This excerpt taken from the DRCO DEF 14A filed Apr 26, 2007.
We provide an ongoing base salary with consideration for annual salary increases based on performance of the executive over the past year. A competitive analysis of base salaries and total cash compensation payouts is developed using published cross-industry surveys for companies comparable in size to the Company.
A performance evaluation is completed for each named executive by the Chairman and CEO, and recommendations are developed based on that review and presented to the Compensation Committee for review and consideration for approval. Final recommendations are then presented to the Board for review and consideration for approval. These recommendations are subject to approval by the Board. The salary increases granted in February 2006 for the named executive officers averaged 4.5%.