Executive Compensation Committee Charter
Nu Skin Enterprises, Inc. Executive Compensation Committee Charter
(Last Modified April 29, 2019)
The Executive Compensation Committee (the "Committee") of the Board of Directors (the "Board") of Nu Skin Enterprises, Inc. ("NSE") is appointed by the Board to:
- Establish and administer NSE's executive compensation strategy, policies and practices;
- Administer NSE's incentive plans;
- Oversee NSE's risk assessment and risk management programs and plans for NSE's risks related to compensation practices and human resources; and
- Oversee the reporting of executive compensation information in accordance with applicable rules and regulations.
II. STRUCTURE AND OPERATIONS
Composition and Qualifications
The Committee shall be comprised of three or more members of the Board, as determined by the Board from time to time; provided, however, that the Committee may operate with fewer than three members as long as such composition complies with applicable laws, rules, regulations, and securities exchange listing standards.Each member shall be an independent director within the meaning of the applicable New York Stock Exchange ("NYSE") listing standards and the applicable rules and regulations of the Securities and Exchange Commission (the "SEC"). Additionally, members of the Committee must qualify as "non-employee directors" for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and as "outside directors" for purposes of Section 162(m) of the Internal Revenue Code ("Section 162(m)") so long as the Company grants or certifies results under performance-based compensation awards that are intended to be fully deductible under Section 162(m).
Appointment and Removal
Members of the Committee shall be appointed by the Board and may be removed, with or without cause, by a majority vote of the Board.
If a Committee Chair (the "Chair") is not elected by the full Board, the members of the Committee may designate the Chair by majority vote of the full Committee membership. In the event of a tie vote on any issue, the Chair's vote shall decide the issue.
The Committee shall meet as often as its members deem necessary to perform the Committee's responsibilities. The Chair or any member of the Committee may call meetings of the Committee. All meetings of the Committee may be held by conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation in a meeting in this manner shall constitute presence in person at the meeting. Any action required or permitted to be taken at any meeting of the Committee may be taken without a meeting if all of the Committee members consent to the action in writing or by electronic transmission. The writing or writings or electronic transmission or transmissions shall be filed with the minutes of the proceedings of the Committee. All other conduct of Committee meetings shall be governed as provided in the Bylaws of NSE, as amended from time to time. The Committee shall maintain minutes or other records of meetings and activities of the Committee.
All non-management directors that are not members of the Committee may attend meetings of the Committee. Additionally, the Committee may invite to its meetings any other persons it deems appropriate in order to carry out its responsibilities including management personnel and other directors. The Committee may also exclude from its meetings, or any part of its meetings, any persons it deems appropriate.
IV. AUTHORITY AND RESPONSIBILITIES
To accomplish the purposes of the Committee, the Committee shall have the authority and responsibility to oversee the design of competitive total compensation programs for executive officers of NSE. The administration of all compensation and benefits will be the responsibility of management. However, the Committee must do the following:
- Review and approve corporate goals and objectives relevant to the compensation of NSE's chief executive officer (the "CEO") and NSE's executive chairman of the Board (the "Chairman"); evaluate the performance of the CEO and the Chairman in light of those goals and objectives, obtaining input from the Nominating and Corporate Governance Committee and other non-management directors; and determine and approve the forms and levels of compensation of the CEO and the Chairman based on this evaluation. In determining the long-term incentive component of the compensation of the CEO and the Chairman, the Committee shall consider, among other things (i) NSE's performance and relative stockholder return, (ii) the value of similar incentive awards to chief executive officers and chairmen at comparable companies, (iii) the results of the most recent stockholder advisory vote on executive compensation required by Section 14A of the Exchange Act, and (iv) the awards given to NSE's CEO and Chairman in past years;
- The Committee shall discharge the responsibilities of the Board with respect to non-CEO and non-Chairman executive officer compensation, executive incentive plans, total incentive payments and executive perquisite programs; oversee the activities of the individuals responsible for administering these plans; and discharge any responsibilities imposed on the Committee by any of these plans. The CEO shall conduct performance evaluations of non-CEO and non-Chairman executive officers and shall report and make recommendations to the Committee related to such evaluations.
- Review and approve the establishment of, or amendments to, executive incentive plans, total incentive payments and executive perquisite programs. The Committee shall also periodically evaluate NSE's executive compensation to ensure it: continues to support NSE's long term mission and business strategies; aligns executives' interests with the long-term interests of NSE's stockholders; enables NSE to recruit, retain and motivate a group of talented and diverse domestic and international executives; provides competitive, flexible compensation arrangements that adequately reward significant personal and corporate achievement; and is economically defensible and consistent with corporate performance;
- Serve as the administrator of NSE's equity incentive plans and establish the timing and terms of all grants to executive officers, employees, and consultants pursuant to such plans. Subject to any applicable regulations of the NYSE or the SEC, and any limitations under Delaware corporate law, the Committee may delegate authority to the CEO and the Chairman to approve the level of incentive awards to be granted to specific non-executive officers, employees or other grantees subject to such limitations as may be established by the Committee;
- Ensure that compensation programs comply with disclosure and other regulatory requirements and operate efficiently with regard to tax, regulatory and legal issues. The Committee shall also evaluate actual and proposed changes to applicable tax, accounting, and other laws and regulations and their implications for executive compensation programs;
- As delegated by the Audit Committee, review and either approve or reject related-person employment matters pursuant to NSE's Policy and Procedures with Respect to Related Person Transactions;
- Oversee NSE's risk assessment and risk management programs and plans for NSE's risks related to compensation practices and human resources. The Committee shall discuss with management, and the Chair shall report to the Audit Committee, regarding such risk assessment and risk management and NSE's related guidelines and policies;
- Oversee the reporting of executive compensation information in accordance with applicable rules and regulations, review and discuss with management NSE’s Compensation Discussion and Analysis (“CD&A”), recommend whether to include the CD&A in NSE’s public filings and prepare a “Compensation Committee Report” for inclusion in NSE’s public filings;
- Make regular reports to the Board; and
- Perform such other functions as delegated to it by the Board or assigned by law, the rules of the NYSE, or NSE's charter or bylaws.
The Committee may delegate its authority to a subcommittee or subcommittees as the Committee may deem appropriate.
The Committee will have the sole authority, to the extent it deems appropriate, to retain or obtain the advice of a compensation consultant, independent legal counsel or other adviser. The Committee shall be directly responsible for the appointment, termination, compensation and oversight of the work of any compensation consultant, independent legal counsel or other adviser retained by the Committee. NSE will provide appropriate funding, as determined by the Committee, for payment of compensation to a compensation consultant, independent legal counsel or any other adviser retained by the Committee. The Committee shall not be required to implement or act consistently with the advice or recommendations of its compensation consultant, independent legal counsel or other adviser, and the authority granted to the Committee herein shall not affect the ability of the Committee to exercise its own judgment in fulfillment of its duties. Subject to any exceptions set forth in the rules of the New York Stock Exchange, including Section 303A.05 of the New York Stock Exchange Listed Company Manual, the Committee may select a compensation consultant, legal counsel or other adviser to the Committee only after taking into consideration all factors relevant to that person's independence from management, including the following: (i) the provision of other services to NSE by the person that employs the compensation consultant, legal counsel or other adviser; (ii) the amount of fees received from NSE by the person that employs the compensation consultant, legal counsel or other adviser, as a percentage of the total revenue of the person that employs the compensation consultant, legal counsel or other adviser; (iii) the policies and procedures of the person that employs the compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest; (iv) any business or personal relationship of the compensation consultant, legal counsel or other adviser with a member of the compensation committee; (v) any NSE stock owned by the compensation consultant, legal counsel or other adviser; and (vi) any business or personal relationship of the compensation consultant, legal counsel, other adviser or the person employing the adviser with an executive officer of NSE. The Committee may select or receive advice from any compensation advisor it prefers, including ones that are not independent, after considering the factors specified above.
V. ANNUAL PERFORMANCE REVIEW
The Committee shall perform a review and evaluation, at least annually, of the performance of the Committee, including by reviewing the compliance of the Committee with this Charter, and report to the Board thereon. The Committee shall review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
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