Assignment Instructions
Public companies are required to disclose the compensation of their so-called "named executive officers" or NEOs - the CEO, CFO and the three most highly compensated executive officers serving at the end of the year (excluding the CEO and CFO) plus up to two additional individuals.
Questions:
Discuss the factors that a company and its compensation committee should consider and the procedures they should follow when approving the compensation arrangements for an executive officer.
As part of your response, please discuss whether compensation committees should take this disclosure obligation into account when determining executive compensation for each NEO and the company's compensation policies and programs? Alternatively, should compensation committees just do what they feel is best for their company regardless of the public disclosure obligations? Why or why not?