Mandatory Risk and Overall Compensation Disclosure

Summary

This template language illustrates the mandated disclosure for the executive compensation section of a public company's annual proxy statement, information statement, or annual report on Form 10-K when the risks arising from the company's compensation policies and practices are reasonably likely to have a material adverse effect on the company. This template includes practical guidance and drafting notes. Item 402(s) (17 C.F.R. § 229.402) of Regulation S-K requires reporting companies (see Item 402(l) of Regulation S-K), other than emerging growth companies and smaller reporting companies, to discuss their compensation policies and practices for their employees, as they relate to risk management practices and risk-taking incentives, if the risks arising from their compensation policies and practices are reasonably likely to have a material adverse effect on the company. This template language describes a hypothetical scenario and is intended to serve as an example. Other situations may ...