Corporate Governance: Committee on Compensation and Organization Charter

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Purpose of Committee

The primary purpose of the Committee on Compensation and Organization (the "Committee") of the Board of Directors (the "Board") of Aetna (the "Company") is to discharge the Board's responsibilities relating to compensation of the Company's executives. In doing so, the Committee shall:

  1. evaluate and determine the compensation of the Company's executive officers and such other key executives or executive positions as identified by the Committee;
  2. oversee compensation and benefits plans, policies and programs of the Company;
  3. administer the equity-based incentive compensation plans of the Company and the Company's Section 162m Annual Incentive Plan; and
  4. consider from time to time and, when appropriate, make recommendations to the Board as to the development and succession plans for the senior management of the Company.

The Committee shall prepare an annual report on executive compensation for inclusion in the Company's Proxy Statement in accordance with applicable rules and regulations.

Committee Membership

The Committee shall be composed solely of at least three members of the Board, each of whom is, in the business judgment of the Board, "independent" under the rules of the New York Stock Exchange, Inc.

The members of the Committee shall be appointed annually and replaced by the Board.

Committee Structure and Operations

The Board shall designate one member of the Committee as its chairperson. The Committee shall meet as often as necessary to carry out its responsibilities under this Charter, but at least three times a year. The Committee shall make regular reports to the Board. Except for grants and awards to executive officers, the Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.

The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain counsel and other experts or consultants. Further, the Committee shall have the sole authority to select, retain and terminate any compensation consultant to be used to assist the Committee in the evaluation of Chief Executive Officer ("CEO") and senior executive compensation, and shall have sole authority to approve the consultant's fees and other retention terms.

Committee Responsibilities and Authority

The following are the goals and responsibilities of the Committee:

  1. To annually review and approve corporate goals and objectives relevant to CEO and other executive officer compensation, evaluate their performance in light of those goals and objectives, and establish their compensation levels based on this evaluation. In determining the long-term incentive component of CEO and other executive officer compensation, the Committee will consider the Company's performance, the value of similar incentive awards to CEOs and other executive officers at comparable companies, and the awards given to the CEO and other executive officers in past years. The Committee also shall take into account the need to attract and retain high-performing executives. The Company's CEO should not attend any portion of a meeting where the CEO's performance or compensation are discussed, unless specifically invited by the Committee.
  2. To review and approve, for the CEO and the executive officers of the Company, (a) the annual base salary level, (b) the annual incentive opportunity level, (c) the long-term incentive level, (d) employment agreements, severance arrangements, and change-in-control agreements/provisions, in each case as, when and if appropriate, and (e) any special or supplemental benefits, arrangements or agreements, including perquisites.
  3. To develop principles and process for selection of CEO and key executives, including succession in the event of an emergency or retirement, for consideration by the Board, and to oversee the creation of development plans for such executives.
  4. To review and recommend to the Board proposed business affiliations of executive officers of the Company.
  5. To review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
  6. To evaluate its own performance annually.
  7. To perform any other responsibilities delegated to the Committee by the Board from time to time.