Analyzing and Identifing Appropriate Peers for Financial Performance and Pay Benchmarking with Competitive Compensation Data

Cowden Associates, Inc. works with companies to identify appropriate peers for financial performance and pay benchmarking. We analyze competitive compensation data from several sources:

• Public documents (i.e., proxy statements and 10-Ks) filed by publicly traded U.S. companies allow us to use data from peer groups or other relevant comparisons. The peer company information enables us to analyze compensation levels in a performance context where financial information is also available. Companies are required to disclose compensation and benefits information only for their top five (5) executive officers.
• Published surveys conducted by consulting firms and trade associations provide the most readily available source of competitive information for the greatest number of positions. Published survey data, however, cannot be “tailored” to meet a client’s specific needs in terms of comparable companies or types of information.
• Best practice research maintained in our database contains the compensation practices of well-known, best practice companies.

Our primary focus is on comparing total compensation programs in the peer group and from other published databases with a company’s existing programs. In addition, we identify general trends in the market place and provide our perspective based on current developments regarding creative pay concepts, such as:

• Pay levels and pay mix

• Performance to pay relationships

• General trends regarding executive incentives and commentary on the approach used by each company

• Technical commentary related to special issues, such as stock option expensing, change-in-control, deferred compensation, etc.