Analyzing and Identifying 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.
Our process includes local and industry market analyses of pay information and an extensive review of all aspects of regional and competitor compensation programs. We use comparative data from national and regional external databases and regional proprietary internal sources. Our analysis includes:
- Base Pay
- Annual and long-term incentives
- Unique incentive opportunities
- Grant types and mix
- Stock ownership guidelines
- Creation of compensation structures
- Employee communication plans and support
- Creation of new or updated plan documents