More Disclosure of Financial Targets

It is becoming more common for Fortune 100 companies to disclose actual performance targets they expect their executives to meet. Disclosing targets, which helps explain why executives deserve the compensation packages they receive, increased from 56 percent in 2006 to 66 percent in 2007.

A study released by Equilar also found that Fortune 100 companies which issued annual bonus plans for their executives, disclosed the performance targets their executives met to earn their payouts. Such disclosure detail increased from 44 percent in 2006 to 68 percent in 2007.

When broken down between short-term and long-term performance payouts, 81 percent of short-term performances were based solely on internally placed company goals. Rather than use clear, predetermined company goals, nearly 61 percent of long-term performance awards were based upon more relative measures.

"Fuller disclosure of specific performance targets for executives has been a major point of emphasis for the SEC over the past year, and we are clearly seeing improvements in this year's proxies," said Equilar Research Manager Alexander Cwirko-Godycki. Incentive-plan targets increasingly disclose otherwise safeguarded information.