The objective of the compensation committee is to establish policies with respect to the compensation of the company’s officers. This charter outlines the committee's purpose, authority and responsibilities.
In this sample, the committee has overall responsibilities for approving and evaluating officer compensation plans, policies and programs for the company. It is also responsible for producing an annual report on executive compensation for inclusion in the company’s proxy statement (10-K). The committee has the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of director, CEO or senior executive compensation. It also has the authority to obtain advice and assistance from internal or external legal, accounting, etc.