63 Percent of Companies Made Peer Group Revisions in ’09

Faced with the twin demons of intense public scrutiny and the pending Dodd-Frank legislation, increasingly large numbers of companies are showing an active interest in their peer groups. Equilar’s newest study found that 63.9 percent of the S&P 1500 made some kind of change to their peer group (adding, deleting, or replacing at least one company) in 2009. In the wake of the infamous Tootsie Roll incident, it’s clear that no one wants to be caught asleep at the wheel when it comes to selecting a relevant peer group.

But while there may not be any Tootsie Roll-sized gaffes in the mix, it’s clear that the trend of smaller companies benchmarking to larger companies is far from over. The S&P 600 (small-caps) had a median revenue rank in the 38th percentile compared to their peers, while their mid-cap compatriots were at the 43rd percentile. The S&P 500 achieved the optimum balance, at a median of the 50th percentile. For the entire S&P 1500, 76.9 percent of companies had median revenues at or below the 60th percentile of their peer group.

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