Self-Identified Peer Groups

Self-identified peer groups, often disclosed in the proxy statements of SEC registrants, have proven to be a valuable tool for benchmarking executive compensation.

Traditionally, peer groups have been formed by selecting a set of 14-24 companies on the basis of similarities in industry, market cap, and revenue. Recently, a company’s self-identified peers have come to be seen as an additional key component in the proper creation of peer groups. In fact, ISS, a proxy advisory firm, recently revised their peer group selection criteria to take into account a company’s self-selected peers.

Analysis of these peers provides an effective way to benchmark not only executive compensation, but also a myriad of other metrics, such as audit fees. The table below reveals the top ten most frequently cited peer companies in the Russell 3000, according to Audit Analytics’ data.

Top Russell 3000 Peer Companies 2011-2012