2015 Peer Group Benchmarking: An Analysis of S&P 1500 Companies

This report analyzes and illustrates trends on how companies choose their peers and where they stack up in comparison. This analysis included S&P 1500 companies that filed a proxy statement for fiscal year 2014 (n=1,461).

With increased scrutiny surrounding pay for performance, companies have become increasingly transparent about their compensation policies. Shareholders are interested not only in how much executives are being paid, but also the foundation on which those company leaders are paid. Consequently, peer group creation and comparison have come into the spotlight and have played a large role in setting compensation at nearly every company in the S&P 1500.

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Key Findings:

• 89.8% of S&P 1500 companies disclosed peer groups in their most recent proxy statements, an increase of 8.4 percentage points over 2013.

• Industry is far and away the most common criterion that companies use when selecting peer groups, with 78.0% of companies in the S&P 1500 benchmarking based on their business sector. Revenue followed at 65.2%.

• A comparison of revenue ranking and CEO compensation between company disclosed peers and Equilar Market Peers, an objective algorithm that determines the 15 companies with the strongest connections to each target company, representing the complex relationships in the marketplace.