Investor Alignment

Americans shared that their perceptions of a corporation’s JUSTness were also shaped by how it relates to its local community, in terms of charitable efforts, communication, and more.


Components

Below are Components Americans defined as important in defining JUST community well-being, and how we are measuring corporate performance for each of them. Click on the Components to learn more.


Is Transparent and Accurate in Financial Reporting

Is financial reporting transparent? According to our 2015 Survey, respondents shared that accurate (93%), clear (88%) reporting was important in measuring JUST investor/shareholder treatment.

SEC Filings Review

Description: Transparency and accuracy in SEC filings, comprising assessments of whether:

  1. a regulator initiated enforcement action against the company in the past two years; a regulator initiated enforcement action against a director or officer of the company in the past two years; or the company, or any of its directors and officers, are currently under investigation by a regulatory body. Enforcement action covers a wide breadth of circumstances, for example, freezing of a company’s assets, fines, probationary periods of any sort, or any other action taken by any regulatory body under any jurisdiction in which the company operates. The value shown here will be True even if the cause of the action has been remediated;
  2. the company’s independent auditor issued an adverse opinion in the past year;
  3. the company disclosed any material weaknesses in its internal controls in the past two years;
  4. the company made non-timely financial disclosure filings in the past two years; and
  5. the company restated financials for any period within the past two years.

Each of these five data points awarded a value of 2 if True and summed.

Data Source(s): Institutional Shareholder Services (ISS)
Metric Type: Performance
Geography: Global
Unit of Measurement: Score (0-10)


Is Profitable Over the Long-Term

Is the company attentive to long-term, rather than short-term, profits? According to our 2015 Survey, 85% indicated that long-term profitability was important to measuring shareholder/investor alignment.

5-Year Operating Income Growth CAGR

Description: 5-year operating income compound annual growth rate (CAGR). Applied to all industries except for banks.

Data Source(s): Bloomberg
Metric Type: Performance
Geography: Global
Unit of Measurement: Percent

5-Year Net Income Growth CAGR

Description: 5-year net income compound annual growth rate (CAGR).

Data Source(s): Bloomberg
Metric Type: Performance
Geography: Global
Unit of Measurement: Percent

5-Year Average ROIC

Description: 5-year average Return on Invested Capital (ROIC) or Return on Tangible Equity (ROTE) for financial companies.
Data Source(s): Bloomberg
Metric Type: Performance
Geography: Global
Unit of Measurement: Percent


Provides Investor Return

Do investors receive a return? According to our 2015 Survey, 82% indicated that investor dividends were important to measuring JUST investor/ shareholder alignment.

5-Year Total Shareholder Return

Description: Annualized 5-year total shareholder return, including reinvested dividends.

Data Source(s): Bloomberg
Metric Type: Performance
Geography: Global
Unit of Measurement: Percent