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Print
EmailOrganization and Compensation Committee Charter
March 2009
I. Purpose
The Organization and Compensation Committee (the “Committee”) is a standing committee of the Board of Directors (the “Board”) of Aon Corporation (the “Company”). The purpose of the Committee is to assist the Board in carrying out its overall responsibilities with regard to executive compensation, including oversight of the determination and administration of the Company’s philosophy, policies, programs and plans for executive officers and non-employee directors.
II. Membership, Structure and Organization
- Members. The membership of the Committee shall be determined by the Board of Directors and shall consist of three (3) or more Directors who are not members of management. The Board shall also appoint a Committee Chairperson. All of the members of the Committee shall meet the independence requirements of the New York Stock Exchange (the “NYSE”) and any other applicable laws and regulations. The Board may remove any member from the Committee at any time.
- Meetings. The Committee shall meet as frequently as it determines, but not less than three (3) times per year. Meetings of the Committee may be held telephonically. The Committee may elect to meet from time to time in executive session at its discretion.
- Delegation of Authority. To the extent permitted by applicable law and the listing standards of the NYSE, the Committee may establish subcommittees consisting of one or more members, other directors and management to carry out such duties as the Committee may delegate.
- Resources. The Committee has the authority to retain such outside advisors, including legal counsel or other experts, as it deems appropriate, and to approve the fees and expenses of such advisors. The Committee shall have the sole authority to select, retain and terminate an independent compensation consultant and approve the consultant’s fees and other retention terms, including limitations on the consultant’s ability to perform work for the Company or management, except as approved by the Chairperson of the Committee and in support of the purpose and responsibilities of the Committee under this charter.
- Charter. The Committee shall annually review and reassess the adequacy of this charter and recommend any proposed changes to the Board for approval.
- Agenda, Minutes and Reports. The Chairperson of the Committee shall be responsible for setting the agendas for meetings. The agenda and information concerning the business to be conducted at each Committee meeting shall, to the extent practicable, be communicated to members sufficiently in advance of each meeting to permit meaningful review. The Chairperson of the Committee will report regularly to the full Board on the Committee’s activities, findings and recommendations, including the results of the Committee evaluation. The report to the Board may take the form of an oral report by the Chairperson or by any other member of the Committee designated by the Chairperson to make such report. The Corporate Secretary shall assist the Committee in maintaining minutes or other records of meetings and activities.
III. Responsibilities
The responsibilities of the Organization and Compensation Committee shall include the following:
- Compensation Philosophy and Program. The Committee shall review and oversee the Company’s compensation philosophy, and oversee the development and implementation of the Company’s executive compensation programs. The Committee shall annually review the Company’s executive compensation programs, including the peer companies for competitive pay and performance comparisons, and make any modifications that it deems necessary or advisable.
- Compensation of the Chief Executive Officer. The Committee shall: (i) annually establish the Company’s goals and objectives relevant to the compensation of the Chief Executive Officer; and (ii) evaluate the performance of the Chief Executive Officer relative to those goals and objectives, the Company’s financial performance and the Chief Executive Officer’s individual performance. Based on such evaluation, and the review of competitive data and tally sheets, the Committee shall make recommendations for consideration by the independent directors of the Board with respect to the compensation (including base salary, incentive compensation and equity-based awards) of the Chief Executive Officer.
- Officer Compensation. The Committee shall annually review and approve the compensation of the Company’s officers (“Section 16 Officers”) subject to Section 16 of the Securities Exchange Act of 1934, as amended, and certain other key employees reporting directly to the Chief Executive Officer.
- Employment and Other Compensation Arrangements. The Committee shall review and approve the terms of any employment agreement, severance or transition agreement or other compensation arrangements to which any Section 16 Officer will be a party, and may, at its discretion, review the terms of any such agreements or arrangements to which any other key executive will be a party.
- Incentive and Equity-Based Compensation Plans. The Committee shall review and make recommendations to the Board with respect to incentive-compensation plans and equity-based compensation plans. The Committee shall fix and determine equity awards under any of the Company’s equity-based compensation plans currently or hereafter in effect, and exercise such other power and authority as may be permitted or required under such plans. The Committee shall also oversee compliance with the requirements of the NYSE with respect to shareholder approval of equity-based compensation plans, and the requirements of the Internal Revenue Code with respect to the deductibility of compensation under Section 162(m).
- Benefit Plans. In consultation with management, make recommendations to the Board regarding, or authorize or approve, the adoption, amendment or termination of the Company’s employee benefit plans and programs. In addition, the Committee shall review, and propose to the Board for approval, the appointment of fiduciaries with respect to the fiduciary committees of certain of the Company’s ERISA employee benefit plans.
- Director Compensation. The Committee shall from time to time review and make recommendations to the Board with respect to the compensation of directors. This review shall occur no less frequently than every two years.
- Compensation Discussion and Analysis; Compensation Disclosures. The Committee shall review and discuss the Compensation Discussion and Analysis section proposed for inclusion in the Company’s Annual Report on Form 10-K (the “Form 10-K”) and annual proxy statement with management, and recommend to the Board whether the CD&A should be included in the Form 10-K and proxy statement. In that connection, the Committee shall also review the related tabular and other disclosures about executive and director compensation proposed by management for inclusion in the Form 10-K and proxy statement.
- Annual Compensation Committee Report. The Committee shall produce an annual report for inclusion in the Company’s annual proxy statement, all in accordance with applicable rules and regulations.
- Committee Evaluation. The Committee shall perform an annual review of its performance, including a review of compliance with this charter. The Committee shall conduct such evaluation and review in such manner as it deems appropriate and report the results of the evaluation to the Board.
- Other Duties. The Committee shall also carry out such other duties as may be delegated to it by the Board from time to time.