Have you ever wondered how your executive or employee compensation plans stack up against those of your competitors? Or perhaps you have been looking for a tool to analyze the return on net worth of distribution companies with $50 - $100 million worth of net sales volume. If you have recently had these or similar inquiries, then be sure to check out AED’s new Compensation and Cost of Doing Business
AED’s annual Compensation and Cost of Doing Business
reports will be released this month. These reports utilize anonymous data offered by AED member firms and non-member participants to establish performance and compensation “yardsticks” for the heavy equipment distribution industry. The Cost of Doing Business Report allows industry members to compare their own company’s financial performance and competition statistics against AED distributors as a whole, companies of a comparable sales volume, companies in a similar line of business, distributors operating in a particular region, and “High Profit” participants.
This year’s Compensation and Cost of Doing Business reports
were developed by Industry Insights under the guidance of their vice president, Michael Becher, CPA. Speaking of the reports, Becher said, “We are currently in the age of data, and both studies provide invaluable insights for gauging strengths, weaknesses and improvement opportunities. I would encourage all AED distributor members to participate in these studies and take advantage of these valuable benefits provided by AED.” Becher pointed out that the number of AED members who participate in the surveys has continued to grow throughout the years. Roughly 25 percent of AED members participated in the 2018 surveys.
Liz McCabe, director of education and programming for AED, took the lead on coordinating AED and Industry Insights’ effort. McCabe was quick to emphasis the new vendor features offered to survey participants. These new features include the following:
▶ Static reports: the full, industry-wide report as well as a personalized Company Performance Report (CPR)
▶ Report card: provides an objective, qualitative evaluation of the business’s performance; participants can see how their company “grades” versus the industry on several key financial metrics
▶ Performance graphs that graphically track company data versus the industry on several key financial metrics
▶ Interactive peer report: a feature that allows participants to create company performance reports on demand; participants choose the data cuts they would like to compare against
▶ Searchable results: a feature that allows participants to dig deeper into the data by creating custom aggregations of the survey results
Survey participation is completely anonymous. While it may be unnerving to give up your company’s financial data, your information is safe and confidential. Michael Becher said, “I believe confidentiality is of the utmost importance, especially when dealing with sensitive information like financial data and compensation figures.” To maintain confidentiality, all data submitted are stored on secure servers and worked with on a completely anonymous basis (all company identification is removed, and each company is assigned a unique company code). No individual company responses are shared with AED or any other person or organization. Additionally, all data is shown in aggregate form with a minimum of five responses needed to show any metric.
AED Senior Vice President and CFO Jason Blake said, “AED is continually looking for ways to add value to membership, and our reports are one way we do that. Our Cost of Doing Business Report
provides our members with the most up-to-date comparative financial data in the industry, and our new reporting system provides more tools to members than ever before. Our Compensation Report allows our members to benchmark themselves not only against others in the construction industry, but across thousands of others in wholesale trade and distribution. These robust reports contain information our members can’t find anywhere else. They allow our members to analyze their businesses to help drive productivity and profitability.”
Purchase AED's 2018 CODB Report here
and be on the look out for the release of our 2018 Compensation Report coming in June!