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The Compensation Committee Handbook, 4th Edition by Michael L. Stevens, Stewart Reifler, James F. Reda

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Appendix E Sample Compensation Discussion and Analysis (CD&A)

This appendix contains examples of Compensation Discussion and Analysis (CD&A) sections contained in the proxy statements issued in 2013 by four large public companies (Google, Prudential Financial, 3M, and the inimitable Berkshire Hathaway). These CD&As illustrate how different companies approach this disclosure. These CD&As should not be viewed as either best-practice or worst-practice, but simply as examples.

Google

Compensation Discussion and Analysis

OVERVIEW

Our CD&A includes a detailed discussion of compensation for our six named executive officers—Larry, Sergey, Eric, our Chief Financial Officer, and the two other highest paid executive officers during the fiscal year ended December 31, 2012:

Larry Page Chief Executive Officer (CEO)
Sergey Brin Co-Founder
Eric E. Schmidt Executive Chairman of the Board of Directors (Executive Chairman)
Patrick Pichette Senior Vice President and Chief Financial Officer (CFO)
Nikesh Arora Senior Vice President and Chief Business Officer
David C. Drummond Senior Vice President, Corporate Development, Chief Legal Officer, and Secretary

The CD&A is organized into five sections:

  • Section 1—Executive Summary
  • Section 2—Elements of Pay
  • Section 3—Determining Competitive Levels of Pay
  • Section 4—Pay Mix, Magnitude, and Leverage
  • Section 5—Other Compensation Information

SECTION 1—EXECUTIVE SUMMARY

Larry and Sergey wrote the following in the 2004 Founders’ IPO Letter: ...

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