Corporate Governance - Committee
ARTHUR J. GALLAGHER & CO.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Arthur J. Gallagher & Co. (the “Company”) shall be appointed by the Board of Directors pursuant to the Board’s overall authority to discharge the Board's responsibilities relating to the compensation and benefits of the Company's executive officers and to perform the authorities, duties and responsibilities set forth in this Charter.
The Committee shall be comprised of three or more directors. Each member of the Committee shall meet (i) the independence requirements of the New York Stock Exchange (“NYSE”), including those requirements applicable specifically to compensation committee members, (ii) the requirements for a "Non-Employee Director" contained in Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and (iii) the requirements for an "outside director" for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended. Determinations as to whether a particular director satisfies the requirements for membership of the Committee shall be made by the Board.
The members of the Committee shall be appointed by the Board on the recommendation of the Nominating/Governance Committee and shall serve for such terms as the Board may determine, or until their earlier resignation, death, or removal by the Board. A chairperson of the Committee shall be designated by the Board.
The Committee shall meet with such frequency and at such intervals as it shall determine is necessary to carry out its duties and responsibilities, but in any case, not less than three times per year. The Committee will meet at such times as determined by its chairperson or as requested by any two of its members. Notice of all meetings shall be given, and waiver thereof determined, pursuant to the provisions contained in the Company’s bylaws. The chairperson will preside, when present, at all meetings of the Committee. The Committee may meet by telephone, video conference or Internet conference and may take action by written consent.
Each member of the Committee shall have one vote. A majority of the members, but not less than two, shall constitute a quorum. The Committee shall be authorized to take any permitted action only by the affirmative vote of a majority of the Committee members present at any meeting at which a quorum is present, or by the unanimous written consent of all of the Committee members.
The Committee shall maintain copies of minutes of each meeting of the Committee, and each written consent to action taken without a meeting, reflecting the actions so authorized or taken by the Committee. A copy of the minutes of each meeting and all consents shall be placed in the Company’s minute book.
The Committee may form, and delegate authority to, subcommittees when it deems appropriate.
Authority, Duties and Responsibilities
The Committee shall:
- Annually review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO's performance and in light of these goals and objectives establish the individual elements of the CEO's total compensation based on this evaluation. In determining the long-term incentive component of the CEO's compensation, the Committee shall consider, among other things, the Company's performance and stockholder returns, including relative to comparable companies, the value of similar incentive awards to CEOs at comparable companies and the awards given to the CEO in past years.
- Review and approve the compensation and benefits of the Company’s executive officers.
- Review and approve proposed stock incentive plans, other long-term incentive plans and stock purchase plans, and all proposed substantive changes thereto. Recommend approval of such plans by the Board, and/or stockholders of the Company, as appropriate.
- Administer the stock incentive plans, other long-term incentive plans and stock purchase plans of the Company, including, among other things, setting performance goals and establishing payout schedules, thresholds, targets, and maximum payouts, as appropriate.
- Consult on the setting of compensation for executive officers and such other officers as the Committee deems appropriate. The Committee may, in its sole discretion, retain a compensation consultant or other advisers, after taking into consideration all factors relevant to adviser independence, including the six factors set forth in Section 303A.05(c) of the NYSE Listed Company Manual. The Committee shall be directly responsible for the appointment, compensation and oversight of the adviser. All fees and expenses of any such compensation consultant or outside legal, tax, accounting or other advisor shall be paid by the Company.
- Annually review and evaluate whether the Company’s compensation policies and practices for all employees, including non-executive officers, create risks that are reasonably likely to have a material adverse effect on the Company.
- Approve grants and/or awards of restricted stock, stock options and other forms of equity-based compensation under the Company’s stock incentive plans, other long-term incentive plans and stock purchase plans, including cash awards linked to equity.
- Review and approve proposed employee benefit plans of the Company and any significant changes thereto (including, but not limited to, pension plans, defined contribution retirement plans, group medical plans and insurance programs) and recommend their approval by the Board when such approval is deemed appropriate by the Committee or required by law.
- Review and approve, for the CEO and other executive officers of the Company, when and if appropriate, employment agreements, severance agreements and change in control provisions/agreements and recommend their approval by the Board when such approval is deemed appropriate by the Committee.
- Provide a compensation committee report required to be included in the Company’s annual meeting proxy statement.
- Review and discuss the Company’s Compensation Discussion and Analysis disclosure. Based upon this review and discussion, the Compensation Committee shall determine whether to recommend to the full Board that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K and annual meeting proxy statement.
- Review and assess the results of stockholder advisory voting on the compensation of the Company's named executive officers, as such information is disclosed in the Company's Compensation Discussion and Analysis proxy statement disclosure.
- Review and assess the results of stockholder advisory voting on the frequency of stockholder advisory voting on the compensation of the Company's named executive officers and make recommendations regarding future frequency of such voting.
- Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
- Conduct an annual performance evaluation of the Committee.
- Report to the Board on a regular basis and make such recommendations with respect to any of the above and other matters as the Committee deems necessary or appropriate.
|Elbert O. Hand|
|David S. Johnson|
|Kay W. McCurdy|
|Sherry S. Barrat|