This chapter discusses the best way to set the performance targets that determine incentive awards when the context for that performance has yet to unveil itself. Performance metrics need to be translated into specific, measurable targets at the beginning of each performance period—an activity that many companies struggle with year after year. The key is to set goals that are challenging enough to meet shareholder expectations, but achievable if the executive team performs competently. Set goals unrealistically high and executives may get discouraged and abandon their efforts. Set goals too low and executives have little incentive to take advantage of significant opportunities. One may not have a crystal ball to see into the future, but by incorporating a wide range of perspectives into the target‐setting process, a company can develop well‐informed targets against which executive performance can be confidently and fairly measured and rewarded.