GlossarySummary Compensation Table columns
Change in pension value and nonqualified deferred compensation earnings
Also called pension column, change in pension value.
An SCT column CompensationBase does not parse as its own bar. The amount can still sit inside SCT Total as filed, so component bars may not add to the headline total.
What it is
Change in pension value is the year-over-year increase in the actuarial present value of defined-benefit pension and related benefits. It appears in the SCT column that also holds above-market nonqualified deferred compensation earnings. If the change is negative, Item 402 generally requires reporting zero in that column, with the decrease explained in a footnote.
The number moves with interest rates, mortality tables, extra service credits, and plan amendments—not only with a new “grant.” CompensationBase does not parse this column as its own bar. The amount can still sit inside SCT Total as filed.
Why companies use it
Older issuers still maintain pension plans for executives. Actuarial increases are real costs and Item 402 requires them in the table so the Total is not only cash-plus-equity.
Companies do not “use” a pension change as an incentive the way they use PSUs; it is a measurement of an existing promise.
Pros
- Puts retirement-plan economics into the same total as salary.
- A spike can reveal a plan amendment or a final-average-pay jump.
- Keeping it in Total as filed avoids understating pay at pension-heavy companies.
Cons
- Interest-rate drops can inflate “pay” without any committee action.
- Readers comparing a pensioned industrial CEO to a tech CEO without a pension are not comparing the same mix.
- Because CompensationBase does not draw the bar, the breakdown can look like it does not add up.
Examples
Rate-driven spike
Discount rates fall, the present value of a $2 million annual annuity rises by $3 million, and SCT Total jumps $3 million. Cash paid that year did not.
The missing bar
If visible components sum to less than the headline, change in pension value is the first place to look in the proxy’s SCT.
On CompensationBase
CompensationBase does not parse this SCT column as its own bar. The amount can still be inside SCT Total as filed, so displayed components may not sum to the headline.
Related terms
- SCT Total as filed
CompensationBase’s headline number: the Total column from the Summary Compensation Table, including amounts (such as change in pension value) that may not appear in the component bars.
- Nonqualified deferred compensation
Pay an executive elects or is required to receive in a later year, outside a qualified plan. Above-market earnings can appear in the SCT pension/deferred column and therefore in Total as filed.
- Summary Compensation Table
The Item 402 table in a proxy statement that lists each named executive officer’s pay components and total for up to three fiscal years. CompensationBase extracts figures from this table.