Amidst increasing pressure from Institutional Shareholder Services (ISS) to disclose forward-looking long-term incentive goals, CAP finds that most companies do not disclose forward-looking financial goals.

In 2025, Institutional Shareholder Services (ISS) issued policy updates that include greater scrutiny of companies that do not disclose forward-looking long-term incentive (LTI) goals, especially in the case of quantitative pay-performance misalignment. When pay-performance misalignment exists, as measured under ISS’ quantitative model, disclosure of goals at the end of the performance period is also less likely to mitigate ISS’ reluctance to support a Say on Pay proposal. Given this policy development, companies who expect challenges with Say on Pay may consider disclosing forward-looking goals to earn additional credit from proxy advisors and shareholders, but clear trade-offs exist.

CAP analyzed the 100 largest U.S. publicly traded companies by revenue to evaluate current practices on disclosing forward-looking goals for performance-based long-term incentive plans. Here is what we found:

94% of the 100 largest companies award long-term performance-based equity awards to Named Executive Officers. Of those companies, 87% include absolute financial performance metrics — i.e., revenue targets, profit targets, or return metrics — and 80% include relative performance metrics in their long-term incentive plans. Relative performance metrics typically involve Total Shareholder Return performance relative to an industry or market index (rTSR), but a few companies use relative financial metrics.

Most companies do not disclose forward-looking financial targets that cover future years. Companies often determine that disclosure of forward-looking business plan targets exposes the company to competitive harm. Disclosing forward-looking goals can also put companies in a precarious position when there is a disconnect between internal budget scenarios built on non-GAAP metrics and accounting scenarios that are reported externally under GAAP.

Under SEC rules, companies that omit actual forward-looking goals from the Compensation Discussion & Analysis established at the beginning of the performance period must provide a statement on the perceived degree of difficulty of the pre-established goals, and there is pressure to make this disclosure more robust. Many companies disclose the financial goals and actual performance relative to those goals only after the performance period has ended, but there is increasing scrutiny of this practice from proxy advisors that view it as insufficient. This creates the trade-off between offering disclosure designed to support Say on Pay and assessing the possibility of causing competitive harm.

Our research finds that only 30% of companies with absolute performance metrics in the long-term incentive plan disclose forward-looking goals. In analyzing whether the type of absolute metric affected the prevalence of disclosure, we found that disclosure of goals was evenly split between companies with return metrics (e.g., return on equity, return on invested capital) and numerical metrics (e.g. absolute revenue or operating margin).

Companies are far more likely to disclose performance targets and associated payouts for relative metrics. We find that 68% of companies with relative performance metrics in their LTI plan disclose forward-looking relative performance targets. For example, a company with an rTSR metric may disclose up front that 50th percentile performance relative to its peer group would result in target funding, 25th percentile performance results in threshold funding and 90th percentile performance results in maximum funding. These targets often stay consistent over time and are generally not viewed as sensitive business information.

Disclosure of forward-looking LTI goals varies somewhat by industry. Specifically, financial services companies are much more likely to disclose absolute financial goals than the overall sample. These companies are also more likely to use return metrics as absolute metrics, which may have relatively consistent goals over time and are typically viewed as less sensitive business information compared to metrics such as revenue or profitability. Conversely, energy and health care companies are lagging in disclosing even relative performance goals.

Overall, even among the largest companies, forward-looking financial goal disclosure clearly remains a minority practice, even though disclosure of relative metrics with non-sensitive performance-payout matrices has become common. Although forward-looking financial goal disclosure may increase over time, it is likely to do so in selective scenarios such as when companies anticipate lower Say on Pay support.