Guidance for Pay vs. Performance Disclosure

Item 402(v) requires tagging of the quantitative derivation of the difference between the “Total Compensation Amount” and the “Compensation Actually Paid” for both the PEO and the individuals comprising the Non-PEO NEOs.

The ECD Taxonomy Guide published by the SEC indicated that all the members of the Adjustments to Compensation Axis are custom. The Taxonomy Guide provides an example of some simple text reflecting a set of adjustments made during the most recent reporting period.

Two custom members: “AdjType1Member” and “AdjType2Member”, together with the signage of the values (additions/positive or deductions/negative) were included as illustrations of the modeling in this example.

It is observed that most filers have more extensive disclosures on the reconciliations between the “Total Compensation Amount” and the “Compensation Actually Paid”. Many filers present two common types of adjustments: pension and equity awards. The values as reflected in the summary compensation table for these items are deducted and the changes in values for the year is added to reconcile to the amount actually paid.

In addition, the change in value for pension may further be broken down to service cost and prior service cost for the year. The change in value for equity award is also detailed with a calculation from the grant date fair value, adjusted for the year-end fair value of awards granted in the current fiscal year plus or minus the annual change in fair value as of the year-end for any unvested awards or as of vesting for awards vested in the current year, as well as other adjustment items.

While the custom members “AdjType1Member” and “AdjType2Member” may be used to report the values in the simple example provided within the ECD Taxonomy Guide, we recommend filers creating more specific custom members to communicate the nature of each adjustment, to facilitate data consumption and increase comparability.

When filers present detail disclosures of the pension and equity award adjustments, simply using Type 1, Type 2, Type 3 members does not provide sufficient meaning to the data. Use the custom elements and members in this spreadsheet.

FAQs for ECD Taxonomy

  1. For filers that do not have adoption, modification, or cancellation of Rule 10b5 1 plans and non-Rule 10b5-1 trading arrangements during the quarter, is XBRL tagging required?

    2. A: Textblock tagging is not required. However, filers should report value ‘false’ on the following elements:

    Rule10b51ArrAdoptedFlag
    NonRule10b51ArrAdoptedFlag
    Rule10b51ArrTrmntdFlag
    NonRule10b51ArrTrmntdFlag

  2. There is an element “Trading Arrangement Duration” for filers to tag the duration of arrangements. When filers present the arrangements ‘expiration date’ (instead of duration), should the ‘duration’ (in PY_M_D_) be calculated and tagged with the durationItem type element, even though such fact is not explicitly presented in the document?

    3. A: Filers may use a standard extension date element: xxx_TrdArrExpirationDate before they migrate to the 2024 ECD taxonomy.  The tagging of the expiration date should follow FAQ guidance issued by the SEC as it relates to dates that do not provide a specific day, month year format. This element has been added to the 2024 ECD taxonomy and should be used going forwards on tagging expiration date of the trading arrangements. The “duration period” is a compulsory disclosure, filers should present the disclosure explicitly even if an expiration date is reported. If the explicit duration period is not presented, the filer’s XBRL will be lacking the information on “Trading Arrangement Duration”.

  3. 408(a) requires quarterly disclosure regarding the adoption and termination (including modification) of Rule 10b5 1 plans and non-Rule 10b5-1 trading arrangements. However, there are no elements in the ECD taxonomy for ‘modifications.’ How should the filers tag information relate to ‘modifications?’

    4. A: Filers may use standard extension elements listed below. XBRL-US will submit a comment to the SEC to add these elements to the future ECD taxonomy.

    xxx_Rule10b51ArrModifiedFlag
    xxx_NonRule10b51ArrModifiedFlag
    xxx_TrdArrModifiedDate

  4. What date context should filers use when tagging the 408(a) disclosures?

    5. A: 408(a) is a ‘quarterly’ disclosure that should cover the information for the latest fiscal quarter end. The latest (2024) ECD Taxonomy Guide 7.1.3 states that for instant type information, use the reporting period of the document (e.g., fiscal year end) for these facts. For duration type information (including the textblock), use the period applicable to the disclosures as required under Item 408(a) (e.g., 3 months ending on fiscal quarter end). In cases where filers present information of more than one quarter, the information should be tagged to the date context of each respective fiscal quarter ends.

    Example 1:

    During the three months ended June 30, 2024, no director or officer of our company adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements, as defined in Item 408(a) of Regulation S-K.

    In January 2024, our company’s CEO, John Smith, adopted a Rule 10b5-1 trading plan for the sale up to 10,000 shares of common stock until February 28, 2025.

    In this example, Rule10b51ArrAdoptedFlag, NonRule10b51ArrAdoptedFlag, Rule10b51ArrTrmntdFlag, NonRule10b51ArrTrmntdFlag should be tagged to date context for the 3 months ending 6/30/2024. The information about John Smith trading arrangement should be tagged to the 3 months ending 3/31/2024.

    Example 2:

    During the six months ended June 30, 2024, no director or officer of our company adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements, as defined in Item 408(a) of Regulation S-K.

    In this example, Rule10b51ArrAdoptedFlag, NonRule10b51ArrAdoptedFlag, Rule10b51ArrTrmntdFlag, NonRule10b51ArrTrmntdFlag should be tagged (twice) to each of the date context for the 3 months ending 6/30/2024 and 3 months ending 3/31/2024.

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