What Is a Proxy Statement?
A proxy statement is a document the SEC requires public companies to provide to shareholders before the annual meeting. It contains information shareholders need to make informed voting decisions, including: director nominees, executive compensation, auditor selection, and shareholder proposals.
The formal name is “Schedule 14A” (definitive proxy statement = DEF 14A). You can find any company's proxy statement on the SEC EDGAR database.
The Five Key Compensation Sections
1. Compensation Discussion and Analysis (CD&A)
The CD&A is the narrative section where the company explains its compensation philosophy, how pay decisions were made, and why. This is where you learn the “why” behind the numbers — performance targets, peer group selection, and the compensation committee's reasoning.
Look for: performance metrics and targets, peer company comparisons, and any special one-time awards (sign-on bonuses, retention grants, make-whole awards).
2. Summary Compensation Table (SCT)
The most cited table in executive compensation. It shows total compensation for the CEO, CFO, and the three other highest-paid executives (the “Named Executive Officers” or NEOs) for the past three fiscal years.
The columns are: salary, bonus, stock awards, option awards, non-equity incentive plan compensation, change in pension value and NQDC earnings, all other compensation, and total. This is the “total comp” figure reported in the media.
3. Grants of Plan-Based Awards Table
Shows the equity and cash incentive awards granted during the year, including the number of shares, grant date, exercise price, and grant date fair value. This table reveals the structure of new awards — whether they are time-based RSUs, performance-based PSUs, or stock options.
4. Outstanding Equity Awards Table
A snapshot of all equity awards held by each NEO at fiscal year-end, showing unvested RSUs, unexercised options, and their current value. This tells you how much “golden handcuffs” wealth the executive has tied to the company.
5. CEO Pay Ratio
Required by the Dodd-Frank Act since 2018, companies must disclose the ratio of CEO total compensation to the median employee's total compensation. A company with a CEO earning $20M and a median employee earning $50K would report a ratio of 400:1.
Pay ratios vary enormously by industry — retail and hospitality companies with large part-time workforces often have ratios above 1,000:1, while financial services and technology firms with higher median salaries may have ratios below 200:1. See our worst pay ratio rankings for details.
How to Find Any Company's Proxy Statement
- Go to SEC EDGAR
- Enter the company name or ticker symbol
- Look for “DEF 14A” in the filing type column
- Click the filing date to see the document
- Use Ctrl+F to search for “Summary Compensation Table”
Common Pitfalls When Reading Proxy Statements
- Grant date value ≠ realized value. Stock awards in the SCT are valued at grant. The CEO may ultimately receive much more or less depending on stock price and PSU achievement.
- Pension swings distort totals. Changes in pension value can add millions or subtract millions from reported compensation without any actual payment change.
- Special awards spike one year. Sign-on, retention, or make-whole awards can make one year look dramatically different from the trend.
- Pay ratio methodology varies. Companies have discretion in identifying the median employee. Two similar companies can report very different ratios based on methodology choices.
All company profiles on CEOPay extract data from these SEC filings. Search for any company on our homepage to see the full compensation breakdown.