Publicly traded companies are required to make certain disclosures in their annual reports about the compensation paid to their top executives. One reason for this is to help interested stakeholders assess the performance of executives. It also helps boards of directors and companies set appropriate compensation levels based on what other companies in the same industry and/or of the same size are paying their executives. These disclosures are audited.

Required

Obtain the annual proxy statements of 10 publicly traded U.S. companies in the same industry. Summarize the information on executive compensation and describe the data using graphs and/or tables. Write a report addressing the following questions (justify your responses by referring to the data where appropriate).

• How are the executives paid (cash, bonuses)?

• Which companies’ executives are paid the most and what is the range of pay?

• Which companies’ executives’ pay is most linked to the company’s profit and/or stock price performance? (Explain any assumptions you have to make.)

• Overall, what do you conclude about how company executives are paid and how clearly the compensation data is reported?