Tuesday, January 8, 2019
A Look at Climate Change Disclosures

Wednesday, January 2, 2019
Quants: Point-in-Time Data for Backtesting

Friday, December 28, 2018
Now Showing: Controls & Procedures

Thursday, December 27, 2018
A Reminder on Non-GAAP Reporting Rules

Monday, December 17, 2018
Researching PG&E’s Wildfire Risk

Wednesday, December 12, 2018
Tracking Brexit Disclosures

Thursday, December 6, 2018
Campbell Soup: Looking Behind the Label

Sunday, December 2, 2018
SEC Comment Letters: The Amazon Example

Wednesday, November 28, 2018
Measuring Big Pharma’s Chemical Dependency

Monday, November 26, 2018
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Monday, November 19, 2018
Digging Up Historical Trend Data: Quest Example

Sunday, November 11, 2018
Cost of Revenue, SG&A: Q3 Update

Monday, November 5, 2018
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Saturday, November 3, 2018
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Wednesday, October 31, 2018
PTC and Two Tales of Revenue

Tuesday, October 30, 2018
10-K/Q Section Text Change Detection

Sunday, October 28, 2018
Finding Purchase Price Allocation

Sunday, October 21, 2018
Charting Netflix Growth in Three Ways

Wednesday, October 17, 2018
Interesting Data on Interest Income

Thursday, October 11, 2018
The Decline of Sears in Three Charts

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In honor of tax time this week, Calcbench decided to take a look at compensation—specifically share-based compensation, one of the more nettlesome reporting issues whether you are a company disclosing information to Wall Street or a person rushing to file your taxes before April 15. Let’s take a look at some of the trends.

Among the S&P 500, the cost of share-based compensation rose 18 percent in the last four years, from $48.6 billion in 2012 to $57.3 billion in 2015. (For comparison purposes, the Dow Jones Industrial Average rose 33.7 percent in that same four-year period.)

The average sum spent per company went from $97.16 million to $114.7 million, but those numbers come with a caveat: 115 businesses in the S&P 500 spent no money at all on share-based compensation from 2012 to 2015. When you strip them out of the sample population, the average yearly numbers are much higher: from $126.2 million in 2012 to $148.9 million in 2015.

Who were the big spenders doling out equity awards? Don’t die of shock here, but all 10 companies that spent the most on share-based compensation hailed from the tech or financial sectors:

Company Total Spent
Google $15.52 billion
Apple $10.44 billion
Goldman Sachs $7.70 billion
Facebook $7.22 billion
JP Morgan Chase $6.95 billion $5.58 billion
Cisco Systems $5.31 billion
Intel $4.67 billion
Morgan Stanley $4.43 billion
Qualcomm $4.42 billion

As a whole, the S&P 500 companies also spend more on share-based compensation today relative to revenue, operating income, and operating cash flow than they did four years ago:

Share-based Comp as % of… Revenue Optng. Income Optng. Cash Flow
2012 0.49% 3.61% 3.18%
2015 0.60% 4.37% 3.57%

Another way to consider share-based compensation—and probably one more relevant to financial analysts or investors—is to remember that this particular line-item ultimately is listed as an operating expense. So anyone who wants to determine whether a company is spending a questionable amount on share-based compensation could start by looking at the company’s sales and net income. If a company’s expense for share-based comp is rising while sales are flat or income is trending downward, that could be worth a question to management on the next investor call.

Calcbench customers can also use our benchmarking tool to see how your target company’s expenses for this item compare to its peers. Our Normalized Data page lets you build your own peer group, or we have a variety of pre-designed peer groups based on SIC or NAICS codes.

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