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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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 the Voya Funds and Advisor
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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Revision Date: March 18, 2020
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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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|
·
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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 the Voya Funds and Advisor
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·
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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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|
|
·
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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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·
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The market standard
is stricter than the Fund’s guidelines; or
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|
|
·
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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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|
1-
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The Board of Directors
|
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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|
·
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Relevant committee
chair
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·
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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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·
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Bundled slates of
directors (e.g., Canada, France, Hong Kong, or Spain);
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·
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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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·
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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 the Voya Funds and Advisor
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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|
·
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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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·
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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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·
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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.
|
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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|
·
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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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|
·
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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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Revision Date: March 18, 2020
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Proxy
Voting Procedures and Guidelines for the Voya Funds and Advisor
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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|
·
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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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Revision Date: March 18, 2020
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Proxy
Voting Procedures and Guidelines for the Voya Funds and Advisor
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·
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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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|
·
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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.
|
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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|
·
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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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·
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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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Revision Date: March 18, 2020
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Page | 14
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Proxy
Voting Procedures and Guidelines for the Voya Funds and Advisor
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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|
o
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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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Revision Date: March 18, 2020
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Page | 15
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Proxy
Voting Procedures and Guidelines for the Voya Funds and Advisor
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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Page | 16
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Proxy
Voting Procedures and Guidelines for the Voya Funds and Advisor
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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·
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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).
|
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).
|
|
|
·
|
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.
|
Vote
ABSTAIN:
|
|
·
|
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.
|
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 the Voya Funds and Advisor
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.
|
|
|
·
|
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.
|
|
|
·
|
Amendment adds performance-based goals to comply
with Section 162(m) of OBRA.
|
|
|
·
|
Cash or cash-and-stock bonus components are being
approved for exemption from taxes under Section 162(m) of OBRA.
|
|
|
o
|
Give primary consideration to management’s
assessment that such plan meets the requirements for exemption of performance-based compensation.
|
Vote
AGAINST if the plan:
|
|
·
|
Exceeds recommended costs (U.S.
or Canada).
|
|
|
·
|
Incorporates share allocation disclosure methods
that prevent a cost or dilution assessment.
|
|
|
·
|
Exceeds recommended
burn rates and/or dilution limits, including cases in which dilution cannot be fully assessed (e.g., due to inadequate
disclosure).
|
|
|
·
|
Allows deep or near-term
discounts (or the equivalent, such as dividend equivalents on unexercised options) to executives or directors.
|
|
|
·
|
Provides for retirement
benefits or equity incentive awards to outside directors if not in line with market practice.
|
|
|
·
|
Allows financial
assistance to executives, directors, subsidiaries, affiliates, or related parties that is not in line with market practice.
|
|
|
·
|
Allows plan administrators
to benefit from the plan as potential recipients.
|
|
|
·
|
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.)
|
|
|
·
|
Allows for post-employment
vesting or exercise of options if deemed inappropriate.
|
|
|
·
|
Allows plan administrators
to make material amendments without shareholder approval.
|
|
|
·
|
Allows procedure
amendments that do not preserve shareholder approval rights.
|
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.
|
Revision Date: March 18, 2020
|
|
Page | 18
|
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
|
|
|
·
|
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).
|
|
|
·
|
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).
|
Revision Date: March 18, 2020
|
|
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
|
|
|
·
|
Maintains a dual
class voting structure.
|
|
Revision Date: March 18, 2020
|
|
Page | 20
|
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.
|
Revision Date: March 18, 2020
|
|
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.
|
Revision Date: March 18, 2020
|
|
Page | 22
|
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:
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|
·
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Support for a single
proposal is not operationally required;
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·
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No one proposal is
deemed superior in the interest of the Fund(s); and
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·
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Each proposal would
otherwise be supported under these Guidelines.
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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.
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Revision Date: March 18, 2020
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Page | 27
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Proxy
Voting Procedures and Guidelines for the Voya Funds and Advisor
Exhibit
1 – Voting Members of the Proxy Group
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Name
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Title
or Affiliation
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Kevin M. Gleason
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Senior Vice President and Chief Compliance Officer of the Voya
Family of Funds
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|
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Jason Kadavy
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Vice President, Reporting, Fund Accounting, Voya Investments,
LLC
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Todd Modic
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Senior Vice President, Voya Funds Services, LLC and Voya Investments,
LLC; and Chief Financial Officer of the Voya Family of Funds
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Maria Anderson
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Vice President, Fund Compliance, Voya Funds Services, LLC
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Sara Donaldson
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Proxy Coordinator for the Voya Family of Funds and Vice President,
Investment Stewardship, Voya Funds Services, LLC
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|
|
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Harley Eisner
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Vice President, Financial Analysis, Voya Funds Services, LLC
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|
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Andrew Schlueter
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Vice President, Mutual Funds Operations, Voya Funds Services LLC
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|
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Joanne Osberg, Esq.
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Vice President and Counsel
II, Voya Funds Services, LLC
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|
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Jonathan Nash
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Senior Vice President
Risk Management, Voya Investments, LLC
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Effective
as of April 1, 2020
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Revision Date: March 18, 2020
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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:
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.
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.
(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 Emerging Markets High Dividend Equity Fund
(IHD)
|
|
Mutual Funds Registered Investment Companies
|
Other Pooled Investment Vehicles
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Other Accounts
|
|
Portfolio Managers
|
Number of Accounts
|
Total Assets (rounded to nearest million)
|
Number of Accounts
|
Total Assets (rounded to nearest million)
|
Number of Accounts
|
Total Assets (rounded to nearest million)
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|
Vincent Costa
|
23
|
$ 10,830,799,097
|
10
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$ 1,513,738,579
|
8
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$ 342,693,271
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Peg DiOrio
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15
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$ 4,451,487,471
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0
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$ 0
|
2
|
$ 84,876,690
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Steven Wetter
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33
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$ 20,933,405,097
|
2
|
$ 1,167,121,115
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5
|
$ 688,963,309
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Paul Zemsky
|
53
|
$ 18,042,852,845
|
100
|
$ 3,508,500,264
|
0
|
$ 0
|
(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 Trust 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 Trust Shares Owned
|
|
|
Vincent Costa
|
|
$
|
$1 - $10,000
|
|
|
Peg DiOrio
|
|
|
0
|
|
|
Steven Wetter
|
|
|
0
|
|
|
Paul Zemsky
|
|
|
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.