Role of the Compensation Committee
The Compensation Committee is responsible to our Board of Directors for oversight of our executive compensation programs. The Compensation Committee consists of independent directors and is responsible for the review and approval of all aspects of our programs. Among its duties, the Compensation Committee is responsible for:
| • | Considering input from our stockholders; |
| • | Reviewing and assessing competitive market data; |
| • | Reviewing the chief executive officer’s performance and determining the chief executive officer’s compensation; |
| • | Reviewing and approving incentive plan goals, achievement levels, objectives and compensation recommendations for the NEOs and other executive officers; |
| • | Evaluating the competitiveness of each executive’s total compensation package to ensure that we can attract and retain critical management talent; and |
| • | Approving any changes to the total compensation programs for the NEOs including, but not limited to, base salary, annual bonuses, long-term incentives and benefits. |
Following review and discussion, the Compensation Committee or the Board, as applicable, approves the executive compensation of our executive officers. The Committee is supported in its work by our Senior Vice President of Human Resources and our General Counsel, as well as the Compensation Committee’s independent compensation consultant.
Role of the Independent Compensation Consultant
The Compensation Committee has historically retained the services of Aon’s Human Capital Solutions Practice, a division of Aon plc (“Aon”), in accordance with the Compensation Committee’s charter. In 2023, the Compensation Committee changed its independent compensation consultant to Exequity LLP (“Exequity”) to first advise with respect to compensation for fiscal year 2024. During the partial year in which Aon was engaged as independent compensation consultant, and the balance of the year when Exequity was engaged as independent compensation consultant, each reported directly to the Compensation Committee. The Compensation Committee retains sole authority to hire or terminate the independent compensation consultant, approves its professional fees, determines the nature and scope of its services and evaluates its performance. A representative of the independent compensation consultant attends Compensation Committee meetings and communicates with the Compensation Committee chair between meetings, as requested. The Compensation Committee makes or recommends to the Board all final decisions regarding executive compensation.
In advising with respect to fiscal year 2022 compensation, which remained unchanged for fiscal year 2023, Aon’s role included the following:
| • | Advising the Compensation Committee on director and executive compensation trends and regulatory developments; |
| • | Assisting with the design of our executive compensation structure, including both short and long-term incentive programs; |
| • | Developing a peer group of companies for determining competitive compensation rates; |
| • | Providing a total compensation study for executives against peer companies; |
| • | Providing advice to the Compensation Committee on corporate governance best practices, as well as any other areas of concern or risk; |
| • | Serving as a resource to the Compensation Committee chair for meeting agendas and supporting materials in advance of each meeting; |
| • | Reviewing and commenting on proxy statement disclosure items, including review of the CD&A; and |
| • | Advising the Compensation Committee on management’s pay recommendations. |
The Compensation Committee has assessed the independence of each of Aon and Exequity as required by the SEC and NYSE listing standards. The Compensation Committee reviewed its relationship with Aon during their engagement, and its relationship with Exequity, and considered all relevant factors, including those set forth in Rule 10C-1(b)(4)(i) through (vi) under the Exchange Act. Based on this review, the Compensation Committee concluded that there are no conflicts of interest raised by the work performed by each of Aon and Exequity, and that each of Aon and Exequity is independent.
Role of Management
For executive officers other than himself, our CEO makes pay recommendations to the Compensation Committee based on competitive market data from our independent compensation consultants, perspectives from our independent compensation consultant on labor market dynamics, an assessment of individual performance and company financial performance. His recommendations to the Compensation Committee establish appropriate and market-competitive compensation opportunities for our NEOs, consistent with our overall pay philosophy. Our CEO and the Compensation Committee also review and approve the short-term incentive metrics and goals for the upcoming year and any new long-term incentive grants. The Compensation Committee reviews and discusses the recommendations, in conjunction with the Compensation Committee’s independent compensation consultant, in making compensation decisions or recommendations to the full Board. No officer participates directly in the final deliberations or determinations regarding his or her own compensation package. For CEO pay decisions, the Compensation Committee independently solicits data and perspectives from our independent compensation consultant and independently establishes compensation opportunities consistent with our overall pay philosophy.
