The board of Healthways is calling on investors to ignore a recommendation by proxy advisory firm Institutional Shareholder Services to vote against the company's executive compensation plan.

ISS recently advised shareholders to vote 'no' at the annual shareholders' meeting Thursday on the pay packages for CEO Ben Leedle and his leadership team. The main point of contention is the massive stock option grant Leedle received late last year as an extra retention incentive. ISS officials contend the options, which begin to vest in late 2013 and have a strike price well above Healthways' current share price, aren't tied closely enough to Healthways' performance.

In a supplement to their proxy statement filed last Friday, Healthways board members came to the defense of their CEO's pay package — and to the defense of Leedle himself, saying the 51-year-old is "uniquely positioned to lead" the company through its strategic shift.

"It is in the best interest of the Company’s stockholders to retain Mr. Leedle and the performance retention award is designed to enhance the retention incentives of Mr. Leedle," the directors wrote.

The board also points out that more than 80 percent of Leedle's total compensation is at risk and details how he has been paid only about 36 percent of the total realizable stock and option rewards in the past three years. On top of that, the big option award that is of concern to ISS should be considered separately, directors wrote.

"The Retention Award was not granted by the Committee as part of the 2011 compensation decisions, but rather in light of the evaluation late in 2011 of the Company’s business strategy and the management team needed to implement it over the next several years," reads the company's statement. "The value of the Retention Award would not be received until it vests in the future and the Company’s stock price has appreciated significantly from current levels."

Healthways' spat with ISS comes shortly after investors in hospital chain Community Health Systems voted down the hospital chain's compensation plans. That vote — like all other say-on-pay referenda — was non-binding, but CHS officials said they will take the result into account.

Healthways shares (Ticker: HWAY) were changing hands Tuesday afternoon at about $6.70, almost 50 percent below the $9.96 strike price of Leedle's November 2011 options.