Legal Definitions - compensation committee

The compensation committee is a group of people who are part of a company's board of directors. They are responsible for reviewing and approving the pay and benefits of a company's top executives, such as the CEO and CFO.

For example, if a company's CEO is up for a raise, the compensation committee would review their performance and decide whether or not to approve the raise.

The Securities and Exchange Commission (SEC) has a rule called 10C-1 that requires public companies to have independent compensation committees. This means that the committee members cannot be affiliated with the company and must be paid by an independent source.

Overall, the compensation committee plays an important role in ensuring that a company's top executives are fairly compensated for their work.