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Compensation Committee

At many public companies and large private companies, this is a committee of the board of directors (generally comprising outside directors) that develops the framework of the company's stock plan and sets the guidelines for making stock grants to senior executives. The details the committee determines include the specifics of stock options, restricted stock, performance shares, and any other grants allowed under the stock plan. The committee may also delegate to the CEO or other executives (e.g. the vice president for human resources) the authority to make stock grants under a process that the committee has approved. For details, see the FAQs in Basics: Grants. The committee also publishes a report, which appears in the proxy statement each year. It explains the company's compensation philosophy, goals, and practices.

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