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1. The Expanded Role of the Committee

Yesterday’s compensation committees are, in many cases, today’s human resources or human capital committees. Many companies have expanded the charter of the compensation committee beyond compensation. The most common expansion of responsibilities is in the following areas:

  • Leadership development and succession planning
  • Inclusion / diversity / equity
  • Culture

In an analysis of the 100 largest public U.S. companies by revenue, we found that 59% of committees were named simply the “compensation committee” in 2014, while this decreased to 35% of committees by 2023 as committee titles began to change and expand with their purview.

Compensation-committee.svg

Many compensation committees now have names that reflect their expanded responsibilities, with “management development,” “human resources,” and “talent” being commonly included terms, as illustrated in the chart below:

expanded-name.svg.svg

Other areas of oversight that may be included in the compensation committee name include “succession,” “benefits,” “inclusion,” and “culture.”

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