The Committee is established by the Board of Directors (“Board”) to, among other things, evaluate recommendations and make determinations relating to (i) setting of the corporate goals and objectives relative to the Chief Executive Officer’s compensation and the evaluation of the Chief Executive Officer’s performance against those goals and objectives, (ii) the compensation of the Chief Executive Officer, the Company’s other executive officers and non-employee directors, and (iii) the incentive compensation, equity and employee benefit plans, programs or similar arrangements for the Company’s employees and non-employee directors.
Composition
Members. The Committee shall consist of as many members as the Board shall determine, but in any event not fewer than three members. The members of the Committee shall be appointed annually by the Board upon the recommendation of the Nominating and Governance Committee.
Qualifications. The Board shall make a determination in the exercise of its business judgment that each member of the Committee (i) meets all applicable independence rules or requirements of the New York Stock Exchange and any other regulatory body with jurisdiction over the Company (“Independence Requirements”), (ii) is a “non-employee director” within the meaning of the rules promulgated under Section 16(b) of the Securities Exchange Act of 1934, as amended (“Section 16”), and (iii) is an “outside director” for purposes of the regulations promulgated under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”); provided, however, that a failure to meet any of such requirements shall not invalidate decisions made, or actions taken, by the Committee.
Chairperson. The Chairperson of the Committee shall be appointed by the Board upon recommendation of the Nominating and Governance Committee.
Removal and Replacement. The members of the Committee may be removed or replaced, and any vacancies on the Committee shall be filled, by the Board upon the recommendation of the Nominating and Governance Committee. In addition, membership on the Committee shall automatically end at such time as the Board determines that a member (i) ceases to meet the Independence Requirements (ii) ceases to be a non-employee director for purposes of Section 16, or (iii) ceases to be an outside director for purposes of Section 162(m).
Operations
Meetings. The Chairperson of the Committee, in consultation with the Committee members, shall determine the schedule and frequency of the Committee meetings, provided that the Committee shall meet in regular session at least four times annually. The Committee shall meet in executive session as appropriate.
Agenda. The Chairperson of the Committee shall develop and set the Committee’s agenda, in consultation with other members of the Committee, the Board and appropriate members of management. The agenda and information concerning the business to be conducted at each Committee meeting shall, to the extent practical, be communicated to the members of the Committee sufficiently in advance of each meeting to permit meaningful review by Committee members.
Report to Board. The Chairperson of the Committee shall review the Committee’s actions with the Board at the next regularly scheduled Board meeting after such actions were taken.
Self-Evaluation; Assessment of Charter. The Committee shall conduct an annual performance self-evaluation and shall report to the Board the results of the self-evaluation. The Committee shall assess the adequacy of this Charter on an annual basis and recommend any changes to the Board.
Authority and Duties
The Committee shall review recommendations and determine all grants of equity-based awards to non-employee directors, executive officers, employees and appropriate third parties, including the terms and conditions of such awards. To the extent permitted by applicable law, the listing requirements of the New York Stock Exchange and the provisions of a given equity-based plan, the Committee may delegate authority to one or more executive officers of the Company to grant equity-based awards to employees of the Company who are not non-employee directors or executive officers.
The Committee shall review recommendations and determine corporate goals and objectives relevant to the compensation of the Chief Executive Officer, evaluate his performance in light of those goals and objectives pursuant to the criteria set forth in Annex A, and determine and approve the Chief Executive Officer’s compensation level based on this evaluation and other appropriate considerations. The Board may direct that the other members of the Board who satisfy the Independence Requirements (the “Independent Directors”), approve, together with the Committee, the Chief Executive Officer’s compensation, as determined by the Committee. The Committee and the Independent Directors may discuss the compensation of the Chief Executive Officer with the Chairperson of the Board or any other member of the Board. In determining the long-term incentive component of the Chief Executive Officer’s compensation, the Committee may consider, without limitation, the Company’s performance and relative shareholder return, the value of similar incentive awards to chief executive officers at comparable companies, and the awards given to the Chief Executive Officer in past years.
The Committee shall review the performance evaluations of the Company’s other executive officers as conducted by the Company’s Chief Executive Officer or other executive officers or management, as applicable. The Committee shall review management’s recommendations regarding compensation of executive officers other than the Chief Executive Officer, and shall determine the compensation of those executive officers based on their performance evaluations and other appropriate considerations .
The Committee shall maintain a well-informed overview of all the Company’s compensation and benefit plans, policies and programs, and shall evaluate any proposed changes thereto.
The Committee shall review periodically and make recommendations to the Board regarding any short- and long-term incentive compensation or equity plans, programs or similar arrangements that the Company establishes for, or makes available to, its employees, non-employee directors and consultants (collectively, the “Incentive Plans”), the extent to which the Incentive Plans are meeting their intended objectives and, where appropriate, recommend that the Board modify or replace any Incentive Plan that yields payments and benefits that are not reasonably related to employee or corporate performance.
The Committee shall administer the Incentive Plans, and any other plans or programs which fall within Board responsibilities (the “Plans”), in accordance with their terms, construe all terms, provisions, conditions and limitations of the Plans and make factual determinations required for the administration of the Plans.
The Committee shall review and make recommendations to the Board regarding all new employment, consulting, retirement, severance, change-in control, and indemnification agreements and arrangements proposed for the Company’s executive officers. Any employment agreement between the Company and the Chief Executive Officer shall be approved by the Board, provided that the compensation set forth in such agreement is approved by the Committee to the extent required by this Charter. The Committee shall also periodically review and evaluate existing arrangements with the Company’s executive officers.
The Committee shall review and make recommendations to the Board with respect to the compensation of the Company’s non-employee directors, including, without limitation, equity and equity-based compensation and deferred compensation.
The Committee shall oversee the Company’s policies on structuring compensation programs for executive officers to preserve tax deductibility and, as and when required, establish and certify the attainment of performance goals pursuant to Section 162(m).
The Committee shall adopt and periodically review a comprehensive statement of executive compensation philosophy, strategy and principles that has the support of the Board, and administer the Company’s compensation program fairly and consistently in accordance with these principles.
The Committee shall produce an annual Compensation Committee Report as required by Regulation S-K of the Securities and Exchange Commission (the “SEC”) to be included in the Company’s proxy statement on Schedule 14A, Annual Report on Form 10-K or other appropriate document to be filed with the SEC.
The Committee shall review and discuss with management the Company’s Compensation, Discussion and Analysis (“CD&A”) required by Regulation S-K of the SEC and shall recommend to the Board of Directors whether to include the CD&A in the Company’s proxy statement on Schedule 14A, Annual Report on Form 10-K or other appropriate document to be filed with the SEC.
The Committee shall discuss with management and evaluate how the Company’s compensation policies and programs for all Company employees may create incentives that can affect risk and shall discuss the Company’s management of that risk, as well as whether the Company’s compensation programs are appropriately aligned with the Company’s risk management.
The Committee shall periodically review the Company’s recruitment, development, promotion and retention programs.
The Committee shall periodically review the composition of the Company’s workforce in terms of diversity and inclusion.
The Committee shall work with management to select peer groups of companies that shall be used for purposes of determining competitive compensation packages.
The foregoing list of duties is not exhaustive, and the Committee may, in addition, perform such other functions as may be necessary or appropriate for the performance of its duties. The Committee shall have the power to delegate its authority and duties to subcommittees or individual members of the Committee, as it deems appropriate in accordance with applicable laws and regulations.
Consistent with any applicable requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any applicable NYSE rules, the Committee shall have the power, in its sole discretion, to retain or obtain advice of compensation consultants having special competence to assist the Committee in evaluating executive and director compensation. The Committee may also, in its sole discretion, retain or obtain advice from compensation consultants, legal counsel, accountants or other advisors, as it deems appropriate. The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any compensation consultants, legal counsel or other advisors retained by the Committee. Subject to any exceptions permitted under NYSE rules, the Committee may have the authority to select a compensation consultant, legal counsel or other advisor to the Committee only after taking into consideration all factors relevant to that person’s independence from management, including the factors required by any applicable requirements of the Exchange Act and NYSE rules. The Company shall provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to any compensation consultants, legal counsel, accountants or other advisors retained by the Committee.
Formal Evaluation of The
Chief Executive Officer
The Executive Compensation and Human Resource Committee will be responsible for the oversight of an annual assessment of the performance of the Chief Executive Officer. This review will be based on a number of criteria, including performance of the Company, formulation and accomplishment of long-term strategic objectives, development of management talent, the adequacy of the Company’s succession plan for the Chief Executive Officer and other executive officers of the Company, and each of the following responsibilities:
fostering a corporate culture that promotes ethical practices, encourages individual integrity, and fulfills social responsibility;
maintaining a positive work climate that is conducive to attracting, retaining, and motivating a diverse group of top-quality employees at all levels;
developing and recommending to the Board strategies and a vision for the Company that provide for profitable growth and that enhance stockholder value;
developing and recommending to the Board annual business plans and budgets that support the Company’s strategies;
striving to continuously improve the quality and value of the products and services provided by the Company;
formulating aand overseeing the implementation of major corporate policies;
overseeing management of the day-to-day business affairs of the Company;
consistently striving to achieve the Company’s financial and operating goals and objectives in an orderly manner;
consistently striving to achieve and maintain a satisfactory competitive position for the Company within the industry;
developing, in cooperation with the Board, an effective succession plan for the Chief Executive Officer position;
developing an effective management team below the level of the Chief Executive Officer and an active plan for its development and succession;
guiding the Company to contribute appropriately to the well-being of the community, patients and its industry; and
working to keep the Board informed, thereby facilitating the effective functioning of the Board and its committees.
In its oversight of the evaluation, the Executive Compensation and Human Resources Committee may seek input from the Nominating and Governance Committee, the Chairperson of the Board, and other Board members and executive officers, as it deems appropriate.
