Executive Performance Targets 'Difficult' to Gauge: SEC

An analysis of executive compensation disclosures by 350 companies found it "difficult" to understand how companies used performance targets to set pay levels, according to a U.S. Securities and Exchange Commission staff review released on Tuesday.

"In making these comments, we do not seek to require companies to defend what may properly be subjective assessments in terms of purely objective or quantitative criteria, but rather only to clearly lay out the way that qualitative inputs are ultimately translated into objective pay determinations," the SEC staff review said.

The review, prepared by the SEC's division of corporation finance, also said that companies should emphasize how and why executive pay levels are set, rather than focusing on the compensation program mechanics.