February 27, 2019
Proxy Disclosure: Frequently Overlooked Items
– Liz Dunshee
Just in time to double check your proxy statements before sending them to print, this Wachtell memo summarizes frequently overlooked disclosure requirements, including:
1. Non-GAAP Reconciliations: Required for all non-GAAP measures that are disclosed outside of the CD&A or aren’t for the purpose of explaining performance targets
2. NEOs’ Direct or Indirect Personal Benefits: Unless they’re “integrally & directly” related to the executive’s duties, or available on a non-discriminatory basis to all employees, these items need to be disclosed as perquisites
3. Deferred Equity Awards
4. Outstanding Performance-Based Shares: Calculate using target (or higher) performance
5. Above-Market Preferential Earnings
6. Directors’ Outstanding Awards: Include footnote disclosure, whether vested or unvested
7. Item 10 of Schedule 14A: Make sure that you’ve included all line items if you’re seeking approval for a compensation plan – e.g. number of persons in each class of eligible participants and market value of company stock