July 26, 2011
Study: Companies Change Peer Groups Often
– Broc Romanek, CompensationStandards.com
From this Cooley news brief: Equilar has issued a report on trends among the S&P 1500 in selecting peer groups in 2010. Apparently, companies change their peer groups quite a bit. According to Equilar, 55.8% modified their peer groups from 2009 to 2010. The most interesting finding was this: “companies benchmark to higher-revenue peers: 78.6% of companies had revenues equal to or below the 60th percentile of their peer group. The average revenue rank was around the 45th percentile.” This finding is consistent with those of earlier academic studies and just might account for the constant ratcheting up of executive pay.