Over the past 20 years, the compensation discussions and analysis (CD & A) structures in corporate proxy systems have declined from the viewpoint of content and length. During this evolution, the importance of CD & A has increased. This is because the company has become a major media that can communicate with shareholders, agency advisors, employees, and other major stakeholders. However, until now, some companies still consider CD & A as compliance exercise, and provides the minimum information required by SEC. CD & AS, which has never been encountered by SAY-on-in-pay-related issues, has been performed only for many years since it has only been a slight update as needed. Companies that use these approaches without evolving them have the risk of losing opportunities to be involved with major stakeholders.
CD & A must be more than a regulatory compliance document. Companies need to develop CD & A from the viewpoint of storytelling, release the true power of disclosure, and make them strategic marketing assets. In order to achieve this, the focus of the company's business strategy and performance context will need to be placed and described Sec Requed. This is an opportunity not only to defend the story of executive pay and performance, but also predict questions from investors and other major stakeholders.
Laying a company reward story may seem like a difficult task, but there are several guidelines that provide blue photos for success.
1. few. The concise and easy -to -read story that gives priority to the main components of annual rewards and performance stories, especially at the beginning of CD & A, promote important themes and easy absorption of important factors and other important stakeholders. Masu.
2. Photo (or list, table, graph) is worth 1,000 words. Presenting data and other important information with these manners may be more effective than the most written story. Graphics help amplify less advantages than the above.
3. “Why” and “what” are important. Discussing the design and payment of annual and long -term incentive plans, it is most important to explain the theoretical evidence of the used vehicles, metric, and weighted, and connect them to business strategies and performance. This link is essential for promoting the unity of the company's performance payment story.
4. It is necessary to apply the mentality of the sculptor. Almost all, this year's performance and compensation story are very different from the previous year's performance and compensation. As a result, CD & A must approach specific needs and approach the applicable viewers like a newly entrusted sculpture that needs to be molded, edited, and sophisticated. By understanding the relevant perspectives of top investors, proxy -devisors, and employees, the company predicts important issues for each group, providing sufficient context and theoretical basis with SEC -leky information. can. Disclosure and format have been done in a specific way in the past few years, but this year should not be done in exactly the same way. By approaching the disclosure from this strategic point of view, the company can manage the story better and answer many questions from external stakeholders.
By applying these basic approaches to CD & A, the company's executive pay and performance story can be achieved, and it can be more specific for various readers of the proxy system. Shareholders and other major stakeholders are increasingly expecting additional exchanges with companies, and by developing and arranging CD & A from the viewpoint of storytelling, companies have an overall stakeholder. You can enhance the engagement experience.
