Answer & Explanation:I was thinking of maybe using Walmart or any company you see fit. I have included the professor’s instructions and guidelines. Do you think this is possible? Not enough information?
student_research_project___proxy_analysis__rev2_.docx
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Student Research Project: Proxy Statement Analysis
Locate the latest proxy statement of a company of your choice (see “Notes” below for guidance).
In this exercise, you will analyze the company’s executive compensation programs. Factors to be
considered are presented below. Refer to materials in Chapter 12 of the text for clarification of
compensation terms and to SEC Regulation S-K, Item 402 – Executive Compensation, for
disclosure requirements. Address the following questions:
1. What is the executive compensation philosophy of the company? Does it support the
business strategy of the company? If so, how? Show the linkage. Would you make
any changes to the company’s philosophy? If so, what would you change? Why?
2. How is the CEO’s performance assessed? Is the approach for assessing the
performance of the CEO adequately described? Based on what you have learned
about performance appraisal in this course, are the factors/measures used to
assess CEO performance appropriate? Why or why not?
3. Looking at the Summary Compensation Table, how much (%) of the CEO’s annual
cash compensation (i.e., non-equity pay) is “at risk” (performance-based)? [For a
given year, consider “at risk” pay = [annual cash incentives paid] divided by [salary +
annual cash incentives paid]. Does the amount of pay at risk change your view of
whether executive pay is too high? Why of why not?
4. Most professionals rely on comparisons of executive pay with Total Shareholder
Return (TSR) as an indicator of “fairness” in executive pay. What is your opinion of
TSR as the measure for assessing CEO performance? What alternative(s) would you
suggest?
5. What is the CEO’s total compensation for the most recent year? Does this level of
compensation appear to be warranted? Why or why not? Support your response with
appropriate arguments and references.
6. The SEC has adopted a final rule implementing the provision of the Dodd-Frank Act
that requires U.S. public companies to disclose the ratio of their CEO’s compensation
to that of their median employee. This rule will go into effect the first time a company
files a proxy statement after January 1, 2017. Do you believe that this “Pay Ratio
Disclosure Rule” will be beneficial in controlling executive compensation? Why or
why not? Support your response with appropriate arguments and references.
7.
Do you believe the proxy statement for the company you selected reflects fair and
adequate disclosure of its executive compensation? Why or why not?
8. What do you feel is your major take-away from this assignment?
The proxy analysis should be prepared in a research paper format following APA
guidelines. Do not merely answer the questions. The analysis must have a title page followed
by text with major section headings addressing each of the issues identified above. For
example, the first section heading would be “Executive Compensation Philosophy.” This
heading should be followed by a narrative discussion and evaluation of the executive
compensation philosophies of the company. Be sure to address the questions posed above in
your narrative response in each section. The paper should be limited to a maximum of 8
pages, excluding the title page and references.
Notes:
1. SEC Regulation S-K, Item 402 is summarized in a website sponsored by the
School of Law, Cornell University
(www.law.cornell.edu/cfr/text/17/229.402).
2. A Proxy Statement can frequently be located on the company’s corporate
website. It can also be located at www.sec.gov. Enter the EDGAR
database, enter the name of the company, and locate the latest version of
Form DEF 14A. This will be the Proxy Statement.
…
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