With the annual meeting approaching for most of you, I wanted to remind you of the July 1st deadline to have the Compensation Committee Charter comply with the new stock exchange rules on independent advisers. Obviously, there is still time before the July 1, 2013 deadline. However, a change to the Charter, if necessary, would require Board/Committee action and there are a limited number of Board meetings before July.
Every Compensation Committee Chair with whom I have spoken has indicated that he/she always believed – even before Dodd-Frank - that the Committee had the authority to retain its own counsel and consultants. However, the stock exchange rules require that the Charter explicitly give the Committee the duty and power to review the independence of its advisers, in writing.
Finally, a reminder about the trap found in some compensation committee charters, which I have blogged on previously [see: "Reviewing Compensation Committee Charters - Watch for this Trap"]. We continue to be surprised by the number of Compensation Committee Charters that give responsibility - and liability - to the committee for employee retirement and other benefit plans. As long as you are reviewing your charter, you might want to double check for this trap.