The term identifies individuals within a company who are specifically required to be disclosed in proxy statements and other Securities and Exchange Commission (SEC) filings. These individuals typically include the chief executive officer (CEO), chief financial officer (CFO), and the three other most highly compensated executive officers. For instance, in a large public corporation, the individuals identified may be the CEO, the CFO, the chief operating officer, the senior vice president of marketing, and the executive vice president of sales.
Identification of these individuals is crucial for transparency and accountability in corporate governance. Disclosure of their compensation packages, including salary, bonuses, stock options, and other benefits, provides shareholders with valuable insights into how a company rewards its top leadership. This information allows investors to assess whether executive compensation aligns with company performance and strategic goals. This process also provides historical context, showing how executive pay practices have evolved alongside corporate governance reforms.
