Annual Meeting May 7, 2020

Equifax CEO Mark Begor’s total compensation of $14,281,552 includes a cash annual incentive that was based on goals set lower than the prior year’s achievement and used an accounting adjustment to make the company’s problems go away with a magic “non-GAAP” wand. As we’ve noted many times before Generally Accepted Accounting Principles are called that for a reason. 

Sometimes I wonder if there is an inverse relationship between the time spent designing how a proxy statement looks and the content of the statement itself. If a company has something bad to report do they make an effort to have a sleeker, longer, and more complex document? One has to wonder with Equifax.

There are pages of descriptions of words that attempt to make compensation look good, and emphasize how much the company cares about being cyber-forward. The company describes its “cybersecurity performance measure” metric in its annual incentive pay on multiple pages in bold print. It makes clear that one goal of the incentive is that it “reinforces our overall security program goals.”

You have to go all the way to page 93 of the proxy statement to “Reconciliation of Non-GAAP Financial Measures” to see that when determining the annual incentive the company excluded $800 millionn cyber-security costs from their calculation.

This is not the first time the company has used non-GAAP figures to make things look better than they are.

It is clear that for a company like Equifax cyber-security is a core element of the business, not something incidental. That’s evident elsewhere in the proxy statement and yet, when it really matters, for executive compensation – poof, let’s not count those costs.