The SEC sent out letters to 350 companies last summer critiquing the way they described the compensation of their top executives. Now, the SEC is reporting that they aren't happy with most of the answers that they received, and they are sending out a second series of letters. In the end, only 26 companies had their cases closed and of those 21 were cided for not giving enough information about the role of individual performance in their pay decisions.

Increasing scrutiny by the SEC could instill changes in how companies calculate compensation, including moving away from individual performance as a measure of success in favor of companywide financial targets such as earnings ro stock prices. The SEC discourages individual performance targets because they are difficult to quantify. It will be interesting to see if the SEC will take a tougher stance the next time around.