Five Practical Improvements for Modernizing Executive Compensation Disclosure
This article outlines five practical ideas to reshape and simplify executive compensation disclosure. They aim to inspire a broader conversation about what compensation disclosure should achieve in a modern, stakeholder-aware capital market.
Reframing Compensation Actually Paid, TSRs, and the CEO Pay Ratio into the SCT
In the first installment of Infinite Equity’s Five Practical Improvements for Modernizing Executive Compensation Disclosure, we explore combining the Summary Compensation Table with the Pay versus Performance Table Disclosure, CEO Pay Ratio, and 10-K Performance Graph. The traditional approach to equity compensation reporting is outdated and fragmented – the four independent tables create confusion and…
Reframing Stock Vesting, Option Exercises, and Compensation Actually Paid into the Outstanding Equity Table
In the second installment of Infinite Equity’s Five Practical Improvements for Modernizing Executive Compensation Disclosure, we recommend streamlining three important and useful tables to get a better overview of compensation. The three independent tables in consideration are — the Outstanding Equity Awards at Fiscal Year-End Table, the Options Exercised and Stock Vested Table, and the…
Revisiting the Termination & Change-In-Control Disclosure
In the third installment of Infinite Equity’s Five Practical Improvements for Modernizing Executive Compensation Disclosure, we review potential revisions to Item 402(j) of Regulation S-K: Potential payments upon termination or change-in-control. Background Item 402(j) of Regulation S-K requires that companies describe, explain, and estimate the specific payments that a Named Executive Officer would receive in…
Rightsizing the Number of NEOs: Why Less is More
This position paper proposes a modernization of the SEC’s executive compensation disclosure requirements by limiting the number of Named Executive Officers (NEOs) disclosed in proxy statements to three roles: Chief Executive Officer (CEO), Chief Financial Officer (CFO), and the single highest paid executive. The current requirement to disclose the CEO, CFO, and the next three…
Leveraging Modern Technologies
In the final installment of Infinite Equity’s Five Practical Improvements for Modernizing Executive Compensation Disclosure, we recommend utilizing contemporary technologies in Executive Compensation Disclosures. Infinite Equity has already proposed four significant changes to the Executive Compensation disclosure landscape: Alongside these streamlined disclosures, more modern tools could further enhance the value of this information for a…
Pay Versus Performance Disclosures: Potential Alternatives for “Compensation Actually Paid”
On June 26th, the SEC will be hosting roundtables focusing on executive compensation disclosures. One of the anticipated discussion points will be Pay versus Performance and the definition of “Compensation Actually Paid.” We believe this is a timely opportunity to revisit the strengths and weaknesses of alternative definitions of compensation. Pay versus Performance disclosure is…