There are several reasons for boards to move on from a compensation consulting firm, and as the mandate facing comp committees increases in magnitude and scope, some comp consultants may not be the right fit any longer.

According to data from public company intelligence provider MyLogIQ, 299 Russell 3000 companies switched comp consulting firms between 2019 and 2020, with 34 companies switching to Pearl Meyer and another 33 hiring Meridian Compensation. Other firms that were newly hired by companies include Radford Aon, Pay Governance and Compensia. Currently, Frederic W. Cook & Co. (F.W. Cook) has the largest portion of Russell 3000 clients as of July 7, advising 15% of companies in the index, according to MyLogIQ data. Pearl Meyer is the comp consulting firm for 11% of the Russell 3000 while Meridian Compensation advises 11%.

Typically, contemplating a change in comp firms comes when there is a board refreshment and new committee members or a new chair or when the principal consultant for the company leaves the consulting firm, sources say. Nora Denzel, chair of the compensation and leadership resources committee at Advanced Micro Devices and compensation committee member at NortonLifeLock, writes in an e-mail that some boards have guidelines to rotate their compensation committees to get a “fresh set of eyes and another perspective on things,” which may drive a consultant change.