This report highlights key issues for compensation committees and boards to consider as they prepare their companies’ compensation discussion and analysis (CD&A) statements. It is based on NACD’s conversations with leading institutional investors, directors, and other governance stakeholders.
The recommendations fall into three categories: content, format, and suggested questions for compensation committees.
Ultimately, each individual company will make its own determination about how to design the CD&A to maximize its effectiveness as a communication tool while fulfilling Securities and Exchange Commission disclosure requirements. The judgment of compensation committee members, as well as that of the full board of directors, is critical in the CD&A development process. This report is not intended to be a comprehensive guide to CD&A preparation but rather should serve as a short list of focus areas and related recommendations.