This excerpt taken from the ALL DEF 14A filed Apr 2, 2008.
LONG-TERM CASH INCENTIVE AWARDS, 2005-2007 CYCLE
The target goal for the average adjusted return on equity was set at a level representing average projected industry performance. The target goals for Allstate Protection growth in policies in force over the 3-year cycle and Allstate Financial growth in retail premiums and deposits over the 3-year cycle were based on evaluations of our historical performance and plans to drive projected performance.
The average adjusted return on equity measure compares Allstate's performance to the peer insurance companies listed on page 28. Allstate's ranked position relative to this peer group determines the percentage of the total target award for this performance measure to be paid, as indicated in the following table. However, no payment is made unless the average adjusted return on equity exceeds the average risk free rate of return on three-year Treasury notes over the three-year cycle, plus 200 basis points, regardless of Allstate's standing compared to the peer group. For the 2005-2007 cycle, we achieved the 4th position and exceeded the target level of performance. In addition, the average adjusted return on equity exceeded the average risk free rate of return by 1,526 basis points.