Compensation Committee Charter of Popular Inc
COMPENSATION COMMITTEE CHARTER
PURPOSE OF COMMITTEE
The purpose of the Compensation Committee (the "Committee") of the
Board of Directors (the "Board") of Popular, Inc. (the "Corporation") is to
discharge the Board's responsibilities (subject to review by the full Board)
relating to compensation of the Corporation's Chief Executive Officer and all
other Executive Officers and to produce an annual report on executive
compensation for inclusion in the Corporation's proxy statement, in accordance
with the rules and regulations of the Securities and Exchange Commission (the
The Committee will consist of three or more members of the Board, each
of whom the Board has determined has no material relationship with the
Corporation and each of whom is otherwise "independent" under the rules of The
NASDAQ Stock Market, Inc.
The Board will appoint the members of the Committee. Members will serve
at the pleasure of the Board and for such term or terms as the Board may
COMMITTEE STRUCTURE AND OPERATIONS
The Committee will designate one member of the Committee as its chair.
In the event of a tie vote on any issue, the chair's vote will decide the issue.
The Committee will meet in person or telephonically at least three times a year
at a time and place determined by the Committee chair, with further meetings to
occur, or actions to be taken by unanimous written consent, when deemed
necessary or desirable by the Committee or its chair.
The Committee may invite such members of management to its meetings as
it may deem desirable or appropriate, consistent with the maintenance of the
confidentiality of compensation discussions. The Corporation's Chief Executive
Officer ("CEO") should not attend any meeting where the CEO's performance or
compensation are discussed, unless specifically invited by the Committee.
COMMITTEE DUTIES AND RESPONSIBILITIES
The following are the duties and responsibilities of the Committee:
1. In consultation with senior management, to establish
the Corporation's general compensation philosophy,
and oversee the development and implementation of
2. To review and approve corporate goals and objectives
relevant to the compensation of the CEO, evaluate the
performance of the CEO 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 will consider, among other factors, the
Corporation's performance relative to other major
companies in the banking and financial services
industries, as measured by standards such as net
income and its growth over prior periods and
shareholder return, the level of compensation paid to
CEOs at comparable companies, the level of the CEO's
individual contribution to the performance of the
Corporation, the incentive awards given to the CEO in
past years and the CEO's compensation as a percentage
of the Corporation's net income.
3. To review and approve compensation programs
applicable to the executive officers of the
4. To make recommendations to the Board with respect to
the Corporation's incentive compensation plans and
equity-based plans, including the 2001 Stock Option
Plan and the Profit Sharing, Annual Incentive,
Long-Term Incentive and Benefit Restoration Plans,
oversee the activities of the individuals and
committees responsible for administering these plans,
and discharge any responsibilities imposed on the
Committee by any of these plans.
5. In consultation with management, to oversee
compliance with federal and state laws and
regulations as they affect compensation matters.
6. To review and approve any severance or similar
termination payments proposed to be made to any
current or former executive officer of the
7. To prepare and issue the evaluations and reports
required under "Committee Reports" below.
8. To handle any other duties or responsibilities
expressly delegated to the Committee by the Board
from time to time relating to the Corporation's
DELEGATION TO SUBCOMMITTEE
The Committee may, in its discretion, delegate all or a portion of its
duties and responsibilities to a subcommittee consisting solely of members of
The Committee will produce the following reports and provide them to
1. An annual Report of the Compensation Committee on
Executive Compensation for inclusion in the
Corporation's annual proxy statement in accordance
with applicable SEC rules and regulations.
2. An annual performance evaluation of the Committee,
which evaluation must compare the performance of the
Committee with the requirements of this charter. The
performance evaluation should also recommend to the
Board any improvements to this charter deemed
necessary or desirable by the Committee. The
performance evaluation by the Committee may be
conducted in any manner that the Committee deems
appropriate. The report to the Board may take the
form of an oral report by the chair of the Committee
or any other member of the Committee designated by
the Committee to make this report.
3. A summary of the actions taken at each Committee
meeting, which will be presented to the Board at the
next Board meeting.
RESOURCES AND AUTHORITY OF THE COMMITTEE
The Committee will have the resources and authority appropriate to
discharge its duties and responsibilities, including the authority to select,
retain, terminate, and approve the fees and other retention terms of special
counsel or other experts or consultants, as it deems appropriate, without
seeking approval of the Board or management. With respect to compensation
consultants retained to assist in the evaluation of CEO or senior executive
compensation, this authority will be vested solely in the Committee.