Researching the Background of a Company Receiving Subsidies

NOTE: A more detailed and updated guide can be found on the website of our Corporate Research Project affiliate.


Researching the Record of a Company Receiving Subsidies

Any effort to challenge a proposed subsidy deal for a specific company will be greatly aided by research into that company itself. In this section we explain how to gather basic information about a company and how to assess the firm's social responsibility record, which can be raised as an issue when the company is being awarded a subsidy.

Basic Company Information
Preliminary Research

Step 1: Find out the company's full legal name
If there is a question about the company's formal name, you can check it by looking at various public documents that the firm must file with local or state agencies. At the local level the key agencies to check are the Tax Assessor and Recorder of Deeds; at the state level it is the office of the Secretary of State (see below). When you look at these documents take down the names of any individuals that appear, in case you want to get more information about them later.

If the company name you have does not show up in these places, it may be a fictitious name that differs from the legal name. Most counties have a Fictitious Business Names Index at the Recorder of Deeds office, which lists the companies that are “doing business as” (DBA) another name in the county. Many counties also require that business licenses include both the legal and DBA name.

The W-2 tax-reporting forms that employees get include the employer's Federal Taxpayer ID Number (also called the Employer Identification Number) which is also useful to have.

Step 2: Find out if the company is public or private
When researching a company, one of the first things to find out is whether it is publicly traded, since this significantly affects the amount of information you will be able to obtain. Public companies (those whose shares are bought and sold by the public on stock exchanges) must divulge a lot more information about their activities than private companies (those owned by a small number of people). See below for more information on researching private companies.

To find out if a company is public, search for its name on one of the following resources:

Hoover's Online offers short profiles of thousands of companies. In addition to indicating whether a firm is publicly or privately held, Hoover's provides a brief sketch of the company's operations, the names of its top officers, and contact information such as address, phone number and website.

If the company is not covered by Hoover's, check the EDGAR database of Securities and Exchange Commission filings that publicly traded companies must submit to the SEC and which then become public documents. (For more on SEC filings, see below.) Plug in the company name. If nothing turns up, the company is not publicly traded.

Also try the firm's website. If there is a section called Investor Relations, then the company is publicly traded.

If your company is not listed in these sources, it may be a subsidiary of a public company. See Step 4 below.

Step 3: Find out the names of people associated with the company
Your Secretary of State's office has business registration documents for corporations based in your state and for foreign (out-of-state) corporations doing business in your state. In some states, these filings include the names and addresses of the key people in the company, such as the officers and directors. In other states, the only name listed may be that of the registered agent. This is the person who can be served with legal papers if the company is sued. Note that registered agents are often outside services that have no direct relationship to the operation of the company.

You can also find out names of corporate executives from the company's website or from directories such as the Standard & Poor's Register, which is available on Lexis-Nexis, or in hard-copy form in reference libraries. See below for more on researching individuals.

Step 4: Find out if the company is a subsidiary or has facilities in other locations
If a company doesn't show up in Hoover's or EDGAR or have its own website, the reason may be that it is a subsidiary of another corporation. One way to check if this is the case is to search under the company name in the Directory of Corporate Affiliations (DCA), which is available in hard-copy form in larger libraries or online via Lexis-Nexis. If the company is a subsidiary, DCA will tell you the name of its parent. You can also plug in the name of a parent company and get a list of its subsidiaries. DCA covers both public and larger private companies.

If you want a list of subsidiaries of a publicly traded company, look at its 10-K filing to the SEC (described in more detail below). Some companies also include complete lists of facilities and their locations in the 10-K, though larger companies with many facilities may provide summaries only.

Step 5: Read the company's website, annual report, and 10-K
To find the company's website, first try connecting to www.[insert the company's name].com. If that doesn't work, try a search engine such as Google.

Once you've reached the website, there are other things to look for besides an Investor Relations section. There is usually a brief company profile and contact information. Many companies include an archive of press releases, which often include information that did not make it into the press. The bigger public companies usually put their entire annual report online, usually in PDF format. Some firms include biographies of top executives, product descriptions, and other information. Although much of the content of these websites is essentially corporate public relations, within that is a great deal of useful information for research purposes.

If the annual report is not available on the website, you can request a printed copy from the company's investor relations department. In most cases, all of the financial information in the glossy annual report is also found in the 10-K (described below). If not, the 10-K will refer to sections of the annual report.

Privately-Held Corporations

Private companies are corporations in which the stock is held by fewer than 500 people, often many fewer. Private companies themselves are not necessarily small; there are some huge private companies in the U.S., such as Cargill and Koch Industries. Private companies tend to be more stingy with the amount of information they put on the Web, and only the larger ones are profiled by Hoover's.

The most valuable source of information on most private companies – from the billion-dollar giants down to mom-and-pop operations – is D&B. The primary business of D&B is to formulate credit ratings for companies by finding out how promptly they pay their bills. In the course of doing this, D&B also collects basic data on millions of firms.

At one time, the only way to gain access to D&B's descriptive information was to subscribe to its credit rating service. D&B’s website now sells access to what it calls Business Background Reports. These reports, which cost about $50 each, payable by credit card, include a brief company history; whether the company is public or private; basic financial data (usually an estimate of annual revenues and net worth); the names of directors and top officers, with some biographical information; a description of the company's operations, including an indication of how many customers it has and the geographical scope of its markets; the number of employees; and a summary of recent developments.

One caveat about D&B information: it is not as reliable as the information a public company puts in its SEC filings. It is against the law to deceive the SEC; there is no legal penalty for embellishing the truth when filling out a D&B questionnaire. Companies will not lie with abandon, since they don't want to damage their credibility, yet it is always worth taking D&B data with a grain of salt.

Key Sources

1. State Corporation Records from the Secretary of State's Office
Every U.S. corporation, whether public or private, must be chartered at the state level. Being incorporated requires the firm to provide state officials with basic information about the corporation. These requirements vary from state to state, but at a minimum you should find the precise name of the company and its address. In some states corporations have to report the names of their officers and directors, the number of shares of stock which have been issued, the date of original incorporation, and possibly the Federal Tax ID number. U.S. subsidiaries of foreign corporations must also file.

These filings are available to the public and can usually be obtained from the state's Secretary of State office. Some states have begun to put the information on free websites. For a list of links to such websites, see the BRB Publications list. Otherwise, the information is available electronically via expensive database services such as Lexis-Nexis. Another option is to use a website called KnowX, which allows pay-as-you-go access.

2. Securities and Exchange Commission (SEC) Documents
All companies that are publicly traded (i.e., whose shares trade on stock exchanges) must file financial reports with the U.S. Securities and Exchange Commission (SEC). These documents are then made public at no cost through an electronic distribution system called EDGAR (short for Electronic Data Gathering Analysis and Retrieval). The system can be found on the SEC website or at various commercial sites.

Note: If your target company is not publicly traded, do not assume that SEC documents will not be available. Some companies whose shares are not traded publicly are still required to file certain reports with the SEC (particularly the 10-K) if their bonds or other debt securities trade publicly. Unless the company is a mom-and-pop operation, it is worth plugging its name into one of the websites containing the EDGAR database to see if anything appears.

Main SEC Documents
10-K report: annual report on the company's activities. Includes full legal name, headquarters address, total market value of stock, total number of shares outstanding, products and/or services, principal markets, significant competitors, number of employees, number of unionized employees and information about upcoming contract negotiations (sometimes), large customers, list of company locations, names of officers, major lawsuits that could affect the company's financial conditions, and three years of detailed financial statements. The list of exhibits is important to read, because it may mention documents like employment contracts for company executives, major loan agreements, and stock option plans.

10-Q reports: quarterly updates of the company's financial condition. 8-K reports are filed shortly after any major event that could affect the value of stock (for example, changes in control of the company, acquisition or sale of assets, changes in directors, etc.).

Proxy statement (also known as Schedule DEF 14A): sent to all stockholders prior to the company's annual meeting, giving a run-down on the meeting agenda, and providing information on executive compensation and other data on officers and directors. It includes a fairly complete run-down on the Board of Directors, including each director's professional background, other affiliations, compensation, and ownership of the company's stock. It also has information on the compensation paid to the five highest-paid executives, including stock options, pensions, insurance policies, etc. The proxy statement also discloses information about transactions between officers or directors and the company. For example, a company president owns buildings he is leasing to the company.

Prospectus (or Registration) statements: these are issued when a company goes public for the first time (called the Initial Public Offering or IPO) or sells new stock to the public; they contain information similar to that in a 10-K.

Forms 3, 4, and 5: these detail stock transactions involving directors and executives (known as insiders). Form 3 is filed after the initial transaction; Form 4 reflects changes in the holdings; and Form 5 is an annual summary.

Summary of key information that public companies must disclose

Type of information    Source

Detailed financial statements 10-K
Detailed description of operations 10-K
Competitive environment 10-K
List of subsidiaries 10-K
Regulatory issues 10-K
Significant legal proceedings 10-K
Significant environmental problems 10-K
Significant environmental problems 10-K or Secretary of State
Background of officers and directors Proxy statement
Interlocks with other corporate boards Proxy statement
Officer and director compensation Proxy statement
Stockholdings by officers and directors Proxy statement
Shareholder resolutions Proxy statement

3. Uniform Commercial Code (UCC) Filings
UCC filings are documents that are filed by companies when they borrow money and use equipment as collateral. The UCCs, which are usually available via the Recorder of Deeds officer or online via a service such as KnowX or Lexis-Nexis, provide clues as to which banks a company is doing business with. They may also give a clue as to a company's expansion plans, since the lenders listed are often equipment suppliers extending credit.

4. Land Records at the Tax Assessor's Office and the Recorder of Deeds
Go to the county where the headquarters of the target company is located, or where your target facility is located. You want to determine all the land in the county which is owned by the company and by company officials individually. The Tax Assessor can show you who is paying the taxes on the property, which is only an indication of ownership.

Most Tax Assessor offices have computerized indexes, which you can search for company names and people. If you cannot find the company name in the index, search for the address of the location. The records will include the full name of the owner, the parcel number of the property, the exact address of the property, a legal property description, the address to which the tax bill is mailed, the date the property was purchased, the amount of the yearly tax and whether it was paid, and the assessed value of the property, which is usually divided between the land and improvements. Land records are increasingly being put online.

The Recorder of Deeds office (other names: County Recorder, Registrar of Deeds, County Registrar) possesses key documents associated with the ownership of land, such as mortgages, deeds, and tax liens. Information about mortgages and deeds can also illustrate relationships between the company and banks that lend it money.

Land records are increasingly being put online.

5. Media Coverage
It is always worth checking media coverage to see what has been reported about a company and its practices. The fact that the full texts of thousands of newspapers, newswires, magazines, trade publications, and broadcast transcripts are available online makes it possible to search through a large portion of the published material on a company in a matter of minutes. Some, but far from all, of these sources can be found on the free Internet and can be retrieved using search engines such as Google.

It is much more efficient to search fee-based information services such as Lexis-Nexis or Factiva. A subscription to these services may be too expensive for smaller organizations, but you can try to gain access through a university library or a larger public library. Both Lexis-Nexis and Factiva allow you to simultaneously search thousands of publications using a company name or other keywords. In addition to published materials, they include the text of company press releases. Although these releases are, strictly speaking, corporate public relations, they often turn out to be the best source of information on aspects of the company that the media did not consider newsworthy but which tell you what you need to know.

Since smaller publications may not turn up on Lexis-Nexis or Factiva, it is worth looking through the archives of a local paper on the web or at a local library. You can also ask the newspaper if you can use its “morgue,” the term for the files where the back clippings are kept.

Social Responsibility Record

If you are organizing around a particular deal or company, it’s useful to know about the company's general reputation and track record. If the company has a history of violating environmental regulations, mistreating workers or otherwise operating contrary to the public interest, those may be relevant issues in a subsidy debate.

Step 1: Do a news search on the company
For any aspect of a company's social responsibility record, it is always useful to start with an online news search of the type described above. Search under the name of the parent company as well as the subsidiary. This will provide leads on legal problems, labor issues, environmental controversies, etc. that can then be investigated in more depth.

Step 2: Interview activists in cities where the company has other facilities
If the news search identifies organizations--such as community groups or unions -- that have had a conflict with the company, find their phone number, and call them. If the news reports do not cite any specific critics, you will need to make some exploratory calls.

Step 3: Check out the company's legal record
When a company – whether publicly-traded or privately-held – gets embroiled in a lawsuit, it often has to disclose documents that would otherwise never see the light of day. Moreover, the existence of multiple lawsuits in an area such as racial discrimination is by itself a clue about corporate culture. For this reason, you should check court dockets for significant cases. All civil court records are public unless they have been officially sealed by a judge. Civil court records include cases involving contract disputes, wrongful discharge cases, failure to pay, personal injury, property rights, divorces, and probating of wills, etc.

The traditional way to check for cases is to go to the relevant county courthouse and look through the paper or electronic index. This is fine for a small, local company, but it is impractical for a major corporation that has far-flung operations and may thus be involved in litigation in many different jurisdictions.

The solution, at least as far as federal courts are concerned, is a system called PACER (Public Access to Court Electronic Records) that was established by the Administrative Office of the U.S. Courts to provide online access to the dockets of individual federal district and bankruptcy courts. All bankruptcy courts and nearly all district courts participate. By setting up an account with the PACER office, you can tap into the various court dockets using a more or less standardized interface, and your modest online costs are combined into one bill. One attractive feature is the U.S. Party/Case Index, which allows you to search nearly all the available dockets at once. 

Once your docket search has turned up an interesting case, the way to find out more about the matter is to look at the actual documents that have been filed by the parties. These would include things such as the original complaint (in a civil matter) or indictment (in a criminal matter), briefs, motions, depositions, and transcripts of court proceedings. In the past, these documents were available only in hard-copy form at the clerk's office of the court in which the case was filed. The federal courts, however, have been developing an extension of PACER that allows subscribers to view images of court filings online. The list of links to court sites on the PACER website indicates which ones have begun to post document images.

State courts have been somewhat slower in putting their dockets online, but they are catching up. For a list of which courts are available electronically, check

Also keep in mind that publicly-traded companies are required to report on any pending lawsuits that might have a "material effect" on the firm's finances. See the section of the 10-K (Item 3) entitled Legal Proceedings.

If you have access to a full-service legal database such as Lexis or Westlaw, you can also search for the full text of written court rulings involving a particular company.

Step 4: Check out the company's labor record
Unfortunately, the SEC does not require public companies to disclose very much about their labor practices. In the 10-K section titled Employees, companies often report nothing more than their head count. Companies with a significant level of unionization will often indicate the percentage of the workforce covered by collective bargaining agreements. Only when there is a major labor dispute that is having an impact on the company's finances will there be more details on labor relations.

To find out more about a company's labor record, check the archives of specialized labor publications, particularly BNA's Daily Labor Report or Labor Relations Week, which are available on a subscription basis (see The price is high, but many unions subscribe to these publications in paper or electronic form.

To learn more about a company's compliance record with regard to employment laws, see the U.S. Department of Labor’s Enforcement page. Information about a company's occupational safety and health record can be found on the website of the Occupational Safety and Health Administration .This site includes the results of all workplace inspections conducted by OSHA since the agency was created, including information on all violations and fines.

Step 5: Check out the company's environmental record
The single best source for information on a company's environmental record is the  U.S. Environmental Protection Agency, whose website has a wealth of information, especially the ECHO (Enforcement and Compliance History Online) database.

Step 6: Check out government contracts the company has received
Government subsidies can become even more controversial when the recipient company is also the beneficiary of government contracts. At the federal level, use the USA Spending site to find information on contracts. You can also determine whether an individual or company has been barred from doing business with the federal government by searching the GSA's Excluded Parties List.

Step 7: Check out a company's campaign contributions and its lobbying activities
In many instances campaign contributions may be the quid pro quo (or trade-off) for subsidies: they are what a company pays to get tax breaks and other incentives. Thanks to federal and state disclosure laws, it is more difficult to hide what some observers have called legal bribery.

At the federal level, campaign contributions by corporate executives and their company's political action committee may be tracked using a database compiled by the Federal Election Commission. This database is available via the FEC itself, but several private groups have enhanced the information in very useful ways. See, especially, the website of the Center for Responsive Politics. These sites have current and past information on both hard money and now abolished soft money (non-candidate-specific) contributions.

State campaign contribution data is now easily available on the web thanks to the  National Institute on Money in State Politics. The Institute's website allows for searching by individual or corporate name. Keep in mind that some states, unlike the federal government, allow corporations to contribute directly to candidates.

Step 8: Check out the compensation paid to the company's top executives
The outrageously inflated compensation paid to top executives of large companies is a familiar story, but it is an issue still worth raising in any corporate-related campaign. For publicly-held companies, documenting this aspect of corporate greed is made easy by the extensive disclosure requirements imposed by the SEC. There is no public source for information on executive compensation in private companies.

A detailed account of pay and benefits to a company's top executives can be found in the proxy statement (also known as Schedule DEF 14A) that is issued in preparation for each annual stockholder's meeting and that is available on the EDGAR database (see above). The proxy includes a summary compensation table listing salary, bonus, other forms of incentive pay and other types of compensation that were given to the five highest-paid executives. Following that are tables showing the number of stock options (the right to purchase shares at an advantageous price) awarded to executives and the value realized by executives in the exercise of previously awarded options. The proxy statement also lists the number of shares owned by each officer and director.

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