The Wall Street Journal reported this week that 16 S&P 500 companies changed 2016 compensation figures by 10% or more for one or more executives, while 17 did so for 2015 pay. The Adjustments, many of which are errors caught after the proxy was filed, include:
- Missing a digit in explaining compensation (e.g., disclosing a CEO earned $1.5 million in total pay rather than $10.5 million, or leaving off a digit in a pay total even though individual elements of pay were correct.)
- Understating the CEO’s stock awards (with one company pointing to the “outside valuation consultant” that valued the grant at $800,000 lower than the correct amount);
- Granting more shares than allowed under the company’s stock plan and having to recoup the shares mistakenly paid in excess.
The story, including company names, is a good reminder of why executive compensation should be carefully reviewed before grants are made and disclosures filed.