Hawaii's Best Paid Executives

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Inside the Numbers

The federal Securities and Exchange Commission requires companies to report overall compensation of their top five executives using these categories. “Salary” is obvious, but here’s an explanation of the other categories:

Bonus

“Cash awards that are based on satisfaction of a performance target that is not pre-established and communicated,” says a report by the national law firm of Pillsbury Winthrop Shaw Pittman and published in the Bloomberg Corporate Law Journal. These discretionary bonuses are different from NEIPC bonuses (see below).

Stock awards

The stocks’ value is the fair-market price at the time they were given to the executive.

Option awards

This is a speculative amount, based on mathematical models, of what executives might earn by exercising their stock option awards. These awards allow the executive, in the future, to buy stock at a fixed price. Sometimes, the executive makes a lot more money than this estimate, because the value of the company’s stock rises faster than expected. Sometimes, the executive decides not to exercise these options because the price of the company’s stock has fallen and the options have become worthless.

CPV

Change in pension value and

NDCE

Nonqualified Deferred Compensation Earnings. These categories quantify “the yearly increase in the actuarial value of all defined benefit and actuarial plans and any above-market or preferential earnings on nonqualified deferred compensation,” according to the Pillsbury law firm’s report.

NEIPC

Nonequity Incentive Plan Compensation. Usually includes cash bonuses that are not tied to the value of the company’s stock, but that use other predetermined measures such as return on assets or return on equity.

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