Baker Hughes 2007 Annual Report Download - page 160

2007 Form 10-K 77
The Compensation Committee is comprised of five inde-
pendent non-management directors and is responsible for see-
ing that the senior executives of our company are compensated
effectively in a manner that is consistent with our compensa-
tion strategy, internal equity compensation considerations and
competitive practice.
The Committee:
•฀ reviews฀our฀compensation฀strategy฀to฀ensure฀that฀manage-
ment is rewarded appropriately for its contributions to
growth and profitability, and that executive compensation
supports both company and stockholder interests;
•฀ reviews฀our฀long-term฀equity฀incentive฀plans฀(and฀makes฀
grants thereunder), employee retirement income plans, the
employee thrift plan and the employee stock purchase plan;
•฀ annually฀approves฀revisions฀to฀our฀annual฀salary฀increase฀
guidelines and sets bonus goals;
•฀ approves฀salary฀and฀bonus฀awards฀to฀key฀executives;
•฀ recommends฀incentive฀compensation฀and฀stock฀award฀plans฀
for approval by stockholders;
•฀ annually฀reviews฀management฀succession฀plans;
•฀ annually฀reviews฀levels฀of฀stock฀ownership฀by฀officers฀in฀
accordance with our stock ownership policy;
•฀ reviews฀disclosures฀in฀compensation฀discussion฀and฀analysis฀
and prepares an annual report to stockholders which are
published in our proxy statement (contained herein) and are
available on our website.
The Finance Committee is comprised of six independent
non-management directors and is responsible for reviewing
and monitoring the financial planning and actions taken that
are related to the financial structure of our company.
The Committee:
•฀ reviews฀and฀approves฀for฀recommendation฀to฀the฀board฀any฀
public equity offerings, public debt offerings or other debt
arrangements, issuances of warrants, options or convertible
or exchangeable securities, loans to third parties and divi-
dend policy changes;
•฀ periodically฀reviews฀our฀activities฀with฀credit฀rating฀agencies฀
and monitors key financial ratios;
•฀ annually฀reviews฀our฀policies฀regarding฀approval฀levels฀for฀
capital expenditures;
•฀ periodically฀reviews฀our฀policy฀and฀controls฀with฀regard฀to฀
derivatives and foreign exchange exposure;
•฀ annually฀reviews฀our฀insurance฀programs.
The Governance Committee is comprised of five inde-
pendent non-management directors and is responsible for all
governance related matters overseen by the board, including
recruiting and recommending candidates for election to the
board, reviewing the criteria for board membership against
the current needs of the board, recommending directors’
fees and monitoring compliance with the Corporate Gover-
nance Guidelines.
The Committee:
•฀ annually฀reviews฀the฀structure฀of฀the฀board฀and฀the฀skills฀and฀
experiences of its members, to assure that the proper skills
and diversity of experience are represented on the board;
•฀ assesses฀the฀board฀contributions฀of฀the฀directors฀and฀recom-
mends to the board if the director should be re-nominated
at the next annual meeting;
•฀ annually฀reviews฀board฀compensation฀and฀compensa-
tion methods;
•฀ reviews฀outside฀directorships฀in฀other฀companies฀by฀
Baker Hughes’ senior officers;
•฀ reviews฀and฀recommends฀directors’฀fees;
•฀ annually฀reviews฀our฀Policy฀Statement฀of฀Shareholder฀
Rights Plans which is on our website;
•฀ periodically฀reviews฀compliance฀with฀our฀environmental฀
policy. The Baker Hughes Environmental Policy is available
on our website.
Committee*
Directors Age Executive Audit/Ethics Governance Finance Compensation Employee Independent Director Since
Chad C. Deaton 55 C X 2004
Larry D. Brady 65 M M X 2004
Clarence P. Cazalot, Jr. 57 M M C X 2002
Edward P. Djerejian 68 M M X 2001
Anthony G. Fernandes 62 M C X 2001
Claire W. Gargalli 65 M M X 1998
Pierre H. Jungels 64 M M X 2006
James A. Lash 63 M M X 2002
James F. McCall 73 C M X 1996
J. Larry Nichols 65 M M X 2001
H. John Riley, Jr. 67 M M C X 1997
Charles L. Watson 58 M M M X 1998
* M=Member; C=Chairman