analysis, Voya Funds Services, LLC
|
|
|
|
|
Andrew Schlueter
|
Vice President, Mutual Funds Operations, Voya Funds Services LLC
|
|
|
|
|
Joanne Osberg, Esq.
|
Vice President and Counsel II, Voya Funds Services, LLC
|
|
|
|
|
Jonathan Nash
|
Senior Vice President Risk Management, Voya Investments, LLC
|
Effective as of April 1, 2020
|
Revision Date: March 18, 2020
|
|
Page | 28
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Item 8. Portfolio Managers of Closed-End
Management Investment Companies.
(a)(1)
Portfolio Management. The following individuals share responsibility for the day-to-day management of the Fund’s
portfolio:
Paul
Zemsky is the chief investment officer and founder of the Multi-Asset Strategies and Solutions
Team (MASS) at Voya Investment Management. He is responsible for the firm’s suite of value-added, customized and off-the-shelf
products and solutions that are supported by the team’s asset allocation, manager research, quantitative research, portfolio
implementation and multi-manager capabilities. Prior to joining the firm, he co-founded CaliberOne Private Funds Management, a
macro hedge fund. Paul began his career at JPMorgan Investment Management, where he held a number of key positions, including head
of investments for over $300 Billion of Fixed Income assets. Paul is a member of the firm’s Management Committee and a board
member of Pomona Capital. He holds a dual degree in finance and electrical engineering from the Management and Technology Program
at the University of Pennsylvania and holds the Chartered Financial Analyst® designation.
Vincent Costa
is head of the value and global quantitative equities teams and also serves as a portfolio manager for the active quantitative
and fundamental large cap value strategies. Vinnie joined Voya Investment Management (Voya IM) in April 2006 as head of portfolio
management for quantitative equity. Prior to joining Voya IM, he managed quantitative equity investments at both Merrill Lynch
Investment Management and Bankers Trust Company. He earned a BS in quantitative business analysis from Pennsylvania State University
and an MBA in finance from the New York University Stern School of Business, and holds the Chartered Financial Analyst® designation.
Peg DiOrio
is the head of quantitative equities at Voya Investment Management and serves as a portfolio manager for the research enhanced
index natural resources strategy. Prior to joining the firm, she was a quantitative analyst with Alliance Bernstein/Sanford C.
Bernstein for sixteen years where she was responsible for multivariate and time series analysis for low volatility strategies,
global equities, REITs and options. Previously she was a senior investment planning analyst with Sanford C. Bernstein. Peg received
an MS in Applied Mathematics, Statistics and Operations Research from the Courant Institute of Mathematical Sciences, NYU and a
BS from SUNY Stony Brook. She holds the Chartered Financial Analyst® designation. She formerly served as president of the Society
of Quantitative Analysts and continues to serve on the board of directors.
Steven Wetter
is a portfolio manager on the global quantitative equity team at Voya Investment Management responsible for the index, research
enhanced index and smart beta strategies. Prior to joining the firm, he served as Co-Head of International Indexing responsible
for managing ETFs, index funds and quantitative portfolios at BNY Mellon, and formerly held similar positions at Northern Trust
and Bankers Trust. Steve earned a BA from the University of California at Berkeley, and an MBA in finance (with distinction) from
New York University Stern School of Business.
(a)(2V-iii) Other Accounts
Managed
The following table show the number of accounts
and total assets in the accounts managed by the portfolio managers of the Sub-Adviser as of February 29, 2020, unless otherwise
indicated.
Voya Asia Pacific High Dividend Equity Income
Fund (IAE)
|
|
Mutual Funds
Registered Investment Companies
|
Other Pooled Investment
Vehicles
|
Other Accounts
|
|
Portfolio Managers
|
Number of Accounts
|
Total Assets
(rounded to the nearest million)
|
Number of Accounts
|
Total Assets
(rounded to the nearest million)
|
Number of Accounts
|
Total Assets
(rounded to the nearest million)
|
|
Paul Zemsky
|
53
|
$ 18,042,852,845
|
100
|
$ 3,508,500,264
|
0
|
$ 0
|
|
Vincent Costa
|
23
|
$ 10,830,799,097
|
10
|
$ 1,513,738,579
|
8
|
$ 342,693,271
|
|
Peg DiOrio
|
15
|
$ 4,451,487,471
|
0
|
$ 0
|
2
|
$ 84,876,690
|
|
Steven Wetter
|
33
|
$ 20,933,405,097
|
2
|
$ 1,167,121,115
|
5
|
$ 688,963,309
|
(a)(2)(iv) Conflicts of Interest
A portfolio manager may be subject to potential
conflicts of interest because the portfolio manager is responsible for other accounts in addition to the Fund. These other accounts
may include, among others, other mutual funds, separately managed advisory accounts, commingled trust accounts, insurance, wrap
fee programs and hedge funds. Potential conflicts may arise out of the implementation of differing investment strategies for the
portfolio manager’s various accounts, the allocation of investment opportunities among those accounts or differences in the
advisory fees paid by the portfolio manager’s accounts.
A potential conflict of interest may arise
as a result of the portfolio manager’s responsibility for multiple accounts with similar investment guidelines. Under these
circumstances, a potential investment may be suitable for more than one of the portfolio manager’s accounts, but the quantity
of the investment available for purchase is less than the aggregate amount the accounts would ideally devote to the opportunity.
Similar conflicts may arise when multiple accounts seek to dispose of the same investment.
A portfolio manager may also manage accounts
whose objectives and policies differ from those of the Fund. These differences may be such that under certain circumstances, trading
activity appropriate for one account managed by the portfolio manager may have adverse consequences for another account managed
by the portfolio manager. For example, if an account were to sell a significant position in a security, which could cause the market
price of that security to decrease, while the Fund maintained its position in that security.
A potential conflict may arise when a portfolio
manager is responsible for accounts that have different advisory fees — the difference in the fees may create an incentive
for the portfolio manager to favor one account over another, for example, in terms of access to particularly appealing investment
opportunities. This conflict may be heightened where an account is subject to a performance-based fee.
As part of its compliance program, VIM
has adopted policies and procedures reasonably designed to address the potential conflicts of interest described above. Finally,
a potential conflict of interest may arise because the investment mandates for certain other accounts, such as hedge funds, may
allow extensive use of short sales which, in theory, could allow them to enter into short positions in securities where other accounts
hold long positions. Voya IM has policies and procedures reasonably designed to limit and monitor short sales by the other accounts
to avoid harm to the Fund.
(a)(3) Compensation
Compensation consists of: (i) a fixed base
salary; (ii) a bonus, which is based on Voya IM performance, one-, three-, and five-year pre-tax performance of the accounts the
portfolio managers are primarily and jointly responsible for relative to account benchmarks, peer universe performance, and revenue
growth and net cash flow growth (changes in the accounts’ net assets not attributable to changes in the value of the accounts’
investments) of the accounts they are responsible for; and (iii) long-term equity awards tied to the performance of our parent
company, Voya Financial, Inc. and/or a notional investment in a predefined set of Voya IM sub-advised funds.
Portfolio managers are also eligible to
receive an annual cash incentive award delivered in some combination of cash and a deferred award in the form of Voya stock. The
overall design of the annual incentive plan was developed to tie pay to both performance and cash flows, structured in such a way
as to drive performance and promote retention of top talent. As with base salary compensation, individual target awards are determined
and set based on external market data and internal comparators. Investment performance is measured on both relative and absolute
performance in all areas.
The measures for each team are outlined
on a “scorecard” that is reviewed on an annual basis. These scorecards measure investment performance versus benchmark
and peer groups over one-, three-, and five-year periods; and year-to-date net cash flow (changes in the accounts’ net assets
not attributable to changes in the value of the accounts’ investments) for all accounts managed by each team. The results
for overall Voya IM scorecards are typically calculated on an asset weighted performance basis of the Investment professionals’
performance measures for bonus determinations are weighted by 25% being attributable to the overall Voya IM performance and 75%
attributable to their specific team results (65% investment performance, 5% net cash flow, and 5% revenue growth).
Voya IM’s long-term incentive plan
is designed to provide ownership-like incentives to reward continued employment and to link long-term compensation to the financial
performance of the business. Based on job function, internal comparators and external market data, employees may be granted long-term
awards. All senior investment professionals participate in the long-term compensation plan. Participants receive annual awards
determined by the management committee based largely on investment performance and contribution to firm performance. Plan awards
are based on the current year’s performance as defined by the Voya IM component of the annual incentive plan. Awards typically
include a combination of performance shares, which vest ratably over a three-year period, and Voya restricted stock and/or a notional
investment in a predefined set of Voya IM sub-advised funds, each subject to a three-year cliff-vesting schedule.
If a portfolio manager’s base salary
compensation exceeds a particular threshold, he or she may participate in Voya’s deferred compensation plan. The plan provides
an opportunity to invest deferred amounts of compensation in mutual funds, Voya stock or at an annual fixed interest rate. Deferral
elections are done on an annual basis and the amount of compensation deferred is irrevocable.
(a)(4) Ownership of Securities
The following table shows the dollar range
of shares of the Fund owned by each team member as of February 29, 2020, including investments by their immediate family members
and amounts invested through retirement and deferred compensation plans.
Ownership:
|
Portfolio Manager
|
|
Dollar Range of Fund Shares Owned
|
|
Paul Zemsky
|
|
0
|
|
Vincent Costa
|
|
0
|
|
Peg DiOrio
|
|
0
|
|
Steven Wetter
|
|
0
|
(b) None.
Item 9. Purchases of Equity Securities by
Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote
of Security Holders.
Not applicable.