1

IPO Compensation Committee Checklist

Overall

Determine role of employees (HR, Finance) and consultants in developing executive compensation programs.

Assess current compensation consultant, including independence and potential conflicts of interest. Select consultant for next year.

Develop a Peer Group of comparable public companies.

Develop an executive compensation philosophy.

Review competitiveness of executive compensation.

Set competitive compensation levels (base, target bonus, equity/long-term incentive awards, perquisites/benefits).

Short-Term Incentive

Develop formalized Short-Term Incentive Plan document.

Select financial performance measures and individual / MBO goals.

Calibrate financial performance targets versus market/street expectations, internal budget, and Peer Group performance.

Long-Term Incentive

Review / develop a long-term incentive strategy including appropriate instrument use / mix.

Develop an LTI award matrix with values and participation rates for all employee levels.

Determine if an “evergreen” provision will be used. If so, determine appropriate evergreen size.

Set equity utilization (share run rate) budget for coming fiscal year.

Determine if any IPO awards will be made (“founders shares”).

Discuss and potentially implement executive and Board share holding/ownership requirements.

Employment, Severance, and Change-in-Control Arrangements

Review existing employment, severance, and CiC agreement terms and conditions and potential payouts.

Complete a competitive analysis of key terms for employment, severance, and CiC agreements and set terms going forward based on the market.

Governance

Develop or amend (as needed) Compensation Committee charter.

Draft Compensation Discussion & Analysis (CD&A) and accompanying tables for S-1 and Proxy.

Compensation risk assessment.

Review and set Board of Directors compensation for the following year.

Set equity award approval process, including what authority, if any, will be delegated to management. Formalize policy regarding award grant timing.

300 Trade Center, Suite 3460 | Woburn, MA 01801 | T: 781.647.2739 | www.dolmatconnell.com