Grant-Date Fair Value vs Realized Pay: Which Measure Are You Comparing?

The peer row says one number; your own records say another

Your compensation committee chair has asked for a short note on how your pay sits against peers before the March review. You open a competitor's DEF 14A and find the principal financial officer's row in the Summary Compensation Table. The stock awards figure looks far larger than anything your own grants have delivered. Your spreadsheet tracks something different: shares that vested, shares sold, cash that reached your account. Both sets of numbers are accurate. They measure different events.

That mismatch spoils more peer comparisons than parsing errors do. The proxy table prices equity on the day it is granted. Your own experience prices it on the day it vests or is sold. Put one beside the other and the comparison tells you nothing, whichever direction the difference runs.

This article separates the measures that proxy filings and pay records use. It works through grant date fair value vs realized pay with round numbers, and it shows how to state your own pay in the same measure as the peer rows you are reading.

Grant date fair value vs realized pay: what the Summary Compensation Table reports

The Summary Compensation Table is the standard source for peer CFO figures, so it helps to be exact about what it counts. Item 402(c) of Regulation S-K requires the table to show each named executive officer's compensation for each of the last three completed fiscal years, as PwC Viewpoint's reproduction of the rule shows. Miller & Chevalier's summary lists eight compensation columns plus a total:

• salary
• bonus
• stock awards
• option awards
• non-equity incentive plan compensation
• change in pension value and nonqualified deferred compensation earnings
• all other compensation
• total

Two of those columns carry the equity. Stock awards fall under Item 402(c)(2)(v) and option awards under Item 402(c)(2)(vi). Since the SEC's 2009 amendments, both are reported at aggregate grant date fair value rather than the annual accounting charge, as SEC press release 2009-268 describes. The rule text has the value computed in accordance with FASB ASC Topic 718, the stock-compensation standard.

The consequence is the point of this article. An SCT equity figure records what an award was worth when it was granted. It does not record what vested, what the shares later traded at, whether the award was forfeited, or what you sold. SCT equity is a grant-date measure, not realized pay.

Awards with performance conditions add a wrinkle. Under Instruction 3 to Item 402(c)(2)(v) and (vi), their grant-date value is based on the probable outcome of those conditions. If that is less than the maximum, a footnote gives the value assuming the highest level of performance. Read those footnotes before treating a peer's figure as comparable to yours. The column-by-column method for locating each footnote is in how to read the Summary Compensation Table.

Four measures that all get called "pay"

The word "pay" hides which measure someone means. Four are in common use for CFOs.

Measure	What it counts	Where you find it
SCT total	Sum of the compensation columns, with equity at grant-date fair value	Summary Compensation Table, DEF 14A
Compensation actually paid (CAP)	Pay adjusted for changes in the value of equity awards during the year	Item 402(v) pay-versus-performance disclosure
Realized pay	What actually vested, was exercised, was sold or was paid in cash; no rule defines it	Your own records; some company proxy statements
Form 990 reportable compensation	For an employee, generally the greater of Form W-2 box 1 or box 5, for the calendar year ending with or within the tax year	Form 990 Part VII and Schedule J

Compensation actually paid needs the most care. The SEC's fact sheet on Release 34-95607 says the pay-versus-performance table covers the five most recently completed fiscal years. It shows the principal executive officer's figures and an average for the other named executive officers. It does not show a separate CFO figure. Foley Hoag reports that the requirement took effect for fiscal years ending on or after December 16, 2022, and that smaller reporting companies provide three years instead of five. Item 402(v) excludes the proxy statements of emerging growth companies. Compensation actually paid reflects changes in the value of equity awards during the year, while the SCT reports grant-date value, according to the Harvard Law School Forum on Corporate Governance. You cannot read an individual peer CFO's CAP off a filing. Compensation actually paid and pay versus performance covers what the table does disclose.

Realized pay is the loosest of the four. Neither the SCT nor Item 402(v) defines it. Some proxy statements present a "realized" or "realizable" view. Treat any such figure as company-specific, and check its footnote for how the company defines it.

For nonprofit and hospital CFOs, the fourth row applies. The IRS Instructions for Form 990 say Part VII reports compensation for the calendar year ending with or within the organization's tax year. For an employee, reportable compensation is generally the greater of Form W-2 box 1 or box 5, so it does not rest on grant-date value. The two are not interchangeable, and a public-company SCT figure should never be set beside a Form 990 figure without saying so. For the exact definition, use the IRS instructions.

A worked example with round numbers

The inputs below are illustrative and are not drawn from any filing.

Suppose a CFO receives a grant of 10,000 restricted stock units. The grant-date fair value is $100 per unit, so the award is valued at $1,000,000 at grant. For simplicity, assume all units vest on the third anniversary of the grant.

In the SCT for the year of the grant, the stock awards column shows $1,000,000. That figure then stays fixed, whatever happens to the share price afterwards:

• If the shares are worth $80 at vesting, the vested value is 10,000 × $80 = $800,000.
• If they are worth $130 at vesting, it is 10,000 × $130 = $1,300,000.
• If the CFO leaves before vesting and the units are forfeited, the realized value is zero.

The SCT shows $1,000,000 in all three cases.

Timing also differs. The SCT records the award once, in the grant year. A realized view records it in the year of vesting, three years later in this example. A year-by-year comparison of SCT rows against your own vest history will therefore diverge even when nothing unusual has happened. What happens to unvested RSUs when an executive leaves covers the forfeiture case in more detail.

The size of the difference between reported and realized pay depends on the share-price path, the award type and the vesting schedule. This article gives no typical figure, because it has no sourced one to cite.

Where an SCT total can move without any pay decision

Several features of the SCT change a CFO's total without anyone deciding to pay them more or less. Know them before you read a peer row as a signal.

• Pension and deferred compensation. The change in pension value and nonqualified deferred compensation earnings column can swing a total without any change in pay decisions.
• Grant timing. An award granted early in one fiscal year and one granted late in the prior year land in different SCT years. Two similar CFOs can show different totals in the same proxy year.
• Recent promotions. Meridian Compensation Partners found that pay for newly promoted S&P 500 CFOs tends to ramp up over two to three years. A new CFO's row may not reflect steady state.
• Proxy year vs fiscal year. A proxy filed in 2025 typically reports the fiscal year that ended in 2024. A company can incorporate Part III into its Form 10-K if the definitive proxy is filed within 120 days after fiscal year-end, per Deloitte DART's summary of SEC staff interpretations. That is why most SCT data appears in the months after year-end. Off-calendar fiscal years break the simple one-year offset, so note which year each peer figure belongs to.
• Whether the CFO appears at all. Under Item 402(a)(3), a non-smaller-reporting filer's named executive officers include everyone who served as principal financial officer, per the GPO's text of 17 CFR 229.402. A smaller reporting company's named executive officers are its principal executive officer and its two most highly compensated other executive officers, so its CFO may not appear in the SCT. Where there is no CFO row, there is no figure in any measure.

Stating your own pay in the same measure as the peer rows

Before you place your pay against any peer figure, put both on the same footing. The steps below do that.

1. Name the measure of every peer figure. For most CFO peer rows it will be the SCT total. Note which columns feed it, because stock awards and the pension column behave differently.
2. Convert your own equity to grant-date values. For each award, use the grant-date fair value in the year it was granted, taken from your grant documents or your equity plan administrator. Do not use the vesting-date value.
3. Keep cash components straight. The SCT separates salary, bonus and non-equity incentive plan compensation. If the performance measure is satisfied during the fiscal year, a non-equity incentive amount is reportable for that year even if it is not payable until later (Instruction 1 to Item 402(c)(2)(vii)). If your company is a non-smaller-reporting filer, your own SCT row is the cleanest reference for how your pay is classified. How CFO pay breaks down into base, bonus and equity sets out the components.
4. Keep a realized view as a separate record. It is useful for your own planning. Label it, and keep it out of any peer comparison.
5. Record source and vintage for each peer figure. Note the company, the filing date, the fiscal year and the measure.

Done by hand, this means rebuilding five things: identifying the CFO row by title, lining up columns across filers, keeping a citation for each figure, cross-checking for keying errors, and noticing which peers disclose no CFO at all. A spreadsheet and EDGAR can replicate all of it, at the cost of your time.

CFOCompensation is built to take over some of that assembly. The app is designed to accept your base, bonus including non-equity incentive, equity grant value and other pay, normalised to SCT conventions. It is designed to show a filing citation and a last-updated date beside every peer figure. It is also built to cross-check each peer's SCT total against the average non-principal-executive-officer total in the Item 402(v) disclosure. That check is a consistency rule, not an audit. Once your pay and the peer rows share a measure, how a CFO pay percentile is defined is the next step.

Limits, and the worksheet that lays out the steps

Several limits apply to everything above:

• Grant-date equity is not realized pay, and no adjustment turns one into the other without your own grant and vesting records.
• The 402(v) cross-check described above tests consistency, not correctness.
• Private-company pay is not covered, and neither is anything that cannot be traced to a filing.
• The size of the difference between reported and realized pay is not stated here, because no sourced figure is available. Check any figure you are given against its filing.

The Proxy Summary Compensation Table Reading Guide and Peer Build Worksheet pairs a reading guide with a worksheet. It covers finding the filing, confirming which row is the principal financial officer, recording each row with its filing and fiscal year, and flagging 'Treasurer'-only, former and interim titles for your review. It ships with no peer pay data and organizes the cited figures you enter for your own preparation. It does not recommend what to ask for.

About these figures: CFOCompensation works from disclosed figures only, shown as filed and cited to the source filing; any third-party survey or study is named and labelled as such. Nothing in this article is legal, tax or negotiation advice. CFOCompensation and Rovaryn Digital Inc. are not affiliated with the SEC or the IRS. Private-company pay is not covered.