Equilar to Launch New Center On Executive Compensation Tool for Assessing Metrics

May 19, 2017

The Association's Center On Executive Compensation is pleased to announce that our tool to help companies assess and identify incentive metrics that are more highly correlated with shareholder value, the Incentive Plan Analytics Calculator (IPAC), will be launched by Equilar in early June. The tool, which has been undergoing testing with a focus group of Center Subscribers and HR Policy members over the past two months, helps companies assess the relationship between incentive metrics and long-term shareholder value in addition to reviewing the prevalence of various metrics among peer companies.  The concept has been developed by Center Executive Vice President Shelly Carlin and builds on the concepts she articulated in Parts I and II of our Executive Compensation Re-Imagined series, urging CHROs to challenge conventional wisdom in identifying incentive metrics, especially regarding the use of total shareholder return.  The IPAC platform encompasses two major functionalities:

  • Financial Metric Correlation. This function allows companies and investors to determine statistical correlation for myriad financial metrics and TSR for a variety of specified timeframes and peer groups. The analysis can be used to help companies assess the robustness of their own incentive plan metrics in addition to considering whether other metrics might be more highly correlated to shareholder return for their industry or forward-looking strategies.

  • Incentive Plan Design. Separate from the correlation analysis above, this function allows companies to research prevalence for almost any financial metric among selected peer groups and then analyze TSR performance for companies that use one metric versus another in their long-term incentive plans.
Access to the Incentive Plan Analytics Calculator will be available through Equilar's existing platform.  For more information, download a PDF overview or contact Shelly Carlin at scarlin@execcomp.org or Ani Huang at ahuang@execcomp.org.