Named executive officer
Also called NEO, named executive officers.
The executives Item 402 requires in the SCT, typically the CEO, CFO, and the next three highest-paid executive officers. CompensationBase’s catalog is S&P 500 named executive officers.
What it is
A named executive officer (NEO) is one of the executives Item 402 requires a company to include in the Summary Compensation Table. For a typical large U.S. issuer that is the principal executive officer (usually the CEO), the principal financial officer (usually the CFO), and the three other most highly compensated executive officers who were serving at year-end, plus up to two additional people who would have been in the top three but left during the year.
CompensationBase’s catalog is S&P 500 named executive officers from those tables. Role groups are CEO, CFO, and other NEOs based on titles in the latest filing. Most officers of a company never appear.
Why companies use it
The NEO definition is an SEC construct so the proxy does not have to list every vice president, while still capturing the CEO, CFO, and the highest-paid other executives.
Companies use the NEO group as the population for CD&A stories, peer benchmarking, and say-on-pay.
Pros
- A short, comparable list across large filers.
- Captures high earners who are not the CEO, which rankings of “other NEOs” need.
- Includes certain leavers so a departure year is still disclosed.
Cons
- “Most highly compensated” uses SCT total, which can pull in an officer with a one-time grant and drop a steady operator.
- Title mapping is imperfect: presidents, COOs, and dual-role executives sit in “other NEOs.”
- A company can have no current CEO in the latest table after a mid-cycle change, depending on who is named.
Examples
Standard five
CEO, CFO, general counsel, head of a division, and chief operating officer. All five have SCT rows. CompensationBase will classify two as CEO and CFO and three as other NEOs.
Seventh NEO
A retired CEO who served part of the year can appear as an extra NEO. The profile may still show that person even though they are no longer in the role.
On CompensationBase
The catalog is S&P 500 named executive officers. Role groups are CEO, CFO, and other NEOs based on titles in the latest filing.
Related terms
- Chief Executive Officer
The principal executive officer. CompensationBase maps proxy titles to a CEO role group for company pages and the highest-paid CEOs ranking, and omits a current CEO when the latest filing lists none.
- Chief Financial Officer
The principal financial officer, a required named executive officer. CompensationBase has a dedicated highest-paid CFOs ranking using the same SCT Total as CEOs.
- Item 402
The SEC disclosure item that requires the Summary Compensation Table and related executive pay tables. CompensationBase is an Item 402 SCT reader, not a Form 4 or 8-K pay feed.
- 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.