This excerpt taken from the FNF DEF 14A filed Apr 13, 2009.
Allocation of Total Compensation for 2008
We compensate our executives through a mix of base salary, short-term cash incentives and long-term equity-based incentives. We also maintain standard employee benefit plans for our employees and executive officers and provide some additional benefits to certain employees including our named executive officers. The compensation committee generally allocates our executive officers compensation based on its determination of the appropriate
ratio of performance-based compensation to other forms of regularly-paid compensation. In making this determination, the compensation committee considers how other companies allocate compensation based on the marketplace data provided by Strategic Compensation Group, our historical compensation practices, internal pay practices or equity among our executive officers and each executives level of responsibility, individual skills, experience and contribution and the ability of each executive to impact company-wide performance and create long-term stockholder value.
In 2008, our named executive officers compensation was allocated among annual salary, short-term cash incentives and long-term equity-based incentives, with a heavy emphasis on the at-risk, performance-based components of short-term cash incentives and long-term equity-based incentives.
Target performance-based incentive compensation comprised about 85% of total compensation for our Chief Executive Officer and about 79% on average for our other named executive officers. The compensation consultants research indicates that this is within a competitive range of the peer companies and the compensation committee believes that this allocation is appropriate. The compensation committee also believes a significant portion of an executive officers compensation should be allocated to equity-based compensation in order to effectively align the interests of our executives with the long-term interests of our stockholders. Consequently, for 2008, about 60% of total compensation for our Chief Executive Officer and an average of approximately 55% of total compensation for our other named executive officers was provided in the form of nonqualified stock options and restricted stock.