While the foregoing list provides some guidance to companies about the topics to be discussed in the CD&A, the ultimate determination of what must be included depends on a company’s particular facts and circumstances. The compensation committee and management must assess the company’s policies, practices and decision-making with regard to executive compensation to determine what information is material and therefore must be disclosed. PRACTICE POINT: Stockholders often find the compensation information concerning NEOs important even if it does not have a substantial impact on a company’s financial performance. Stockholders often view executive compensation as indicative of a company’s corporate governance; therefore, it is important for a company to provide material information that is relevant for voting and investment decisions. All personnel within a company that can add value and provide the relevant information should be included in the process of drafting the CD&A. Typically, the following groups may be included in the CD&A drafting process: ■ employee benefits and stock administration; ■ human resources; ■ accounting and financial reporting; ■ legal; ■ investor relations; ■ members of the senior management team; and ■ internal audit. 43 | 2024 Guide to REIT Executive Compensation
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