May 22, 2023
ICYMI: PVP Gets a Big Write-up
In case you missed it, the Wall Street Journal ran a big write-up on CEO comp last week based on the numbers reported as “Compensation Actually Paid” under the new pay-versus-performance rules. It’s always interesting to see how new disclosures land, how they’re taken in, analyzed and reported on by the media and, therefore, how they’re widely understood.
The article highlights that the “new method” takes into account changing stock prices. But I think companies and compensation committees hoped that it would be evident from their disclosure — and many included language to this effect — that Compensation Actually Paid isn’t actually reflective of take-home pay and, like the Summary Compensation Table total, still only provides a “moment-in-time snapshot.”
In any event, this is a must-read for those interested in how their retail holders likely view PVP disclosures. Also, check out the table with CEO pay data for the S&P 500, which includes the Summary Compensation Table total, Compensation Actually Paid and median employee pay and graphically depicts pay versus industry pay and performance versus industry performance.
– Meredith Ervine