advice and assistance from internal or external compensation consultants, attorneys, accountants and other advisers. The Board of Directors annually evaluates the independence of its members and
has determined that each
non-executive
member of the Board of Directors satisfies the relevant criteria for independence.
The Compensation Committee considers multiple factors to ensure that compensation packages are consistent with our pay for performance philosophy and that we remain competitive in the market for talent.
Important factors considered in these decision-making processes included Company performance, individual leadership and performance assessments, market compensation levels, job scope, individual skills and experience, the relative importance of the
individuals role, internal pay equity, historical pay levels and equity holdings.
The Board of Directors completed an annual
comprehensive performance assessment of the NEOs and conducted a review of the CEOs performance. This assessment included an evaluation of
pre-established
strategic objectives and review of direct
feedback from managers, peers and subordinates. The Compensation Committee also held an annual joint meeting with the full Board of Directors to review and discuss Company leadership development, performance objectives and emergency and long-term
succession planning.
The Role of the Independent Compensation Consultant
During 2018, the Compensation Committee continued to retain Semler Brossy Consulting Group, LLC (SBCG) to assist in evaluating executive and
director compensation. In addition, SBCG prepared materials and analyses for the Compensation Committee on CEO compensation, including both Mr. Blacks fiscal 2018 compensation, as well as Mr. Seraphins interim CEO compensation
and CEO promotion compensation. The Compensation Committee reviewed and approved both Mr. Blacks compensation and Mr. Seraphins compensation, and neither Mr. Black nor Mr. Seraphin was present for any voting or deliberations
regarding their compensation. SBCG reports directly to the Compensation Committee and works collaboratively with management and the Compensation Committee. Pursuant to SEC rules, the Compensation Committee has assessed the independence of SBCG, and
concluded that no conflict of interest exists that would prevent SBCG from independently representing the Compensation Committee. SBCG does not perform other services for the Company and will not do so without the prior consent of the Compensation
Committee. SBCG regularly meets with the Compensation Committee outside the presence of management.
The Role of Management
Each year, the CEO and the head of Human Resources present to the Compensation Committee annual performance reviews and compensation
recommendations for the then-current NEOs, excluding the CEO. Evaluation of CEO performance and compensation is determined by the Compensation Committee without the presence or consultation of the CEO. Management personnel work with SBCG to prepare
compensation information and assessments for the Compensation Committees consideration.
In addition, the Compensation Committee also
determines the amount of funding available for our CIP pool. Our CEO then allocates this funding based on a measurement of each NEOs achievement levels against specific performance milestones in relation to the Companys overall
performance targets and recommends a specific CIP award for each NEO other than himself. The Compensation Committee reviews and assesses the CEOs proposed CIP award for each NEO.
Peer Group Comparisons
Each year, SBCG, together with senior members of our Human
Resources department, defines and assesses the appropriateness of a group of similarly situated companies, referred to as the Compensation Peer Group, for purposes of assisting the Compensation Committee to determine whether the total compensation
opportunity available to our NEOs is appropriate and competitive.
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