/sec-proxy-analysis

name: sec-proxy-analysis
description: Analyze proxy statements (DEF 14A) to extract executive compensation, governance information, and shareholder voting matters using Octagon MCP. Use when researching CEO pay, board composition, say-on-pay votes, and corporate governance practices.

SEC Proxy Analysis

Analyze proxy statements (DEF 14A) to extract executive compensation and governance information for public companies using the Octagon MCP server.

Prerequisites

Ensure Octagon MCP is configured in your AI agent (Cursor, Claude Desktop, Windsurf, etc.). See [references/mcp-setup.md](references/mcp-setup.md) for installation instructions.

Workflow

1. Identify Analysis Parameters

Determine the following before querying:

• **Ticker**: Stock symbol (e.g., AAPL, MSFT, GOOGL)
• **Focus Area** (optional): Compensation, governance, proposals
• **Comparison** (optional): Peer companies, prior years

2. Execute Query via Octagon MCP

Use the `octagon-agent` tool with a natural language prompt:

Extract executive compensation details and governance information from <TICKER>'s latest proxy statement.

**MCP Call Format:**

{
  "server": "octagon-mcp",
  "toolName": "octagon-agent",
  "arguments": {
    "prompt": "Extract executive compensation details and governance information from TSLA's latest proxy statement."
  }
}

3. Expected Output

The agent returns structured proxy analysis including:

**Director Compensation:**

• Stock awards valued at over $3 billion collectively
• Comparison to peer compensation levels

**Governance Framework:**

• Board standards for employees, officers, and directors
• Governance policies and oversight

**Voting Matters:**

• Non-binding votes on executive compensation frequency
• Director compensation disclosures

**Data Sources**: octagon-companies-agent, octagon-sec-agent, octagon-web-search-agent

4. Interpret Results

See [references/interpreting-results.md](references/interpreting-results.md) for guidance on:

• Understanding compensation structures
• Evaluating governance practices
• Analyzing shareholder proposals
• Comparing to peer companies

Example Queries

**Full Proxy Analysis:**

Extract executive compensation details and governance information from TSLA's latest proxy statement.

**CEO Compensation Focus:**

What is the total compensation for AAPL's CEO in the latest proxy statement?

**Board Composition:**

Analyze the board of directors composition and independence from MSFT's latest DEF 14A.

**Say-on-Pay Results:**

What were the say-on-pay voting results for AMZN in their latest proxy?

**Peer Comparison:**

Compare executive compensation between GOOGL and META based on their latest proxy statements.

**Shareholder Proposals:**

What shareholder proposals were included in JPM's latest proxy statement and how did they fare?

Proxy Statement Components

Executive Compensation (Item 402)

| Component | Description | |-----------|-------------| | Summary Compensation Table | Total pay for Named Executive Officers (NEOs) | | Salary | Base salary amounts | | Bonus | Cash bonus payments | | Stock Awards | Equity grants at grant date fair value | | Option Awards | Stock options at grant date fair value | | Non-Equity Incentive | Performance-based cash compensation | | Pension Value | Change in pension/deferred compensation | | All Other Compensation | Perks, 401(k) match, insurance |

CEO Pay Ratio

| Element | Description | |---------|-------------| | CEO Total Compensation | All-in CEO pay | | Median Employee Pay | Median worker compensation | | Pay Ratio | CEO pay / median employee pay |

Compensation Discussion & Analysis (CD&A)

| Section | Content | |---------|---------| | Philosophy | Compensation objectives and strategy | | Pay Mix | Balance of fixed vs. variable pay | | Performance Metrics | Goals used for incentive pay | | Peer Group | Companies used for benchmarking | | Decisions | Rationale for pay decisions |

Corporate Governance

| Area | Details | |------|---------| | Board Composition | Directors, independence, diversity | | Committees | Audit, Compensation, Nominating | | Leadership Structure | Chair/CEO separation, lead director | | Risk Oversight | Board role in risk management | | Shareholder Rights | Voting standards, proxy access |

Shareholder Proposals

| Type | Common Topics | |------|---------------| | Governance | Board declassification, majority voting | | Environmental | Climate disclosure, emissions targets | | Social | Human rights, DEI reporting | | Compensation | Pay for performance, clawbacks |

Compensation Analysis

Pay Components Breakdown

| Component | Typical Range | What to Look For | |-----------|---------------|------------------| | Base Salary | 10-20% | Stability, changes | | Cash Bonus | 15-25% | Metrics, achievement | | Stock Awards | 40-60% | Vesting, performance | | Options | 5-15% | Strike price, term | | Other | 1-5% | Perks, benefits |

Pay-for-Performance Alignment

| Metric | Strong Alignment | Weak Alignment | |--------|------------------|----------------| | TSR Correlation | Pay tracks returns | Pay disconnected | | Metric Rigor | Challenging targets | Easy thresholds | | Vesting | Performance-based | Time-based only | | Peer Rank | Median position | Outlier high |

Red Flags in Compensation

1. **Excessive perks** - Private jets, security, housing 2. **Guaranteed bonuses** - No performance link 3. **Option repricing** - Underwater options reset 4. **Pension spiking** - Inflated pension values 5. **Golden parachutes** - Excessive change-in-control pay 6. **Tax gross-ups** - Company pays executive taxes

Governance Assessment

Board Quality Indicators

| Factor | Strong Governance | Weak Governance | |--------|-------------------|-----------------| | Independence | >75% independent | <50% independent | | Diversity | Diverse backgrounds | Homogeneous | | Tenure