On their earnings call recently, Equifax announced that due to their recent cyber breach, the executive team would be foregoing any annual incentive this year. Read More Here. “Well that’s good I thought. About time some executives owned up, felt the pain, …” But then this little voice in me wondered … how much pain are they really going to be feeling? Is this for real, or just a good story? So I did what any good compensation consultant would do:
I read their proxy.
It turns out that this noble act isn’t necessarily as noble as it first sounded. First, in their comp design, the target annual incentive comprises only 18% of the Target Pay Mix for the Named Executive Officers. Then, if the 2017 plan follows the design of the 2016 plan, 15% of the annual incentive plan is tied to Corporate Operating Revenue and 65% is tied to Corporate Adjusted EPS. Something tells me that the chances of Corporate Operating Revenue meeting expectations this year aren’t very good. And as for Corporate Adjusted EPS, which they footnote is a non-GAAP financial measure, well why that is a questionable measure in an annual incentive plan is a blog for another day. Read More Here.