The Compensation Committee Handbook

The updated guide to outstanding compensation strategy The compensation committee chair is widely considered the most difficult role on the board. In the current political landscape, executive pay structures are more closely scrutinized than ever before. The consequences of making bad compensation decisions can be severe, up to and including the dreaded shareholder rebellion. The Compensation Committee Handbook is a practical guide designed to help compensation committee members make sensible and defensible decisions every time. Now in its Fourth Edition, this volume provides a comprehensive review of the complex issues facing compensation committees in the wake of the Sarbanes–Oxley and Dodd–Frank Acts. Compensation committees need to know how to navigate new accountability requirements, tax regulations, and shareholder expectation. The Compensation Committee Handbook guides board members through this complex maze so compensation policies can stand as the foundation for business success. Compiled by a team of experts in executive compensation, The Compensation Committee Handbook addresses the common and not–so–common issues that all committee members must understand, including: Selecting and training compensation committee members CEO succession and evaluation strategies The latest regulations impacting compensation Roles and responsibilities of the committee, including new best practices How to turn the compensation committee into a key performance driver Incentives, perquisites, and equity–based compensation IFRS and ERISA requirements Decisions regarding the compensation of senior executives are some of the most important that a board will ever have to make. The Compensation Committee Handbook is a roadmap to retaining outstanding talent, aligning objectives, and avoiding controversy. Practical and defensible compensation strategy starts here.

Foreword Preface Acknowledgments Part One The Modern Compensation Committee Chapter 1 The Compensation Committee Chapter 2 Selecting and Training Compensation Committee Members Chapter 3 CEO Succession and Evaluation Chapter 4 Director Compensation Part Two Legal and Regulatory Framework Chapter 5 Corporate Governance Chapter 6 Disclosure of Executive and Director Compensation Chapter 7 Other Securities Issues Chapter 8 Tax Rules and Issues Chapter 9 Accounting Rules and Issues Chapter 10 ERISA and Labor Law, Rules, and Issues Part Three Practical Applications Chapter 11 Executive Employment, Severance, and Change–in–Control Arrangements Chapter 12 Incentive Compensation Chapter 13 Equity–Based Compensation Chapter 14 Executive Pension–Benefit, Welfare–Benefit, and Perquisite Programs Selected Resources Appendix A Selected SEC Rules, Regulations, Schedules, and Forms TK Appendix B List of Organizations and Periodicals Appendix C List of Director’s Colleges and Other Training Opportunities Appendix D Sample Compensation Committee Chapters TK Appendix E Sample Compensation Discussion and Analysis (CD&A) TK Glossary Bibliography

JAMES F. REDA is Managing Director, Executive Compensation Consulting, Arthur J. Gallagher Co., Human Resources Consulting Practice. Mr. Reda has served for more than 27 years as advisor to the top management and boards of major corporations in the United States and abroad in matters of executive compensation, performance, organization, and corporate governance. STEWART REIFLER is the head of the executive compensation practice at the New York office of Vedder Price, P.C. Mr. Reifler has over 25 years of experience negotiating and structuring executive compensation arrangements on behalf of executives, board compensation committees, and companies. MICHAEL L. STEVENS is a partner in the executive compensation practice at Alston Bird, LLP. Mr. Stevens has over 20 years of experience advising clients with respect to securities, corporate governance, and tax issues relating to stock plans, incentive compensation arrangements, executive employment agreements, and deferred compensation.