Download Compensation Committee Charter
The Compensation Committee of the Board of Directors of Southwest Airlines Co. shall consist of at least two Directors, each of whom is “independent,” as defined by the applicable requirements of the New York Stock Exchange. The members of the Committee shall be appointed, removed, or replaced by the Board of Directors, and any vacancies on the Committee shall be filled by the Board of Directors, in accordance with any applicable requirement of the Company’s Bylaws. To the extent permitted by applicable law and regulations, the Committee has the power to delegate its authority and duties to subcommittees or individual members of the Committee, as it deems appropriate.
The Committee shall have the following powers, authority, duties, and responsibilities:
- The Committee shall review and approve corporate goals and objectives relevant to CEO compensation, evaluate the CEO’s performance in light of those goals and objectives, and, together with the other independent members of the Board (as directed by the Board and to the extent consistent with any applicable plan documents or law), determine and approve the CEO’s compensation level based on this evaluation. In determining the longterm incentive component of CEO compensation, the Committee will consider the Company’s performance and relative Shareholder return, the value of similar incentive awards to CEOs at comparable companies, and the awards given to the Company’s CEO in past years.
- The Committee shall review and approve all stock-based compensation arrangements for Employees of the Company and make recommendations to the Board with respect to equity-based plans that are subject to Board approval.
- With the advice of the Chairman of the Board and CEO, the Committee shall perform an annual review of the compensation structure of the Company’s officers and shall approve the salary, bonus, and other incentive and equity-related compensation for each of the Company’s executive officers who are subject to §16(b) of the Securities Exchange Act of 1934, as amended (“Executive Officers”).
- The Committee shall make recommendations to the Board with respect to non-CEO Executive Officer compensation and incentive-compensation plans that are subject to Board approval.
- The Committee shall conduct an annual review of compensation for the non-management members of the Board, which shall be an appropriate combination of cash and equity-based compensation, and recommend any changes to the Board.
- The Committee shall be directly responsible for the appointment, retention, compensation, and oversight of the work of any compensation consultant, independent legal counsel, or other adviser retained by the Committee in its sole discretion. 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 any independence factors that may be specified from time to time by the Securities and Exchange Commission and the New York Stock Exchange. The Committee shall determine the appropriate funding by the Company for payment of reasonable compensation to any compensation consultant, independent legal counsel, or other adviser retained by the Committee.
- The Committee shall review and discuss with management of the Company the Compensation Discussion and Analysis required to be included in the Company’s proxy statement and, based on such review and discussion, prepare a Compensation Committee Report for inclusion in the Company’s proxy statement.
- The Committee shall meet as often as the Board or the Chairman of the Committee shall deem necessary for the Committee to carry out its responsibilities. The Committee shall meet periodically in executive sessions without the presence of management.
- The Committee shall perform such additional functions as may from time to time be assigned to the Committee by the Board of Directors.
- The Committee shall report periodically to the entire Board.
- The Committee shall annually review and reassess the performance of the Committee.
- The Committee shall review the adequacy of this Charter and recommend any proposed changes to the Board for approval.
While the Committee has the responsibilities and powers set forth in this Charter, the role of the Committee is to assist the Board in its responsibilities. It is not the Committee’s responsibility to conduct investigations or to assure that the Company complies with specific legal requirements. Each member of the Committee will be entitled to rely, to the fullest extent permitted by law, upon the integrity of those persons or organizations within and outside the Company from whom it receives information and the accuracy of the information.
It is the intention of the Board and the Committee that any consultations between the Committee and the Company’s internal or external counsel be deemed to constitute communications for the purpose of obtaining legal advice and are therefore privileged attorney-client communications.
As adopted by the Board of Directors of Southwest Airlines Co. on May 14, 2013.