I. Purpose of Committee
The Human Capital Committee (the “Committee”) is a committee of the Corporation’s Board of Directors (the “Board”) established to ensure the Board understands how People strategies support the mission and maintains visibility to organizational health since an engaged, diverse, and inclusive workforce drives better business outcomes.
The Committee also exercises good governance and fiduciary care in discharging its duty to advise on and review the total compensation paid to the Chief Executive Officer (“CEO”) and certain other executives of the Corporation who may be classified as Disqualified Persons within the meaning of section 4958 of the Internal Revenue Code (“Disqualified Persons”). Included in its governance and fiduciary responsibilities, the Committee reviews and approves the total compensation paid to certain executives employed by a Designated Entity. For purposes of this Charter, the term “Designated
Entity” shall mean the American Cancer Society Cancer Action Network or any future affiliate of the Corporation in which the Corporation has a controlling interest. For purposes of this Charter, total compensation includes, but is not limited to, salary, membership fees, incentives, bonuses, retention payments, severance payments, and all forms of deferred compensation, whether vested or unvested and all benefits whether or not included as income for tax purposes (e.g. medical, dental, life insurance, disability benefits). In this context, the term “Disqualified Person” includes:
- any individual who is, or within the prior five years has been, in a position to exercise substantial influence over the affairs of the Corporation or any Designated Entity;
- any individual who is the spouse, brother or sister (whether whole or half-blood), ancestor, child (whether natural or adopted), grandchild, great-grandchild, or the spouse of a brother or sister, child, grandchild, or great-grandchild, of an individual referenced in subparagraph 1; and
- any organization in which an individual described in subparagraph 1 or 2 has a 35% ownership or controlling interest, or in the case of a partnership, or a professional corporation, a direct or indirect ownership interest in excess of 5%.
An Inclusive Workforce Subcommittee (the “Subcommittee”) is a subset of the Human Capital Committee established to provide relevant updates that confirm our engaged, diverse, and inclusive workforce is working toward business outcomes linked to our organizational commitment to health equity.
II. Committee Membership
The Committee and Subcommittee are each chaired by a Board member appointed by the Chair of the Board and are each composed of a minimum of three members, all of whom must be “independent voting members” of the Board without a “conflict of interest”, as such terms are defined in the attached EXHIBIT A. The Chair of the Board shall sit on the Committee ex officio, as a full voting member. Any question regarding a Committee member’s independence, conflict of interest or appearance of a conflict of interest will be reviewed by the Audit Committee and the Board for final resolution. Committee members are appointed by the Chair of the Board and approved by the Board. Committee members must each have current knowledge and understanding of fundamental human capital management topics, such as compensation and total rewards; diversity, equity, and inclusion; engagement; and organizational health measures. Committee members serve one-year terms beginning January 1st and ending December 31st of that same year or until the new Committee is appointed by the Chair of the Board Committee and Subcommittee membership is restricted to Board members but as needed, external expert ad-hoc individuals may be invited to Committee meetings or workgroups by the chair of the Committee to assist with its work. Ad-hoc members are advisory only and are not considered voting Committee members.
III. Committee Authority and Responsibilities
The Committee has the authority and responsibility to do the following for the Corporation and each Designated Entity:
- (a) Conduct an annual review of the CEO’s performance and ensure the reasonableness of his or her total compensation in relation to the marketplace; (b) solicit Board input regarding the CEO’s performance; (c) develop and recommend for Board approval any changes in the CEO’s total compensation; (d) decide on any changes in the CEO’s employment agreement, severance and/or retention agreement, if any are in effect; (e) work collaboratively with the CEO to establish the CEO’s annual performance goals; (f) oversee development and recommend Board approval of the Corporation’s Leadership Incentive Plan including the determination of the incentive plan trigger; (g) approve the Incentive Plan awards recommended, if any, are payable each year;
- Review Management’s recommendations regarding Disqualified Persons or Likely Disqualified Persons of the Corporation and any Designated Entity (“Designated Executives”) in accordance with the Corporation’s compensation guidelines approved the Committee or the Board;
- Review and ensure the reasonableness of total compensation ranges (including participation in and payout potential for any incentive plan), and the terms of any employment agreements, severance and/or retention agreements of all Designated Executives (in addition to the CEO). The CEO is empowered to set any component of compensation and the terms of any severance and/or retention agreements for all other Designated Executives, provided the total compensation falls within the guidelines detailed in the Corporation’s compensation guidelines. The CEO will either certify to the Committee that the total compensation of each Designated Executive is within the guidelines or obtain the prior approval of the Committee to provide compensation to a Designated Executive that is outside the approved guidelines. The Committee must review in advance any severance and/or retention agreement for any Designated Executive that is not covered by a severance or retention policy previously approved by the Committee;
- With respect to the CEO and all Designated Executives, select, engage and work with appropriate professionals (as described in section IV) to gather and review in advance appropriate market comparability data on the amount and form of compensation paid for comparable executive positions by other comparable employers, including those organizations with which the Corporation or the Designated Entity may be competing for executive talent, and to ensure that the comparability data so gathered and reviewed meets the standard for “appropriate data as to comparability” to qualify for the rebuttable presumption of reasonableness under section 4958 of the Internal Revenue Code;
- Work with appropriate professionals (as described in section IV) to annually evaluate all elements of economic benefit provided (or potentially to be provided) to the CEO and each Designated Executive. Such evaluation will include a tally sheet displaying the maximum annualized value of total remuneration for the upcoming year, as well as the potential maximum value of total remuneration under multiple scenarios (such as retirement, termination with or without cause, death, disability, and severance in connection with business combinations or the sale of a business). Further, the Committee will review and maintain an inventory of all documents pertaining to all elements of economic benefit (including, but not limited to, plan documents, summary plan descriptions, employment agreements, severance agreements, retention awards and any other documents that could potentially provide economic benefit to the CEO or a Designated Executive).
- Before the later of (i) its next meeting or (ii) sixty (60) days after making its determination of reasonableness with respect to the total compensation of the CEO and all Designated Executives, document in a written report: (a) the terms that were approved and the date approved; (b) the members of the Committee present during the discussion and those who voted in favor and those who dissented or abstained; (c) the comparability data obtained and relied upon by the Committee and how the data were obtained; and (d) any actions taken with respect to the determination by anyone who is otherwise a member of the Committee but who had a conflict of interest. The report must be approved by the Committee as reasonably accurate and complete within a reasonable time thereafter and reported to the Board for its consideration;
- Review and act on reports of conflicts of interest from the Board or the Audit Committee of the Board as such reports relate to the compensation of the CEO, Designated Executives, and/or Committee members;
- Oversee the CEO succession process, working with the CEO to ensure an orderly succession, whether via an external search or the identification and development of leaders within the organization. Ensure that there are designated successors who are qualified and prepared to undertake and discharge the CEO’s responsibilities on an interim basis should that become necessary, and report to the Board annually with respect to the foregoing;
- Determine whether all compensation and benefit plans, including but not limited to the Retirement Plans, Medical and Dental, Retiree Medical and Retiree Life Insurance, and other such plans of the Corporation and any Designated Entities are appropriate to market for the skills employed and, if not, make appropriate recommendations to the Board;
- At least annually provide a report to the Board concerning the actions and recommendations of the Committee as described in paragraphs 1 through 9 above. If the Board declines to approve all or part of the Committee’s report or recommendations, the Committee will undertake further review of the part in question on the basis of the comments from the Board and submit a revised or restated report or recommendation to the Board for its review and approval;
- At least annually provide a redacted version of the report described in paragraph 10 above containing only the Committee actions and recommendations related to each Designated Entity to the Board of Directors or other appropriate governing body of such Designated Entity. If such governing body declines to approve all or part of the Committee’s report or recommendations, the Committee will undertake further review of the part in question on the basis of the comments from such governing body and submit a revised or restated report or recommendation to such governing body for its review and approval;
- Oversee enterprise risk management related to assigned risk area and submit a report to the Audit Committee each year;
- Review and monitor compliance with the Emergency CEO Succession Policy and recommend new policies to the Board as necessary;
- Review the Corporation’s compensation guidelines for adequacy annually and recommend any changes to the Governance Committee for approval by the Board; and
- Accomplish such additional tasks as are assigned to the Committee by the Chair of the Board.
IV. Resources and Authority of the Committee
The Committee will have the resources and authority it deems appropriate to discharge its duties and responsibilities, including the sole authority to select, retain, terminate, and approve the fees and other retention terms of appropriate professionals with relevant expertise, without seeking approval of the Board or management. Any such engagement shall be reported to the Board. Appropriate professionals are limited to: in-house and outside legal counsel; certified public accountants or accounting firms with expertise regarding the relevant tax law matters; and experienced independent compensation valuation experts who certify in their written opinion that they meet the standards set forth in the regulations implementing section 4958 of the Internal Revenue Code. All outside professional advisors selected by the Committee will be independent and have primary and direct reporting relationship with and accountability to the Committee. Copies of all documents material to the Committee’s responsibilities (including without limitation Committee meeting minutes, employment, severance and retention agreements, employee benefit policies, and documents received from legal counsel and consultants) shall be maintained and made available for the review and inspection of Committee members.
V. Committee & Subcommittee Meetings
The Committee & Subcommittee will meet at least annually and as often as its chair or a majority of its members deems necessary or appropriate, either in person, telephonically or electronically, and at such times, places and manner as its chair and chair’s staff may determine. Deliverables, budget, and alternative meeting methods should be included in the decision-making process. The chair and chair’s staff will develop an agenda in advance of each meeting and communicate meeting details to Committee or Subcommittee members in a timely fashion.
As necessary, the Committee and Subcommittee will meet in joint sessions with other committees regarding items of concern to both.
VI. Committee Reports
The Committee and Subcommittee will produce a written report at the conclusion of each meeting, which will include an attendance record, a copy of the agenda and a full report of Committee and Subcommittee discussions with documented recommendations and decisions. These reports will be completed no more than three weeks following the meeting and forwarded to Committee and Subcommittee membership and the Office of Enterprise Governance for proper filing. In addition, a redacted version of these reports containing only the Committee and Subcommittee discussions related to each Designated Entity shall be forwarded to the Board of Directors or other appropriate governing body of such Designated Entity for proper filing.
VII. Committee Evaluation
The Committee will conduct periodic performance evaluations to review the performance of the Committee in relation to the requirements of this Charter and such other matters as the Committee deems appropriate.
Independent Voting Members:
A voting member of the Board of Directors or a committee will be considered “independent” only if he or she satisfies the following criteria:
- The member has not been, and is not currently being compensated as an officer or other employee of the Corporation or of a related organization1; nor was the member compensated by an unrelated organization or individual for services provided to the Corporation or to a related organization, if such compensation is required to be reported in Part VII, Section A of the Corporation’s Form 990.
- The member did not receive total compensation or other payments exceeding $10,000 during the Corporation’s tax year from the Corporation and related organizations as an independent contractor.
- Neither the member, nor any family member2 of the member, was involved in a transaction with the Corporation (whether directly or indirectly through affiliation with another organization) that is required to be reported on Schedule L of the Corporation’s Form 990.
- Neither the member, nor any family member of the member, was involved in a transaction with a taxable or tax-exempt related organization (whether directly or indirectly through affiliation with another organization) of a type and amount that would be reportable on Schedule L of the Form 990 or 990-EZ, if required to be filed by the related organization.
Committee members who are associated with institutions that receive grants pursuant to the Corporation’s various Independent Peer Review Committees and the Council for Extramural Grants will not be treated as failing to satisfy the above criteria on the basis of their relationship to the recipient institutions.
Absence of a Conflict of Interest:
A member of the Committee does not have a conflict of interest with respect to a compensation arrangement if the member:
- Is not the CEO or a Designated Executive participating in or economically benefitting from the compensation arrangement and is not a family member of the CEO or any such Designated Executive;
- Is not in an employment relationship subject to the direction or control of the CEO or any Designated Executive participating in or economically benefitting from the compensation arrangement;
- Does not receive compensation or other payments subject to approval by the CEO or any Designated Executive participating in or economically benefitting from the compensation arrangement;
- Has no material financial interest affected by the compensation arrangement; and
- Does not approve a transaction providing economic benefits to the CEO or any Designated Executive participating in the compensation arrangement, who in turn has approved or will approve a transaction providing economic benefits to the member.