The L-Blast | August 2021
Another proxy season is behind us, and like every year, we had an opportunity to take notice of trends, specifically as they relate to executive compensation disclosures. In this case, we see companies are taking approaches to more clearly portray the link between pay, performance, and shareholder alignment.
In this month’s L-Blast, we focus on an important issue that helps paint this picture more accurately – knowing the difference between reported pay and realizable/realized pay is key to truly understanding executive compensation. Many companies are taking steps forward by enhancing disclosures within their CD&A’s to further educate investors.
We hope you find this information helpful and have a clearer understanding of how executive pay should be measured. As always, let us know if you have any questions regarding the topics covered in this L-Blast.
What’s the Real Deal? Bridging the Gap Between Reported Pay & Realized Pay
For a long time and even more recently in a pandemic/worldwide health crisis, the compensation of executives, specifically in cyclical and commodity-based businesses, has always been scrutinized.
Realized Pay – Explained
The pay reporting methods required for disclosure to public companies continues to be a debate, especially as companies, shareholders, regulators, and other advisors focus on pay for performance. Traditionally, there are three ways to calculate and potentially disclose pay: realizable, reported, and realized pay.
Realizable Pay: Insights into Performance Alignment
How much compensation does a CEO really end up with? It’s a tough question to answer—the summary compensation table is often cited as what the CEO is paid, but the ultimate value that an executive realized from those grants can differ significantly from the amounts disclosed.
We are Rebranding as NFP Compensation Consulting.
After operating as an independent brand within the NFP family, we will be rebranding NFPCC as NFP’s Compensation Consulting practice, thereby integrating our expertise and expanding our capabilities to better serve our clients. We shared this exciting news earlier this month, click below if you missed the communication.
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