Compensation Committee | Center for Corporate Governance

The role of the compensation committee is to set appropriate and supportable pay programs that are in the organization’s best interests and aligned with its business mission and strategy.

With the adoption of the executive and director compensation disclosure rules by the SEC, changes to the accounting for certain equity awards, and more active shareholder groups wanting a “say on pay,” the compensation committee is working harder to meet the requirements of all observing parties. A number of constituents, including investors, analysts, the media, government, and governance rating agencies are now shining a spotlight on compensation committees.

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NYSE and NASDAQ Propose Rules Regarding Independence of Compensation Committee Members and Compensation Advisers

The NYSE and NASDAQ submitted proposed rules to the SEC that will be used to determine independence for compensation committee members and compensation advisers. The proposed rules do not require compensation committees to retain independent compensation advisers, but rather to conduct an independence analysis of them. This article provides a detailed summary of the proposed rules.

Publication date: 10/2012 | File size: 221 KB

US Securities and Exchange Commission Adopts Dodd-Frank Compensation Committee and Advisor Independence Rules

The SEC has adopted rules under Section 10C of the Securities Exchange Act of 1934, as mandated by Section 952 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The rules impose independence requirements, authorize compensation committees to retain compensation consultants, and require compensation committees to assess the independence of any consultant, legal counsel, or other adviser. The rules, which were adopted on June 20, 2012, are effective for annual proxy statements filed after January 1, 2013. This article summarizes the steps companies should take to address the new rules.

Publication date: 7/2012 | File size: 196 KB

SEC Finalizes Rules for Compensation Committee and Advisor Independence

The SEC’s Final Rules covering independence standards and related disclosures for Compensation Committees and their advisers were published in the Federal Register on June 27, 2012.

Publication date: 6/2012 | File size: 298 KB

2011 Trends in Corporate Governance of the Largest U.S. Public Companies

Director & Executive Compensation

The results of this annual survey highlight director and executive compensation trends and recommended practices that have emerged in the past year.

Publication date: 8/2011 | File size: 7.8 MB

Key Responsibilities of Compensation Committees

The SEC, the NYSE, and the NASDAQ require a compensation committee of a public company to assume a number of responsibilities which may include:

Establish CEO and executive officer compensation
Develop the compensation philosophy
Assist with and review the Compensation Discussion and Analysis
Complete the Compensation Committee report
Oversee equity compensation grant policy
Retain and terminate outside experts
Evaluate shareholder proposals related to executive remuneration

Compensation Committees and Compensation Advisers

January 28, 2013 - New corporate governance listing standards of the NYSE and NASDAQ were approved by the SEC - certain requirements apply beginning July 1, 2013. Listing companies should start preparing now to conduct an independence assessment of compmensation consultants, outside legal counsel and other advisers that are retained by or provide advice to the compensation committee. Listed companies will need to revisit the independence of compensation committee members under new, enhanced independence standards, and will need to revise their compensation committee charters to reflect the new standards.