The bottom line
DEF 14A is the “definitive proxy statement” — the document a US public company must file before its annual shareholder meeting. It is also where every meaningful disclosure about executive compensation lives. The headline figure you see in the press (“CEO X received $Y million”) almost always comes from the Summary Compensation Table — and that table reports grant-date target value of stock awards, not what the executive actually realized. Reading the proxy carefully gives you not only the comp figure but also the structure (base / bonus / equity), the performance metrics, the peer group, the say-on-pay vote, the new pay-versus-performance disclosure, and any related-party transactions. It is the single most informative governance document a public company files.
What a DEF 14A actually is
Before each annual shareholder meeting, the company sends shareholders a proxy statement on Schedule 14A describing the matters to be voted on, who's nominated to the board, what the compensation plans look like, and other governance items. The “DEF” prefix means “definitive” — the version that's mailed to shareholders and filed with the SEC. There's often a preliminary version (PRE 14A) filed earlier; ignore it unless you're tracking changes.
DEF 14As are publicly available on SEC EDGAR. Each is typically 60–150 pages and follows a standard structure mandated by Schedule 14A and Regulation S-K Item 402.
Standard sections of a DEF 14A
- Notice of Annual Meeting — date, place, agenda items.
- Voting Items — typically: director election, ratification of auditor, advisory vote on compensation (say-on-pay), advisory vote on say-on-pay frequency every 6 years, occasional shareholder proposals.
- Director Information — biographies, attendance, committee assignments, director compensation.
- Audit Committee Report — auditor's independence, fees paid.
- Executive Compensation — the largest section. Subdivided into:
- Compensation Discussion and Analysis (CD&A) — narrative description of the comp philosophy, peer group, pay mix, performance metrics, decisions made.
- Summary Compensation Table — the headline numbers (3 years of data for the named executive officers).
- Grants of Plan-Based Awards Table — equity grants made in the year.
- Outstanding Equity Awards Table — what the NEOs hold at year end.
- Option Exercises and Stock Vested Table — what realized in the year.
- Pension / Nonqualified Deferred Compensation tables.
- Pay Versus Performance Table — required since 2022.
- Stock Ownership — Section 16 officer/director ownership and 5%+ beneficial owners.
- Related Party Transactions — disclosure of any deals between the company and insiders.
- Shareholder Proposals — if any.
The Summary Compensation Table
This is the table that produces every CEO-pay headline. The columns are standardized:
- Year — three most recent fiscal years.
- Salary — actual cash base salary paid.
- Bonus — discretionary cash bonus.
- Stock Awards — grant-date fair value of stock awards (RSUs, PSUs).
- Option Awards — grant-date fair value of options.
- Non-Equity Incentive Plan — performance-based cash bonus paid (separate from discretionary bonus).
- Change in Pension Value & Nonqualified Deferred Compensation Earnings.
- All Other Compensation — perks, contributions, severance, tax gross-ups.
- Total — sum.
Critical to understand: the “Total” column is target / grant-date value, not what the CEO actually pocketed. A $50 million stock award reported as $50 million in the year of grant might end up worth $30 million or $80 million depending on how the stock performs over the vesting period. The Pay Versus Performance Table (mandatory since 2022) provides a separate “Compensation Actually Paid” figure that's closer to realized value.
The Pay Versus Performance disclosure
Required under SEC Item 402(v) starting fiscal year 2022 / proxy 2023. The table presents 5 years of:
- Summary Compensation Table total (the headline figure).
- “Compensation Actually Paid” — adjusted to fair-value-at-vest for stock awards, less the original grant value, plus changes in unvested-award value.
- Total shareholder return (TSR).
- Peer-group TSR.
- Net income.
- A company-selected performance measure.
The intent is to make it easier to see whether realized executive pay tracks shareholder outcomes. In practice, “Compensation Actually Paid” can swing wildly with stock-price moves and can be larger or smaller than the headline figure. Read both columns and the company's narrative explanation.
CD&A — the narrative section to read carefully
The Compensation Discussion and Analysis is 5–25 pages of management-written prose explaining:
- The comp committee's philosophy.
- The peer group used for benchmarking (often the most subtle disclosure — companies pick peers strategically).
- The pay-mix targets (typically 10–25% base, 15–30% short-term incentive, 50–70% long-term equity for a CEO).
- The specific performance metrics for the year (revenue growth, EPS, TSR, free cash flow, ESG metrics).
- The threshold / target / max payouts for performance-based awards.
- A qualitative discussion of decisions made (raises, special grants, severance).
A few flags to look for:
Peer-group inflation. If the company's peer group consists of larger or higher-paying companies, benchmark-based compensation creeps up over time. Compare the peer group year-over-year.
Special grants. Large one-time equity grants outside the normal annual cycle. Sometimes justified (new hire, special retention). Often not.
Severance / change-in-control packages. Disclosed as “potential payments upon termination” tables. Excessive packages are governance red flags.
Discretionary adjustments. When the comp committee deviates from the formula to pay more, the rationale is required. Read it.
Worked example: Apple's 2024 proxy
Apple's 2024 DEF 14A (filed January 2025) reported Tim Cook's compensation:
- Base salary: $3.0M.
- Cash bonus: $10.7M (under the cash incentive plan).
- Stock awards: $57.6M (grant-date target value of PSUs and RSUs).
- All other comp: $0.99M (security, retirement contributions, gross-ups).
- Summary Compensation Table total: ≈ $74.6M.
Pay Versus Performance disclosure showed Cook's “Compensation Actually Paid” for the same year was meaningfully different from the headline (driven by Apple's stock performance). The proxy also disclosed the peer group (a large list of mega-cap tech and consumer-products companies) and the specific PSU performance metrics (relative TSR, operating income).
The headline “Tim Cook $74M” is the SCT figure, not realized. To know what Cook actually realized in that year, look at the Option Exercises and Stock Vested table (grants from prior years that vested in 2024) plus any open-market sales he made.
Common mistakes
1. Treating Summary Compensation as realized. It's grant-date value of awards. Realized pay can differ materially over the vesting period.
2. Ignoring peer group. The peer group is often where the comp committee anchors target levels. Whether the peer group is reasonable matters.
3. Skipping related-party transactions. Sometimes the most important governance disclosure. Look for loans to officers, business with insiders' relatives, lease arrangements.
4. Not reading say-on-pay vote results. Annual non-binding shareholder vote on comp. Below 70% support is a red flag; under 50% is a major problem the company has to address publicly.
5. Confusing director compensation with executive compensation. Both are in the proxy but reported in separate tables. Directors typically get $200–500k/year in mid/large-cap companies; executives are an order of magnitude higher.
Where infoz.com surfaces this
The future infoz.com Person profile pages will surface compensation by year for tracked named executive officers — sourced from each company's DEF 14A — with links back to the underlying filing. The Company Profile pages will list the Compensation table for the latest fiscal year on the executives sub-page.
What this guide does NOT cover
- Specific industry comp norms (Wall Street vs Silicon Valley vs traditional industry)
- ISS and Glass Lewis voting recommendation methodology
- 162(m) deductibility limits and their post-TCJA changes
- Section 280G excise tax on parachute payments
- ASC 718 stock-based comp accounting in detail
- Foreign private issuer comp disclosure differences
- Pre-2022 historical proxy formats
For a deep dive into a specific company's comp structure, the proxy plus 3 years of historical DEF 14As gives you the trajectory. For governance evaluation, ISS / Glass Lewis reports remain the institutional baseline.