Methodology ExplanationsGranted Compensation
Readers should note that grant-date fair values represent the estimated value of new equity awards. Although these values are typically disclosed by companies, there is no guarantee that these values will actually be realized. Executives may eventually realize more or less in compensation from these awards. Equilar's analysis counts equity awards in the fiscal year they were granted. In some cases, especially in the financial sector, companies grant equity awards at the beginning of each fiscal year based on performance in the prior fiscal year. As such, the equity awards granted in a fiscal year should not necessarily be viewed as indicative of corporate performance in that year.
Annual compensation for each chief executive includes base salary, cash bonuses, the value of stock awards which vested during the year, the value of option awards exercised during the year, and other compensation. Base salaries, which are annualized for new hires, represent yearly pay that is not tied to company performance. Cash bonuses include discretionary cash awards and payouts from annual and multi-year performance-based incentive plans. Stock and option award figures include the value of all service-based and performance-based equity awards on the day they vested or were exercised. Equity awards which are counted as earned, vested or exercised were not necessarily sold by the executive. Other compensation typically includes benefits and perquisites.
Total accumulated wealth is calculated as the sum of an executive's equity holdings and pension and deferred compensation plan balances. All values are measured as of the end of the fiscal year. Equity holdings include the value of shares owned plus the value of previously awarded options that have not yet been exercised. Pension plan balances represent the lump-sum present value of an executive's accumulated pension benefits. Deferred compensation plan balances represent the aggregate value of an executive's nonqualified deferred compensation accounts.