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Purpose of Committee
The primary purpose of the Committee on Compensation and Organization (the "Committee") of the Board of Directors (the "Board") of Aetna (the "Company") is to discharge the Board's responsibilities relating to compensation of the Company's executives. In doing so, the Committee shall:
1. evaluate and determine the compensation of the Company's executive officers and such other key executives or executive positions as identified by the Committee;
2. oversee compensation and benefits plans, policies and programs of the Company;
3. administer the equity-based incentive compensation plans of the Company and the Company's Section 162m Annual Incentive Plan; and
4. consider from time to time and, when appropriate, make recommendations to the Board as to the development and succession plans for the senior management of the Company.
The Committee shall meet to review and discuss with management the specific executive compensation disclosures included in the compensation discussion and analysis section of the Proxy Statement and shall prepare a report recommending to the Board of Directors that the compensation discussion and analysis be included in the Proxy Statement.
The Committee shall be composed solely of at least three members of the Board, each of whom is, in the business judgment of the Board, "independent" under the rules of the New York Stock Exchange, Inc.
The members of the Committee shall be appointed annually and replaced by the Board.
Committee Structure and Operations
The Board shall designate one member of the Committee as its chairperson. The Committee shall meet as often as necessary to carry out its responsibilities under this Charter, but at least three times a year. The Committee shall make regular reports to the Board. Except for grants and awards to executive officers, the Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.
The Committee, in its sole discretion, shall have the authority 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, compensation and oversight of the work of any such compensation consultant, legal or other adviser retained by the Committee. In addition, the Company shall provide appropriate funding, as determined by the Committee, for the payment of reasonable compensation to such compensation consultant, legal or other adviser. When selecting a compensation consultant, legal or other adviser to the Committee (other than in-house counsel), the Committee shall consider (i) the provision of other services to the Company; (ii) the amount of fees paid to the adviser as a percentage of the adviser's total revenue; (iii) the policies and procedures of the adviser's employer that are designed to prevent conflicts of interests; (iv) any business or personal relationship between the adviser and a member of the Committee; (v) any Company stock owned by the adviser; (vi) any business or personal relationship of the adviser and an executive officer of the Company; and (vii) any other factor deemed relevant to the adviser's independence from management.
Committee Responsibilities and Authority
The following are the goals and responsibilities of the Committee:
1. To annually review and approve corporate goals and objectives relevant to CEO and other executive officer compensation, evaluate their performance in light of those goals and objectives, and establish their compensation levels based on this evaluation. In determining the long-term incentive component of CEO and other executive officer compensation, the Committee will consider the Company's performance, the value of similar incentive awards to CEOs and other executive officers at comparable companies, and the awards given to the CEO and other executive officers in past years. The Committee also shall take into account the need to attract and retain high-performing executives. The Company's CEO should not attend any portion of a meeting where the CEO's performance or compensation are discussed, unless specifically invited by the Committee.
2. To review and approve, for the CEO and the executive officers of the Company, (a) the annual base salary level, (b) the annual incentive opportunity level, (c) the long-term incentive level, (d) employment agreements, severance arrangements, and change-in-control agreements/provisions, in each case as, when and if appropriate, and (e) any special or supplemental benefits, arrangements or agreements, including perquisites. In determining the compensation of the CEO, the Committee shall consult with the non-management Directors of the Board. In determining the compensation of executive officers other than the CEO, the Committee shall consult with the CEO.
3. To develop principles and process for selection of CEO and key executives, including succession in the event of an emergency or retirement, for consideration by the Board, and to oversee the creation of development plans for such executives.
4. To review and recommend to the Board proposed business affiliations of executive officers of the Company.
5. To review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.
6. To evaluate its own performance annually.
7. To perform any other responsibilities delegated to the Committee by the Board from time to time.Amended: May 17, 2013
Reviewed: February 28, 2013