Compensation Committee

1 January 2019 to 31 December 2019

Committee Purpose:

(Overall charge, purpose, or focus of this committee in helping the PMI Board to do its job.)

The Compensation Committee is responsible for the management and application of the CEO performance and compensation practices and top executive succession in accordance with the Board Level 1 PMI President and CEO Performance Achievement and Compensation Policy and the Top Executive Succession Policy.

Deliverables:

(Products the committee is tasked to produce.)

Ongoing Deliverables:

Governance

  1. Review committee charter, including roles and responsibilities, and the annual work plan during the first committee meeting.
  2. Ensure all committee members are aware of and comply with the responsibilities, processes, reporting and timing established by the PMI Board Level 1 President and CEO Performance Achievement and Compensation Policy and PMI Board Level 1 Top Executive Succession Policy.
  3. Develop committee-related planning assumptions as input to subsequent year’s Executive budget.
  4. Review committee charter and Policy triennial activities to recommend deliverables for subsequent year.
  5. Facilitate Board awareness of the policy and provide educational support to Board Directors in areas of committee responsibilities.

President and CEO Performance Achievement and Compensation

  1. The purpose of the President and Chief Executive Officer (CEO) Performance Achievement and Compensation Policy (Policy) is to document the scope, reporting requirements and process for CEO performance management and compensation decisions including the Board, Compensation Committee (CompCom), CEO, and Vice President, Human Resources (VP, HR) roles and responsibilities. The Policy serves as a tool for supporting CEO leadership effectiveness, attainment of strategy and performance achievement. The Policy supports Rule of the Board 9.5, President and CEO Employment.
  2. The CompCom is responsible to:
  • Administer the CEO Performance Achievement and Compensation Policy
  • Collaborate with the CEO to develop annual performance objectives for Board approval
  • Manage the CEO performance achievement process in close partnership with the CEO and input from the full Board
  • Engage an independent consultant to prepare annual CEO base salary adjustment review
  • Recommend annual CEO base salary adjustment and variable compensation award to the Board for approval
  • Facilitate compensation studies at least every three years or as needed to support Employment Agreement initiation or renewal
  • Engage independent consultant to prepare Compensation Study of PMI’s CEO Compensation Philosophy, peer group and the Policy at least every three years or as needed
  • As needed, engage independent consultant to prepare a Performance Feedback Study for process reviews
  • Present summary of key findings from Compensation and Performance Feedback Studies to the Board and facilitate discussion of implications
  • Monitor the administration of total compensation provisions of the CEO Employment Agreement to ensure that terms are carried out as documented
  • Review and recommend updates to the CEO Performance Achievement and Compensation Policy to the Board for approval no less than every three years

Top Executive Succession

  1. The purpose of the Top Executive Succession Policy is to document the guidance,
    the roles and responsibilities of the Board of Directors (“Board”), the
    Compensation Committee (“CompCom”), the CEO, and the reporting
    requirements for the Institute’s approach to succession planning for the CEO
    position.
  1. Ensure that an effective and rigorous succession planning approach is in place to facilitate an orderly and effective transition of the CEO position and to ensure stability of the Institute
  2. Maintain succession plans for the change in the top executive staff leadership position, the CEO – either
    planned or unplanned.
  3. Endeavor to identify or acquire suitable internal candidates to develop the skills, competencies, experience
    and cultural fit required to be considered as a potential candidate to lead the Institute and support Board
    governance in the role of the CEO.

2. The CompCom is responsible to:

  1. Review and recommend updates to the Top Executive Succession Policy
  2. Maintain the CEO Position Description and Success Profile: Duties and Future Competencies, Skills, & Profile
  3. Comply with the Emergency Succession Plan, consult with the CEO on the Plan, familiarize the Board with the
    Plan, and ensure the CEO maintains a list of internal staff executives to be called upon to fill the duties of the
    CEO in the event of Emergency Succession.
  4. Consult with the CEO about the Top Executive Succession Plan and internal candidates, familiarize the Board with the Plan and CEO Succession Summary. Maintain the ability to seek an external review of the senior management job market to assess capability should the need arise to recruit externally.

Other Assignments

  1. Accept additional assignments that are in line with CompCom’s mission, as assigned by the Executive Committee.

One-Time Deliverables: none.

Administrative and Reporting Requirements:

(Reports to PMI Board through whom, when, and how?)

  1. Use standard agenda, note-taking and reporting.
  2. Written reports submitted to Executive Committee for review at their July and December meetings.
  3. Subsequently, Executive Committee will distribute reports to the Board, via e-Receipt calendar, in January and October.
  4. Final CompCom notes are posted in the Board portal.

Resources and Budget:

(In terms of budget, staff, etc.)

  • PMI staff assigned by the PMI President & CEO.
  • Executive Liaison and Administrative Support – Vice President Human Resources.
  • Staff Liaison and other staff resources as assigned by the PMI President & CEO.
  • As approved in annual budget

Committee Composition and Terms:

  • Number of Compensation Committee members: Three to four (3-4)
    • Committee Chair as stated in R.O.B. 6.5.6 c) elected by the Board
    • Immediate Past Board Chair, unless the elected term of ends prior to the start of the Charter year
    • Appointed Directors by the Executive Committee and approved by the Board
  • Compensation Committee members serve a minimum two-year term to help ensure continuity of historical knowledge and orientation of new members.

Requirements, Experience, and Skills:

Recognizing the purpose and scope of the Committee, the following are required:

  • Chair has a minimum of one year of current Board experience, negotiation proficiency, strong emotional intelligence and demonstrated experience with executive total compensation and performance management aligned with enterprise strategy, through their profession or service on the PMI Board or other Boards.
  • Committee members have a minimum of one year of Board experience.
  • Demonstrated experience with executive total compensation and performance management aligned with enterprise strategy, through their profession or service on the PMI Board or other Boards.
  • Understanding of top executive succession and its significance to the continuity of organization leadership.
  • No conflict of interest related to CEO total compensation or pay decisions.

Committee Chair and Contact Information:

Name: J. Davidson Frame
E-mail Address: Davidson.Frame@bod.pmi.org

Committee Chair Roles and Responsibilities:

  1. Guides the committee in accomplishing the mission and objectives detailed in the charter and in accordance with established Institute Policy. Keeps the committee focused.
  2. Ensures all committee members are fully oriented on the committee objectives, deliverables and roles/ responsibilities at the committee’s first meeting.
  3. Ensures all committee members are aware of and adhere to the processes and timing established by the PMI Board for placing items on the PMI Board agenda for discussion and deliberation, i.e., follow the PMI Board calendar; submit completed Board agenda topic form; ensure that committees have consensus approval of items before presentation to the PMI Board; ensure that Board agenda items are discussed and a straw vote taken in Board informal session; and ensure that motions are adjusted, as needed, before deliberation and voting in formal session.
  4. Works toward building a sense of trust, productivity, and camaraderie within the committee.
  5. As outlined in the charter, develops a work plan in coordination with the Executive Liaison that will allow the committee to effectively and efficiently discharge their responsibilities.
  6. Develops meeting agendas, in coordination with the Executive Liaison, using the standard agenda topic form.
  7. Conducts meetings of the committee and directs the communication for committee matters.
  8. Works to ensure that meeting notes capture consensus agreement items and follow-up actions of the committee using the standard meeting notes template.
  9. Assigns tasks among committee members, as necessary.
  10. Promotes consistent participation and timely connection to all teleconference meetings and addresses nonproductivity within the committee.
  11. Works with Executive Liaison to ensure committee work is carried out between meetings.
  12. Works with Executive Liaison to develop final reports, proposals and supporting documentation for the PMI Board and that the material presented to the PMI Board accurately reflects the committee’s work and is submitted in a timely fashion.
  13. Provides updates on committee’s deliverables at Executive Committee meetings, as requested by the Chair.
  14. Provides updates to respective committees after Executive Committee meetings.
  15. Represents the committee at PMI Board meetings.
  16. Works toward building a sense of trust and productivity between committee members and other Board Standing Committees.
  17. Works with the Executive Liaison to review the charter mid-year and offer recommendations to Executive Committee for updates to the following year’s charter.
  18. Transitions the incoming Committee Chair into the role.

Executive Liaison Roles and Responsibilities:

  1. Empowered to make decisions to support accomplishing the mission and objectives of the committee. Any direction of the committee that may violate Institute policy must be discussed with the Committee Chair and the President and CEO.
  2. Works in coordination with the Committee Chair to efficiently discharge the responsibilities of the committee.
  3. Coordinates all administrative duties and ensures that an online community exists for the team.
  4. Works in coordination with the Committee Chair to develop agendas, set meeting dates and locations, and communicate meeting requirements using the following criteria:
    - Meeting dates and locations should be determined as far in advance as possible.
    - Meeting request forms should be sent to the proper contact with all meeting requirements stated.
    - Agendas should be developed using the standard agenda template and should include the meeting date, venue and meeting room on all agendas. The agenda should reflect what agenda items are tied to a stated deliverable in the charter.
    - Handouts should be distributed to the team in advance of the meeting via the team’s online community.
  5. Works in coordination with the Committee Chair to capture notes that reflect consensus agreements and follow-up actions using the standard format for meeting notes for Board Standing Committees.
  6. Works in coordination with the Committee Chair to ensure all reports, proposals, and supporting documentation are developed in a professional and timely manner.
  7. Works in coordination with appropriate staff to ensure that any financial, ethical, legal, and strategic implications associated with any option brought to the PMI Board is identified and revealed during the preparatory stages and that these implications are reported on the Board agenda form.
  8. Ensures that an online community site is established and maintained and committee documents are appropriately archived.
  9. Coordinates and deploys any approved external communications.

Applicable Governing Documents:

(In addition to the below, identify sections from PMI’s governance documents specifically related to roles and responsibilities of this committee.)

  1. PMI Code of Ethics and Professional Conduct
  2. Bylaws Article VI: PMI Board of Directors
  3. Bylaws Article IX: President and Chief Executive Officer
  4. Rule of the Board 6.5, Board Standing Committees and Task Teams
  5. Rule of the Board 9.0, PMI Board – President and Chief Executive Officer Relationship
  6. Rule of the Board 12.1, Board Member’s Code of Conduct
  7. Strategic Plan, specifically Core Value on Volunteerism: Volunteers and effective volunteer partnerships with staff are the best way to accomplish the Institute's goals and objectives
  8. Institute Policies:
    - Confidentiality
    - Conflict of Interest
    - Contractor/Volunteer Electronic Systems and Communication
    - Board Travel and Expense
    - Volunteer Records Management
  9. Expense Report

Version #: 3
Date: July 2019
Description: 2019 Compensation Committee Charter