USA Law and Practice Contributed by: Matt Hurd, Melissa Sawyer and Scott Crofton, Sullivan & Cromwell LLP
The NYSE and Nasdaq listing standards also require listed companies to receive stockholder approval for most equity compensation plans
deferred compensation earnings, other compen - sation and total compensation. The SEC’s “pay-for-performance” rules also require companies to include a table containing specific executive compensation and financial performance measures for the five most recent fiscal years, as well as narrative disclosure explaining the relationship between the com - pensation paid to each named executive officer and the performance of the company. Other required tables must include information relat - ing to grants of equity and bonus awards made to each named executive officer in the last fiscal year, outstanding equity awards at the end of the last fiscal year, stock options exercised by the named executive officers and stock awards that have vested during the last fiscal year, pension benefits, and non-qualified deferred compensa - tion. Narrative or tabular disclosure regarding the cir - cumstances in which a named executive officer may be entitled to compensation upon termi - nation of employment or in connection with a change in control, including estimates of poten - tial payouts, is also required. Companies must also disclose the ratio between the CEO’s annual total compensation and the median of the annual total compensation of all other employees. Director Compensation Director compensation for the most recent fiscal year is also required to be disclosed in a table that is similar to the Summary Compensation Table, along with related narrative disclosure.
(and material amendments thereto). 4.11 Disclosure of Payments to Directors/Officers
The federal securities laws require extensive dis - closure regarding the compensation of execu - tive officers and directors in a public company’s proxy statement. The disclosure focuses on compensation for the company’s named execu - tive officers (as described in 4.10 Approvals and Restrictions Concerning Payments to Direc- tors/Officers ); however, additional executives may be included in this group because of turno - vers during the applicable year. The company’s Compensation Discussion and Analysis (CD&A) in its annual proxy statement must explain the material elements of the com - pany’s compensation for its named executive officers and is intended to facilitate investors’ understanding of the numbers in the requisite tables that follow the CD&A. A short compen - sation committee report is also required to be included in the proxy statement. Disclosure of any policies or practices regarding the ability of employees and directors to engage in hedg - ing transactions with respect to the company’s securities is also required. Summary Compensation Table The main table required to be included in a com - pany’s proxy statement is the Summary Com - pensation Table, which generally discloses the compensation earned by each named executive officer for each of the prior three fiscal years by category: salary, bonus, stock awards, options awards, non-equity incentive plan compensa - tion, change in pension value and non-qualified
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