The Advisors' Blog

From the folks who brought you the say-on-pay tracker and other tools, the team at Farient Advisors has now announced the launch of “PVP Tracker” – which can help you stay on top of how S&P 500 competitors and peers are sharing data. Here’s more detail:

Included in our newly launched PvP Tracker™ is coverage of both qualitative and quantitative elements. On the qualitative side, the PvP Tracker™ summarizes trends in peer group selection, the “most important” performance measures, and the formats employed when describing the relationships between CAP and measures of financial performance, among other elements.

Here are a couple of early findings that the real-time data reveals:

– When companies reference the relationship between CAP and performance measures, they most commonly (55% of S&P 500 companies) disclose those relationships in a graphic format only. Another 34% of companies use a combination of graphs and narrative. A slim minority (11%) of S&P 500 companies disclose these relationships in a strictly narrative format. Thus, a visual representation is the preferred approach either because it helps to better show the connection between pay and performance, or because no additional narrative is needed to satisfy SEC reporting requirements.

– In terms of the “most important” company-selected metric (CSM), Farient’s PvP Tracker™ finds that a majority (54%) of companies are choosing an earnings metric, such as operating profit or EPS, followed by returns (15%) and cash flow (13%). Of course, CSM trends vary by industry—for instance, 37% of companies in the financial sector select a returns measure as their CSM.

You can sort the data by industry to show comparisons of CAP to SCT compensation and to explore disclosure trends. It’s a very handy tool for anyone tasked with benchmarking – or just curious about how these disclosures are shaping up.

– Liz Dunshee