Selecting the Right Peers for the Right Pay
Challenge: When one of Farient Advisors’ industrial clients realized its multi-business focus and major international presence was atypical for its size, we helped the company successfully rethink its approach to peer group development.
Approach: By conducting an in-depth analysis to identify companies of comparable size with similarly diverse and complex operations, we were able to design a new peer group that paid significantly more – despite being similar in size to the old peer group.
Result: Based on the new peer group, the compensation committee approved an increase in our client’s target compensation, which in turn enabled our client to more easily compete for and retain top talent. In addition, Farient developed a shareholder/proxy advisor communication plan and worked with our client to explain the rationale behind the new peer group to Institutional Shareholder Services, gaining its acceptance and favorable Say on Pay recommendation.