Compensation Committee Charter
The purpose of the Compensation Committee of the Board of Directors (the “Board”) of ABM Industries Incorporated (the “Company”) is (i) to discharge the responsibilities of the Board of Directors relating to compensation of the Company’s Chief Executive Officer and other executive officers, (ii) to assist the Board in establishing the appropriate equity-based compensation plans and to administer such plans, (iii) to assist the Board in its oversight responsibilities with respect to compensation and benefit plans established by the Company, (iv) to prepare an annual report on executive compensation for inclusion in the Company’s annual proxy statement, and (v) to perform such other duties and responsibilities enumerated in and consistent with this Charter. The Committee will undertake those specific duties, responsibilities and processes listed below, and such other duties as the Board from time to time may prescribe.
The Committee shall consist of no fewer than three directors. The members will be appointed by and serve at the pleasure of the Board. Committee members shall serve until they are replaced, they resign, or their successors are duly elected and qualified.
Each member shall meet the objective test of “independence” that has been established by the Board, or in the absence of such test, the Board shall make an individual determination that such director is independent within the meaning of any applicable law or any listing standard or rule established by the New York Stock Exchange and applicable to the Committee. In addition, each member shall qualify as an “outside director” as such term is defined in section 162(m) of the Internal Revenue Code of 1986 as amended and the regulations promulgated thereunder, and as a “non-employee director” as such term is defined in section 16 of the Securities Exchange Act of 1934 as amended and the rules and regulations promulgated thereunder.
The Committee shall meet as often as may be deemed necessary or appropriate, but no fewer than four times annually. The Committee may ask members of management or others to attend meetings or to provide relevant information. The Committee shall periodically meet in executive session without management.
Duties and Responsibilities
The Committee shall be responsible for matters related to executive officer compensation and all equity-based compensation plans. To fulfill its responsibilities, the Committee shall:
1. Provide direction to the Company in the area of executive compensation.
2. Prepare an annual report on executive officer compensation for the proxy statement.
3. Annually review and approve corporate goals and objectives relevant to the CEO’s compensation, and evaluate the CEO’s performance in light of those goals and objectives.
4. Meet with the Board in executive session to discuss the Committee’s evaluation of the CEO’s performance and its recommendation for the CEO’s compensation. Following this meeting, the Committee will recommend to the independent directors of the Board the CEO’s compensation level based on the Committee’s evaluation of the CEO’s performance. In determining the long-term incentive component of the CEO’s compensation, the Committee will consider the Company’s performance and relative shareholder return, the value of similar incentive awards to the CEOs at comparable companies, and the awards given to the CEO in past years.
5. Review the Company’s compensation structure and after considering the recommendations of the CEO, establish the compensation of all other employees of the Company who are executive officers of the Company or who occupy such other positions as may be designated by the Committee.
6. With the assistance of an outside consultant retained directly by the Committee, conduct a review of all executive incentive plans at least every three years.
7. Make recommendations to the Board with respect to incentive compensation plans and equity-based compensation plans for the Company and its subsidiaries. Within the confines established under the various incentive plans, the Committee may delegate such powers and authority as it may determine appropriate.
The responsibilities and duties set forth above are meant to serve as a guide, with the understanding that the Committee may diverge from the specific duties enumerated as necessary or appropriate given the circumstances.
Self-Evaluation and Charter Review
The Committee annually will conduct a self-evaluation of this Committee to review the Committee’s performance, including its effectiveness and compliance with this Charter. In connection with the evaluation, the Committee will review and reassess the adequacy of this Charter annually and recommend to the Board any appropriate changes.
The Chair of the Committee will report orally to the Board at its regularly scheduled meetings on the matters considered by the Committee. The Committee will, to the extent deemed appropriate, record its summaries of recommendations to the Board in written form that will be incorporated as a part of the minutes of the Committee and distributed to the Board. This Charter will be posted on the Company’s website to be available to all stockholders. To the extent required, the Committee also will prepare and sign a report for inclusion in the Company’s proxy statement for its annual meeting of stockholders.
The Committee shall undertake any other action or exercise such other powers, authority and responsibilities as necessary or appropriate to the discharge of the responsibilities and duties set forth in this Charter or the Company’s Bylaws, or otherwise required by the Listing Standards of the New York Stock Exchange or other applicable laws, rules or regulations, or as shall otherwise be determined by the Board.
In discharging its responsibilities and duties, the Committee is empowered to investigate any matter brought to its attention that it determines to be within the scope of its authority with full access to all books, records, facilities and personnel of the Company. The Committee has the power to retain compensation consultants, outside counsel or other consultants or experts as the Committee may deem appropriate in its sole discretion, shall receive funding from the Company to engage such advisors, and shall have sole authority to approve related fees and retention terms.
The Committee may delegate authority to individuals or subcommittees when it deems appropriate. However, in delegating authority it shall not absolve itself from the responsibilities it bears under the terms of this Charter.