5. Compare, screen and follow the money

Executive pay (EXEC)

EXEC reads the yearly proxy statement into key pay figures (CEO total pay, the pay ratio, the share in stock, shareholder support) and a table of the top executives.

  • 4 min
  • 3 questions
  • Lesson 3 of 4

Why you would care

How are the people running this company paid, and do shareholders approve? Pay drives behavior. A CEO paid mostly in shares that vest over years thinks like a long-term owner; one paid on short-term targets may chase them. Pay is also where governance problems show first: big raises after a bad year, low shareholder support, perks.

The idea from scratch

The proxy statement (form DEF 14A) is sent to shareholders before the annual meeting, where they vote on directors and other matters. It must include the pay of the named executive officers (NEOs): the CEO, the CFO and the next three highest paid.

Pay comes in pieces:

Salary
Fixed cash
Stock awards
Shares granted, usually vesting over several years
Option awards
Options to buy shares at a fixed price
Incentive (bonus)
Cash for hitting yearly targets
Other
Perks: security, travel, pension, insurance

Three numbers analysts check first:

  • Total pay in the summary compensation table, and its change on the year.
  • CEO pay ratio: CEO pay divided by the pay of the median employee (the one in the middle).
  • Say-on-pay: the share of shareholder votes approving the pay plan at the last meeting. Below about 70% is a warning.

Compensation actually paid (CAP) is a newer disclosure: it counts the change in value of stock awards, so it rises a lot when the share price rises.

Diagram: Proxy statement before the annual meeting leads to Summary compensation table; Proxy statement before the annual meeting leads to CEO pay ratio; Proxy statement before the annual meeting leads to Say-on-pay vote result; Summary compensation table leads to Mix: salary, stock, incentive, other.
Wide diagram: scroll sideways to see all of it.

See it in Gloom

Gloom screenshot: EXEC NVDA: key pay figures from the 2026 proxy, the CEO's pay mix, and the named executive officers with their equity share and total pay
EXEC NVDA: key pay figures from the 2026 proxy, the CEO's pay mix, and the named executive officers with their equity share and total pay. Historical example.

open ittype EXEC NVDA. y switches the year; o opens the filing.

  1. Top line: 2026 proxy · pay for fiscal 2026 · meeting Jun 24, 2026.
  2. $36.3M Jen-Hsun Huang total pay, -27.12% vs prior year: total CEO pay from the summary table.
  3. 129:1 CEO to median employee, median $282K: the pay ratio.
  4. 68% CEO pay in equity and the bar Salary 4% Stock 68% Incentive 17% Other 11%: mostly stock.
  5. 92% prior say-on-pay support: strong shareholder approval at the last vote.
  6. $162,180,936 CEO pay as CAP: compensation actually paid, far above the 36.3 million, because the stock rose.
  7. The table: each named executive officer, title, share of pay in equity (EQ%) and total.

Practice and recap

Try it3 tasks
  1. In the screenshot, how much of the CEO's pay was salary, in dollars? (About 4% of 36.3M: roughly 1.5 million.)
  2. Why is CAP four times the summary total? (The stock awards gained value as the share price rose.)
  3. Which executive has the highest share of pay in equity? (Debora Shoquist, 90%.)
Common mistakes4 mistakes
  • Comparing CAP of one company with summary-table pay of another.
  • Judging pay in dollars without the company's size and performance.
  • Ignoring "Other": security and travel can be large.
  • Reading a high CEO pay ratio as bad by itself: it depends on the industry's typical wages.
Check yourself3 questions
  1. Which filing reports executive pay?
  2. What is say-on-pay?
  3. What is the CEO pay ratio?
Answers
  1. The proxy statement (DEF 14A), before the annual meeting.
  2. The shareholders' advisory vote approving or rejecting the pay plan.
  3. CEO pay divided by the pay of the company's median employee.
Words in this lesson7 words
proxy statement (DEF 14A)
The document shareholders get before the annual meeting.
annual meeting
The yearly meeting where shareholders vote.
named executive officers (NEOs)
The CEO, CFO and next three highest-paid executives.
summary compensation table
The proxy's standard table of each NEO's pay.
CEO pay ratio
CEO pay divided by the median employee's pay.
say-on-pay
The shareholder vote on the pay plan.
compensation actually paid (CAP)
Pay including the change in value of stock awards.

Educational material about reading market data, not investment advice.