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Related-party transactions

What Item 404 requires companies to disclose about deals with directors, executives and their families, with Apple's 2026 proxy statement as an example.

What Item 404 asks for

Item 404 of Regulation S-K defines a related person to include directors, executive officers, director nominees and their immediate family members, and it asks for the name of the related person, the person's interest, the approximate dollar amount involved, and the amount of the related person's interest. The $120,000 threshold is a disclosure trigger, not a judgment that a transaction is improper. Ordinary compensation of directors and officers is reported under the executive compensation rules, not as a related-party transaction of this kind.

The company's 10-K often points to the proxy statement for Item 13, Certain Relationships and Related Transactions, and Director Independence. The proxy statement is therefore the usual place to read the disclosure.

An example: Apple's proxy

Apple's 2026 proxy statement has a section on related party policy and transactions. It describes commercial and charitable relationships at organizations where directors or executive officers also serve, and states that Apple does not believe any director had a direct or indirect material interest in those relationships during 2025 and through the date of the proxy. It also discloses that a family member of the former chief operating officer is employed by Apple and received total compensation in excess of $120,000 for the period from the beginning of fiscal 2025 through the date of the filing, and that the compensation was set under the practices that apply to employees in similar roles.

That is a typical pattern: a policy, a statement about relationships that did not rise to a material interest, and a specific item that did meet the dollar threshold. The disclosure describes the arrangement; it does not, by itself, say whether the arrangement is large relative to the company's overall costs.

How to read the disclosure

• Look for the amount, the related person's role, and whether the company says the terms were comparable to an unrelated deal.
• A family employment disclosure is common and is usually about one employee; a loan, a related-party supplier, or a property lease can be more significant for the business.
• If Item 13 in the 10-K says 'incorporated by reference' to the proxy, the proxy is the document to open.

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