Peer group

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A group of companies that are similar in industry, size, complexity and/or geography. Peer groups are used to evaluate the relative financial and operating performance of a given company. They are also used for benchmarking the size and structure of executive compensation programs. Because the choice of participants in a peer group can influence relative comparisons, peer groups can be subject to manipulation (e.g. a company that is not relevant might be included in the peer group to create a favourable comparison, or a company that is relevant might be excluded to obscure an unfavourable comparison).

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Choose Your Peers with Care (Summary)