tomevault-io 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 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 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
- Excessive perks - Private jets, security, housing
- Guaranteed bonuses - No performance link
- Option repricing - Underwater options reset
- Pension spiking - Inflated pension values
- Golden parachutes - Excessive change-in-control pay
- 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 | Balanced mix | All long-tenured |
| Overboarding | Limited seats | Directors overcommitted |
| Attendance | >90% average | Low attendance |
Committee Structure
| Committee | Key Oversight | Best Practices |
|---|---|---|
| Audit | Financials, controls | All independent, financial experts |
| Compensation | Executive pay | All independent, no interlocks |
| Nominating | Board composition | Independent, clear criteria |
| Risk | Enterprise risk | Defined charter, regular meetings |
Shareholder Rights
| Right | Shareholder-Friendly | Concern |
|---|---|---|
| Voting Standard | Majority voting | Plurality only |
| Proxy Access | Available | Not available |
| Special Meetings | Low threshold | High/no threshold |
| Written Consent | Allowed | Prohibited |
| Dual Class | Single class | Multi-class voting |
Voting Analysis
Say-on-Pay Voting
| Support Level | Interpretation |
|---|---|
| >90% | Strong approval |
| 70-90% | Acceptable |
| 50-70% | Concerns raised |
| <50% | Failed - action required |
Director Elections
| Support Level | Interpretation |
|---|---|
| >95% | Strong support |
| 80-95% | Normal range |
| <80% | Significant opposition |
| <50% | Failed (if majority vote) |
Shareholder Proposals
| Support Level | Interpretation |
|---|---|
| >50% | Passed - expect action |
| 30-50% | Significant support |
| 20-30% | Moderate interest |
| <20% | Limited support |
Analysis Tips
Track trends: Compare compensation over 3-5 years, not just one year.
Read the CD&A: Narrative explains rationale behind numbers.
Check peer group: Ensure peers are truly comparable.
Note changes: New compensation elements or governance provisions.
Follow the votes: Declining support signals concerns.
Review related transactions: Conflicts of interest disclosed.
Use Cases
- Investment analysis: Assess management alignment with shareholders
- Governance screening: Evaluate board quality and practices
- Activist research: Identify governance improvement opportunities
- Compensation benchmarking: Compare pay across companies
- ESG analysis: Evaluate social and governance factors
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