Report of the Compensation Committee and Compensation Committee Responsibilities and Procedures
 J. Estey, Chair |
 W. Fetzer lll |
 K. Martell |
 J. McCaig |
 P. Schoenhals |
Composition of the Compensation Committee
We have a standing Compensation Committee, referred to as the "Committee" in this Compensation section. The Committee is, at present, composed of five directors: John W. Estey (Chair), Wade Fetzer III, Keith G. Martell, Jeffrey J. McCaig and Paul J. Schoenhals. The Board has determined that each of the directors who served as members of the Committee during the year ended December 31, 2008, is independent according to the Board's independence standards as set out in the "PotashCorp Governance Principles" (which is available on our website, www.potashcorp.com), NI 58-101, applicable rules of the SEC and the NYSE corporate governance rules. See also "Board of Directors — Director Independence and Other Relationships". The Board believes the members of the Committee have the knowledge and experience to effectively perform their responsibilities. The members of the Committee have expertise in, among other areas, business management and finance, and four of the members are current or former principal executive officers. See also "Board of Directors — Nominees for Election to the Board of Directors".
The Committee held 6 meetings in the last fiscal year. The Committee meets without management present at each regularly scheduled Committee meeting.
Compensation Committee Responsibilities and Procedures
The Committee has a Committee Charter, which is available on our website and in print to any shareholder who requests a copy from our Corporate Secretary. The Committee may delegate any of its responsibilities to a subcommittee comprised of one or more members of the Committee.
As described in the Committee's charter, the Committee has the responsibility to:
| 1. | Review and approve on an annual basis the corporate goals and objectives relevant to the compensation of our CEO. The Committee evaluates at least once a year the CEO's performance in light of established goals and objectives and, based on such evaluation, together with all other independent members of the Board, determines and approves the CEO's annual compensation, including, as appropriate, salary, bonus, incentive and equity compensation; |
| 2. | Review and approve on an annual basis the evaluation process and compensation structure for our executive officers, including an annual Executive Salary Administration Program under which the parameters for salary adjustments (at the discretion of the CEO) for executive officers are established; |
| 3. | Review and make recommendations to the Board with respect to the adoption, amendment and termination of our management incentive-compensation and equity-compensation plans, oversee their administration and discharge any duties imposed on the Committee by any of those plans; |
| 4. | Assess the competitiveness and appropriateness of our policies relating to the compensation of the executive officers; |
| 5. | Review management's long-range planning for executive development and succession, and develop a CEO succession plan; |
| 6. | Approve the Committee's annual report on executive compensation for inclusion in our proxy statement, in accordance with applicable rules and regulations, and review and approve, prior to publication, the compensation sections of the proxy statement; |
| 7. | Review the general design and make-up of our broadly applicable benefit programs as to their general adequacy, competitiveness, internal equity and cost effectiveness; |
| 8. | Annually review the performance of our pension plans; |
| 9. | Review periodically executive officer transactions in our securities and approve such transactions as appropriate for their exemption from short-swing profit liability under Section 16(b) of the Exchange Act; |
| 10. | Annually review and recommend to the Board a compensation package for our directors. In considering the director compensation package, the Committee may take into consideration the relative responsibilities of directors in serving on the Board and its various Committees. The Committee may request that management report to the Committee periodically on the status of the compensation package of the Board in relation to other similarly situated companies. Directors who are our employees shall not be compensated for their services as directors. The Committee shall review annually any stock ownership guidelines applicable to directors and shall recommend to the Board revisions to any such guidelines as appropriate; and |
| 11. | Perform other review functions relating to management compensation and human resources policies as the Committee deems appropriate. |
As the chief human resources officer, the Senior Vice President, Administration is our company's representative to the Committee and provides the Committee with information and input on corporate compensation and benefits philosophy and plan design, succession planning, program administration and the financial impact of director, executive and broad-based employee compensation and benefit programs. In addition, the Senior Vice President, Administration provides information to and works with the Committee's executive compensation consultant as directed by the Committee.
Compensation Committee Interlocks and Insider Participation
During 2008, none of the members of the Committee served, or has at any time served, as an officer or employee of our company or any of our subsidiaries. None of our executive officers has served as a member of a compensation committee, or other committee serving an equivalent function, of any other entity, one of whose executive officers served as a member of the Committee.
Report of the Compensation Committee
The following report has been submitted by the Committee:
The Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this Management Proxy Circular with management and, based on this review and discussion, recommends that it be included in our annual report on Form 10-K for the year ended December 31, 2008 and in this Management Proxy Circular.
By the Compensation Committee:
Wade Fetzer III
Keith G. Martell
Jeffrey J. McCaig
Paul J. Schoenhals