Compensation Consultant Market Share Rankings 2015
January 13, 2016
Executive compensation continues to play a key role in attracting, retaining and awarding corporate employees
primarily responsible for company success. Five years after Congress passed Dodd-Frank, companies continue to
focus on sound pay-for-performance practices to balance incentives for executives with the expectations of
shareholders and proxy advisors that vote for or against Say-on-Pay proposals.
Well-rounded compensation programs, however, do not end with a resolution to pay for performance. A majority
of public companies engage compensation consulting firms that will advise not only on the level and structure
of annual executive pay, but also on supplemental features such as severance and change-in-control policies
and equity compensation plans.
Compensation consultants are engaged by a company’s board of directors, its management or both. Consultants
engaged by the board advise its compensation committee, while consultants engaged by management advise the
employees within the company’s ranks tasked with monitoring and aiding the design of executive pay programs.
Equilar’s Compensation Consultant Market Share Rankings 2015 reveals the most popular consulting firms among
companies of varying size and industry, while ranking them against their peers. The consultants sitting atop
the ranks remained largely the same compared to the
2014 report. Although
certain consultants may own highest share across broader categories such as the market indices, further
examination of the industry sectors reveals that those market leaders are not always in highest demand for
companies with specialized considerations.
New for this year’s report, Equilar also examined consulting firms engaged by company management, in addition
to those firms engaged by boards of directors. Rankings for board vs. management engagements demonstrate a clear
difference in market share.
Equilar’s Compensation Consultant Market Share Rankings 2015 details market share of compensation consulting
firms across multiple market indices and industry sectors, ranking the top 10 firms per category. For the
indices, consulting firm market share is divided between those firms engaged by public company boards of directors
and management. The industry sectors examine board engagements within the Russell 3000 Index®. The Russell 3000®
SmallCap was determined by taking the bottom-third of the Russell 3000 Index® by market cap.
This information was compiled through a study of the most recent consulting firms disclosed in proxy statements
for the sample sets of companies, and those that did not disclose a consultant were excluded. The study defines
years by fiscal year ends between March 1st and February 28th.
Compensation Consultant Market Share By Index
Equilar calculated the market share held by consulting firms for both board of directors and management engagement
in three popular indices: the Russell 3000, Fortune 1000 and S&P 500. In addition, the bottom third of the Russell
3000 by market cap was examined for a look at smaller cap companies.
Frederic W. Cook & Co. continues to hold the highest market share for board engagement within the Russell 3000,
Fortune 1000, and S&P 500, while Pearl Meyer & Partners ranked on top for Russell 3000 SmallCap companies. Within
the past three years, all top three consulting firms engaged by the company’s board of directors consistently
ranked the same across the Russell 3000, Fortune 1000, S&P 500 and Russell 3000 SmallCap.
Between 2013 and 2015, Towers Watson held the highest market share across the most popular indices when engaged by
management. Among the bottom third of the Russell 3000, Towers Watson and Radford both topped the list with equal
market share of 13.3% in the most recent year.
Board Engagement Market Share in the Russell 3000 by Industry Sector
Consultants will often hold more market share in a particular industry sector over others, as their expertise
can provide valuable insight into optimal executive compensation policies and structures for a specific type of
company. Equilar looked at board engagements for the Russell 3000 and determined which consultants had the
largest market shares across eight sectors.
In 2015, Frederic W. Cook & Co. had the highest market share for almost all industry sectors, except for the
healthcare and technology sectors, in which it ranked second. Since Radford specializes in delivering advice
to life sciences companies, it is not surprising the firm topped the list for the healthcare sector. As for
the technology sector, Compensia’s principal consultants have done significant work advising technology
companies in the past, which helps explain its leading market share in this area.
For more information on Equilar’s research and reports, please contact Amit Batish, Director of Content &
Marketing Communications at firstname.lastname@example.org. The contributing authors
of this report were Jasmin Tran and Shawn Wong, Research Analysts, and Matthew Goforth, Equilar Research and