Following the admission of Merrion Pharmaceuticals plc and its subsidiaries (together the 'Group') to IEX in December 2007, the Groups attention to financial reporting processes and corporate governance has intensified. Attention is being placed not only on the board of directors but also on those committees that have been delegated responsibility and accountability by the board.
The compensation committee ('the Committee') of the Group is viewed as a critical component in the overall corporate governance process. This Compensation Committee Charter has been prepared to support the committee as they oversee the reasonableness and integrity of the remuneration, equity compensation and reporting practices of the Group. This charter has been drafted with reference to the Combined Code on Corporate Governance, Financial Reporting Council, June 2008.
1 Membership and organisation
1.1 The board shall appoint the Committee. All members of the Committee should be non - executive directors of the Group. The committee should consist of three members. The board shall appoint the chairman of the committee from amongst the non-executive directors.
1.2 The company secretary of the Group shall be the secretary of the Committee.
1.3 No one, other than the compensation committee members shall be entitled to attend compensation committee meetings. The chairman, other non -executive directors, CEO, CFO, representatives of external auditors or other persons shall attend meetings at the invite of the Committee. The timing of committee meetings should coincide with the key dates in the Group's goal setting and remuneration review cycle.
1.4 At least annually, this charter shall be reviewed and reassessed by the committee and any proposed changes shall be submitted to the Board of Directors for approval. Members shall establish guidelines for the performance evaluation of the committee and annually assess the performance of the committee in light of those guidelines.
1.5 The quorum necessary for the legitimacy of a compensation committee meeting shall be two. A duly convened meeting of the Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Committee.
2 Authority
2.1 The Committee will have the resources and authority necessary to discharge its duties and responsibilities. The committee has the authority to:
Seek any information that it requires from any employee of the Group and all employees are directed to cooperate with any request made by the Committee;
Obtain outside legal or independent professional advice, at the group's expense (any expenses greater than €5,000 are to be signed off by the Board), and secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.
3 Duties and Responsibilities
The compensation committee shall have the following duties and responsibilities:
3.1 Determine and agree with the board a policy for the remuneration for the Chairman, CEO, executive directors, Company Secretary and other senior members of the executive management as it is designated to consider. The remuneration of non-executive directors shall be a matter for the Board of Merrion. No director or manager shall be involved in any decision as to their own remuneration policy.
3.2 In determining such policy, take into account all relevant factors which it deems appropriate. The objective of such policy shall be to ensure that members of the executive management of the Company are provided with appropriate incentives to encourage enhanced performance and are, in a responsible manner, rewarded for their individual contributions to the success of the Company;
3.3 Oversee an evaluation of the performance of the Company's executive officers and approve the annual compensation, including salary, bonus, incentive, pension contributions and equity compensation for executive officers;
3.4 In determining such packages and arrangements, give due regard to any relevant legal requirements, the provisions and recommendations in the Combined Code and IEX Listing Rules and associated guidance;
3.5 Review and recommend the remuneration, pension contributions and other benefits of new senior executive officers and termination packages for senior executive officers. Review and approve policies regarding senior executive officer compensation;
3.6 Approve the design of, and determine targets for, any performance-related pay schemes operated by the company and approve the total annual payments made under such schemes;
3.7 Review the ongoing appropriateness and relevance of the remuneration policy;
3.8 Review the design of all share incentive plans for approval by the board and shareholders and, for any such plans, determine each year whether awards will be made and , if so, the overall amount of such awards, the individual awards to executive directors and other senior executives and the performance targets to be used;
3.9 Review the operation of share option schemes and the granting of such options;
3.10 Ensure that contractual terms on termination, and any payments made, are fair to the individual and the company, that failure is not rewarded and that the duty to mitigate loss is fully recognised;
3.11 Ensure that all provisions regarding disclosure of remuneration including pensions are fulfilled;
3.12 Agree the policy for authorising claims for expenses from the chairman and CEO;
3.13 Be exclusively responsible for establishing the selection criteria, selecting, appointing and setting the terms of reference for any remuneration consultants who advise the committee, and obtain reliable, up-to-date information about remuneration in other companies. The committee shall have full authority to commission any reports or surveys which it deems necessary to help it fulfil its obligations; and
3.14 Make available its terms of reference explaining clearly its role and the authority delegated to it by the board.
4 Reporting
4.1 The Secretary shall minute the proceedings and resolutions of all Committee meetings, including the names of those present and in attendance. Minutes of Committee meetings will be circulated to all members of the Board.
4.2 The Compensation Committee Chairman shall attend the AGM and shall answer questions, through the Chairman of the board, on the compensation committee's activities and their responsibilities.
show all
hide all
Download PDF
23.6 KB
