The CD&A addresses the objectives and implementation of executive compensation programs, focusing on the most important factors underlying the company’s compensation policies and decisions. It addresses why each compensation program element was chosen, how award levels were determined, and how each element fits into the company’s overall compensation objectives.
 
Recent changes to proxy requirements also include a new disclosure of how risk is related to compensation and whether or not these risks may have a material effect on the company. The focus is on how the corporation’s compensation structures and practices drive an executive’s risk-taking and the compensation committee’s management of risk regarding its compensation program.
 
The changes are meant to increase disclosure of the relationship between a company’s overall compensation policies and how these policies create incentives that can affect its risk and the management of that risk. Public companies are required to discuss and analyze in the CD&A the risk attributes of its broader compensation policies for employees (including non-executive officers). This new disclosure will only be required if the risks from a company’s compensation policies have a material impact on the company.