This excerpt taken from the ALL DEF 14A filed Apr 2, 2008.
AVERAGE ADJUSTED RETURN ON EQUITY RELATIVE
Target award opportunities approved by the Committee are stated as a percentage of annual base salary. Award opportunities for the named executives are capped at 300% of the target awards. Awards for each cycle are calculated using base salary in effect at the beginning of the cycle, as adjusted by any promotional increases granted during the course of the cycle on a prorated basis. For the 2005-2007 cycle, the long-term cash incentive target awards for the named executives, as a percentage of base salary, were as follows: Mr. Wilson-100% for the portion of the cycle prior to his promotion to chief operating officer in June 2005, 120% for the portion of the cycle after his promotion to chief operating officer and prior to his promotion to CEO in January 2007 and 140% for the remainder of the cycle, Mr. Liddy-155%, Messrs. Hale and Simonson-80%, and Mr. Ruebenson-70% for the portion of the cycle prior to his promotion to President of Allstate Protection, and 100% for the remainder of the cycle. The size of these target awards is based on each executive's level of responsibility for contributing to our long-term performance and overall market competitiveness.
Unless otherwise adjusted by the Committee, in calculating the long-term cash incentive awards, our achievement with respect to each performance measure for a particular cycle is expressed as a percentage of the target goal with interpolation applied between threshold and target goals and between target and maximum goals. The amount of each named executive's award is the sum of the amounts calculated using the following calculation for all of the long-term cash incentive performance measures.
The weighting for each named executive is provided on page 38. Long-term cash incentive awards based on the achievement of the performance measures for the 2005-2007 cycle were paid in March 2008 and are included in the amounts reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table and broken out separately from annual cash incentive awards in a footnote to that table. The threshold, target and maximum long-term cash incentive award opportunities for the 2007-2009 cycle are included in the Estimated Future Payouts under Non-Equity Incentive Plan Awards column in the Grants of Plan-Based Awards table.