AbbVie 2013 Annual Report Download - page 133

Committees of the Board of Directors
The board of directors has five committees established in AbbVie’s By-Laws: the executive
committee, audit committee, compensation committee, nominations and governance committee, and
public policy committee. Each of the members of the audit committee, compensation committee,
nominations and governance committee, and public policy committee is independent.
The executive committee members are Mr. Gonzalez, chair, Ms. Austin, Mr. Liddy, Mr. Roberts,
and Mr. Tilton. This committee may exercise all the authority of the board in the management of
AbbVie, except for matters expressly reserved by law for board action.
The audit committee members are Ms. Austin, chair, Mr. Burnside, Mr. Rapp, and Mr. Waddell.
The committee is governed by a written charter. This committee assists the board of directors in
fulfilling its oversight responsibility with respect to AbbVie’s accounting and financial reporting
practices and the audit process, the quality and integrity of AbbVie’s financial statements, the
independent auditors’ qualifications, independence, and performance, the performance of AbbVie’s
internal audit function and internal auditors, certain areas of legal and regulatory compliance, and
enterprise risk management. Each of the members of the audit committee is financially literate, as
required of audit committee members by the New York Stock Exchange, and the independence
requirements set forth in Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the
‘‘Exchange Act’’). The board of directors has determined that Ms. Austin, the committee’s chair, is an
‘‘audit committee financial expert.’’
The compensation committee members are Mr. Liddy, chair, Ms. Austin, Mr. Tilton, and
Mr. Waddell. The committee is governed by a written charter. This committee assists the board of
directors in carrying out the board’s responsibilities relating to the compensation of AbbVie’s executive
officers and directors. The compensation committee annually reviews the compensation paid to the
directors and gives its recommendations to the full board regarding both the amount of director
compensation that should be paid and the allocation of that compensation between equity-based awards
and cash. In recommending director compensation, the compensation committee takes comparable
director fees into account and reviews any arrangement that could be viewed as indirect director
compensation. The processes and procedures used for the consideration and determination of executive
compensation are described in the section of this proxy statement captioned ‘‘Compensation Discussion
and Analysis.’’ This committee also reviews, approves, and administers the incentive compensation
plans in which any executive officer of AbbVie participates and all of AbbVie’s equity-based plans. It
may delegate the responsibility to administer and make grants under these plans to management,
except to the extent that such delegation would be inconsistent with applicable law or regulations or
with the listing rules of the New York Stock Exchange. The compensation committee has the sole
authority, under its charter, to select, retain and/or terminate independent compensation advisors. The
compensation committee reviews and discusses with management and its independent compensation
advisor potential risks associated with AbbVie’s compensation policies and practices as discussed in the
section captioned ‘‘Compensation Risk Assessment.’’ Each member of the committee qualifies as a
‘‘non-employee director’’ for purposes of Rule 16b-3 under the Exchange Act and as an ‘‘outside
director’’ for purposes of Internal Revenue Code Section 162(m).
The committee has an engagement with Aon Hewitt to provide counsel and advice on executive
and non-employee director compensation matters. Aon Hewitt, and its principal, report directly to the
chair of the committee. The principal meets regularly, and as needed, with the committee in executive
sessions, has direct access to the chair during and between meetings, and performs no other services for
AbbVie or its senior executives. The committee determines what variables it will instruct Aon Hewitt to
consider, and they include: peer groups against which performance and pay should be examined,
financial metrics to be used to assess AbbVie’s relative performance, competitive long-term incentive
practices in the marketplace, and compensation levels relative to market practice. The committee
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