This excerpt taken from the BNI DEF 14A filed Mar 16, 2009.
What were the respective roles of the Compensation Committee, the Board, the Chief Executive Officer and the Compensation Committees independent compensation consultant in establishing 2008 named executive officer compensation?
The Compensation Committee, the Board, the CEO and the Compensation Committees compensation consultant each play a significant role in establishing and reviewing our executive compensation programs. The Compensation Committee has engaged the consulting firm of Frederic W. Cook & Co., Inc. as its compensation consultant. For further information about the Compensation Committees compensation consultant, please see page 11.
For purposes of setting 2008 compensation of our named executive officers, the compensation consultant discussed market data and prevalent practices with the Compensation Committee and the CEO. The Compensation Committee used information provided by the consultant to establish the framework of our compensation programs. The Compensation Committee approved the annual performance goals under our Incentive Compensation Plan, subject to ratification by the Board.
Within the framework of the compensation programs approved by the Compensation Committee, and based in part on the market data provided by our consultant, the CEO recommended the levels of base salary increases for the other named executive officers, their target Incentive Compensation Plan awards and their long-term incentive grants. The CEO also recommended any changes he thought were necessary to the Companys compensation programs. To enable the CEO to make these recommendations, he generally attended portions of the Compensation Committee meetings.
The CEO recommended to the Compensation Committee the cash and equity compensation for the other named executive officers. The cash compensation was discussed and approved by the Compensation Committee and then ratified by the Board. The equity compensation was discussed and approved by the Compensation Committee with input from the Board. The Compensation Committees and the Boards compensation decisions were consistent with the CEOs recommendations.
The Compensation Committee recommended, and the independent Directors of the Board approved, the CEOs cash compensation, and the Compensation Committee approved his equity-based compensation, with input from the Board.
None of the named executive officers played a role in establishing his own compensation, although the Chief Financial Officer assisted the Compensation Committee in setting the performance goals for incentive cash compensation and performance-based equity awards, which impacted a broad group of employees that includes the named executive officers. The Compensation Committee and the Board met in executive session without the CEO to discuss and determine the CEOs compensation.