Sunoco Inc. Sunoco, Inc.
downarrow.gif (846 bytes)Compensation Committee Charter
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Authority  By resolution dated September 26, 1974, the Sunoco, Inc. Board of Directors established the Compensation Committee. The Board adopted this Charter of the Compensation Committee on March 3, 2005. 

 

Membership  The Compensation Committee will consist of no fewer than three directors. Every member shall satisfy the independence standards of the New York Stock Exchange Listing Standards, as amended, and the Company’s Categorical Standards of Independence as set forth in the Company’s Corporate Governance Guidelines. Additionally, all members shall meet the definition of “outside director” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended and the definition of “non-employee director” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended. The Board shall appoint a Chairman and the members upon recommendation of the Governance Committee and shall have the power to fill vacancies on the Committee. Additionally, the Board shall have the power to remove any member at any time with or without cause.

 

Purpose

The Compensation Committee, in order to assist the Board in the discharge of its responsibilities relating to the fair and competitive compensation of the executives and other key employees of Sunoco: 

 

Duties & Responsibilities

     Executive Compensation-The Committee:

  1. Reviews Sunoco’s philosophy regarding executive compensation. 
  2. Engages its own third-party compensation consultant to advise regarding “best practices” in executive compensation and to annually review market data to assess Sunoco’s competitive position for the three components of executive compensation (base salary; annual incentives; and long-term incentives). The market data that is reviewed includes data from the proxy peer group, other companies from the oil industry and general industry information which is adjusted for each company’s relative revenues (“Market Data”).
  3. Adopts, amends and makes awards under Sunoco’s long- or short-term incentive compensation plans in which the CEO and other executive officers may be participants, including, but not limited to:
  1. With regard to Sunoco’s annual incentive program, and the performance-based common stock unit portion of the long-term incentive compensation program, evaluates the performance of the Company in meeting specific performance criteria set previously by the Committee, and assures that both programs result in payments that are closely correlated with Sunoco’s achievement of those performance criteria.
  2. Annually reviews the perquisites of the CEO and executive officers, as well as their compliance with Sunoco’s policies regarding perquisites.
  3. Reviews and pre-approves any compensation arrangement or other perquisite that is outside of Sunoco’s approved policies.
  4. Reviews recommendations made by the CEO and the third-party compensation consultant for the compensation of Sunoco's other executive officers and determines their compensation.
  5. Reviews and approves, in advance, employment agreements, severance or similar agreements or provisions and payments to be made to any executive officer.
  6. Reviews and approves, Sunoco’s Executive Stock Ownership Guidelines and monitors executive compliance with the Guidelines.
  7. Annually reviews Sunoco’s total compensation liabilities to the CEO and senior executives under various scenarios, including voluntary termination, retirement, involuntary termination and change-in-control.
  8. Annually produces a report on executive compensation in accordance with applicable rules and regulations of the Securities and Exchange Commission for inclusion in Sunoco’s proxy statement.

     CEO Compensation

  1. Base Salary. Annually, the Committee determines and approves the CEO’s base salary. In determining the salary, the Committee:
  1. Annual Incentives. Annually, the Committee determines and approves the CEO’s annual incentive award.  In approving the award, the Committee:
  1. Long-Term Incentive Compensation.  Annually, the Committee reviews and approves the long-term incentive award.  In approving the award, the Committee:

 

    Review the general employee pension and employee welfare benefit plans

  1. The Committee:

 

Consultants

  1. The Committee has sole authority to retain (and terminate) any consulting firm (including the sole authority to approve the consultant’s fees and other retention terms) to assist in the evaluation of CEO or senior executive compensation.

 

Committee Evaluations

  1. The Committee will conduct an annual self-evaluation and will review the results of the evaluation with the Governance Committee and with the Board.

Committee Meetings and Action

  1. The following items shall govern Committee meetings and actions: