Health Net 2015 Annual Report Download - page 153

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• reviewing all equity-compensation plans to be submitted for stockholder approval under the federal tax rules or
NYSE listing standards, and reviewing and, in the Compensation Committee’s sole discretion, approving, or
recommending to the Board of Directors the approval of, all equity-compensation plans that are exempt from or
not subject to such stockholder approval requirements, in each case, in light of our goals and objectives with
respect to such plans;
• reviewing and approving any severance or termination arrangements to be made with any of our Oversight
Executives;
• reviewing periodically perquisites or other personal benefits to our Oversight Executives and recommending
any changes to the Board of Directors;
• producing a report of the Compensation Committee that contains a statement as to whether the Compensation
Committee has reviewed and discussed the proposed Compensation Discussion and Analysis (“CD&A”)
disclosure with management and whether it has recommended to the Board of Directors that the CD&A be
included in the Company’s proxy statement related to its annual meeting or Annual Report on Form 10-K; and
• performing such duties and responsibilities as may be assigned to the Board of Directors or the Compensation
Committee under the terms of any compensation or other employee benefit plan, including any incentive-
compensation or equity-based plans or compensation recovery policy.
As provided in its charter, the Compensation Committee has the responsibility to review at least annually the
performance of the Chief Executive Officer, the second-highest paid executive and the other Oversight Executives. The
Compensation Committee has the authority to approve the compensation for all Oversight Executives, other than the
Chief Executive Officer and the second-highest paid executive. The Board of Directors has the responsibility to
determine the compensation for the Chief Executive Officer and second-highest paid executive. When making such
determination, the Board of Directors takes into consideration the Compensation Committee’s recommendation
regarding the compensation for the Chief Executive Officer and second-highest paid executive and may choose to ratify,
modify or reject such recommendation. The annual performance review of the Oversight Executives occurs in the first
quarter of the calendar year following the previous 12-month performance period. Such review cannot be delegated to
anyone other than the Compensation Committee, though the annual performance evaluation of the Chief Executive
Officer may be done as a committee or together with other independent directors, as directed by the Board of Directors.
The Board of Directors and the Compensation Committee, as applicable, determine the compensation levels for
our named executive officers on an annual basis by considering a variety of factors described in the section “—How do
we determine the amount for each element of executive officer compensation?” portion of the “Compensation
Discussion and Analysis” section of this Annual Report on Form 10-K.
For all employees other than the Oversight Executives, the Chief Executive Officer and his direct reports review
and approve compensation decisions on an annual basis. In conducting their annual compensation review, the Chief
Executive Officer and his direct reports consider the same factors that the Compensation Committee uses for its annual
review. The Compensation Committee is not responsible for considering or determining compensation for the Board of
Directors. The evaluation of the compensation of our Board of Directors is the responsibility of the Governance
Committee and Board of Directors as discussed above in the “Governance Committee” section of this Annual Report on
Form 10-K.
The Compensation Committee is committed to staying apprised of current issues and emerging trends, and
ensuring that Health Net’s executive compensation program remains aligned with best practice. To this end, the
Compensation Committee has directly selected and retained the services of Semler to assist it with its responsibilities,
which relate primarily to executive compensation matters. Semler reports directly and exclusively to the Compensation
Committee with respect to executive compensation and related matters.
The Compensation Committee has the sole discretion to retain or obtain the advice of compensation advisers,
including compensation consultants, legal counsel or other advisers in order to assist the Compensation Committee in
carrying out its responsibilities. The Compensation Committee is also responsible for the appointment, determination of
the compensation and oversight of the work of so retained compensation advisers and the determination of the
independence of each compensation adviser prior to selecting or receiving advice from any such compensation adviser
and on at least an annual basis thereafter. The Company provides for appropriate funding for payment of reasonable
compensation to any compensation adviser to the Compensation Committee.