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The Compensation Committee Handbook, 4th Edition

Book Description

New and updated information on the laws and regulations affecting executive compensation

Now in a thoroughly updated Fourth Edition, The Compensation Committee Handbook provides a comprehensive review of the complex issues challenging compensation committees that face revised executive compensation disclosure regulations issued by the SEC, as well as GAAP and IFRS rulings and trends. This new and updated edition addresses a full range of functional issues facing compensation committees, including organizing, planning, and best practices tips.

  • Looks at the latest regulations impacting executive compensation, including new regulations issued by the SEC, as well as GAAP and IFRS rulings and trends

  • Covers the selection and training of compensation committee members

  • Explores how to make compensation committees a performance driver for a company

  • Guides documentation requirements and timing issues

  • The Compensation Committee Handbook, Fourth Edition will help all compensation committee members and interested professionals succeed in melding highly complex technical information and concepts with both corporate governance principles and sound business judgment.

    Table of Contents

    1. Foreword
    2. Preface
    3. Acknowledgments
    4. About the Authors
    5. PART One The Modern Compensation Committee
      1. CHAPTER 1 The Compensation Committee
        1. Board Structure: The Focus on Independence
        2. Compensation Committee Composition and Multiple Independence Requirements
        3. Compensation Committee Size
        4. Compensation Committee Charter
        5. Role of the Compensation Committee
        6. Role of the Compensation Committee Chair
        7. Duties and Responsibilities of the Compensation Committee
        8. Compensation Benchmarking
        9. The Importance of Compensation Committee Meeting Minutes
        10. Call to Action
      2. CHAPTER 2 Selecting and Training Compensation Committee Members
        1. The Role of the Nominating Committee
        2. Nomination and Selection of New Compensation Committee Members
        3. Time Commitment
        4. Diversity
        5. Attracting Candidates
        6. Conducting the Search
        7. How to Approach Candidates
        8. CEO Involvement in the Selection Process
        9. Making the Final Selection
        10. How to Say No
        11. What if the New Director Does Not Work Out?
        12. Benefits of an Educated Board
        13. Orientation of New Members
        14. Ongoing Training
        15. Outside Experts and Advisors
      3. CHAPTER 3 CEO Succession and Evaluation
        1. The Relationship Between Pay and Succession Planning
        2. The Advantages of Effective Succession Planning
        3. The Succession Planning Process
        4. CEO Evaluation
        5. Notes
      4. CHAPTER 4 Director Compensation
        1. Overview
        2. Elements of Director Compensation
        3. Disclosure
        4. Trends in Director Compensation
        5. Conducting a Director Compensation Study
    6. PART Two Legal and Regulatory Framework
      1. CHAPTER 5 Corporate Governance
        1. Fiduciary Duties of Directors
        2. Practical Applications of Fiduciary Duty Rules
        3. Stock Exchange Corporate Governance Rules
        4. External Compensation Policies and Guidelines
      2. CHAPTER 6 Disclosure of Executive and Director Compensation
        1. Background
        2. Compensation Discussion and Analysis
        3. The Tabular Disclosures
        4. Option Grant Practices
        5. Director Compensation
        6. Disclosure of Material Compensation Risk
        7. Compensation Disclosure Requirements for Smaller Reporting Companies
        8. Golden Parachute Compensation
        9. Pending Dodd-Frank Disclosure Requirements
        10. Beneficial Ownership Reporting
        11. Disclosure of Related Person Transactions
        12. Director Independence and Governance Disclosure
        13. Disclosure of Equity Compensation Plans
        14. Plan Filing Requirements
        15. Form 8-K
        16. Selected Provisions of Regulation S-K
      3. CHAPTER 7 Other Securities Issues
        1. Selected Dodd-Frank Provisions Relating to Executive Compensation
        2. Special Rules Regarding Stock Transactions
        3. NYSE/NASDAQ Rules: Approval of Equity Compensation Plans
        4. Selected Sarbanes-Oxley Provisions Relating to Executive Compensation
      4. CHAPTER 8 Tax Rules and Issues
        1. Overview
        2. Organizations Responsible for Federal Tax
        3. Major U.S. Tax Law and Issues
      5. CHAPTER 9 Accounting Rules and Issues
        1. Overview
        2. Organizations Responsible for Accounting Standards (Past and Present)
        3. New Equity-Based Compensation Accounting Rules
        4. Previous Equity-Based Compensation Accounting Rules Under U.S. GAAP
        5. Other Current and Past Accounting Standards
      6. CHAPTER 10 ERISA and Labor Law, Rules, and Issues
        1. ERISA Law and Regulations
        2. Labor Laws and Regulations
        3. ADEA Law
    7. PART Three Practical Applications
      1. CHAPTER 11 Executive Employment, Severance, and Change-in-Control Arrangements
        1. Background
        2. At-Will Employment Arrangements
        3. Contractual Employment Arrangements
        4. Fundamental Elements of a Written Employment Arrangement
        5. Process
        6. Types of Employment Arrangements
        7. Terms and Conditions Contained in Employment Arrangements
      2. CHAPTER 12 Incentive Compensation
        1. Useful Definitions and Abbreviations
        2. Cash versus Equity
        3. Typical Plan Features and Designs
        4. Shareholder Approval Requirements
        5. Retention-Only Plans
      3. CHAPTER 13 Equity-Based Compensation
        1. Equity-Based Incentive Awards
        2. Stock Ownership and Retention Guidelines
      4. CHAPTER 14 Executive Pension-Benefit, Welfare-Benefit, and Perquisite Programs
        1. List of Programs
        2. Pension-Benefit Arrangements
        3. Welfare-Benefit Arrangements
        4. Perquisites
    8. APPENDIX A Selected SEC Rules, Regulations, Schedules, and Forms
      1. Securities Act of 1933, as Amended
      2. Securities Exchange Act of 1934, as Amended
      3. Forms
      4. Sarbanes-Oxley Act of 2002
      5. Dodd-Frank Wall Street Reform and Consumer Protection Act
      6. Other
    9. APPENDIX B List of Organizations and Periodicals
    10. APPENDIX C List of Director's Colleges and Other Training Opportunities
    11. APPENDIX D Sample Compensation Committee Charters
      1. Human Resources Committee of the Board of Directors of AT&T Inc.
      2. Citigroup Inc.
      3. The Coca-Cola Company
      4. Intel Corporation
      5. The Home Depot Inc.
    12. Appendix E Sample Compensation Discussion and Analysis (CD&A)
      1. Google
      2. Prudential Financial
      3. 3M
      4. Berkshire CD&A 2013
    13. Glossary
    14. Bibliography
    15. Index
    16. End User License Agreement