5 Tips for an Effective Compensation Committee Meeting

Compensation committees play a critical role in shaping executive pay programs and aligning them with company strategy, performance, and shareholder expectations. Establishing a compensation committee commonly occurs in tandem with plans to become a public company, but mature private companies may consider forming a committee if the Board meets regularly to provide input on formal compensation decisions. Delegating compensation-related tasks to a dedicated committee helps create efficiency to compensation processes, regardless of whether a company is private or public. 

Thoughtful planning, structured discussions, and defined governance practices are all important to successful committee meetings. How can you better ensure committee meetings are efficient, productive and effective? Here are five practical tips.

1. Establish a Calendar & Agenda

A regular calendar and agendas with topics to be addressed each quarter ensure committees are effective in carrying out their responsibilities.

A well-planned calendar serves as a checklist for items delegated to the committee under its charter, and organizes the committee’s annual workload. Key decisions should be mapped out, with ideally at least one meeting for review and discussion prior to approvals. 

The calendar and agendas are typically developed by management with the help of the executive compensation consultant, with direction from the committee chair. Most committees meet four to six times per year, though cadence varies based on company-specific circumstances and process. 

2. Schedule Prep Meetings

The most effective committees avoid surprises during formal meetings. This is best achieved through prep meetings held in advance to review any materials that will be presented to the full committee.

Prep meetings are often held with the committee chair, management, and the executive compensation consultant to review materials prior to the formal meeting. Giving the committee chair time to digest information, request refinements to draft materials, and a primer on any sensitive topics greatly reduces the risk of derailment during the formal session.

Once sign-off has been provided by the committee chair, final meeting materials should be circulated to the full committee in advance, giving all parties time to thoroughly review and identify issues before the committee convenes. The goal is simple: no one should walk into the committee meeting caught off guard.

3. Decide Who Should Be in the Room

It is important to be intentional about who is present at the committee meetings. Beyond the committee members, other participants may include:

1. CEO
2. Outside advisors, including the executive compensation consultant and external legal counsel
3. Members of management, whose attendance should be limited given the sensitive nature of compensation

Members of management that participate often include the Head of Human Resources, and the individual that leads the relationship with the committee, if different (e.g., General Counsel). Other executives may also be asked to join discussions when their expertise is directly relevant. For example, the CFO may be invited to discussions on incentive plan metrics, company strategy, or equity financing. Strong leadership from the committee chair is critical to managing the range of voices and perspectives in the room. 

Most importantly, decisions on compensation for specific individuals should always take place without those individuals present. This is why executive sessions are a standard part of committee meetings, giving members the opportunity to deliberate independently.

4. Hold Executive Sessions

Time set at the end of each meeting for the committee to meet privately without management is an essential governance practice. Outside advisors, such as external legal counsel and the executive compensation consultant, are often included. These executive sessions create space for committee members to speak freely, raise sensitive questions, and engage with their outside advisors in a candid manner.

CEO compensation is also typically discussed in executive sessions to ensure independence from management influence. 

5. Debrief After Each Meeting

The work does not end when the meeting adjourns. A post-meeting debrief ensures that all follow-up questions are addressed, next steps are clearly defined, and responsibilities are assigned. Whether it involves conducting new analyses, preparing communications, or coordinating with management, a structured debrief keeps everyone aligned and accountable.

Building Your Compensation Committee Practices

An effective compensation committee meeting demands careful planning, thoughtful participation, and disciplined follow-through. By maintaining a consistent calendar, preparing in advance, being intentional about who is in the room, holding executive sessions, and debriefing afterward, committees can operate with efficiency, independence, and impact. These practices strengthen governance and help ensure that compensation programs support both company strategy and shareholder interests.

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This blog was authored by Lauren Spencer with oversight by Jin Fu. Questions and comments can be directed to Ms. Spencer or Ms. Fu at lauren.spencer@fwcook.com and jin.fu@fwcook.com, respectively.

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