How to Handle “Change-of-Control” Pay Disclosure

Our guests – Wilson Sonsini’s Dave Thomas and Murphy USA’s Magen Olive – dig into the proxy disclosure elicited by Item 402(j) of Regulation S-K, the change-in-control & severance disclosures, including:

1. How challenging is putting this table – or “tables” if you have multiple tables – together?
2. Since this is “principles-based” disclosure, what philosophy do you use to help guide you in deciding what to disclose & how to calculate the amounts?
3. What do you do with NEOs who departed during the fiscal year – or after the fiscal year?
4. How far out do you go with the types of triggering events – death, disability, resignation, retirement, termination of any kind – but what about a change in responsibilities?
5. How detailed do you need to describe the types of termination – for example, how much detail about “termination for cause”?
6. For a change-in-control, what date do you need to presume as the trigger date for purposes of the disclosure?
7. Can you talk for a few minutes about some of the tricky parts of making calculations?
8. Item 402(j)(4) requires companies to describe and explain any material conditions or obligations for CIC benefits. This includes non-competes, non-solicitations and confidentiality agreements. How much of this disclosure is there in the proxy?
9. How much do investors care about this table?

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