What is it:
A proxy statement (officially filed with the SEC as a DEF 14A) is the annual disclosure document a public company sends to shareholders ahead of its annual meeting. This document typically includes detailed disclosures on executive compensation, including specific PSU metrics, weightings, and any exercised discretion by the compensation committee.
Why does it matter:
If your company is public, the proxy statement is often the clearest place to see how your own compensation committee designs and discloses pay decisions, since it explains structure and rationale in plain language, more so than your own plan document typically does. It can also be a valuable source for evaluating a potential employer's compensation philosophy and rationale before you negotiate an offer.
What do people most often get wrong:
People often assume the proxy statement will disclose everything, including the specific forward-looking performance targets tied to an active grant. It usually doesn't. Companies commonly keep those specific numbers confidential, disclosing the structure and rationale now and the underlying numbers after the performance period has ended and the certification of the results occurs.