What is the SEC filing for executive compensation?
Executive Compensation is described in three types of SEC filings: Executive and Director Salaries – listed in Form 10-K. Executive Employment Contract Terms – in Exhibit 10, Material Contracts, filed with Form 10-K.
What is the role of the Securities and Exchange Commission with respect to executive pay programs and disclosures?
All executive compensation information can be found in public filings with the Securities and Exchange Commission (SEC). The SEC mandates all public companies to disclose how much they are paying their executives, how this amount is derived, and who is involved in determining pay.
What are the factors affecting executive compensation?
We find that 1) Executive compensation is positively correlated to firm performance, firm size, CEO duality; 2) Executive compensation is negatively correlated to state share proportion and independent director proportion; 3) Company location, industry both have significant influence on executive compensation.
What are the ethical issues surrounding executive compensation?
There are multiple ethical issues with executive compensation. These include whether such compensation is excessive compared against provision of service and whether the compensation process is compromised by inadequately transparent negotiation (Perel 2003, p. 381; Moriarty 2009, p. 235).
How is executive compensation structure?
As a rule of thumb, the base salary constitutes 30% of total compensation, the annual incentive another 20%, the benefits about 10% and long-term incentives or the wealth creation portion of the compensation about 40%.
What is the main purpose of executive compensation?
The executive compensation is often designed with the intent to retain the executives during the bad times caused due to the adverse market and industry factors. The cost of the executive pay must be limited to the extent where the shareholder’s wealth does not get affected and, in fact, maximizes.
Is executive compensation justified?
The rising pay level for CEOs is justified by recent increases in overall national wealth and productivity, increases in competition for top-tier talent, and increases in overall job risk associated with the position.
Is executive pay out of control?
CEO pay is not out of control, it is controlled by the shareholders who pay it, through the directors they elect, and if shareholders thought compensation was outrageous, they would not keep electing directors who agreed to pay so much.
Is executive compensation unethical?
Excessively high executive compensation linked to operational goals, induces unnecessary risk-taking and increased probability of unethical, possibly unlawful behavior.
What are the ethical implications of executive compensation?
What are the basic components of executive compensation?
A typical executive compensation package consists of five components: base pay; health and retirement benefits; fringe benefits; short-term incentives; and long-term incentives.
What are all the three basic compensation strategies?
Here are the three most popular types of compensation packages and a few notes on who might be most attracted to them.
- Straight salary compensation.
- Salary plus commission compensation.
- Straight hourly compensation.
What are the elements of executive compensation?
The 5 Most Important Elements of Executive Compensation Packages
- Base pay.
- Benefits.
- Short-term incentive compensation.
- Long-term incentive compensation.
- Executive perks.
What are the two main types of compensation?
There are two main types of compensation:
- Direct compensation (financial)
- Indirect compensation (financial & non-financial)
Do companies have to disclose executive compensation to the SEC?
The federal securities laws require clear, concise and understandable disclosure about compensation paid to CEOs, CFOs and certain other high-ranking executive officers of public companies. Several types of documents that a company files with the SEC include information about the company’s executive compensation policies and practices.
Does the SEC have jurisdiction over the compensation of executive officers?
NOTE: The decision by a company regarding the amount and type of compensation to give an executive officer is a business decision and is not within the jurisdiction of the SEC.
Does the SEC have a response to frequently asked questions?
From time to time, the staff at the SEC will release responses to “Frequently Asked Questions” concerning SEC laws and regulations. These FAQs do not have the authority of law, and they are not the same as statements made by the Commission.
Does an executive officer receive compensation for services provided as a director?
This executive officer does not receive any additional compensation for services provided as a director, and the conditions in Instruction 5.a.ii to Item 404 (a) of Regulation S-K are satisfied.