How to read executive pay in a proxy statement's summary compensation table

Want to know what a public company pays its top executives? The answer sits in a free government filing, and once you know which table to open, you can read it in one sitting. This guide takes you through the summary compensation table in a proxy statement, column by column, so you know what each number means and what it does not.

It is for employees, job seekers sizing up an employer, and small investors. One real filing runs throughout: Costco Wholesale's proxy statement covering its fiscal year 2025, which ended August 31, 2025.

Where to find a company's proxy statement on EDGAR

Executive pay disclosure lives in the company's annual proxy statement, the document sent to shareholders before the yearly shareholder meeting. On EDGAR, the SEC's free filing database, the final version is filed as form type DEF 14A (definitive proxy statement). A preliminary version, PRE 14A, sometimes appears first. Investor.gov's guide to EDGAR notes that the annual 10-K report may simply point you to the proxy rather than repeat the pay data, so start with the DEF 14A.

Two ways to find it:

• Company search. Type the company name or ticker into the search bar on SEC.gov, open the company's filing list, and filter or scan for "DEF 14A". Pick the most recent one.
• Full-text search. EDGAR Full-Text Search lets you search inside filings, not just by company name. According to the SEC's Full-Text Search FAQ, it covers electronic filings since 2001, supports exact phrases in quotation marks, and lets you narrow results by form type and date range under "More Search Options".

A search that works well:

1. Enter the exact phrase "summary compensation table" plus the company name or ticker.
2. Click "More Search Options", then use "Browse Filing Types" to pick DEF 14A.
3. Set the date range to "Last Year" so you get the latest proxy, not one from years ago.
4. Click the form type link in the results to open the document, then use your browser's find function (Ctrl+F or Cmd+F) for "Summary Compensation Table".

The first hits are often the table of contents. The actual table usually sits right after the Compensation Discussion and Analysis (CD&A) section.

Timing tip: the proxy is filed once a year ahead of the annual meeting and covers the fiscal year just ended. Costco's fiscal 2025 proxy set its meeting for January 15, 2026. Always check the year column so you know which year you are reading.

Who is in the table: the named executive officers

The table does not list every executive. It covers a defined group the rules call the "named executive officers", or NEOs. Under 17 CFR 229.402(a)(3), that group is:

• Everyone who served as principal executive officer (usually the CEO) during the last completed fiscal year, whatever they were paid.
• Everyone who served as principal financial officer (usually the CFO) during that year, whatever they were paid.
• The three most highly compensated other executive officers who were still executives at year-end.
• Up to two more people who would have made that top-three list but had left their executive role before year-end.

In practice:

• You may see more than five people. If the CEO or CFO changed mid-year, both the old and new person appear. Costco's fiscal 2025 table lists six people, including a former executive vice president.
• "Most highly compensated" is measured on total pay, minus the pension and deferred-earnings column, and there is a floor: executives other than the CEO and CFO do not have to be disclosed if that adjusted total is $100,000 or less.
• Smaller reporting companies follow a lighter version. The regulation lets them cover the CEO plus the two most highly compensated other executives, show two fiscal years instead of three, and use a slightly simpler set of columns.

The summary compensation table at a glance

The regulation spells out the exact layout: ten lettered columns, one row per person per year, three fiscal years per person. Here is what each column holds, based on the text of Item 402(c).

Companies may drop a column if nobody in the table received that type of pay. That is why Costco's table has no option awards column: it lists salary, bonus, stock awards, non-equity incentive pay, the pension and deferred earnings column, all other compensation and total.

Column by column: salary, bonus, stock and option awards

Salary and bonus

Salary is base pay earned during the fiscal year. If an executive chose stock instead of part of their salary or bonus, the forgone cash still counts here, with a footnote explaining the swap.

The bonus column is narrower than the word suggests. It is for discretionary bonuses and one-off payments like sign-on bonuses. Bonuses paid under a plan with preset performance goals go in column (g) instead. So an empty bonus column does not mean nobody got a bonus.

Costco's footnotes show the difference. Its bonus column holds a discretionary bonus tied to environmental and social accomplishments, and for some newer executives, sign-on bonuses. The filing explains that one executive's fiscal 2025 bonus includes a $3M sign-on bonus earned after about a year of service, and that sign-on bonuses paid in 2024 compensated new hires for pay they gave up at previous employers.

Stock and option awards: what grant-date fair value means

This is the column that confuses most readers, and usually the biggest number in the row.

The rule requires companies to report stock and option awards at their aggregate grant date fair value, calculated under the accounting standard FASB ASC Topic 718. In plain words: it is the company's estimate, on the day the award was granted, of what the award was worth. It is not what the shares were worth when the executive could finally keep or sell them, and it is not cash the executive received that year.

How the estimate works:

• For plain restricted stock units, the value is usually based on the share price on the grant date, sometimes adjusted, for example for dividends the holder will not receive while waiting to vest.
• For options, companies use a pricing model, and the assumptions behind it (expected volatility, expected term and so on) must be disclosed by reference in a footnote.
• For awards tied to performance goals, the rule says to report the value based on the "probable outcome" of those goals at grant. If that is below the maximum possible payout, a footnote must show the value assuming the highest performance level is hit. Look for that footnote: it tells you the ceiling.
• The value lands in the year of grant, even if the award vests over several years.

The Costco example

Here is the fiscal 2025 row for Costco's CEO, Ron M. Vachris, exactly as reported in the Costco proxy statement.

Add the columns and you get the total, a quick sanity check worth doing on any table. Stock awards make up most of it. Costco's own footnote says these values reflect grant-date fair value and "do not reflect the amount of compensation actually received" during the year. That one sentence is the key to reading every summary compensation table.

Non-equity incentive pay and "all other compensation"

Non-equity incentive plan compensation

Column (g) is cash earned under an incentive plan where performance targets were set in advance, typically the annual bonus plan. The rule counts the money in the year the performance goal is met, even if it is paid later. So a bonus earned for fiscal 2025 but paid in the fall after year-end still shows up in the fiscal 2025 row.

To see how the payout compares with what was possible, go to the Grants of Plan-Based Awards table. Costco's shows a fiscal 2025 annual incentive for the CEO with a target of $600,000 and a maximum of $700,000, and the summary table shows $600,000 earned.

Change in pension value and deferred compensation earnings

Column (h) combines two different things:

• The increase in the value of a traditional pension, including supplemental executive pensions. A decrease is not subtracted; it goes in a footnote instead.
• Above-market earnings on deferred pay. If an executive defers salary into a nonqualified plan, only the interest above a benchmark is reported here. The rule sets that line at 120% of the applicable federal long-term rate.

Costco shows no pension here; its $53,896 for the CEO is the above-market interest on his deferred compensation balance, per the filing's footnote.

All other compensation

Column (i) is the catch-all. The regulation lists what must go in it, including:

• Perks and personal benefits, unless they total less than $10,000 for that person
• Tax gross-ups, meaning payments to cover taxes the executive owes
• Company contributions to 401(k) and other defined contribution plans
• Life insurance premiums paid for the executive's benefit
• Severance or change-in-control payments paid or accrued
• Dividends on stock awards not already counted in the grant-date value

Perks are valued at the company's "aggregate incremental cost", meaning the extra cost to the company, not what the perk would cost you to buy. Once perks reach $10,000, each must be named by type, and any single perk above the greater of $25,000 or 10% of the executive's total perks must be given a dollar figure in a footnote.

Costco breaks its column out in a separate Fiscal 2025 All Other Compensation table. For the CEO:

Why the reported total is not what an executive took home

The total in column (j) is a disclosure total, not a paycheck. It mixes cash earned with accounting estimates of awards that may pay more, less or nothing. Here is why it differs from take-home pay:

• Stock is counted at grant, not when it is received. The executive usually cannot keep the shares until they vest, often over several years.
• Share prices move. The award may end up worth far more or less than its grant-date value.
• Performance awards can shrink or grow depending on whether goals are met.
• Everything is shown before tax. Salary, cash bonuses and vested shares are all taxed, and companies often withhold shares to cover taxes on vesting.
• Prior-year awards are invisible here. Stock that vested this year from grants made in earlier years does not show up in this year's total.

Costco's filing shows each of these effects. The CEO's performance RSUs granted October 22, 2024 had a grant-date fair value of $12,036,800. At fiscal year-end those 13,834 units were still unvested, valued at $13,049,889 based on the $943.32 closing price on August 29, 2025. They vest 20% a year over five years, starting October 22, 2025. Meanwhile, the RSUs that actually vested for him during fiscal 2025, from earlier grants, had a value realized of $3,420,903, a figure the filing says includes shares withheld to pay taxes.

That is three different stock numbers in one year: granted, worth at year-end, and actually vested. Only the first goes into the summary table total.

Pay versus performance and other tables worth reading

The summary table is the headline. These sections fill in the story:

• Compensation Discussion and Analysis (CD&A). The narrative before the tables: what the pay program rewards and how each element is set.
• Grants of Plan-Based Awards. Each award made during the year, with threshold, target and maximum payouts.
• Outstanding Equity Awards at Fiscal Year-End. Unvested stock and unexercised options, at year-end market value.
• Option Exercises and Stock Vested. What actually vested or was exercised during the year and its value at that point. This is the closest table to "what the executive realized" from equity.
• Pay versus performance. Adopted by the SEC in 2022 and required for fiscal years ending on or after December 16, 2022, according to the SEC's announcement. It shows "compensation actually paid" alongside total shareholder return, peer group return, net income and a measure the company picks, for the five most recent fiscal years, plus a list of three to seven measures the company considers most important.
• CEO pay ratio. Compares the CEO's total with the pay of the company's median employee.

"Compensation actually paid" is a confusing name. It is not cash either. It starts from the summary table total, removes the grant-date value of stock awards, and adds back year-end values and changes in value of equity awards. Costco states plainly that these amounts "do not reflect the actual amount of compensation earned or paid". For fiscal 2025, Costco reports compensation actually paid to its CEO of $15,633,675, against a summary table total of $13,932,597. The difference comes mostly from equity values rising between grant and year-end.

For the median employee side of the picture, see our CEO pay ratio guide in the Company Pay section. As a preview, Costco reports a median employee total compensation of $49,186 and a ratio of 283:1 for fiscal 2025, and also gives a supplemental full-time-only figure. Ratios are hard to compare across companies because methods differ, as Costco's filing notes.

What executive pay tells you about a prospective employer

A proxy will not tell you your own salary, but it reveals things recruiters rarely say out loud.

Which benefits are shared with everyone. Footnotes often say when a benefit is available to all employees on the same terms. Costco's footnote says its 401(k) match, 50% of the first $1,000 an employee contributes, applies to all U.S. employees (except those covered by union contracts) after 90 days. That is why the CEO's match is $500. Read these footnotes for any employer you are considering: they are an official description of the retirement plan.

What the company rewards. The CD&A names the metrics behind bonuses and equity. If executive bonuses hinge on sales or operating income, expect those numbers to shape priorities further down.

How equity works. Vesting schedules for executives often mirror the company's broader equity design. If you are offered RSUs, compare the vesting pattern you are offered with the one in the filing, then ask.

Whether the company buys out forfeited pay. Sign-on bonuses that replace pay left behind at a former employer are disclosed for executives. The same idea can apply at your level.

A script you could use in an offer conversation (example):

"If I accept, I'll be walking away from a bonus that pays out in March. Is there flexibility for a sign-on payment to bridge that, the way companies often do for senior hires?"

And one for an interview:

"I read in the proxy that executive bonuses are tied to [the measures named in the CD&A]. How do those company goals translate into targets for this team?"

Keep the tone curious. You are showing you did your homework. For more on asking, see our negotiation section.

Know the limits. Executive pay tells you about priorities, not the going rate for your role. For that, see salaries by role.

What to do next

• Open the company's latest DEF 14A using EDGAR Full-Text Search with the phrase "summary compensation table" and the DEF 14A filter.
• Check the year column and confirm you are reading the most recent fiscal year.
• Read the footnotes to the stock awards and all other compensation columns before quoting any total.
• Jump to the Stock Vested and pay versus performance sections for a fuller view of what equity was actually worth.
• If you are job hunting, note any benefits the footnotes say are shared with all employees, and bring one informed question to your next interview.

If a filing is unclear, contact the company's investor relations team. Investor.gov's executive compensation page explains the SEC's role: it oversees disclosure, not how much executives are paid.