Question: The SEC recently required additional information in the proxy statements that describe the compensation packages of the companys top executives. A Wall Street Journal article

The SEC recently required additional information in the proxy statements that describe the compensation packages of the company’s top executives. A Wall Street Journal article pub¬ lished soon after the requirement (January 29, 1993) offered a list of recommendations about how shareholders might use the additional information. Included in the list: compare executive pay with shareholder returns, check to see if executive compensation is linked to stock market performance, find out how much company stock is owned by the executives, and beware of changes in the auditor. REQUIRED: Explain what a proxy statement is, and discuss how each of the recommendations listed above may provide useful information to the shareholders.

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