According to equity-compensation firm Equilar, the recent imbroglio at the NYSE "highlights the importance of peer group selection for CEO compensation analyses."

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Compensation analysis conducted by Equilar.

Equilar, in San Mateo, CA, can be reached via email or at (877) 441-6090.

The firm recently analyzed S&P 100 companies to uncover trends regarding how the

largest corporations in America are selecting their peer groups when

benchmarking CEO pay, and discovered that companies are disclosing more.

Findings

Among the firm's key findings were the following:

Greater Disclosure

Equilar identified a general trend towards increased disclosure of peer group companies

for benchmarking purposes.

Forty-one percent of S&P 100 companies

changed the disclosure of their peer group over the two most-recent fiscal

years. By a ratio of almost three to one, companies increased the specificity

of disclosure regarding peer groups.

Disclosure Varies

The level of disclosure varied widely. At the high-end of the

disclosure spectrum, 11 percent of companies provided actual company names that were

included in their benchmarking analysis.

A few examples of how

companies described their peer groups were:

"Comparable companies"

"Significant, global industrial/service corporations"

"Large and high-performing industry competitors: Abbott, AstraZeneca,…"

(ten other competitors listed)

General & Industry Peers

According Equilar's analysis, more companies are benchmarking CEO pay against a peer group that

includes a complement of both general peers and industry-specific peers.

General peers are determined by criteria such as

market capitalization or revenues; industry-specific peers are those that are considered the same industry or included in the same market index).

"This trend may be tied to the fact that domain

experience is becoming less critical as more CEOs are hired from outside their

industries," stated the study. "In addition, as consolidation has swept various industries, there

appear to be fewer relevant peers against which to compare."

Related to general vs. industry peers, Equilar found:

Forty-three percent of S&P 100 companies used both a general peer

group and specific industry peer group for benchmarking purposes.

A typical example was: "Pharmaceutical, medical device, and biotech industries

included in S&P's 500 Health Care Index, as well as other large

non-health care companies of similar size and scope."

Thirty-one percent used a general peer group ONLY.

An example of a general peer group comparative disclosure is: "General Industry with revenue comparable to the level of the

company."

Twenty-six percent identified specific industry peer group ONLY.

Example: "Companies within the S&P Aerospace/Defense Index."

Hard Numbers

Among the 21 S&P 100 companies that disclosed the number of

companies against which they benchmarked, the median number of peer group

companies was 15.

Those values ranged from three companies (Harrah's Entertainment) to as

many as 600 companies (Medimmune).