Executive Compensation: The Clown Makes A Good Argument

Executive compensation is composed of salary, bonuses, stock options, and other company benefits. Staggering figures like the CEO-to-worker pay ratio of 354:1 (in 2012) have brought executive compensation under some scrutiny in the United States. Other provisions like the ‘say on pay’ provision of the Dodd-Frank Act have brought executive compensation to the forethought of many shareholders’ minds.

dilbert ceo pay

Let’s start with a quick exercise. Which of the following CEOs had the highest base salary for the year 2012?

A. Larry Page (Google)
B. Alex Gorsky (Johnson & Johnson)
C. W. James McNerney, Jr. (Boeing)
D. C. Douglas Mcmillon (Walmart)

I’m not sure who you guessed (the answer is C), but we can quickly find out answers to questions like this using several library databases. A number of publications provide lists of the top paid CEOs, like Forbes’ list of America’s Highest Paid Chief Executives. Lists are helpful, but you may want to search by company or executive or create a time series of data.

Click to Expand

Click to Expand

LexisNexis Academic allows you to search within the Morningstar US Executive Compensation database. This source provides information on salaries, cash compensation, option grants, other stock-related compensation and auditor fees for U.S. public company directors and officers. Data comes from the Form 10-K or Annual Meeting Proxy Statements. The coverage is the current edition (i.e. FY 2013) and does not include historical data. Click Search by Content Type and select Company Profiles. Under the Advanced Options area select the source. Then search by company name (e.g. Apple Inc.) or by executive (e.g. Larry Page). This database is helpful if you are searching for a single company or executive.

Standard & Poor’s Execucomp database is available through WRDS (for Wharton account holders). Go to COMPUSTAT and select Execucomp. This database covers 2,872 companies, both listed and unlisted, with data for up to 9 executives, although most companies only report 5. Similar to the Morningstar database, this data is collected from each company’s annual proxy (DEF14A SEC form). With data back to 1992 and numerous fields to select from (e.g. EIP_UNEARN_NUM — Equity Incentive Plan–Number of Unearned Sha), this is a good database to use to build a time series. Below is an example of Google’s data for the past 5 years, with only Larry Page’s salary shown. Continue reading

Flappy Bird and Splashy Fish: Researching the Mobile Gaming Industry

In February, 2014, Dong Ngoyen removed his hugely successful mobile app, Flappy Bird, from the Internet claiming that he was concerned that the game was too addictive (Flappy Bird’s Demise: 10 Things to Know About the Game’s Rise, Fall).

Whatever Ngoyen’s motives, the removal of Flappy Bird caused hundreds of copycat games with names such as Flappy Bat, Splashy Fish, and Flappy Miley to spring up.  Apparently, making a mobile gaming app is fairly easy. Researching the industry is not very difficult, either.

The mobile gaming industry develops and publishes gaming apps for smartphones and mobile devices. Apps are typically sold in a special “app store” that can be accessed through the device. As a new and very specific industry, the Mobile Gaming Industry doesn’t have its own NAICS code or even standardized natural language indexing.

Mobile game(s), mobile gaming, mobile apps, smartphone gaming, and the more general digital games, are terms used by various sources. Finding stories about individual games when you know the name is no problem. For example, search Dow Jones Factiva for flappy bird in the lead paragraph (lp=flappy bird) to retrieve thousands of published items. Searching standard sources for industry information will often retrieve a general report on mobile apps that will have a subsection dealing with gaming. Continue reading

Bloomberg Cuts through the Government Contract Maze

Bloomberg’s Government Spending module <BGS> is an important new tool designed to measure the effect of US contracts on a company’s outlook. Based on data from the 500 largest US Federal Government contract holders, the module displays prime contract orders for a company based on obligations posted by U.S. Federal Agencies. Details provided include key statistics, contract portfolio analysis, peer comparisons and quarterly trends.

To get access, type the ticker symbol into the command line, hit the Equity key, type BGS and hit Go. To search for Boeing’s US Government Contracts for example:

 BA US <EQUITY>  BGS  <GO>    

Blog contract first screen

The tabs on the Overview Table allow the examination of different aspects of a company’s contracts. The “Contract Analysis” tab, for example, lists Boeing’s individual Government Contracts by their value, Government Agency, and start and end dates.

Blog contract screen 2

For a list of the companies receiving US Government Contracts, type:

 BGSD <Go>

Blog contract screen 3

For more information on doing business with the U.S. Government and with individual states, see this FAQ.

 

What’s the Deal? Researching Specific M&A Deals

Companies make acquisitions for two primary reasons: (1) to fill a strategic gap (products, resources (people), or capabilities) or (2) enable the company to enter a new market with a new revenue stream. Researching a company’s M&A activity provides insight into the corporate strategy. When researching a specific deal, we are often looking for deal financials and deal valuation. It’s also important to research the strategies behind the deal. We often want information on business drivers, overall strategy, execution plan, implementation, etc.

Let’s take a well-known deal as an example, eBay’s acquisition of Paypal. In 2002, eBay, the largest online auction platform bought, PayPal, a web-based payment service, for $1.5B. The deal was a perfect match – Paypal drove eBay’s revenues while eBay supported the growth of PayPal’s active user base. A decade later, it is evident that both businesses fueled each others growth. So how does one research a specific deal?

Start with Thomson One for deal information including deal financials, news, filings, and research.

Note that this database only works in Internet Explorer versions 7-9. Take a look at our blog post for an IE10 workaround or Chrome plug-in.

Go to Screening & Analysis => Deals & League Tables => M&A => Advanced Search. Continue reading

Do You Have This Report? Finding Market and Industry Reports

Doing research on an industry? The Library has several databases that can help. Most Library resources can be accessed by typing the database name into the Findit box at the top of the Library homepage.

Standard&Poors

Net Advantage - Standard & Poors has been providing industry surveys since 1941. Older, print editions are available at Lippincott Library – Peck Collection (call number HG4921 .S672).  Recent years are available electronically. Once you are logged into the database, click on the Industries Tab. While coverage is mostly limited to the U.S. there are some international reports as well. The reports include industry profiles, trends, how the industry operates, key ratios, and how to analyze a company in this industry. Comparative company analysis is also available for industry leaders.

MoodysRatingsResearch_edited

Moody’s Analytics examines industries from the standpoint of the bond markets. Not only does Moody’s provide very detailed reports on their methodologies for rating bonds in a particular industry, it also provides industry outlooks explaining what industry trends will affect the bond markets. Coverage is international in scope. Both types of reports provide deep insight into what is needed for an industry to thrive and what companies in that industry have the strongest potential for investment.Combined_2

Navigate using the Ratings and Research Tab. Next in the middle column, select Research Type and then choose Industry/Sector Research or Methodologies.

Use the filters on the left of the screen to limit to Corporates (under Market Segment) and then select an industry from the Market Segment filter. These are listed in alphabetical order. Continue reading

Finding and Using Online Images – Creative Commons

Windwärts Energie GmbH / Photographer: Mark Mühlhaus/attenzione

Windwärts Energie GmbH / Photographer: Mark Mühlhaus/attenzione

A picture is worth a thousand words. Especially when you only have 5 minutes to make a compelling presentation. Using an image to support your point can be an effective way to cut down on the text of your Powerpoint. So where can you find good quality images that are free to use?

Finding non-copyrighted images can be challenging since in the United States when you take a picture, you automatically get the copyright to that photo. We are used to searching Google for everything, but not every image on Google is under a Creative Commons (CC) license. For presentations and other non-commercial projects, you will want to find images with a Creative Commons (CC) license, which means you can use the image without seeking permission. For Coursera lectures, you’ll need to find Creative Commons images that are licensed for commercial use.

Windwärts Energie GmbH / Photographer: Mark Mühlhaus/attenzione

Below are a couple of suggestions for finding images that are under a Creative Commons license. For a more complete overview of open access images, see the Penn Libraries’ Finding Open Access Images Research Guide. Even though an image is under CC, you will still want to attribute the photo to its creator.

Flickr, the online photo Continue reading

Thomson One & Browser Compatibility: Using Chrome and Firefox

Students who use Thomson One are already familiar with its quirks. The database only runs properly using Internet Explorer, and works best in older versions (7-9). There is a workaround for IE10, using the compatibility feature, which we discuss in our previous post. For those without Internet Explorer there is another option. The IE Tab extension allows your Chrome or Firefox browser to act like IE, which allows you to access Thomson One using one of those browsers (for Windows only). 

Note that we were unable to download analyst reports using the IE Tab extension in Chrome. Other functionality such as exporting data to Excel was successful.

Download the IE Tab extension from the Chrome Web Store or from Firefox Add-ins. We tested the extension using Chrome. IE Tab 1

When IE Tab is added to your Chrome browser, it will appear as an icon next to Settings.

IE Tab 2

To access Thomson One. Search for Thomson One in the FindIt box on the Lippincott Library homepage. Right-click on the link to Thomson One under E-Resources. Hold your cursor over IE Tab Options and select Open in IE Tab.

IE Tab 3

Log into the database with your PennKey and Password.

IE Tab 4

The only functionality that the IE Tab extension does not allow is downloading analyst reports. We received an error message every time we tried to download analyst reports, but let us know if you have better results.

For more on accessing Thomson One see:

Thomson One & Browser Compatibility: The Case of IE10

Wrestling with Analyst Reports: A Guide to Downloading from Thomson One

BRIC Works: Resources for Emerging Markets

The acronym BRIC (Brazil, Russia, India, China) was coined in 2001 as a concise reference to the largest emerging markets. Since then, there has been a proliferation of Emerging Market acronyms. An “S” is sometimes added to BRIC to include South Africa. You can also find references to:

  • MINTS (Malaysia, Indonesia, New Zealand, Thailand and Singapore)
  • CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa)
  • MIST (Mexico, Indonesia, South Korea and Turkey)
  • TIMP (Turkey, Indonesia, Mexico and the Philippines)

Although the rapid expansion of emerging market economies has slowed recently (see for example, The BRICs have Hit a Wall) there is still strong interest in uncovering emerging market economic, financial and marketing data. Here are four important data sources.

Emerging Market Country ListISI Emerging Markets

Published by Euromoney Institutional Investor, ISI Emerging Markets gives full-text news (in English and in the original language), company and industry information, as well as general financial and economic data for 100 emerging market countries. The only notable gap in country coverage is Israel.

Business Monitor International

Although BMI reports on countries worldwide, the BRIC Business monitor menudata it provides on emerging markets is especially useful.  Their coverage includes political risk, finance, economic indicators, macroeconomic performance, outlook and forecast, and the business operating environment. The breadth of coverage is indicated by their industry menu (shown at the right).

The depth of the reporting is revealed by the cover of this 140-page quarterly report on the Brazilian Oil and Gas Industry.

BRIC Business Monitor Cover

CEIC

The CEIC suite of databases provide time series data on 100 plus countries. Its Global and Sector databases cover more than 400,000 data items on topics including national accounts, government and public finance, demographic and labor markets, inflation, foreign trade, forex, financial markets, as well as data on a variety of industry sectors. Data are from national statistical sources. In addition, CEIC has a set of “premium” databases for Brazil, India, Russia, China and Indonesia that include greater detail.

Here are a few examples of the data granularity available from the premium CEIC files:

  • Indian 15-year annual time series on electricity consumption by fuel type by industry and region.
  • Chinese monthly real estate data at the city level for investment, building sales, and floor space.
  • Average Russian gasoline price for high/low octane by month (shown below).

CEIC Graph (1)

Bloomberg

Bloomberg, of course, is a comprehensive source of detailed financial data for all developed and developing markets. If you want a one page snap shot of the BRIC countries economic and financial markets, type:

BRIC <GO>

Bloomberg BRIC

For a larger view of emerging market countries, type:

EMDB <GO>

EMMV bloomberg

Click on the Area Name in blue for an expanded list of countries.

For more sources on Emerging Markets, see our Business FAQ and our guides to specific areas and countries.

A League Table of Your Own

A League Table is a list of entities such as companies, teams, or individuals, ranked in order of achievement. In business, league tables most often refer to a list of investment banks ranked on the volume or value of such transactions as IPO’s or M&A deals. There are a very large number of combinations of league table variables (e.g. types of issues, country, time periods and currency). Here are descriptions of three financial databases that can help you construct a league table that fits your criteria.

(1) Bloomberg (available in Lippincott Library and Huntsman Hall)

Type LEAG and hit the green GO key.

The screen below is a list of investment banks ranked by amount of U.S. Bonds underwritten in 2013.

Bloomberg league default ok

There are many customization options. Click on:

  • Year (to choose dates from 1999 on)
  • Period (to choose year, half year or quarter)
  • Select a Market (to choose among markets for Debt, Equity, Structured Notes, and Syndicated Loans). You can also choose “custom markets” which will enable you to create a table based on detailed security, issuance and issuer data
  • Related Functions (to choose among league tables for M&A, Legal Advisors, Clean Energy, Muni League, and to create a matrix table)
  • View Ranks (to view a five year history and a detailed description of the table criteria)

Bloomberg also has hundreds of pre-formatted league tables with accompanying analysis. For a listing of these, type:

NI LEAG CRL and hit GO. Continue reading

Bloomberg’s PAC-MAN: Tracking Company Campaign Contributions

Determining company and PAC (Political Action Committee) contributions to candidates is made easy with Bloomberg’s Campaign Finance module.

Type BGCF <GO>

Click to Enlarge

Click to Enlarge

The series of screens below show the increasing detail available for election results by industry. The initial screen gives an industry sector breakdown showing the number of candidates who received at least $25,000 from individual company employees for each Sector ($25K+ Candidates) and the number of winning and losing candidates.

.

Click to Expand

Click to Expand

Clicking on a Sector will reveal the companies within the sector and their contributions.

Further detail is available at the company level showing individual candidate donation and external PAC recipients.

Use the left hand column of the initial screen (Monitor, Candidates, Donors PACS) to find information about specific companies and individuals. For example, to find contributions made by companies and PACS to individual Senators or Representatives, click on, for example, HOUSE (under the heading Candidates) and then on the name of a Representative. Search by company name to find donations by individual employees to candidates together with percentage of donation by party and office.

Bloomberg uses information supplied by the FEC – Federal Election Commission. Candidates for House and Senate are required to file with the FEC quarterly.

See our Business FAQ for other resources for corporate contributions to U.S. political parties.