The Compensation/Human Resources Committee (the “Committee”) shall be directly responsible for review and approval of compensation of the persons (other than the CEO) named as executive officers of the Company in its annual meeting proxy statement and any other persons identified as Executives herein. The Committee shall also, together with the other independent members of the Board of Directors, be directly responsible for determining and approving the CEO’s compensation level based upon the evaluation performed by the Corporate Governance/Nominating Committee. The Committee shall also be responsible for making recommendations to the Board on the employee compensation and benefit plan matters described below, and to produce an annual report on executive compensation as required by the SEC for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations.
Committee Composition and Operation
The Committee shall consist of no fewer than three, nor more than seven, directors, none of whom are employees of the Company or any of its affiliates and all of whom are independent as required under the rules promulgated from time to time by the New York Stock Exchange and the Securities and Exchange Commission, and are outside directors as defined pursuant to Internal Revenue Code §162(m).
The Board shall have the authority to remove at any time one or more of the members of the Committee, to fill any vacancy that may exist on the Committee or to fill any newly created Committee membership caused by the increase in the size of the Committee.
The Committee may create one or more sub-Committees to which it may delegate some or all of its authority, provided, however, that it may not delegate to a sub-committee the power and authority to authorize the issuance of shares of the Company’s stock or options to purchase Company stock (or securities convertible into or exercisable for any such stock or options).
The Committee may make such rules of procedure as it deems necessary or appropriate
for its efficient functioning.
The Committee shall meet at least twice annually, or more frequently as circumstances require. Each meeting shall include a time of executive session.
Committee Duties and Responsibilities
1. The Committee shall, together with the other independent members of the Board of Directors, determine and approve the CEO’s compensation level taking into account the annual evaluation performed by the Corporate Governance/Nominating Committee and such other factors as the Committee deems appropriate. In determining the long-term incentive component of CEO compensation, the Committee will consider 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.
2. The Committee shall have sole authority to retain and terminate any compensation consulting firm or other advisers it may desire to use to assist it in discharging its duties hereunder, including sole authority to approve the firm’s fees and other retention terms.
3. The Committee shall review and make recommendations to the Board with respect to non-CEO executive officer compensation, and incentive compensation and equity-based plans that are subject to Board approval, including the Long-Term Incentive Plan, Executive Benefit Plans and Tax Qualified Retirement Plans, and shall fix the level or amount of benefits to be received by Executives thereunder. The Board has authorized the Committee to have full power and authority to oversee the evaluation of, and to approve the Salary Administration Program for, management employees, and to set the maximum salary limit for officers and employees that may be fixed by the Chief Executive Officer and to determine the compensation of each officer of PHI and any employee whose salary exceeds the level of authorization held by the Chief Executive Officer.
4. The Committee shall have full power and authority to fix the salaries (other than the salary of the CEO) and other compensation (including Annual and Long-Term Incentive Awards) of the five most highly compensated officers of the Company, the heads of the major subsidiaries, any individual who the Board has determined to be an executive officer subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 (together, the “Executives”), and any individual who is not an Executive but whose total compensation (including Annual and Long-Term Incentive Awards) exceeds the total compensation (including such incentive compensation) of the lowest ranked proxy reported salary and compensation.
5. The Committee shall oversee the administration of the Annual Incentive Plans of the Company and its subsidiaries, including the following:
a. Approve the Executive Annual Incentive Plan of the Company, including plan design, performance targets, target level awards, participants and awards for participants exceeding the salary limit that may be fixed by the Chief Executive Officer.
b. Approve Executive Incentive Plans for the Company’s subsidiaries, including plan design, target award levels and review plan results and awards as approved by the subsidiary Board.
6. The Committee shall oversee the Administration of the Long-Term Incentive Plan (the "Plan"), including Plan design, award levels, participants and awards made under the Plan; provided that the Committee shall have sole authority to approve any awards made to Executives thereunder.
7. The Committee shall oversee corporate diversity issues with respect to the workforce.
8. The Committee shall conduct an annual evaluation of its performance of its duties.
9. The Committee shall produce an annual report on executive officer compensation as required by the SEC for inclusion in the Company’s proxy statement, in accordance with applicable rules and regulations.
10. The Committee shall report to the Board at least annually (and more frequently, if the Committee believes its activities merit such reporting) as to the Committee’s activities.