CHARTER OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS OF ALLEGION PUBLIC LIMITED COMPANY
The purpose of the Compensation Committee is to discharge the responsibilities of the Board of Directors with respect to the compensation of the Company’s executives.
The Committee shall be comprised of three or more members, each of whom is determined by the Board of Directors to be “independent” under the rules of the New York Stock Exchange. Additionally, no director may serve unless he or she (i) is a “Non-employee Director” for purposes of Rule 16b-3 under the Securities and Exchange Act of 1934, as amended, and (ii) satisfies the requirements of an “outside director” for purposes of Section 162(m) of the Internal Revenue Code.
The Committee shall:
- Establish the Company’s executive compensation philosophy, strategies, policies and programs to enable the Company to attract, retain, deploy and motivate executives necessary to meet current and future needs of the enterprise and to ensure the Company’s long-term compensation policies and programs are aligned with total shareholder return and performance as compared to relevant peer group companies.
- Review and approve the compensation, including salary, annual incentives, long-term incentives, equity-based awards and all other executive benefits for the Chief Executive Officer.
- Set the Chief Executive Officer’s variable compensation awards based on the evaluation by the Board of Directors of the Chief Executive Officer’s performance against the goals and objectives set by the Board of Directors
- Review and approve compensation, including salaries, annual incentives, long-term incentives, equity-based awards and all other executive benefits for all elected officers other than the Chief Executive Officer.
- Review and approve executive compensation and benefit programs including the Company’s executive incentive compensation plans, equity-based plans and executive pension and welfare plans.
- Review broad-based employee benefit programs, (e.g., major pension plans, employee savings plans and employee health and welfare plans), and recommend to the Board of Directors proposals for adoption, significant amendment or termination of such plans.
- Review the potential risks associated with the Company’s compensation policies and programs, including any incentive plans, and whether such programs and policies incentivize unnecessary and excessive risk taking.
- Exercise all powers and discretion vested in the Board under the Company's equity compensation plans, including the authority to grant awards.
- Approve the content of change in control plans or arrangements for employees.
- Select, retain and/or replace, or obtain advice of, as needed in its sole discretion, compensation and benefits consultants, independent legal counsel and any other adviser to provide advice to the Committee. In that connection, in the event the Committee retains any such adviser, the Committee shall be directly responsible for compensation and oversight of the adviser and shall have the sole authority to approve such adviser’s fees and other retention terms. The Company shall provide appropriate funding, as determined by the Committee, for payment of reasonable compensation to such adviser. Before selecting such an adviser, the Committee shall undertake an independence assessment prior to selecting the adviser that will provide advice to the Committee, taking into account such factors as may be required by the New York Stock Exchange from time to time.
- Report to the Board all significant issues discussed and make recommendations to be acted upon by the Board, as appropriate.
- Issue a report to the shareholders as required by the Securities and Exchange Commission for inclusion in the Company’s annual general meeting proxy statement.
- Conduct an annual evaluation of the Committee’s performance.
- Perform any other activities consistent with this Charter, the Company’s Articles of Association and governing law, as the Committee or the Board deems necessary or appropriate.
Adopted by Board – December 5, 2013