Equilar and the Center On Executive Compensation have partnered over several years to develop the Incentive Plan Analytics Calculator (IPAC), a tool that allows employers to analyze their incentive plan design benchmarked against market peers, ISS peers and the Equilar 500.
This week, Shelly Carlin, Executive Vice President at the Center, co-hosted a webinar to discuss the capabilities of IPAC and how these features can bring a data driven approach to answer questions like “Are we using the right metrics that are most closely correlated to shareholder return?” and “Are the targets we set robust and how do they compare to the outcomes of our peer group?”
Equilar’s IPAC analytics can help assess:
- Metric Prevalence and Trends: Understand how different financial and ESG metrics are used among your peer group to determine if you are an outlier. Compare the prevalence of metrics by category with your peers and review recent plan changes for peer companies based on 8-K filings.
- Financial Metric Correlation: Analyze the correlation of financial metrics to relative TSR and other financial metrics.
- Target Setting: Assess the rigor of your targets by reviewing historical outcomes to understand relative difficulty for your organization as well as peer companies.
- Scenario Planning: Test potential changes to metrics, weightings and targets by modeling various scenarios and assessing impact.
On the webinar, Shelly explained that IPAC complements the judgement that compensation committees are using when discussing incentive plan design. IPAC can elevate the discussions that HR leaders have with finance and compensation committees and “bring HR to the front and center by combining this judgement with analytics.”
To become a member of Equilar and subscribe to the IPAC tool, click here.