2003 Compensation Charter: BENPurpose
The purpose of the Compensation Committee (the "Committee") is to assist the Board of Directors of Franklin Resources, Inc. (the "Board") in fulfilling its responsibility relating to (1) the compensation of the executives of Franklin Resources, Inc. (the "Company"), (2) the administration of the Company's incentive compensation and stock incentive plan, and stock purchase plan and (3) the preparation of the annual report on executive compensation, which is included in the Company's proxy statement.
The members of the Committee shall be appointed by the Board. The Committee shall consist of no fewer than three members. Each member of the Committee shall satisfy the independence requirements of and the rules relating to compensation committees established by the New York Stock Exchange. The members of the Committee shall serve until their successors are duly appointed and qualify, and shall designate the Chairman of the Committee.
The Committee shall meet on a regular basis and will hold special meetings as circumstances require. The timing of the meetings shall be determined by the Committee. At all Committee meetings, a majority of the members of the Committee shall constitute a quorum for the transaction of business. The action of a majority of those present at a meeting, at which a quorum is present, shall be the action of the Committee. The Committee shall keep a record of its actions and proceedings and report to the Board at its next meeting.
Authority and Responsibilities
The Committee shall have the following authority and responsibilities:
The Committee shall review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO's performance in light of those goals and objectives, and set the CEO's compensation level based on this evaluation.
In determining the long-term incentive component of CEO compensation, the Committee may consider, among other factors, the Company's performance and relative shareholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the Company's CEO in past years.
The Committee shall make recommendations to the Board with respect to incentive compensation plans, stock plans and stock purchase plans.
The Committee shall adopt, administer, approve and ratify awards under incentive compensation and stock incentive plans, including amendments to the awards made under any such plans, and review and monitor awards under such plans. The Committee shall also serve as the plan administrator for such incentive compensation plans, stock incentive plans and stock purchase plans as the Committee, from time to time, is so designated by the Board or the plan documents.
The Committee shall review and make recommendations to the Board on the overriding compensation philosophy for the Company.
The Committee shall review and make recommendations with respect to performance or operating goals for participants in the Company's incentive plans.
The Committee shall meet annually with the CEO to receive the CEO's recommendations concerning performance goals and the CEO's evaluation of the Company's progress toward meeting those goals.
The Committee shall annually review and approve, for the CEO and the senior executives of the Company, (1) employment agreements, severance arrangements, and change in control agreements or provisions, in each case, when and if appropriate, and (2) any special or supplemental benefits.
The Committee shall make regular reports to the Board.
The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
The Committee shall annually review its own performance.
The Committee may form and delegate authority to subcommittees as appropriate.