Benchmarking CEO compensation and Performance

Policy Memo
Objectives:
• Critically evaluate compensation and performance peer groups
• Suggest modifications as appropriate
• Benchmark CEO compensation and assess compensation versus peers
• Benchmark TSR performance and assess performance versus peers
You have been retained by the board of Pem Ppot Corp to support them in making
policy decisions for their peer groups for executive compensation and performance assessment
purposes.
You have been asked to review their existing peer groups as disclosed in the latest proxy
circular. Review and provide comment on the appropriateness of the selection criteria and list
of peers, particularly in light of the pending arrangement with Kiner Murg Canada – suggest
modifications as you see appropriate. Note: you are expected to suggest modifications to both
peer groups, do not use their existing groups without change.
After selecting a set of compensation peers, benchmark the CEO’s 2018 compensation across
various components of pay and total pay versus the peers. Comment on the competitiveness of
pay levels versus Pem’s current CEO. Based on your recommended set of performance
peers, benchmark Pem’s TSR performance against its peers on 1/3/5-year basis, and
comment on the overall level of performance.
Your report should consist of no more than eight pages. Four pages of written commentary,
with four pages for illustrations and graphs. The required tables include:
i) A list of suggested compensation peer companies, including key size and description
metrics;
ii) A list of suggested performance peer companies, including key size and description
metrics;
iii) CEO pay benchmarking data for all the compensation peer companies by
component;
iv) TSR performance analysis data for all the performance peer companies.
Accuracy and conciseness will be heavily weighted in the grading scheme – typos,
miscalculations will result in significant marks deducted.