Medtronic, Inc. Board of Directors Compensation Committee Charter
(As amended through December 7, 2011)
Purpose
The Compensation Committee (the “Compensation Committee” or the “Committee”) assists the Board in carrying out its responsibilities with respect to (i) employee benefit plans and employee stock programs and (ii) matters relating to the compensation of persons serving as directors, senior management and the Chief Executive Officer (“CEO”) of the Company. Senior management is defined as any officer who is defined as a Section 16 officer under the Securities Exchange Act of 1934.
Members
The Compensation Committee shall consist of at least three members of the Board who satisfy the New York Stock Exchange independence requirements for compensation committee members, as such requirements are interpreted by the Board in its business judgment. Additionally, members of the Compensation Committee shall qualify as “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, and as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code.
The Board shall appoint (and may remove) the members of the Committee. The Board shall designate one member as Chairman or delegate authority to designate a Chairman to the Compensation Committee.
Outside Advisors and Compensation Consultants
The Committee may, as it deems necessary or appropriate and at the Company's expense, obtain advice and assistance from internal or external legal or other advisers. The Committee shall have the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of director or executive compensation and shall have sole authority to approve the consultant's fees and other retention terms and to periodically review such consultant’s performance. The Committee shall select a compensation consultant, legal counsel, or other adviser only after taking into consideration the independence of the compensation consultant, legal counsel, or other adviser using factors established by law, the rules and regulations of the Securities and Exchange Commission, and the New York Stock Exchange listing standards.
Duties and Responsibilities
The functions of the Committee, on behalf of the Board, shall include having responsibility:
- To review compensation philosophy and major compensation programs, including, as appropriate in the discretion of the Committee, consideration of peer companies and other data sources, and to administer particular programs for which the Committee is the designated administrator.
- To annually review and approve (i) executive and senior management compensation programs, and (ii) goals and objectives relevant to CEO and senior management compensation and, based on its evaluation of performance in light of those goals and objectives as well as input from the Corporate Governance Committee, to determine and approve the total compensation of the CEO and senior management. With respect to senior management, the Committee will also consider input from the CEO. Upon approval of the compensation of the CEO and other senior management, the Committee shall report such determinations to the Board.
- To administer and determine the Company’s incentive-compensation and equity-based compensation and approve stock option and other stock incentive awards for senior management. Upon approval of such stock option and other stock incentive awards, the Committee shall report such determinations to the Board.
- To make recommendations to the Board with respect to, and monitor compliance by the CEO, senior management and directors with, the Company’s stock ownership guidelines.
- To review proposed compensation arrangements for any person serving as CEO, a senior manager, or a director, and review and recommend to the Board employment agreements and severance arrangements for such persons, including change-in-control provisions, plans or agreements.
- To periodically review the design of and approve the Company’s qualified benefit plans and nonqualified benefit plans (including retirement, medical and other employee benefit and perquisite plans).
- To review and discuss with senior management the Compensation Discussion and Analysis and other disclosure relating to executive and director compensation required by the rules of the Securities and Exchange Commission (“SEC”) to be included in the Company’s annual proxy statement. Based on such review and discussion, recommend to the Board the inclusion of the Compensation Discussion and Analysis in the Company's annual proxy statement.
- To prepare the Committee’s report as required by the rules of the SEC to be included in the Company's annual proxy statement.
- To assist the Board in reviewing the results of any shareholder advisory votes, or responding to other shareholder communications, that relate to the compensation of the executive officers of the Company who are named in the Company’s annual proxy statement.
- To periodically assess the Company’s risk relating to its compensation policies and practices and report its assessment to the Board.
- To review this Charter annually and recommend any changes to the Board for approval.
- To review the Committee’s own performance annually.
Delegation
The Committee may form and delegate authority to one or more members or subcommittees when appropriate.
Meetings
The Compensation Committee shall meet as often as may be deemed necessary or appropriate in its judgment, but not less frequently than 3 times annually, either in person or telephonically, and at such times and places as the Committee shall determine. The Committee may request any officer or employee of the Company or the Company’s outside counsel to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Committee shall report on its activities to the Board regularly.