In recent proxy seasons, SEC staff have issued numerous comment letters focused on executive compensation disclosures—particularly Pay Versus Performance (PvP) calculations, footnote clarity, and consistency across compensation tables—underscoring how easily errors can arise in this area12. Proxy season is not just a compliance deadline; it is a reputational moment. Errors in grant-date fair values, equity award modifications, or inconsistent footnotes do not simply lead to comment letters—they invite investor scrutiny and, in some cases, public amendments.
This article explores the hidden costs of preparing proxy tables in-house and offers a strategic decision framework for navigating build-versus-buy choices in the 2025 proxy season and beyond.
Many public companies face the same proxy season reality: increasingly complex compensation tables that require specialized expertise internal teams may not fully possess year-round. While the choice between “keeping it in-house” versus “outsourcing” may appear straightforward, a closer analysis reveals hidden costs and risks that many issuers are no longer willing to ignore.
The costs of internal proxy table preparation extend far beyond surface-level expenses. They affect strategic focus, compliance risk, and long-term organizational efficiency. Recognizing these costs enables smarter resource allocation and stronger disclosure outcomes.
The Real Economics of Internal Proxy Preparation
Direct Costs: More Than Meets the Eye
Specialized Personnel Requirements
Managing proxy compensation tables internally requires a rare intersection of skills, including:
- ASC 718 accounting expertise for complex equity valuations
- Fluency in SEC executive compensation disclosure requirements
- Advanced modeling capabilities for Pay Versus Performance calculations
- Legal judgment for disclosure nuance and internal consistency
Companies that hire senior equity compensation or proxy specialists often incur fully loaded annual costs in the low- to mid-six-figure range once salary, benefits, recruiting, and overhead are included3. These costs reflect not only compensation but the challenge of sourcing and retaining highly specialized talent for work that peaks seasonally.
Technology and Infrastructure Requirements
Internal proxy preparation frequently requires:
- Specialized valuation and reporting tools, often costing $15,000–$50,000 annually depending on scale and complexity4
- Secure document management and version control systems
- Audit-ready modeling and disclosure support
- Cross-functional collaboration tools to support multi-stage review
While Excel may support basic calculations, many issuers invest in layered systems to ensure accuracy, control, and defensibility under regulatory scrutiny.
Hidden Costs: Strategic Trade-Offs
Opportunity Cost of Internal Focus
Proxy season absorbs significant internal capacity. When finance, HR, and legal teams collectively spend 200–400 hours preparing proxy tables, strategic work inevitably suffers.
For example, a cross-functional team investing 300 hours at a fully loaded rate of $75 per hour represents $22,500 in direct internal cost, before accounting for the value of strategic initiatives delayed or abandoned during that period5. The greater loss is often invisible: compensation design work, talent analytics, or forward-looking planning that never occurs.
Coordination and Fragmentation Risks
Proxy table preparation spans multiple functions:
- Payroll (cash compensation data)
- Stock administration (equity award activity)
- Accounting (ASC 718 valuation)
- Legal (disclosure language and compliance)
- Internal audit (tie-outs and verification)
Each handoff introduces risk, timing delays, data mismatches, and additional review cycles that compound pressure during the filing window.
Three Proxy Preparation Models — and Where Most Companies Land
In practice, public companies tend to fall into one of three proxy preparation models.
Fully In-House.
Typically limited to very large issuers with permanent, specialized internal resources or very small filers that rely heavily on outside counsel and board advisors. These organizations have either the scale or simplicity to absorb proxy preparation internally on a recurring basis.
Fully Outsourced.
Used selectively and often driven by complexity, turnover, or heightened risk sensitivity rather than company size alone. Companies may adopt this model following acquisitions, leadership transitions, or when facing particularly complex equity or Pay Versus Performance disclosures.
Hybrid (Most Common).
Routine data collection and core disclosures are handled internally, while specialized components, such as Pay Versus Performance tables, complex equity disclosures, technical review, and formatting, are outsourced to specialists and financial printers as needed. This approach allows companies to retain control while managing risk and capacity constraints during peak proxy season.
Risk Assessment: What’s Really at Stake?
Compliance Exposure
Several factors amplify compliance risk, including:
- Equity award modifications
- Market-based versus performance-based valuation treatment
- Increasingly complex Pay Versus Performance modeling and mark-to-market CAP calculations
- Table-to-table consistency requirements
Regulatory expectations around PvP disclosures, clawbacks, and narrative coherence continue to evolve, adding complexity to recent proxy seasons67.
Reputational Risk and Disclosure Quality
Unlike financial statements, proxy tables are not audited pre-filing. Yet they are scrutinized by:
- Institutional investors
- Proxy advisory firms
- Media and governance analysts
- Employees
- The SEC, through post-filing comment letters89
Errors undermine credibility and can necessitate public amendments—an outcome companies increasingly seek to avoid.
Strategic Alternatives: Build vs. Buy
The Internal Build Approach
Building internal proxy capabilities may be appropriate for:
- Very large filers with recurring, complex disclosure needs
- Organizations already staffed with deep ASC 718 and SEC expertise
However, this approach requires:
- 12–18 months of ramp-up and training
- Ongoing technology investment
- Robust documentation and review controls
- Dedicated, not part-time, ownership
Without these elements, internal builds can struggle under seasonal pressure and become increasingly fragile as programs evolve.
The Strategic Partner Approach
Why Outsourcing Works
Specialized proxy partners offer:
- Economies of scale
- Continuous regulatory monitoring
- Dedicated technology and quality controls
- Law-firm-level accuracy at consulting cost levels
Depending on scope and complexity, companies that outsource all or part of proxy reporting can reduce internal staffing and technology costs by a meaningful margin, often cited directionally in the 25–50% range, while also lowering execution risk1011.
Hybrid Models: The Best of Both Worlds
Many issuers now adopt blended approaches, such as:
- Outsourcing Pay Versus Performance tables while managing core disclosures internally
- Engaging specialists for technical validation of in-house work
- Adding peak-season support during Q1 filing crunches
Conclusion: The Strategic Choice That Pays Off
Proxy compensation reporting has evolved into a high-stakes discipline requiring precision, transparency, and technical fluency across accounting, legal, and HR domains.
Leading companies are no longer asking whether they need expert help. They are asking how to access it in a scalable, risk-aware way.
Whether through an internal center of excellence or a specialized partner, the objective is the same: disclosures that build investor trust, withstand scrutiny, and reflect operational excellence. If you need a trusted partner for your entire proxy season or targeted support for the most complex components, contact us here.
Sources
- U.S. Securities and Exchange Commission, The State of Disclosure Review, June 24, 2024.
https://www.sec.gov/newsroom/whats-new/gerding-state-disclosure-review-062424 ↩︎ - White & Case LLP, Key Considerations for the 2025 Annual Reporting and Proxy Season – Proxy Statements, February 25, 2025.
https://www.whitecase.com/insight-alert/key-considerations-2025-annual-reporting-and-proxy-season-part-ii-proxy-statements ↩︎ - Infinite Equity experience-based benchmarks. Cost ranges, staffing assumptions, and time estimates are directional and based on client work across industries and market capitalizations. ↩︎
- Infinite Equity experience-based benchmarks. Cost ranges, staffing assumptions, and time estimates are directional and based on client work across industries and market capitalizations. ↩︎
- Infinite Equity experience-based benchmarks. Cost ranges, staffing assumptions, and time estimates are directional and based on client work across industries and market capitalizations. ↩︎
- U.S. Securities and Exchange Commission, The State of Disclosure Review, June 24, 2024.
https://www.sec.gov/newsroom/whats-new/gerding-state-disclosure-review-062424 ↩︎ - U.S. Securities and Exchange Commission, Executive Compensation Disclosure Requirements Roundtable Transcript, June 26, 2025.
https://www.sec.gov/files/sec-roundtable-executive-compensation-disclosure-requirements-2025-06-26-transcript.pdf ↩︎ - U.S. Securities and Exchange Commission, The State of Disclosure Review, June 24, 2024.
https://www.sec.gov/newsroom/whats-new/gerding-state-disclosure-review-062424 ↩︎ - White & Case LLP, Key Considerations for the 2025 Annual Reporting and Proxy Season – Proxy Statements, February 25, 2025.
https://www.whitecase.com/insight-alert/key-considerations-2025-annual-reporting-and-proxy-season-part-ii-proxy-statements ↩︎ - Infinite Equity experience-based benchmarks. Cost ranges, staffing assumptions, and time estimates are directional and based on client work across industries and market capitalizations. ↩︎
- ProfitJets, Outsourced Accountant ROI, 2023 (contextual benchmarking only).
https://profitjets.com/blog/outsourced-accountant-roi/ ↩︎
