Public companies in the United States must publish detailed information about how much they pay their top executives, and the executive compensation disclosure requirements set by the Securities and Exchange Commission spell out exactly what has to appear, in which tables, and for whom. The rules sit under the Securities Exchange Act of 1934 and Regulation S-K, and they cover base salary, bonuses, stock and option awards, pension values, perks, severance, the ratio of CEO pay to median worker pay, and a five-year comparison of pay against company performance. Almost all of it lives in one document each year: the annual proxy statement.
Which Companies Have to Disclose
Any company registered under the Securities Exchange Act of 1934 files periodic reports with the SEC. In practice, that means companies listed on a national stock exchange, plus companies with more than $10 million in assets whose securities are held by more than 500 owners.1Legal Information Institute. Securities Exchange Act of 1934 Private companies generally do not publish executive pay data.
Two categories of public companies get a lighter version of the rules. Smaller Reporting Companies — generally those with a public float under $250 million, or under $700 million combined with revenues below $100 million — can file shorter compensation narratives, only two years of data instead of three, and are exempt from the CEO pay ratio.2U.S. Securities and Exchange Commission. Smaller Reporting Companies Emerging Growth Companies get similar accommodations and are also exempt from the pay-versus-performance table and the pay ratio.3U.S. Securities and Exchange Commission. Emerging Growth Companies Foreign private issuers are also exempt from the pay ratio.
Which Executives Must Be Named
The rules use the term “Named Executive Officers” for the specific people whose pay must be disclosed. The group always includes:4eCFR. 17 CFR 229.402 – Executive Compensation
- The Principal Executive Officer (typically the CEO), regardless of pay level.
- The Principal Financial Officer (typically the CFO), regardless of pay level.
- The three next most highly compensated executive officers serving at fiscal year-end.
- Up to two former officers who would have made the top-three list but left the officer role before year-end.
Most filings list five Named Executive Officers, sometimes seven when former officers qualify. Inclusion turns on actual compensation, not job title, so a company cannot bury a highly paid executive by redrawing the org chart before year-end.
What the Filing Must Contain
Regulation S-K, Item 402 sets out the specific tables and narratives. Each piece answers a different question.
Compensation Discussion and Analysis
The CD&A is the narrative section of the filing. It explains the company’s pay philosophy, what the compensation committee weighed, and how specific decisions connect to performance and shareholder interests. This is where you learn why a CEO got a particular bonus or why the mix shifted from cash to equity. The compensation committee reviews and approves the CD&A before it goes into the proxy.
Summary Compensation Table
The Summary Compensation Table is the primary numerical record. It shows three years of total compensation for each Named Executive Officer (two for Smaller Reporting Companies), split into columns for base salary, bonus, stock awards, option awards, non-equity incentive plan compensation, changes in pension value and nonqualified deferred compensation earnings, and all other compensation.5eCFR. 17 CFR 229.402 – Executive Compensation Stock and option awards appear at grant date fair value, not what the executive eventually realizes on sale, so the totals can either overstate or understate the actual economic outcome. The pension column captures the year-over-year increase in the actuarial present value of any defined benefit accumulated, making retirement wealth visible even before the executive can access it.
Perks and Personal Benefits
Perks like personal aircraft use, home security, financial planning, and tax gross-ups go into the “All Other Compensation” column. Reporting kicks in once an executive’s total perks reach $10,000. Each individual perk exceeding the greater of $25,000 or 10 percent of that officer’s total perks must be separately identified and valued in a footnote.6eCFR. 17 CFR 229.402 – (Item 402) Executive Compensation Perks are valued at the aggregate incremental cost to the company, and the company must describe its methodology.
Termination and Change-in-Control Payments
Companies must quantify what each Named Executive Officer would receive on resignation, firing, retirement, or a merger or acquisition. Estimates assume the triggering event happened on the last business day of the fiscal year at the closing stock price.5eCFR. 17 CFR 229.402 – Executive Compensation Any conditions attached — non-competes, confidentiality — must be described. When an actual deal is on the table, a separate “Golden Parachute” table appears in the proxy solicitation, itemizing cash severance, accelerated equity, enhanced pension, perks, and tax reimbursements for each Named Executive Officer.
Insider Trading Plan Disclosures
Since 2023, companies must report each quarter whether any officer or director adopted, modified, or terminated a Rule 10b5-1 trading plan, along with the material terms (pricing excluded).7U.S. Securities and Exchange Commission. Insider Trading Arrangements and Related Disclosures When insiders trade under such a plan, they check a box on their Form 4 identifying the transaction and the plan’s adoption date.
CEO Pay Ratio
Section 953(b) of the Dodd-Frank Act requires most public companies to disclose the ratio of CEO total compensation to the median annual total compensation of all employees.8Congress.gov. Dodd-Frank Wall Street Reform and Consumer Protection Act The filing reports three numbers: CEO total compensation, median employee total compensation, and the resulting ratio. A ratio of 200:1 means the CEO earned 200 times what the median worker made.
Companies have flexibility in identifying the median employee. They can use the full workforce, statistical sampling, or another reasonable method, and can apply reasonable estimates for non-CEO pay.9U.S. Securities and Exchange Commission. Division of Corporation Finance Guidance on Calculation of Pay Ratio Disclosure The median employee only needs to be re-identified every three years unless the workforce or pay structure has shifted enough to change the ratio.10Federal Register. Pay Ratio Disclosure
Pay Versus Performance
The Pay Versus Performance table, under Item 402(v) of Regulation S-K, forces companies to show whether pay actually received tracked with results. It covers the most recent five fiscal years (three for Smaller Reporting Companies) and includes:5eCFR. 17 CFR 229.402 – Executive Compensation
- Summary Compensation Table totals for the CEO and the average for other Named Executive Officers.
- Compensation Actually Paid (CAP) for the CEO and the average for other Named Executive Officers. CAP replaces grant date values of equity awards with mark-to-market changes, capturing what the awards were worth as stock prices moved.
- Cumulative total shareholder return for the company and its peer group.
- Net income.
- A Company-Selected Measure, the financial metric the company treats as most important for linking pay to performance.
Companies must also provide a Tabular List of at least three and up to seven financial performance measures they view as most important for connecting executive pay to results, and must describe the relationships graphically, narratively, or both.
Clawback Policies
Two separate frameworks require companies to recover pay from executives after certain restatements, and they work differently.
Under SEC Rule 10D-1, every company listed on a national stock exchange must maintain a written policy for recovering incentive-based compensation that was erroneously awarded due to a financial restatement. If the company restates because of material noncompliance with reporting requirements, it must recover the excess from any current or former executive officer who received incentive pay during the three fiscal years before the restatement date.11eCFR. 17 CFR 240.10D-1 – Listing Standards Relating to Recovery of Erroneously Awarded Compensation The amount is the difference between what was paid and what would have been paid under the restated numbers, calculated without regard to taxes. Recovery is mandatory with narrow exceptions, and companies cannot indemnify executives against the loss.
The older Sarbanes-Oxley Section 304 clawback applies specifically to CEOs and CFOs when a restatement results from misconduct. In that case, the CEO and CFO must reimburse the company for any bonus or incentive-based compensation received, plus any profits from selling company stock, during the 12 months after the flawed financial document was filed or issued.12Office of the Law Revision Counsel. 15 US Code 7243 – Forfeiture of Certain Bonuses and Profits The key difference: Section 304 requires misconduct as the trigger, while Rule 10D-1 does not — a restatement alone is enough regardless of fault.
Say-on-Pay Shareholder Votes
The Dodd-Frank Act also gave shareholders an advisory vote on the compensation packages described in the proxy. The Say-on-Pay vote covers the pay of all Named Executive Officers.13U.S. Securities and Exchange Commission. Investor Bulletin – Say-on-Pay and Golden Parachute Votes It is advisory, not binding, so the board is not legally required to change anything based on the outcome. In practice, companies that draw significant opposition routinely revise their programs the following year, and institutional investors watch these results when voting on board elections.
Companies must hold a Say-on-Pay vote at least once every three years, though most do it annually. Shareholders also get a separate vote on the frequency itself — every one, two, or three years.
Where to Read the Disclosures
The most detailed executive pay information appears in the annual proxy statement, filed as Schedule 14A (or DEF 14A in its definitive version). This is the document distributed before the annual shareholder meeting, and it contains the CD&A, all the required compensation tables, the pay ratio, the pay-versus-performance table, and the voting items. The Form 10-K includes some compensation data, but the comprehensive disclosure lives in the proxy.
All of these filings are free on the SEC’s EDGAR system. You can search by company name, ticker symbol, or Central Index Key to pull any company’s full filing history.14U.S. Securities and Exchange Commission. Search Filings Every filing is part of the permanent public record, so you can watch how a company’s executive pay has moved over time or compare pay across competitors in the same industry.