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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.

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