SAMPLE COMMITTEE CHARTER:
EXECUTIVE EVALUATION AND COMPENSATION COMMITTEE
Overall Roles and Responsibilities
The Executive Evaluation and Compensation Committee recommends policies and processes to the board for the regular and orderly review of the performance, compensation, and development of the CEO, other senior executives, and the organization’s disqualified individuals. The committee is also responsible for conducting annual CEO goal-setting, evaluation, and compensation review, in accordance with board policy.
The specific responsibilities of the Executive Evaluation and Compensation Committee include:
• Recommending a CEO evaluation policy to the board, including annual goals for the CEO and a process for annual CEO performance evaluation. The policy includes provisions for input from the full board and a report to the board on the results of the evaluation and compensation review.
• Conducting the CEO evaluation process, consistent with board-approved policy, and in a manner that promotes trust and candid communication between the board and CEO, ensures that the CEO understands the board’s expectations, and provides constructive feedback to the CEO on his or her performance.
• Ensuring that the organization’s executive compensation program meets IRS requirements and achieves the “rebuttable presumption of reasonableness.”
• Reviewing and understanding all current legal and regulatory requirements with regard to executive compensation.
• Recommending a compensation philosophy and plan to the board