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Summary Compensation Table SCT
Summary
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Key SEC disclosure item for executive compensation
- Table shows items of compensation for each NEO
- For last three fiscal years
- Together with related narrative disclosures
Foots
to an annual total figure for each NEO
- Covers all amounts, whether or not actually paid
- Uses FASB 123R to value options and other equity
awards
- Requires a subsequent Form 8-K filing
- If an amount is not determinable at time of
initial filing
Substantially
revised per
SEC Release 33-8732
2006
- Final release commentary
Rel 33-8732 §II.C.1
- Compensation will now include amounts that were
previously excludable as non-recurring and unlikely to continue
Applies
to fiscal year ending on or after 12.15.06
See
also SEC FAQs
below 1.24.07
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Dec 2006 Amendments
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Changes
made to Summary Compensation Table
- Per SEC Rel 33-8765 12.29.06
- Changes are already effective
New quantitative measure for stock and option awards
- Affects dollar value used in Stock Awards
and Option Awards columns
- Same change applies to the Director Compensation
Table
- Has affect of spreading out value of award over
the vesting period, rather than being fully reflected in year of grant
- Must now use the compensation cost of awards over their
requisite service period
- Rather than their aggregate grant date fair value
- Grant date fair value
will instead be disclosed in a new column in the
Grants of Plan-Based Awards Table
- Forfeitures are required to be described in accompanying footnotes
More
detail at
SEC Rel 33-8765
- Includes text of rule changes at
S-K 402(c)
Summary Compensation Table
See
also Negative Compensation Numbers
below
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S-K 402(c)
 General -
Table
S-K 402(c)(1) |
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Detail
S-K 402(c)(2) |
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General
instructions to 402(c)
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Annotated
Summary Compensation Table
| a |
b |
c |
d |
e |
f |
g |
h |
i |
j |
| Name Position |
Year |
Salary |
Bonus |
Stock
Awards |
Option
Awards |
Non-Equity Incentive |
Deferred
Comp
Earnings |
All
Other |
Total |
| PEO |
-
-
- |
$
$
$ |
$
$
$ |
$
$
$ |
$
$
$ |
$
$
$ |
$
$
$ |
$
$
$ |
$
$
$ |
|
PFO |
-
-
- |
|
|
|
|
|
|
|
|
| A |
-
-
- |
|
|
|
|
|
|
|
|
| B |
-
-
- |
|
|
|
|
|
|
|
|
| C |
-
-
- |
|
|
|
|
|
|
|
|
| Column |
|
| a |
Name
and principal position
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| b |
Year
- Will be phased in, however
- Only last fiscal year for 2007 filings
- Last two fiscal years for 2008 filings
- Last three fiscal years for 2009 filings
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| Salary and Bonus |
| c |
Salary
- Including compensation earned,
but subject to deferred payment
- Excluding amounts reportable in another column of the
SCT, and amounts foregone at NEOs election
-
If salary and bonus are not calculable as of the most
recent practicable date, must
- Disclose this fact in a footnote, together with
the date on which such amounts are expected to be determined
- Once that amount becomes
calculable, in whole or
part, the company must file a Form 8-K disclosing the
salary or bonus amount and a new total compensation number including
that amount
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| d |
Bonus
- Bonuses that are instead payable upon the
achievement of pre-determined performance
goals are instead covered by Column G
Non-Equity Incentive Plan column
- Show amount earned for the reported fiscal year
- Including compensation earned,
but subject to deferred payment
- Excluding amounts reportable in another column of the
SCT, and amounts foregone at NEOs election
-
If salary and bonus are not calculable as of the most
recent practicable date, must
- Disclose this fact in a footnote, together with
the date on which such amounts are expected to be determined
- Once that amount becomes
calculable, in whole or
part, the company must file a Form 8-K disclosing the
salary or bonus amount and a new total compensation number including
that amount
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Instructions
for Columns c and d
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| Plan-Based
Compensation |
| e |
Stock
awards
-
S-K 402(c)(2)(v)
-
Final release commentary
Rel 33-8752 §II.C.1.c.i
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Covers
awards without option-like features which derive their value from
company stock or permit settlement by issuance of company stock, such as
- Restricted stock
- Restricted stock units
- Phantom stock
- Phantom stock units
- Common stock equivalent units
- Performance-based conditions
- Service-based vesting
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Disclose compensation cost of stock awards over their
requisite service period valued per
FAS 123R
- Amended by
SEC Rel 33-8765
12.29.06
- Replaces use of grant date value
- Change makes disclosure more consistent with
FAS 123R
- Forfeitures are required to be described in accompanying footnotes
- Also see
Equity Compensation Accounting
-
Right to receive dividends
- If the right to receive dividends has been
factored into the grant date fair
value determination, any dividends
subsequently paid need not be disclosed
- If the right to receive dividends has not been
factored
into the grant date fair value determination, dividends paid must be disclosed in
the All Other Compensation column
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| f |
Option
awards
- Amended by
SEC Rel 33-8765
12.29.06
- Replaces use of grant date value
- Change makes disclosure more consistent with
FAS 123R
- Forfeitures are required to be described in accompanying footnotes
- Also see Equity Compensation Accounting
-
Right to receive dividends
- If the right to receive dividends has been
factored into the grant date fair
value determination, any dividends
subsequently paid need not be disclosed
- If the right to receive dividends has not been
factored
into the grant date fair value determination, dividends paid must be disclosed in
the All Other Compensation column
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If options or SARs have been repriced or otherwise
materially modified, the incremental value, again calculated as
prescribed by FAS 123R, is reportable in the column for option
awards
- Must use a footnote to cross-reference to the
relevant valuation assumptions in the notes to the companys financial
statements or in MD&A
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Instructions
for Columns e and f
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| g |
Non-equity
incentive plan compensation
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Report the dollar value of all amounts earned
pursuant to incentive plans under which awards are not within the scope of
FAS 123R, i.e. non-equity
- E.g., annual bonuses that are
paid upon the satisfaction of pre-determined performance goals that were
uncertain to be met at the time they were established
- Including bonuses intended to comply with
IRC § 162(m)
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Also covers earnings on already outstanding awards
- Even where not currently payable
- Once so reported, the payment will not be subject to disclosure
in the fiscal year actually paid
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Instructions
for Column g
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| Pensions - Deferred
Compensation |
| h |
Nonqualified
deferred compensation earnings
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Disclose the increase or decrease
in the actuarial present value of accumulated pension benefits over the
companys last fiscal year
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Disclose any above-market or preferential earnings on non-qualified deferred
compensation.
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Above
market or preferential earnings are those that exceed 120% of the applicable
long-term federal rate
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Dividends and dividend equivalents on
compensation denominated in the companys stock will not be
construed as preferential unless paid at a rate higher than dividends on the
companys common stock generally
- Amounts disclosed that are attributable to benefits under separate plans
should be separately
identified and quantified in a footnote
- The entire accrued
pension value and the aggregate earnings on non-qualified deferred compensation
will be disclosed in the tables disclosing post-employment compensation
- Requires a footnote identifying and quantifying the amounts
attributable to pension plans and to earnings on deferred
compensation
- If the change in pension value is negative, it
must be disclosed in the footnote, but it may not be subtracted from the total
reported in column (h)
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According to the SEC, segregating the amounts disclosed in this column from
the All Other
Compensation column, where it would have been disclosed under the proposed
rules, will permit
investors to readily identify items that may relate principally to longevity of
service |
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Instructions
for Column h
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| Perquisites - All
Other |
| i |
All
other compensation
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Report all compensation not required to be included in any other column
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Any item that exceeds $10,000 must be separately identified and quantified in a
footnote
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Includes perquisites and personal benefits (but not if total for the fiscal year is less
than $10,000)
See
Perquisite Disclosures
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Covers amounts paid/accrued in connection with any termination of employment or
change-in-control, contributions to defined contribution plans, company-paid
life insurance premiums and tax gross-ups
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Benefits paid pursuant to defined benefit plans and distributions of
nonqualified deferred compensation
are not required to be disclosed in this column unless the payment of these
amounts is accelerated pursuant to a change in control
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Need not disclose information about group
life, health,
hospitalization, or medical reimbursement plans that are generally available to
all salaried employees and that do not discriminate in favor of executive
officers
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Must disclose benefits payable under relocation plans even when the
relocation plan is generally available to all salaried employees
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Instructions
for Column i
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| Total |
| j |
Total
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Instructions
for Item 402(c)
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S-K 402(e) Narrative Description
General
S-K 402(e)(1)
- Text
- Provide a narrative description of any material factors necessary to an
understanding of the information disclosed in the table
- Examples
- (i) Employment agreement
- (ii) Option repricings
- (iii) Terms of awards
- (iv) Proportion of salary and bonus
- S-K 402(e) also applies to S-K 402(d)
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lnstructions
to 402(e)
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SEC Releases
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Final
release 33-8765 Dec 2006
Final
release 33-8732 Aug 2006
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SEC FAQs
SEC_CODE_REF_0090001192884
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S-K
Item 402 FAQs
- These FAQs were last updated 8.08.07
- Supersede old S-K 402 FAQs in 1997 Telephone
Manual
and its March 1999 Supplement
- See S-K 402 FAQs
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Practice Aids
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Printable
form of table
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Select Precedent Disclosures 2008
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Select
Proxy and Other 1934 Act Filings
- Notable detail in Footnote (4) with regard to
Stock Option Repricing and Section 409A Payment
- Footnote 10 includes detailed information with
regard to Long Term Incentive Awards and FAS 123(R) Assumptions
- Notable for plain English
- See also Executive Summary at start of CD&A
- No employment contracts, pension plan
or deferred compensation
- 2 years of compensation history
- Footnotes include All Other Compensation Table as
well as Tax Gross-up Table
- All bonus payments made under performance-based
non-equity compensation plan
- Begins on page 25
- Notable footnote disclosure on calculation of
equity compensation cost recognized for financial reporting purposes under FAS
123(R)
- Narrative description of CEO's employment
agreement immediately follows table
- Table preceded by commentary with regard to fair
and reasonable compensation practices page 30
- Summary Compensation Table includes footnote
reconciliation of reported Total Compensation to 2007 compensation approved by
Compensation Committee footnote (a)
- Notable introduction to Summary Compensation
Table
- See supplemental table in SCT footnotes
with detail on SFAS 123R stock award expense recognition in 2007
- Notable detail on SFAS 123R accounting expense
for PSU and RSU awards
- See also detail in All Other
Compensation table
- Notable footnote disclosure of grant date fair
value of Restricted Stock awards and Stock Option awards
- Footnote reference to 2007 financial statements
for description of stock awards accounting
- Footnote disclosure on restorative options issued
under Bank One option program
- 3-year compensation history
- Notable footnote disclosure of assumptions used
to calculate compensation expense for option awards
- Footnotes cross-reference to FAS 123R valuation
detail in Form 10-K
- 2007 All Other Compensation and Personal Benefits
tables supplement SCT disclosures
- Total footnote clarifies that reported
amount includes incremental change in future pension benefits and FAS 123R
values for equity awards, which may not be paid out to NEOs
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Select Precedent Disclosures 2007
Negative Compensation Numbers
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Result
of new quantitative measure for stock and option awards found in
December 2006 Amendments
Reversal
of previously recorded compensation cost
- Will be reflected in Stock Awards and
Option Awards
columns, as applicable
- e.g., recalculation of compensation cost
as result of decline in stock price, award forfeiture, or determination that
satisfaction of performance condition has become unlikely
- See
SEC
interpretive guidance on this point
 Precedent
Disclosures 2007
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Supplemental Equity Disclosure
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Some
companies have provided supplemental information with regard to amounts reported
in Stock Awards and Option Awards columns
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Supplemental Disclosures in CD&A
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Supplemental
Compensation Information in CD&A
- For further transparency, tabular and narrative
disclosures with regard to 2007 compensation actions
- Picks up compensation awarded in 2007 for 2006
performance, but not expensed in 2006 or reportable in Summary Compensation
Table
- Otherwise supplements required disclosures in Summary
Compensation Table
Go
to
Regulation S-K, Item 402(b)
topic page for sample of precedent disclosures
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Commentary
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Compensation
consultants
Law
firms
- The Media and Executive Compensation Disclosures
- Comment letter on new disclosure requirements for
executive pay and XBRL tagging project
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Related Topics
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