Compensation Glossary

Indexing

A statistical model expressed in terms of percentages of a base year or years that serves as a reference in judging investment performance. The index most often used for stock market performance is the Standard & Poor's 500 Index, which measures the average performance of 500 widely held common stocks. Other frequently used indexes are the Dow Jones Industrial Average, the NASDAQ and the Russell 2000, used for smaller company stocks, the Toronto Stock Exchange 300 Composite Index (TSE 300), used in Canada, and the Morgan Stanley Capital International Europe, Australia, Far East Index (EAFE), which is used as a benchmark for foreign company stocks.