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NYSE: ITT

59.25

07/14/2020 4:10 PM
Min. 20 Minutes Delay

Compensation and Personnel Committee Charter

I. Purpose

The purpose of the Compensation and Personnel Committee (the “Committee”) is to provide oversight review of compensation and benefits of the employees of ITT Inc. (the "Company"). The Committee evaluates and makes regular reports to the Board of Directors (the "Board") on matters concerning management performance, employee compensation and human resources policies, programs and plans, management development and succession plans. It approves Chief Executive Officer and other executive officer compensation and benefit programs.

II. Responsibilities

  1. Approve and oversee administration of the Company's executive compensation program, including annual incentive compensation plans, longer-term cash incentive plans, equity-based compensation plans, as well as plans and policies if any pertaining to perquisites. In determining executive compensation, the Committee considers enterprise risk and other risk factors in determining appropriate compensation objectives. The Committee structures compensation so that unnecessary or excessive risk-taking behavior is discouraged and behaviors correlated with long-term value creation are encouraged. With respect to long-term incentives, the Committee considers the Company's performance and relative shareholder return, as well as considering, where appropriate, past compensation levels and peer company compensation practices.
  2. Review and approve compensation matters for the Chief Executive Officer and other executive officers of the Company.
    • Set annual performance goals and objectives with respect to the Chief Executive Officer. The performance of the Chief Executive Officer will be evaluated with respect to these performance goals and objectives and the compensation level of the Chief Executive Officer will reflect, as appropriate, the results of this evaluation. In determining the appropriateness of any element of the long-term incentive compensation awarded to the Chief Executive Officer, the Committee shall consider similar compensation awarded to the Chief Executive Officer in prior fiscal years, the Company’s overall performance and the relative return on the investment of the Company’s stockholders for the fiscal year, and the value of similar awards made to the chief executive officers of comparable companies in the industry.
    • Provide an annual review of such matters referenced in part A above and this part B with the full Board. No communications regarding compensation matters shall be made to the above listed employees prior to this review. The Committee will also review, as appropriate, any changes to compensation matters for the officers listed above with the Board.
    • Approve individual compensation actions for the remaining executive officers.
  3. Oversee the establishment and administration of the Company's benefit programs and severance policies that apply to executive officers, including review and approval of benefit plans, employment agreements and change-in-control provisions.
  4. The Committee shall have the sole authority and the necessary funding to select, retain, determine the terms of engagement for and oversee such independent compensation and benefits consultants, outside counsel and other advisors as the Committee may deem appropriate in its sole discretion after considering all factors relevant to the advisor’s independence, including the factors specified by the New York Stock Exchange listing standards, to provide independent advice to the Committee with respect to the Company's current and proposed executive officer compensation and benefit programs. If the compensation consultant, or its affiliate, is engaged for non-executive compensation consulting services, the Committee will review and recommend such other services for full Board consideration and approval. The Committee shall establish policies regarding the retention of compensation consultants by the Board or the Committee that may include, among other considerations, the scope of the role and functions to be performed by the consultant, the consulting fees forecasted and incurred, and communications between the consultant and the Committee, the Company’s executive officers and management.
  5. The Committee will review succession planning and talent assessment for executive officers (including the Chief Executive Officer) and other critical senior management roles, as needed. Succession planning discussions and talent review for the Chief Executive Officer and other executive officers will be reviewed with the full Board at least annually. For the avoidance of doubt, succession planning for the Chief Executive Officer is the responsibility of the full Board.
  6. Review and discuss with the Company’s management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on such review and discussion, the Committee shall determine whether to recommend to the Board that the Compensation Discussion and Analysis be included in the Company’s annual report or proxy statement for the annual meeting of stockholders.
  7. Prepare the Report of the Committee required by the Securities and Exchange Commission to be included in the Company's annual proxy statement.
  8. Oversee and monitor other compensation related policies and practices of the Company, including (a) the stock ownership guidelines for the Company’s executive officers and non-management directors, (b) compliance by management with rules regarding equity-based compensation plans for employees pursuant to the terms of such plans, and guidelines for issuance of awards as the Committee or the Board may establish; and (c) the Company’s recoupment policy and procedures.
  9. Assist the Board in fulfilling its oversight of enterprise risk management, particularly the approach and risks in connection with the Company’s compensation, talent management and diversity programs.
  10. Review its Charter regularly and make recommendations to the Board for approval and adoption of the Charter, including any additions, deletions or modifications, as may be deemed appropriate.
  11. Perform any other functions required to carry out its responsibilities under this charter. The Committee shall also perform such other functions as are delegated to it by the Board from time to time.

III. Membership and Organization

  1. The Committee shall consist of no fewer than three members, all of whom (a) must meet the independence requirements of the applicable listing standards of the New York Stock Exchange and be an “Independent Director” as defined in the Company’s Corporate Governance Principles and (b) shall qualify as a “non-employee director” pursuant to regulations under Section 16(b) of the Securities and Exchange Act of 1934.
  2. The members of the Committee shall be designated by the Board annually and shall serve until such member's successor is duly designated or until such member's earlier resignation or removal. Any member of the Committee may be removed from the Committee, with or without cause, by a majority vote of the Board.
  3. The Chairperson of the Committee shall be designated by the Board. The Secretary of the Company shall be the Secretary of the Committee unless the Committee designates otherwise.
  4. The Chairperson of the Committee shall be responsible for scheduling all meetings of the Committee and providing the Committee with a written agenda for each meeting. The Chairperson shall preside at meetings of the Committee.
  5. One third of the members of the Committee, but not fewer than two persons, shall constitute a quorum.
  6. Action taken by the majority of the members present at a meeting at which a quorum is present and action taken by the written consent of all members shall constitute action of the Committee.
  7. The Committee shall meet as often as may be deemed necessary or appropriate, but no fewer than four times annually. The Committee may ask members of management or others to attend meetings or to provide relevant information. The Committee shall periodically meet in executive session absent management.
  8. The Committee shall regularly report to the Board on the matters discussed and actions taken by the Committee. The Committee shall maintain written minutes of its meetings which minutes shall be maintained with the books and records of the Company.
  9. The Committee may delegate authority to act upon specific matters within determined parameters to a subcommittee consistent with the delegation of such powers to the Committee by the Board.
  10. For purposes of this Charter, “executive officers” shall mean those individuals specifically designated by the Board as executive officers pursuant to Rule 16a-1(f) of the Securities Exchange Act, as amended.

Adopted: May 22, 2019