Financial Accounting Foundation
Board of Trustees
Finance and Compensation Committee
Board of Trustees
Finance and Compensation Committee
|Michelle R. Seitz, Chair||Gary H. Bruebaker|
|Charles S. Cox||Nancy K. Kopp|
|Ann Marie Petach||Ann M. Spruill|
The Board of Trustees (Board) of the Financial Accounting Foundation (Foundation) has established the Finance and Compensation Committee (Committee) to: (1) oversee the financial aspects of the Foundation, including review of annual budgets, periodic review of financial results, evaluation of transactions that are material to the Foundation’s business, review of business, risk and health insurance policies and coverage, review and oversight of employee benefit plans, and review and approval of investments and investment plans and (2) recommend compensation for its Trustees and senior executives (which include, but may not be limited to, the Foundation’s Chairman, the Foundation’s President/Chief Executive Officer, members of the Financial Accounting Standards Board (FASB), members of the Governmental Accounting Standards Board (GASB), and FASB and GASB advisory council chairs, if applicable), and recommend appropriate policies for salaries and benefits for all Foundation employees and monitor their implementation.
Membership and Structure
The Committee shall be a standing committee of the Board and all Committee members shall be Trustees. The Committee shall consist of three or more members. The Chair and the other members of the Committee shall be appointed by the Board and shall serve until their successors shall be duly appointed and qualified or until their earlier resignation or removal.
All Committee members shall be financially literate and have a working familiarity with basic finance and investing practices. Members of the Committee shall possess competencies that reflect the responsibilities of this Committee. This shall be signified by, among other factors, employment experience in the fields of finance or investing, or other appropriate background or experience which has created financial sophistication on the part of the member. It is recognized that Committee members do not devote full-time efforts to the Committee’s functions and may not be experts in the fields of investments or finance.
The Committee may invite, consistent with the maintenance of the confidentiality of compensation discussions, such members of management or outside consultants to its meetings as it deems appropriate. The Foundation’s Chairman, Foundation President/Chief Executive Officer, FASB members, GASB members, and FASB and GASB advisory council chairs (if applicable) may not be present during any discussions and deliberations of the Committee regarding their respective compensation.
The Committee shall be charged with the following responsibilities:
Annual Budget and Financial Review
- Reviewing the proposed annual operating and capital budget of the Foundation, FASB and GASB, including the accounting support fee calculations, for the ensuing fiscal year as presented by the Foundation’s management. After review and amendment, if necessary, the Committee will recommend a final budget to the Board for approval. The approved budget formally delegates spending authority for operating costs to management, subject to the policies and procedures adopted by the Foundation.
- Reviewing the quarterly financial statements consisting of year-to-date budget to actual amounts for revenues and expenses and the statement of financial position. These financial statements will be accompanied by a narrative from management highlighting any financial issues and, where necessary, management actions related thereto.
- Reviewing potential material financial obligations and transactions including leases, license fee arrangements, procurement contracts, banking arrangements and designating the officers and employees of the Foundation who can execute these approved documents or arrangements and act on behalf of the Foundation in the ordinary course of business.
- Adopting, periodically reviewing, and revising (subject to approval of the Board) the Investment Policy and Guidelines statements for the Employee’s Pension Plan (Pension Plan) Trust Fund, the Postretirement Health Coverage Plan (PHCP) Fund, the Employees’ Tax Sheltered Annuity (TSA) Plan funds, the Reserve Fund, the Operating Funds of the Foundation and any other investment vehicles that may be established by the Foundation from time to time (collectively the “Investments”), including policies and guidelines regarding asset classes, asset allocation ranges, and prohibited investments.
- Identifying, retaining, and overseeing such investment managers as the Committee may deem appropriate in its discretion, with sole authority to approve related fees and retention terms.
- Overseeing investment and reinvestment of the funds of the Foundation. The Committee may delegate investment functions to officers and employees of the Foundation and to retained external investment managers.
- Monitoring the management of the funds and performance of the investment managers by reviewing written reports from the investment managers and management of the Foundation and by discussions with investment staff at Committee meetings that focus on the primary determinants of returns, including asset allocation and investment strategy. These evaluations will take into account compliance with investment policies and guidelines and risk levels.
- Reporting quarterly to the Board on the performance and operations of the investment programs.
- Monitoring the performance of the investment manager(s) and meeting with them on at least an annual basis.
- Periodically (at least annually) reviewing the investment options available in, and fund performance on, the TSA Plan and 457(b) non-qualified defined contribution Deferred Compensation Plan (457(b) Plan).
- Reviewing the Foundation’s cash management strategies and banking structure as deemed necessary and appropriate.
- In consultation with senior management, establishing the Foundation’s general compensation philosophy, and overseeing the development and implementation of compensation programs and benefit plans.
- Determining whether the Foundation’s compensation and benefit plans are consistent with the market and sufficient to attract and retain talent, and making appropriate recommendations to the Board regarding the need for changes in the Foundation's overall compensation structure and benefits programs.
- Making recommendations to the Board , based on relevant data and studies, and input from the Appointments and Evaluations Committee, for the compensation and benefits of the Foundation President/Chief Executive Officer, FASB members, GASB members, and advisory council chairs (if applicable).
- Making recommendations to the Board, based on relevant data and studies, for the compensation of the FAF Chairman and the members of the Board.
- Overseeing the administration of and monitoring and interpreting the Foundation’s qualified and non-qualified employee retirement plans and other fringe benefit plans, including, without limitation, the Pension Plan, TSA Plan, 457(b) Deferred Compensation Plan, PHCP, and the Foundation’s medical, dental, vision, long-term disability and life insurance plans, for compliance with applicable law and making material decisions as to the disposition of benefit claims and/or petitions thereunder.
- Reviewing and approving bonus payments for eligible Foundation senior management employees (other than the Foundation President/Chief Executive Officer) and the eligible FASB and GASB senior management, consistent with the Foundation’s incentive compensation guidelines.
- Making recommendations to the Board on bonus payments to the President/Chief Executive Officer, consistent with the Foundation’s incentive compensation guidelines.
- Reviewing and approving any severance or similar termination payments proposed to be made to any senior executive.
- Retaining, overseeing, and directing such compensation consultants, outside counsel and other advisors as the Committee may deem appropriate in its discretion, with sole authority to approve related fees and retention terms.
- Reviewing on an annual basis, the Foundation’s insurance program, the scope and limitations of coverage, and the credit quality of its insurance carriers.
- Exercising, when deemed appropriate or advisable, authority to (1) retain independent counsel and (2) retain other professionals as appropriate to assist in the performance of its duties, including assisting in the conduct of or authorization of any investigation that is consistent with the Committee’s scope of responsibilities.
- Overseeing and directing the Employee Benefits Administrative Committee, and overseeing its operation.
- Performing such other functions as assigned by law, the Foundation’s charter or by-laws, or the Board.
- Evaluating the adequacy of the Committee’s resources to fulfill its responsibilities.
- Performing periodic self-assessments of the Committee’s roles, functions and performance, including a review of the Finance and Compensation Committee Charter and a recommendation to the Board of any necessary or appropriate amendments.
This charter may be amended only by the affirmative vote of the Board.
Approved by the FAF Board of Trustees on May 19, 2015