The Advisors' Blog

– Broc Romanek

Equilar recently issued a new report on peer group composition, with commentary from PayGovernance. Here are some key data points:

– 95.4% of S&P 500 companies disclosed a compensation benchmarking peer group in their most recent proxy statements; up from 91% in 2011
– Median peer group size for S&P 500 companies is 17, and more than 10% of companies disclosed more than 25 peers. The maximum number of peers was 132.
– Most S&P 500 companies named only one peer group in their most recent proxy statements, but a handful—11%—included two or more.
– More than 90% of S&P 500 companies chose their peers at least partially based on industry, while approximately 75% of companies chose peer groups based on revenue size.
– 3M was the most commonly cited peer company, named by more than 10% of all S&P 500 companies. Honeywell and Johnson & Johnson were the next-most included peer companies.
– About half of the S&P 500 included at least one peer based outside the U.S. Ireland was the most common headquarters country for non-U.S. peers, and companies based there were cited 183 times in S&P 500 proxy statements.
– Majority of S&P 500 companies — or 53.5% — paid their CEOs between the 25th and 75th percentiles of the peer groups they disclosed. And very few — less than 8% — paid the maximum or minimum in comparison to their disclosed peer groups.