Def 14a Proxy Statement

Publicly traded companies are subject to the reporting and disclosure requirements of the Securities Exchange Commission (SEC). The laws that govern the securities industry were established to provide transparency to investors, creditors and shareholders alike. According to Hoyle, Schaefer & Doupnik, (2015) there are seven major disclosure requirements, the first being a five-year summary of operations to encompass sales, assets, income from continuing operations. Followed by a description of business activities, a three year summary of industry segments to include foreign and domestic operations, a list of company directors and executives, quarterly market price of common stock for the last two years, restrictions on the company’s ability to continue paying dividends, and finally, an analysis of the company’s financial condition, changes in the conditions and results of operation.

This assignment aims to present in a clear and concise manner our viewpoint towards remuneration disclosure, considering steps to improve this matter of contention is taken voluntarily by the boards as recently stated by The Australian Financial Review.

I hope this finds you well. As head of the executive compensation committee I am writing this recommendation in order to reach a unilateral consensus on the adequate amount the new CEO just hired should be paid. I want to concisely go over the pros and cons of attempting to follow industry standards and will debrief a compensation plan I have put together that reflects our values as a company.

I agree with the advisory votes provision of the Dodd-Frank Act, because it serves as a valuable means of gauging the pulse of the collective shareholders’ interests. Since executive compensation is an important tool intended to align the interests of both the corporation and the shareholders, a system of assessing the shareholders’ interests is necessary – without it, the shareholders’ interests are in many ways left to speculation. Given the varied geographical locations of the shareholders and the regulations governing their ability to interact with one another, the advisory votes mandate affords the shareholders a collective voice and provides the board of directors with valuable feedback.

As a president of the publicly owned corporation, Wexly, my number one priority is that of the stockholders. The stockholders have the ability to influence my career directly or indirectly. Directly in the sense that they have the ability to alter my title or status with the company through feedback to the board of the directors who have total influence on whether they want to keep me as the president of the company; and indirectly by changing compensation plans that will force me to alter or change my decision-making that will help their benefit as owners.

The most relevant provision of the SEC Act is the Rule 14a-8 which inscribed the rules for submission of shareholder proposals, and the circumstances under which a shareholder proposal may be excluded from the company. SEC Staff Legal Bulletin No. 14 (July 13, 2001) explains the Rule 14a-8 is designed to “provide an opportunity for a shareholder owning a relatively small amount of a company’s securities to have his or her proposal placed alongside management’s proposals in that company’s proxy materials for presentation to a vote at an annual or special meeting of shareholders. It has become increasingly popular because it provides an avenue for communication between shareholders and companies, as well as among shareholders themselves. The rule generally requires the

The second compensation package was not well designed nor did it help define what the corporate strategy would be. For a second time the compensation package focused on maximizing shareholder’s wealth and didn’t take into consideration the stakeholder’s position at all. Dunlap’s package was deeply weighted in company options ($3.75M). In fact it was weighted heavier than before. The stock grants were

It was reasonable for a CEO’s compensation to increase as the company expanded and became a larger entity, and the newly-granted shares and increasing stock options further aligned the CEO’s personal interests with those of the company and shareholders. In this sense, the second compensation package was also well-structured and not excessive. Seeing Sunbeam’s revenue rising and stock price climbing steeply upwards, Sunbeam’s shareholders and directors were fully convinced by Dunlap’s leadership, so they might perceive the increase in compensation amount necessary to retain and better motivate Dunlap to enhance the company’s value. Nonetheless, they neglected the fact that the increased portion of the equity-based compensation also further motivated the CEO’s dangerous behaviors pertaining to improper earnings management.

The SEC requires that an annual report, Form 10-K,are filed. This form has detailed financial information, operating information, and managements responses to specific questions about the company’s operations. The SEC also requires that all relevant business and financial information be disclosed to potential shareholders any time new securities are being issued. Lastly, Form 3 and Form 4 must also be filed with the SEC. Form 3 is a personal statement of beneficial ownership of securities of a company, for any officer, director, or principle stockholder of a company. Form 4 is a record of any change of ownership within that company (SEC, 2016). Companies must also disclose certified financial statements, including a two-year audited balance sheet, and a three-year audited statement of income and cash flows. Furthermore, the annual reports are required to contain five years of financial data, including “net sales, income or loss from continuing operations, total assets, long-term obligations, and redeemable preferred stock, and cash dividends declared per common share” (SEC,

The number of common stock shares has gradually increased from 2014 to 2016, along with the value of the stocks. Due to market volatility in general and variations between company’s operating results and expectations of inventors, the price at which Netflix's common stock has traded has fluctuated significantly. The company has total 430,054,212 and 427,940,440 common stock shares at December 31, 2016 and December 31, 2015, respectively. In the 2011 Stock Plan, the company provided incentive stock options to employee, and stock appreciation rights, restricted stock and restricted stock units to employees, directors and consultants. Netflix has reserved 13.3 million shares for future grants in accordance with the 2011 Stock Plan.

A major role of this committee is the reviewing of the Company’s compensation strategy. Ensuring that the compensation strategy aligns with their goal to attract and retain high-quality leadership is crucial to the success of The Home Depot. They must make certain that management is awarded the appropriate incentives and rewarded appropriately for its contributions to the growth and profitability of the Company. The Home Depot’s compensation strategy must also align with all of the Company’s objectives and stockholder interests. ("Leadership development &," 2013)

The Chairman mentions the Bonus Share Scheme for the 190,000 employees in the statement, as the employees who partook in this will benefit from reading the annual report as the outcome of achievement for the group is due to their determination of meeting company objectives. The schemes intention is to deliver employees with an honest and extensive connection with the group’s performance and their individual pay. (Ref: Page 41)

A public business corporation establishes a compensation committee consisting of outside directors that sets the salaries, incentive bonuses, and other forms of compensation of the top-level executives of the organization. An outside director is one who has no management position in the business and who, therefore, should be more objective and should not be beholden to the chief executive of the business.

To improve our understanding of accounting concepts and become familiar with the contents of a company’s annual report (Form 10-k), and the proxy statement (DEF 14A) which are both filed with the Securities and Exchange Commission (SEC).

A proxy statement is a statement required of a United States firm when soliciting shareholder votes. This statement is filed in advance of the annual meeting. The firm needs to file a proxy statement, otherwise known as a Form DEF 14A, with the U.S. Securities and Exchange Commission. This statement provides important information and is useful in assessing how management is paid and potential conflict-of-interest issues with auditors.