Leggett & Platt Governance
Human Resources and Compensation Committee Charter
The Human Resources and Compensation Committee will assist management and the Board of Directors in providing oversight relating to (i) the Company’s human resources policies and programs, (ii) CEO, executive officer and director compensation, (iii) Company equity and incentive compensation plans, (iv) executive succession planning, and (v) senior management leadership development.. Such oversight will (i) support the Company’s business objectives, (ii) attract, retain and develop high quality leadership, and (iii) link compensation with business objectives and performance. “Compensation” includes base salary, bonus, long-term incentives, benefits, perquisites, and post-termination benefits.
The Committee will be composed of at least three members of the Board of Directors, all of whom are (i) “independent” for the purpose of serving on the Committee as determined in accordance with New York Stock Exchange listing standards; (ii) “non-employee directors” as defined under Rule 16b-3 of the Securities Exchange Act of 1934 (the “Exchange Act”); and (iii) “outside directors” as defined by Internal Revenue Code Section 162(m).
The Board will appoint Committee members annually. The Board may remove Committee members at any time, with or without cause, by a majority vote. The Board will fill any vacancy on the Committee. During a vacancy on the Committee, the remaining members will have full power to act as the Committee.
The Board will appoint a Committee Chair annually. If the Chair is absent from a meeting, the Committee may, by majority vote of those members present, designate one of its members to serve as acting Chair for the meeting.
The Committee may delegate duties and responsibilities to one or more members or officers of the Company as it deems appropriate, except that it may not delegate authority to non-members for any action involving individuals who are subject to Section 16 of the Exchange Act or who are “covered employees” as defined by Internal Revenue Code Section 162(m)(3).
The Committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser, and, if so retained, the Committee shall be directly responsible for the appointment, compensation and oversight of the work. However, the retention of any such advisors will not affect the Committee’s ability to exercise its own judgment in fulfillment of the duties nor will the Committee be required to implement or act consistently with the advice or recommendations of such advisors.
The Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to any such advisors retained by the Committee.
The Committee may select a compensation consultant, outside legal counsel or other adviser only after taking into consideration, all factors relevant to that person’s independence from management, including those specified by the New York Stock Exchange listing standards.
The Committee will meet at least twice annually and at such other times as it deems appropriate, upon the call of the Committee Chair or the Board Chair. Meetings may be conducted by teleconference.
A majority of members present at a meeting will constitute a quorum. If a quorum is present, the majority vote of those Committee members present at the meeting will be sufficient to adopt a resolution or otherwise take action. The Committee Chair will report the Committee’s actions to the Board as appropriate.
The Committee may take action without meeting if consents in writing, setting forth the action so taken, are signed by all the members of the Committee.
The Board Chair will be invited to attend Committee meetings, unless matters to be discussed at the meeting would make it appropriate to excuse him or her. The Board Chair may vote on matters before the Committee only if he or she is a member of the Committee. At the invitation of the Committee Chair, the CEO and other members of management may attend Committee meetings.
The Secretary or an Assistant Secretary of the Company will attend and keep written minutes of Committee meetings, unless matters to be discussed at the meeting make it appropriate to excuse him or her. If the Secretary or Assistant Secretary is excused, a member of the Committee will provide to the Secretary or Assistant Secretary minutes of the meeting or information sufficient to prepare minutes.
Duties and Responsibilities
The duties and responsibilities of the Committee include the following:
- Annually review and approve corporate goals and objectives regarding CEO compensation and evaluate the CEO’s performance in light of those goals and objectives. In evaluating the CEO’s long-term incentive compensation, the Committee may evaluate the Company’s performance and relative shareholder return, the value of similar awards to CEOs at comparable companies, the CEO’s previous awards and other comparative data as appropriate. The Committee, or the Committee in cooperation with the other independent directors (as directed by the Board), will set CEO compensation based on this evaluation.
- Annually review and approve (or recommend Board approval of) non-CEO executive officer compensation.
- Periodically review and make recommendations to the Board with respect to cash and equity compensation for directors.
- Review and make recommendations to the Board with respect to incentive compensation and equity-based plans that are subject to Board approval.
- Approve grants of awards under Company bonus, option or other incentive plans required to comply with IRS Code Section 162(m) or other applicable tax laws.
- Review and make recommendations to the Board with respect to employment agreements, change-in-control agreements and plans, and severance benefit agreements and plans with the CEO and executive officers, as applicable.
- Review and approve any related person transactions of a compensatory nature, as provided in the Corporate Governance Guidelines.
- Review and provide oversight of the Company’s material human resources policies and programs.
- Review and oversee the Company’s executive succession planning.
- Review and oversee the Company’s senior management leadership development. Senior management shall include business unit presidents and higher and Corporate Office departments led by a corporate vice president or higher.
- Perform such other functions relating to compensation or benefit plans as may be assigned by the Board of Directors from time to time.
- Review and discuss with Company management the Compensation Discussion & Analysis (CD&A) and determine whether to recommend to the Board that the CD&A be included in the Company’s proxy statement or 10-K annual report.
- Prepare or review the annual compensation committee report to be included in the Company’s proxy statement.
- Oversee the Company’s compliance with SEC rules and regulations regarding shareholder approval of certain executive compensation matters, including advisory votes on executive compensation and the frequency of such votes, and the Company’s compliance with NYSE rules requiring approval of certain equity compensation plans.
- Conduct an annual self-evaluation to determine whether the Committee is functioning effectively.