Under SEC disclosure rules, companies historically have been responsible for evaluating the amount of risk inherent in their executive incentive plans. This requirement has been reinforced by 2010 SEC rules requiring evaluation and disclosure of excessive risk in certain incentives for employees below the named executive level. Guidance finalized by the Federal Reserve in 2010 and the proposed rules issued by a consortium of financial regulators under Section 956 of the Dodd-Frank Act ask companies to consider whether performance criteria and corresponding objectives represent a balance of performance and the quality of such performance, in order to mitigate the potential danger that executives will strive to achieve to increase certain measures while not focusing on others that are equally important. Further, the proposed rules also urge companies to ensure the overall mix of compensation is balanced between annual and long-term incentive opportunities to avoid manipulation of short-term results as a method to boost compensation. The Center On Executive Compensation believes that the Compensation Committee is in the best position to assess the appropriate relationship between the risk inherent in executive compensation arrangements and how that level of risk corresponds to the overall business strategy and competitive environment of the company. The Compensation Committee is responsible for establishing company-specific performance goals and potential incentive payouts that will motivate and reward performance supporting the long-term success of the company.