Get the free Compensation Discussion and Analysis Template - Deloitte

Performance & Compensation Committee California Public Employees Retirement SystemAgenda Item 7June 11, 2012ITEM NAME: Investment Office Classification and Organization Study PROGRAM: Administration

How to fill out compensation discussion and analysis

How to fill out compensation discussion and analysis

1. Start by reviewing the compensation objectives and guidelines set by your company.
2. Gather all relevant financial and non-financial data related to employee compensation.
3. Analyze the market trends and compensation practices of similar organizations in your industry.
4. Identify any legal or regulatory requirements that must be considered during the analysis.
5. Clearly define the structure of your compensation discussion and analysis report.
6. Present a detailed overview of the company's compensation philosophy and strategy.
7. Summarize the executive compensation programs and their alignment with company goals.
8. Provide a breakdown of the compensation components, such as base salary, bonuses, and equity awards.
9. Explain the rationale behind individual compensation decisions and the performance metrics used.
10. Discuss any risks or challenges associated with the current compensation practices.
11. Outline the process for approving and reviewing compensation programs.
12. Conclude the report with a summary of key findings and recommendations for improvement.

Who needs compensation discussion and analysis?

1. Compensation discussion and analysis is typically required for publicly traded companies in the United States.
2. It is a regulatory requirement imposed by the U.S. Securities and Exchange Commission (SEC).
3. Companies that issue proxy statements to shareholders must include a compensation discussion and analysis as part of the filing.
4. Additionally, compensation discussion and analysis can be beneficial for private companies and organizations aiming to align their compensation practices with industry standards and best practices.
5. It provides transparency and accountability in the decision-making process related to employee compensation.

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What is compensation discussion and analysis?

Compensation discussion and analysis (CD&A) is a section of a company's proxy statement that provides a comprehensive overview of the company's executive compensation policies and practices, outlining how pay is structured, awarded, and linked to performance.

Who is required to file compensation discussion and analysis?

Publicly traded companies are required to file a CD&A as part of their annual proxy statements, particularly those that are subject to the Securities and Exchange Commission (SEC) regulations.

How to fill out compensation discussion and analysis?

To fill out a CD&A, companies should clearly articulate their compensation philosophy, detail the components of executive pay, explain how the compensation aligns with the company's performance and goals, and include relevant data and metrics to support their discussions.

What is the purpose of compensation discussion and analysis?

The purpose of CD&A is to provide shareholders with transparent and detailed information regarding executive compensation decisions, helping them understand the rationale behind pay practices and how these practices support the company’s strategic objectives.

What information must be reported on compensation discussion and analysis?

CD&A must report information such as the compensation philosophy, the decision-making process for setting executive pay, details on salary, bonuses, equity awards, long-term incentive plans, and performance metrics used to determine compensation.