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EASTERN VIRGINIA BANKSHARES

COMPENSATION COMMITTEE CHARTER

Organization - The Board of Directors shall have a Compensation Committee composed of three or more outside directors who are independent of the management of the corporation, who are not employed by the corporation, and who are free of any relationship that would interfere with their exercise of independent judgment as committee members.

Statement of Policy - The Compensation Committee shall provide assistance to the Board in fulfilling its responsibility to shareholders, potential shareholders, and the investment community. The Committee shall advise the Board, and shall recommend, and approve executive compensation policies and strategies necessary to support organizational objectives.

The Compensation Committee shall maintain free and open communication among the Board of Directors, independent consultants, internal human resources professionals, and the chief executive officer of the corporation.

Responsibilities - The Compensation Committee shall:

  • Assist the corporation in defining an executive total compensation policy that (i) supports the corporation’s overall business strategy and objectives, (ii) attracts and retains key executives, (iii) links total compensation with business objectives and organizational performance, and (iv) provides competitive total compensation opportunities at a reasonable cost while enhancing shareholder value.
  • Act on behalf of the Board of Directors in administering compensation plans approved by the Board and shareholders and in developing recommendations with respect to the compensation of corporate executives.
  • Evaluate annually the total compensation of corporate against (i) pre-established performance goals and objectives, and (ii) an appropriate peer group of similar financial organizations.
  • Review and comment on the corporation’s strategic and financial plans to determine their relationship to the compensation program.
  • Review the retirement plans of the corporation and determine any differences between plan objectives, needs, and current benefit levels, approve any amendments, and review the results of the retirement plan investments for compliance with organization policies, tax law, Employee Retirement Income Security Act of 1974
  • Select independent compensation consultants to advise the Compensation Committee, when appropriate.
  • Review the management succession program. If succession responsibility is delegated to another committee, the Compensation Committee should coordinate closely with that committee.
  • Advise the Board of Directors with respect to outside directors’ compensation, as well as its components (retainers, fees, long term incentive plans, benefits, and perquisites).
  • Keep abreast of current developments in executive compensation in the financial community.

The Compensation Committee shall exercise its governance and oversight responsibility without direct involvement in the corporation’s day-to-day management. The Compensation Committee will always be mindful of the fact that compensation structures not properly aligned with organizational objectives inhibit sustainable returns to shareholders.



Approved November 13, 2007 by Compensation Committee