Corporate Governance: Committee on Compensation and
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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:
and determine the compensation of the Company's executive officers and such
other key executives or executive positions as identified by the Committee;
compensation and benefits plans, policies and programs of the Company;
the equity-based incentive compensation plans of the Company and the Company's
Section 162m Annual Incentive Plan; and
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
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.
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
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.
Responsibilities and Authority
The following are the goals and
responsibilities of the Committee:
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
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.
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.
review and recommend to the Board proposed business affiliations of executive
officers of the Company.
review and reassess the adequacy of this Charter annually and recommend any
proposed changes to the Board for approval.
evaluate its own performance annually.
perform any other responsibilities delegated to the Committee by the Board
from time to time.