It depends on what you prefer and how tender your meat is. I've never done it, but my dad used to make it and it was definitely coarser than that. About 1/4"? It depends on the meat. If it's too chewy, chop it finer.
He used salt, black pepper, shallots or chives, and egg yolk. Sometimes he added mustard or Worcestershire.
My mom didn't like capers mixed in, so we had cornichons on the side. It's a pretty forgiving thing to make if you start with good meat and taste as you go.
Oh, and once I cooked fois gras and it melted, so now I leave it to the pros.