This publication is part of an Association of Governing Boards of Universities and Colleges (AGB) series devoted to strengthening the role of key standing committees of governing boards. While there is no optimum committee system for institutions of higher education, certain principles, practices, and procedures prevail. The best practices outlined support the objectives of board committees: (1) focused effort; (2) informed decision making; and (3) self-management. Hiring and retaining a president are among the core fiduciary responsibilities of governing boards. This puts them on the front lines for ensuring that the compensation and benefits paid by a college or university to its leaders (and coaches) are reasonable, compliant with the law, befitting of the institution's philosophy and budget, and effective at securing the best talent possible. "The Compensation Committee" presents tips for determining salary and benefit packages that: (1) Meet the oft-conflicting goals of remaining within the institutional budget; (2) Stay true to institutional principles; (3) Meet compliance requirements; and (4) Remain generous enough to retain a leader the board wants to keep or secure top new candidates for leadership. The author also discusses four pitfalls to avoid regarding: (1) Expense reimbursement; (2) Spousal/partner compensation and benefits; (3) "Gratitude" benefits; and (4) Confidentiality issues. Sections Include: (1) "The Case for a Dedicated Compensation Committee; (2) "Purpose of the Committee"; (3) "Committee Responsibilities"; (4) "Committee Composition"; (5) "Legal Compliance"; (6) "Transparency and Confidentiality"; (7) Tips for Effective Compensation Committees"; (8) "Pitfalls to Avoid"; and (9) "Conclusion." A list of references and resources are provided. Appended are: (1) Sample Compensation Committee Charter-Independent Institution; (2) Sample Compensation Committee Charter-Public Institution"; (3) Sample Compensation Philosophy Statement; (4) Sample Compensation Committee Tally Sheet; and (5) Sample Compensation and Benefit Items in Presidential Employment Agreements.