It is good governance to establish in advance a Compensation Committee Calendar for the full year. Topics and timing should be pre-determined and agreed-upon. Following is a sample calendar. Executive sessions are presumed to take place at each meeting.

First Quarter

  • Approve merit budgets, salary increases and other changes to pay opportunities
  • Evaluate CEO and executive performance
  • Determine appropriate payout incentives based on performance
  • Approve grants, goals and other terms of new short- and long-term incentive awards
  • Review CD&A and other executive pay-related proxy disclosures

Second Quarter

  • Pay-for-performance analyses vs. peer companies
  • Tally sheet reviews
  • Annual compensation risk review
  • Dilution and equity incentive run rate study
  • Change-in-control severance eligibility and design review
  • Legislative, regulatory and ISS update

Third Quarter

  • Peer group review
  • Market data refresh (data on CEO position to be reviewed in executive session)
  • Market trends presentation
  • Short-term/long-term incentive design changes
  • Committee charter review
  • Legislative, regulatory and ISS update

Fourth Quarter

  • Finalize short-term/long-term incentive design
  • Evaluate Committee performance
  • Evaluate consultant performance
  • Review executive progress toward stock ownership guidelines

 

Other Annual or More Frequent Items

  • Approve promotions, new employment agreements, hire grants
  • Succession planning and leadership development
  • Review incentive payout projections
  • Approve changes to benefit plans

Periodic but Less Frequent Items

  • Comprehensive reevaluation of incentive designs
  • Benefits and perquisites review
  • Review of employment agreement or severance template, clawback policy, anti-hedging policy
  • Change-in-control provision review and costing