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Stryker Corporate Governance
 
Stryker Home >> For Investors >> Corporate Governance - Compensation Charter


Corporate Governance
Compensation Committee Charter


This Charter governs the operations of the Compensation Committee of the Board of Directors of Stryker Corporation (the “Committee”). The Committee shall review and reassess the adequacy of this Charter at least annually and recommend any proposed changes to the Board of Directors for approval. This Charter may be amended only by the affirmative vote of the Board of Directors.

Organization

The Committee shall be appointed annually by the Board of Directors upon the recommendation of the Governance and Nominating Committee and shall comprise at least two directors, each of whom has been affirmatively determined by the Board to be independent of the Company. A director shall not be considered independent if he or she (i) has a material relationship with the Company or any of its subsidiaries (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company or a subsidiary and determined not merely from the standpoint of the director but also from that of organizations with which the director is affiliated) that may interfere with the exercise of his or her independence from management and the Company or (ii) does not meet any other independence requirement under applicable laws, rules or stock exchange listing standards. Members of the Committee may be removed by the Board of Directors in its discretion.

Meetings

The Committee shall meet as often as it deems necessary to fulfill its responsibilities and shall report to the Board of Directors following each meeting. The Committee may delegate any of its responsibilities to one or more subcommittees, each of which shall be composed of two or more members, as it may deem appropriate.

Purpose

The purpose of the Committee shall be to assist the Board of Directors in discharging its overall responsibilities relating to executive compensation, including the administration of the Company's stock option and other equity-based plans.

Responsibilities and Processes

The Committee in carrying out its responsibilities believes its policies and procedures should remain flexible, in order to best react to changing conditions and circumstances. The following shall be the principal duties and responsibilities of the Committee and are set forth as a guide, with the understanding that the Committee may supplement them as appropriate:

• The Committee shall review and approve prior to the beginning of each year the corporate goals and objectives relevant to the compensation of the Chief Executive Officer and the other executive officers of the Company for such year, evaluate individual current year performance in light of the established goals and set annual compensation for the Chief Executive Officer and other executive officers, including salary and bonus targets, for the upcoming year.

• The Committee shall review the evaluation process and compensation structure for the other members of senior management and provide oversight regarding management's decisions concerning the performance and compensation of such senior management personnel.


• The Committee shall receive and review reports assembled by the Company's staff regarding the status of Board compensation in relation to other U.S. corporations of similar size and a peer industry survey group and make recommendations to the Board regarding changes in Board compensation as it deems appropriate.


• The Committee shall have sole authority to retain, at the Company's expense, and terminate, a compensation consulting firm to assist in the evaluation of director or executive compensation, and any legal and other advisor that it deems necessary for the fulfillment of its responsibilities, including the sole authority to approve fees and other retention terms.


• The Committee shall review the Company's stock option plans and other equity-based plans and recommend changes to the Board as it deems appropriate. The Committee shall have all authority granted to a committee of the Board under the terms of any such plan with respect to the granting of options or awards thereunder and the administration of such plans.


• The Committee shall prepare the report on executive compensation for inclusion in the Company's annual proxy statement, as required by regulations promulgated by the Securities and Exchange Commission.


• The Committee shall perform an evaluation of its performance at least annually to determine whether it is functioning effectively.

This Charter was approved by the Board of Directors on April 26, 2005.

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