January 11, 2013 Issue
The Most Powerful Name In Corporate News and Information
Equilar is proving Access to the High Quality Independent Data needed for Senior HR Professionals, Corporate Secretaries, General Counsel and C-Suite Executives to make Highly Scrutinized Executive Compensation Decisions
W product suite is the gold standard for benchmarking and tracking executive
compensation, board compensation, equity grants and award policies and
Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – February 11, 2013
Mr. Chun: Equilar was founded in March of 2000. The vision is consistent with what it was when we first started. With all this information out there and disclosed in SEC filings, our goal was to mine this data and build insight around it and to offer tools and solutions to allow people to navigate through this information more easily. It took a couple of fits and starts but somehow we discovered the whole executive compensation arena and have been very active there providing a tool that is being used by HR professionals, corporate governance professionals, c-suite executives and board members to help them in the pay-for performance discussion.
CEOCFO: Your website indicates you are the leading provider of executive compensation data - is there much competition?
Mr. Chun: Yes there is! There is actually more than you would think. There is everything from the free Edgar filings themselves, a number of the financial websites have exec comp data as part of their offerings. In terms of having a high quality tool for benchmarking, we clearly are the market leader but there are alternative sources out there for this information.
CEOCFO: What are some of the simple and more common things you provide and what are some of the data you provide that people might not even realize can be found?
Mr. Chun: We provide the raw compensation data such as the base salaries, bonuses, equity grants, stock options, stock awards. There is quite a bit of information out there in the SEC filings that go above and beyond the more obvious things. What we do is we track peer groups that companies use to figure out the pay packages. We will go into a section of the document called the Compensation Discussion and Analysis section and pull out some of the more intricate pieces there. What we have done with the peer group data is help companies come up with their own peer group based on all the market data out there on peer groups. We go into the Form 4 filings and pull out new equity grants as they occur and are being granted by companies. We will go into 8-K filings and pull information from the employment contracts. There is quite a bit out there that goes above and beyond just base salary and bonus that somebody receives.
CEOCFO: You have a wide range of companies that use your services but, in general, who is looking at Equilar’s material?
Mr. Chun: We work with primarily public companies. Within a public company, we are working with senior HR professionals, the corporate secretary, general counsel, c-suite executives, finance, even comp committee members. It is a broad universe of people.
CEOCFO: Do people typically have an annual contract with you?
Mr. Chun: Yes they do. It is an annual subscription and gives you unlimited access to the database and be able to prepare for a comp committee meeting, hiring and a wide range of uses on that front. We have another product called Atlas. What we have done is taken the same data that we have been tracking over the last twelve or thirteen years and have built a “Linkedin of the C-Suite”, so we have connected board members and executives of public companies. If you are trying to reach a certain company, we can help you identify, based on who you know, how you are connected to key executives and board members there.
CEOCFO: What was the hardest part to put together for you?
Mr. Chun: Getting those first sets of sales. Convincing people that what we were offering was significantly more valuable than what they were currently using. Getting people comfortable with using third-party data is always a challenge and we have been able to get a good position in the marketplace. We work extensively with the media, the New York Times, Wall Street Journal and others. It is building that reputation and that takes time.
CEOCFO: Are there pieces of data you would like to provide?
Mr. Chun: We are going to be going international. We are in Canada today but our plan is to eventually go into Europe and Asia.
CEOCFO: Is that as far as selling or getting the information?
Mr. Chun: In a number of the companies, it is publicly available so for us to go out and do it, it is relatively straightforward. It is just about having the resources to be able to go do it ourselves.
CEOCFO: How do you reach potential customers?
Mr. Chun: We have over a thousand corporations that are clients today. We have a direct sales force that reaches out to the thousands of public companies that are not clients today. We do web based demos, we use Go-to-Meeting to help demonstrate the capabilities of our product, so we do have a direct sales team. The other thing we use is we publish about twenty reports a year, we will do major media studies of about thirty to forty of those each year. We get many inquiries based on the thought leadership we have out in the marketplace.
CEOCFO: Do potential customers realize the value of the data you provide or are there still some companies that do not quite get it?
Mr. Chun: We have a thousand corporate clients and a number of them have been clients of ours for five, six, seven years and have renewed every year. They clearly get it. They recognize the comp decisions that comp committees are making are probably one of the most important decisions that board members are asked to make as well as probably the most highly scrutinized decisions that they are making. They clearly recognize having access to high quality independent data is a key component when making highly scrutinized executive compensation decisions.
CEOCFO: Do you feel the current economic scenario has been helpful, hurtful or not much difference?
Mr. Chun: I think it has been helpful. I think the focus on corporate governance is making sure pay decisions are aligned with performance. If you look back ten or fifteen years ago, shareholders were not nearly as engaged as they are today around those decisions and that has had a positive impact in interest in our services.
CEOCFO: What is ahead for you?
Mr. Chun: We are excited about the potential of the Atlas product. We expect a number of our existing clients to be using that for recruiting board members, for business development. We are excited to be launching that and have a number of interesting organizations using that today. We are looking to take our services outside of North America.
CEOCFO: You mentioned resources to do that. Is Equilar looking actively for funding or partnerships?
Mr. Chun: The good news about us is we are profitable, we have been profitable for a while, we are able to reinvest our profits back into our business and we are very comfortable with the investment rate we are making. We are not looking for outside funding. We may be looking for partners as we go outside the US as we enter new markets, so maybe some strategic partners down the road.
CEOCFO: Why should the business and investment community pay attention to Equilar?
I think your readers are people who are very successful in business and are
looking to network and connect with other very successful people in
business. With Atlas, we have connected the community that is not on
Linkedin or Facebook, to allow people to find and uncover connections to key
individuals that they would not be able to find on their own. If you are
looking to expand and grow your business, Atlas is a tremendous resource for
that. With regards to our benchmarking tools, compensation is a very complex
decision, it is an emotional decision and having access to tools that we
provide help tremendously. This is something that all successful executives
are certainly sensitive to.
“They clearly recognize having access to high quality independent data is a key component when making highly scrutinized executive compensation decisions.”- David Chun
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