How to Handle the “Director Compensation Table”

Our guests – Wilson Sonsini’s Dave Thomas and Murphy USA’s Magen Olive – dig into the proxy disclosure elicited by Item 402(k) of Regulation S-K, the director compensation table, including:

1. Let’s talk about board processes to start. Who typically approves the director compensation? The full board? Shareholders?
2. Does a compensation consultant sometimes get involved in designing the directors’ pay?
3. Which directors get included? (ie. What about directors who leave during a fiscal year or don’t stand for re-election; or new directors who start after end of fiscal year?; NEOs? Officers who aren’t NEOs?)
4. How do you calculate amounts for the “Stock Awards” and “Options Awards” column?
5. How do you deal with deferred compensation?
6. What might go in the “All Other Compensation” column?
7. Can you omit a column if there are no amounts for any of the directors?
8. What do you do if you don’t know a fee amount at the time you file a proxy? (the 5.02(f) 8-K)
9. What typically is disclosed in the footnotes?
10. For the narrative disclosure, what typically is included there? How similar to a CD&A is that?
11. What are common areas where folks have trouble or might make mistakes when dealing with this table?
12. How much do investors care about this table?

For many more Vid-Guides dealing with corporate & securities law, corporate governance, E&S issues and more – particularly if you want to review any Vid-Guides referred to during this Vid-Guide – see the list of Vid-Guides spread throughout these categories:

• Corporate Governance
• Proxy Season
• Executive Pay
• ’34 Act/Other
• ’33 Act/Deals
• Sustainability/E&S
• Career Advice
• Fun Party

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