For its annual study of CEO pay, the Richmond Times-Dispatch used data provided by Equilar Inc., an executive compensation consulting firm.
Equilar examined the regulatory filings detailing the pay packages of 19 executives (one company has two co-CEOs) from 18 of the largest public companies in the Richmond region.
Equilar looked at companies that filed proxy statements with federal regulators.
To calculate total compensation for a CEO, Equilar adds base salary, discretionary and performance-based cash bonuses, the grant date value of stock and option awards, and other compensation. All data are taken from the summary compensation table provided in each company’s proxy statement.
Grant date values represent the estimated value of new stock and option awards. Although companies disclose grant date values for these awards, there is no guarantee that executives will actually realize these amounts. They may earn more or less depending on stock price movements and satisfaction of any relevant performance criteria.
Equilar’s analysis reports stock awards in the fiscal year they were granted.
In some cases, especially in the financial sector, companies grant equity awards at the beginning of each fiscal year based on performance in the previous fiscal year. As such, the equity awards granted in a fiscal year should not necessarily be viewed as indicative of corporate performance in that same year.
Percentage change in pay for each executive is calculated using compensation data from the previous fiscal year.
For some executives, particularly for newly named CEOs, their change in pay is listed as “N/A.” Their compensation, however, is included in averages and medians for other columns.
Here are key definitions:
Salary: Annual cash compensation that is not tied to corporate performance, usually paid on a weekly or biweekly basis.
Bonus: Discretionary cash payments made in addition to base salary.
NEIP: Stands for non-equity incentive pay, which is performance-based cash bonuses that include payouts from both annual and multiyear incentive plans.
Stock: The grant date value, as reported by the company, of service-based or performance-based stock and/or unit awards. Performance-based awards are earned based on the achievement or predetermined performance goals. Service-based awards are earned based on continued employment with the company for a specific period of time.
Options: The grant date value, as reported by the company, of service-based or performance-based stock option and/or stock appreciation right awards. Performance-based awards are earned based on the achievement or predetermined performance goals. Service-based awards are earned based on continued employment with the company for a specific period of time.
Other: The value of compensation derived from benefits and/or perquisites provided to an executive by the company. These amounts may include the personal use of corporate aircraft, financial planning assistance, automobile leases, contributions to retirement plans, and the payment of insurance premiums, among others.