DEF 14A of Boston Scientific Corp
Filed Mar 20, 2024 · FY20230000885725-24-000033
Director Nominees at a Glance
Director Nominees at a Glance
Diverse Range of Experience, Skills and Qualifications Represented by our 2024 Director Nominees
Diverse Range of Experience, Skills and Qualifications Represented by our 2024 Director Nominees
Diverse Range of Experience, Skills and Qualifications Represented by our 2024 Director Nominees
| | Academia | | Business Strategy | | Corporate Governance | | Environmental, Health, Safety & Sustainability | | | Executive Experience | | Finance / Capital Allocation | | Financial Literacy / Accounting | | Government / Public Policy | | | Human Capital Management / Compensation | | International | | Manufacturing | | Marketing / Sales | | | Medical Device Industry | | Mergers & Acquisitions | | Operations | | Public Company Board | | | Real Estate | | Risk Management | | Technology / Systems / Cyber-Security | | |
Board of Director Nominees at a Glance
Board of Director Nominees at a Glance
Board of Director Nominees at a Glance
| | | | | | | | | | | | | | | | | | | | | | | | | | | n | Female | n | Male | | n | Non-Binary | n | Asian, Hawaiian or Pacific Islander | n | White/ Caucasian | | | •Mega •Morano •Zane | | •Dockendorf •Fujimori •Ludwig | | •Mahoney •Sununu •Wichmann | •None identified | | | | | | | | | | | | | | | •Fujimori | | •Dockendorf •Ludwig •Mahoney •Mega | | •Morano •Sununu •Wichmann •Zane | | | | | | | | | | | | | | | S&P* Average: 63.3 *per 2023 Spencer Stuart Board Index | | | | | | | S&P* Average: 7.8 *per 2023 Spencer Stuart Board Index | | | | |
Board of Director Nominees at a Glance
| 2024 Proxy Statement | 17 |
Director Nominees
Director Nominees The biography of each of the nominees is listed below and contains information regarding the person’s service as a director, business experience, public company director positions currently held or held at any time during the last five years, information regarding involvement in certain legal or administrative proceedings (if applicable), and the experiences, qualifications, attributes or skills that caused the Nominating and Governance Committee and the Board to determine that the person should serve as a director. Each of the director nominees listed below exemplifies how our Board values professional experience in business, education, policy and governmental fields, as well as strong moral character and diversity in terms of viewpoint as well as age, race/ethnicity and gender. Our Board believes these strong backgrounds and sets of skills provide the Board, as a whole, with a strong foundation of technical expertise and a wealth of diverse experience in a wide variety of areas to address the current and anticipated needs of the Company as its opportunities and challenges evolve.
Director Nominees
| Charles J. Dockendorff Independent | | Age: 69 | | Former Executive Vice President and Chief Financial Officer, Covidien plc Director since: April 2015 Board Committees: Audit (Financial Expert) Risk Other Current Public Boards: Haemonetics Corporation Hologic, Inc. Keysight Technologies, Inc. Education: University of Massachusetts at Amherst, B.B.A. in Accounting Bentley College, M.S. in Finance | Experience Highlights: Mr. Dockendorff is the former Executive Vice President and Chief Financial Officer of Covidien plc, a publicly traded medical device and supplies company, and its predecessor, Tyco Healthcare, having served in those positions from 1995 to 2015. While Chief Financial Officer of Covidien plc, Mr. Dockendorff was also in charge of Information Security for the company. Mr. Dockendorff joined the Kendall Healthcare Products Company, the foundation of the Tyco Healthcare business, in 1989 as controller and was named Vice President and Controller in 1994. He was appointed Chief Financial Officer of Tyco Healthcare in 1995. Prior to joining Kendall/Tyco Healthcare, Mr. Dockendorff was the Chief Financial Officer, Vice President of Finance and Treasurer of Epsco Inc. and Infrared Industries, Inc. Select Skills and Qualifications: Mr. Dockendorff’s qualifications to serve on our Board include his executive leadership experience at public medical device companies, his service as a director of other public companies, as well as his extensive expertise in accounting, finance, technology and business strategy. | |
Director Nominees
| Yoshiaki Fujimori Independent | | Age: 72 | | Senior Executive Advisor, Japan to CVC Capital Partners Director since: July 2016 Board Committees: Executive Compensation and Human Resources Risk (member and Chair, effective April 1, 2024) Other Current Public Boards: Oracle Corporation Japan Takeda Pharmaceutical Company Limited Education: Tokyo University of Science, B.A. in Petroleum Engineering Carnegie Mellon Graduate School of Business, M.B.A. | Experience Highlights: Mr. Fujimori is currently Senior Executive Advisor of Japan to CVC Capital Partners, a position he has held since February 2017. He was an advisor to the LIXIL Group Corporation from June 2016 to December 2019 and was the President and Chief Executive Officer of the LIXIL Group Corporation from August 2011 to June 2016. Prior to joining LIXIL, he was Chairman, President and Chief Executive Officer of General Electric Japan from January 2008 to June 2011. In his 25 years at General Electric Company, beginning in October 1986, he held a variety of positions including Senior Vice President and Chief Executive Officer of a number of Asian and global business divisions, including Medical Systems, Plastics, and Capital. Mr. Fujimori also served as a member of the General Electric’s Corporate Executive Council from 2001 to 2010. He formerly served as a director of Shiseido Company Limited, Toshiba Corporation, Japan Construction Material & Housing Equipment Industries Federation and Tokyo Electric Power Company Holdings. Select Skills and Qualifications: Mr. Fujimori’s qualifications to serve on our Board include his expertise in international business, including developing markets, with a particular emphasis on operations and manufacturing in Japan and Asia, technology, and his service on other public company boards. | |
Director Nominees
| 2024 Proxy Statement | 19 |
Director Nominees
| Edward J. Ludwig Independent | | Age: 72 | | Former Chairman of the Board and Chief Executive Officer, Becton, Dickinson and Company Director since: March 2014; Lead Independent Director Board Committees: Executive Compensation and Human Resources Nominating and Governance Other Current Public Boards: CVS Health Corporation Education: The College of Holy Cross, B.A., in Economics and Accounting Columbia University, M.B.A. | Experience Highlights: Mr. Ludwig is the former Chairman of the Board of Becton, Dickinson and Company (BDX), a global medical technology company, having served in that position from February 2002 through June 2012. He also served as BDX’s Chief Executive Officer from January 2000 to September 2011 and as its President from May 1999 to December 2008. Mr. Ludwig joined BDX as a senior financial analyst in 1979. Prior to joining BDX, Mr. Ludwig served as a senior auditor with Coopers and Lybrand (now PricewaterhouseCoopers), where he earned his CPA, and as a financial and strategic analyst at Kidde, Inc. Mr. Ludwig was a member of the board of directors of POCARED Diagnostics Ltd, a privately held company focused on infectious disease diagnostics from 2013 to 2022. He formerly served as a director of Aetna, Inc., Xylem, Inc. and as Vice Chair of the board of trustees of the Hackensack University Medical Center Network. Select Skills and Qualifications: Mr. Ludwig’s qualifications to serve on our Board include his executive leadership experience, specifically his service as a director and executive of a public medical technology company, along with his extensive expertise in business strategy, finance, management and manufacturing. | |
Director Nominees
| Michael F. Mahoney CEO, Chairman of the Board | | Age: 59 | | President and Chief Executive Officer, Boston Scientific Corporation Director since: November 2012 Other Current Public Boards: CVS Health Corporation Education: University of Iowa, B.B.A. in Finance Wake Forest University, M.B.A. | Experience Highlights: Michael F. Mahoney joined the Company as our President in October 2011 and became our President, Chief Executive Officer and a Director in November 2012. Mr. Mahoney became our Chairman of the Board in May 2016. Prior to joining the Company, he was Worldwide Chairman of the Medical Devices and Diagnostics division of Johnson & Johnson from January 2011 to September 2011, overseeing 50,000 employees and seven franchises. Prior to assuming this position, Mr. Mahoney served as Worldwide Group Chairman of Johnson & Johnson’s DePuy franchise, an orthopedics and neurosciences business, from April 2007 through January 2011. From January 2001 through March 2007, Mr. Mahoney served as President and Chief Executive Officer of Global Healthcare Exchange, a provider of supply chain solutions and services that brings together hospitals, manufacturers, distributors and group purchasing organizations. From 2015 to 2023, Mr. Mahoney served as a member of the Board of Directors of Baxter International Inc., a multinational health care company. Mr. Mahoney began his career at General Electric Medical Systems, where he spent 12 years, culminating in the role of General Manager of the Healthcare Information Technology business. Mr. Mahoney also serves on the board of the Boys & Girls Club of Boston, is the Chair of the board of governors of Boston College CEO Club, and a member of the American Heart Association CEO roundtable. Select Skills and Qualifications: In addition to serving as our President and Chief Executive Officer, Mr. Mahoney’s qualifications to serve on our Board, include his management experience leading complex organizations in medical device and other healthcare-related businesses, expertise in building strong leadership teams, developing international markets, and a proven ability to execute successful business strategies and drive operational excellence. | |
Director Nominees
| 2024 Proxy Statement | 21 |
Director Nominees
| Jessica L. Mega, M.D. Independent | | Age: 49 | | Co-Founder and Former Chief Medical and Scientific Officer, Verily Life Sciences, LLC Director since: June 2023 Board Committees: Executive Compensation and Human Resources Risk Other Current Public Boards: Danaher Corporation Education: Yale University School of Medicine, M.D. Harvard School of Public Health, M.P.H. Stanford University, B.A. | Experience Highlights: Dr. Mega co-founded Verily Life Sciences, LLC, a subsidiary of Alphabet Inc. focused on life sciences and healthcare, and served as Chief Medical and Scientific Officer from 2015 to the end of 2022. At Verily, Dr. Mega oversaw Verily’s clinical and science efforts, focusing on translating technological innovations and scientific insights into partnerships and programs that improve patient outcomes. Prior to Verily, she served as Cardiologist and Senior Investigator at Brigham and Women’s Hospital from 2008 to 2015. Dr. Mega has also served as a faculty member at Harvard Medical School and with the TIMI Study Group, where she led large-scale international clinical trials evaluating novel cardiovascular therapies and directed the genetics program. Dr. Mega is currently on the Board of Advisors at the Duke-Margolis Center for Health Policy and at Research!America. Select Skills and Qualifications: Dr. Mega’s qualifications to serve on the Board include her executive experience in life sciences, technology, and global business strategy, specifically her service as a director and executive and her background in academia and public policy. | |
Director Nominees
| Susan E. Morano Independent | | Age: 59 | | Former Vice President Business Development and Strategic Operations, Johnson & Johnson Medtech Director since: June 2023 Board Committees: Audit (Financial Expert) Nominating and Governance Other Current Public Boards: None Education: Columbia University, M.B.A. Villanova University, B.S. | Experience Highlights: Ms. Morano is the former Vice President Business Development and Strategic Operations, Johnson & Johnson Medtech, having served in that position from 2020 through February 2023. Prior to this role, she served as Vice President Business Development, Johnson & Johnson Medical Devices, beginning in 2012, with responsibility for licensing, acquisitions and divestitures for its Medical Devices Group. In addition, during her time at Johnson & Johnson, Ms. Morano held a number of positions with increasing responsibility through six operating companies, primarily within Finance and Business Development, and is a former member of its MedTech Leadership Team. Select Skills and Qualifications: Ms. Morano’s qualifications to serve on the Board include her executive experience in the medtech industry, specifically extensive experience in global mergers and acquisitions, management and business strategy, in addition to her financial expertise. | |
Director Nominees
| 2024 Proxy Statement | 23 |
Director Nominees
| John E. Sununu Independent | | Age: 59 | | Former United States Senator from New Hampshire Director since: April 2009 Board Committees: Nominating and Governance (Chair) Audit (Financial Expert) Other Current Public Boards: BlueRiver Acquisition Corp. Education: Massachusetts Institute of Technology, B.S. and M.S. in Mechanical Engineering Harvard University, M.B.A. | Experience Highlights: Senator Sununu served as a U.S. Senator from New Hampshire from 2003 to 2009. He was a member of the Committees on Banking, Commerce, Finance and Foreign Relations, and he was appointed the Congressional Representative to the United Nations General Assembly. Before his election to the Senate, Senator Sununu served three terms as a member of the U.S. House of Representatives from New Hampshire’s 1st District from 1996 to 2002, where he was Vice Chairman of the Budget Committee and a member of the Appropriations Committee. During his twelve years in Congress, he drafted and helped pass several important pieces of legislation, including the Internet Tax Freedom Act, the Survivors Benefit Act and the New England Wilderness Act. Prior to serving in Congress, Senator Sununu served as Chief Financial Officer for Teletrol Systems, a manufacturer of building control systems. Senator Sununu formerly served as a Council Member of Lloyds of London and as a director of Time Warner Cable Inc. and several private and charitable entities. Select Skills and Qualifications: Senator Sununu complements our Board with his experience in government and corporate leadership. Senator Sununu provides important insights on government relations, public policy and other matters relevant to our Company due to his extensive experience in both the public and private industry sectors. | |
Director Nominees
| David S. Wichmann Independent | | Age: 61 | | Former CEO, UnitedHealth Group Incorporated Director since: June 2021 Board Committees: Audit (Chair, Financial Expert) Risk Other Current Public Boards: Privia Health Group, Inc. Education: Illinois State University, B.S. in Accounting | Experience Highlights: Mr. Wichmann is the former Chief Executive Officer of UnitedHealth Group Incorporated, having served in that position from September 2017 through March 2021. Prior to this role, he served as President, UnitedHealth Group, beginning in November 2014, with oversight responsibility for all of UnitedHealthcare’s domestic and international businesses, and for overall UnitedHealth Group performance, and as Chief Financial Officer of the UnitedHealth Group from 2011 until 2016. In addition, during his time at UnitedHealth Group, he held positions as President, UnitedHealthcare; President and Chief Executive Officer, Specialized Care Services (now OptumHealth); and Senior Vice President, Corporate Development. Prior to joining UnitedHealth Group, Mr. Wichmann was a partner at Arthur Andersen & Co. and Chief Financial Officer of Advanced Machine Company. He previously served on the boards of UnitedHealth Group Incorporated and Tennant Company. Mr. Wichmann currently serves on the board of a private accountable care organization. Select Skills and Qualifications: Mr. Wichmann’s qualifications to serve on our Board include his executive experience in the healthcare industry as the chief executive officer of a large public health and well-being company and a current and former board member of other public companies, as well as his financial expertise and background in business strategy, operations, manufacturing, technology and environmental, health, safety and sustainability matters. | |
Director Nominees
| 2024 Proxy Statement | 25 |
Director Nominees
| Ellen M. Zane Independent | | Age: 72 | | CEO Emeritus and Founding Chair, Tufts Medicine Director since: April 2016 Board Committees: Executive Compensation and Human Resources (Chair) Nominating and Governance Other Current Public Boards: Haemonetics Corporation Synchrony Financial Education: George Washington University, B.A. Catholic University of America, M.A. in Audiology and Speech-Language Pathology | Experience Highlights: Ms. Zane is CEO Emeritus and Founding Chair at Tufts Medicine. Ms. Zane previously served as President and Chief Executive Officer of Tufts Medical Center from 2004 to 2011 when she retired from this role. Prior to this, Ms. Zane served as Network President for Mass General Brigham (formerly Partners Healthcare System), a physician/hospital network sponsored by the Harvard-affiliated Massachusetts General Hospital and Brigham and Women’s Hospital. Ms. Zane also previously served as Chief Executive Officer of Quincy Hospital in Quincy, Massachusetts. Ms. Zane currently is a director of Savista, a Georgia-based private company involved with healthcare revenue cycle management; Fiduciary Trust Company, a privately owned wealth management company; and AgNovos Healthcare, LLC, a privately held medical device company, focused on bone health. Ms. Zane previously served as a director of Azenta, Inc., Century Capital Management, Parexel International Corporation, Lincare Holdings Inc. and Press Ganey Holdings. Ms. Zane has received Honorary Degrees from Curry College, Stonehill College, Bentley University and University of Massachusetts-Dartmouth. Select Skills and Qualifications: Ms. Zane’s qualifications to serve on our Board include her executive experience in the healthcare industry, specifically as the chief executive officer of a large urban academic (teaching and research) medical center, in addition to her experience as a director at several other public companies. | |
Elements and Level of Director Compensation
Elements and Level of Director Compensation The Compensation Committee evaluates the appropriate level and form of compensation for non-employee directors at least annually and recommends changes to our Board when appropriate. Non-employee directors receive a combination of cash and equity compensation for their service on our Board. To determine the level of compensation for 2023, the Compensation Committee relied on the consulting services of Semler Brossy, as well as publicly available data describing director compensation in our peer group companies, to establish an appropriate and competitive level of compensation. The Compensation Committee generally aims to provide a level of compensation that is competitive with the median of peer and other similar companies. The Compensation Committee also took into consideration the significant amount of time and dedication required by our directors to fulfill their duties on our Board and Board committees as well as the need to continue to attract highly qualified candidates to serve on our Board. Our non-employee director compensation is set forth below.
Director Compensation Table
Director Compensation Table The table below summarizes the compensation paid or earned by our non-employee directors for the year ended December 31, 2023.
Director Compensation Table
| Name(1) | Fees Earned or Paid in Cash ($)(2)(3) | Stock Awards ($)(2)(4)(5) | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($)(6) | Total ($) | | Nelda J. Connors | 130,000 | 205,000 | 5,222 | 340,222 | | Charles J. Dockendorff | 121,250 | 205,000 | — | 326,250 | | Yoshiaki Fujimori | 115,000 | 205,000 | — | 320,000 | | Donna A. James(7) | 43,333 | — | — | 43,333 | | Edward J. Ludwig | 155,000 | 205,000 | — | 360,000 | | Jessica L. Mega(8) | 59,233 | 174,000 | — | 233,233 | | Susan E. Morano(8) | 59,233 | 174,000 | — | 233,233 | | David J. Roux | 120,000 | 205,000 | — | 325,000 | | John E. Sununu | 135,000 | 205,000 | — | 340,000 | | David S. Wichmann | 133,750 | 205,000 | — | 338,750 | | Ellen M. Zane | 130,000 | 205,000 | — | 335,000 |
Director Compensation Table
(1)Mr. Mahoney, the Chairman of our Board, President and Chief Executive Officer, is not included in this table because Mr. Mahoney did not receive any compensation for his services as a director in 2023. His compensation as an executive of the Company is discussed in the Compensation Discussion & Analysis and Executive Compensation sections of this Proxy Statement. (2)The “Stock Awards” column and, to the extent a director received equity in lieu of cash compensation, the “Fees Earned or Paid in Cash” column, present the grant date fair value (and the notes below present the individual grant date fair values, both rounded to the nearest thousand) of each director’s equity award computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Stock Compensation. For a description of the assumptions used for purposes of determining grant date fair value, please see Note K—Stock Incentive and Purchase Plans to our consolidated financial statements included in Item 8 — Financial Statements and Supplementary Data of our Annual Report on Form 10-K for the year ended December 31, 2023. (3)For the term beginning after the 2023 Annual Meeting of Stockholders, Mr. Ludwig elected to receive his cash retainer and fees as equity in the form of deferred restricted stock units. Ms. Morano elected to receive 50% of her cash retainer and fees as equity for the portion of the term following her appointment to the Board in June 2023, divided evenly between deferred restricted stock units, which will be released upon separation from the Board, and a restricted stock award, which will vest on the day of the 2024 Annual Meeting. Mr. Wichmann elected to receive his Chair position fees in connection with his appointment in April 2023 as Chair of the Audit Committee in the form of restricted stock, which award was granted to him in April 2023 and vested on the day of the 2023 Annual Meeting of Stockholders. Information about the equity grants described in this footnote are included in the following table.
Director Compensation Table
| Name | Equity Award Type | Grant Date | Number of Units(#) | Grant Date Fair Value($) | Vesting Date | | Edward J. Ludwig | Deferred Restricted Stock Unit | May 4, 2023 | 2,984 | 155,000 | May 2, 2024 | | Susan E. Morano | Deferred Restricted Stock Unit | July 3, 2023 | 456 | 24,000 | May 2, 2024 | | | Restricted Stock Award | July 3, 2023 | 456 | 24,000 | May 2, 2024 | | David S. Wichmann | Restricted Stock Award | April 3, 2023 | 41 | 2,000 | May 4, 2023 |
Director Compensation Table
(4)Each non-employee director elected at our 2023 Annual Meeting of Stockholders was granted an equity award with a value of $205,000. For each director who elected to receive a restricted stock award, the restricted stock award vests on the date of the annual meeting of stockholders immediately following the date of grant, subject to the director’s continued service during such term. For each director who elected to receive deferred restricted stock units, the deferred restricted stock units vest on the date of the annual meeting of stockholders immediately following the date of grant, subject to continued service during such term, and vested shares of stock will be issued to the director upon his or her separation from Board service in accordance with the Non-Employee Director Deferred Compensation Plan. The awards to Dr. Mega and Ms. Morano each represent the annual equity award for the 2023 term prorated for the period from the effective date of their appointments to the date of the Annual Meeting. The following table reports annual equity awards granted to our non-employee directors during 2023:
Director Compensation Table
| Name | Equity Award-Type | Grant Date | Number of Shares/Units (#) | Grant Date Fair Value ($) | Vesting Date | | Nelda J. Connors | Restricted Stock Award | May 4, 2023 | 3,946 | 205,000 | May 2, 2024 | | Charles J. Dockendorff | Restricted Stock Award | May 4, 2023 | 3,946 | 205,000 | May 2, 2024 | | Yoshiaki Fujimori | Deferred Restricted Stock Units | May 4, 2023 | 3,946 | 205,000 | May 2, 2024 | | Edward J. Ludwig | Deferred Restricted Stock Units | May 4, 2023 | 3,946 | 205,000 | May 2, 2024 | | Jessica L. Mega | Restricted Stock Award | July 3, 2023 | 3,253 | 174,000 | May 2, 2024 | | Susan E. Morano | Deferred Restricted Stock Units | July 3, 2023 | 1,626 | 87,000 | May 2, 2024 | | | Restricted Stock Award | July 3, 2023 | 1,626 | 87,000 | May 2, 2024 | | David J. Roux | Restricted Stock Award | May 4, 2023 | 3,946 | 205,000 | May 2, 2024 | | John E. Sununu | Restricted Stock Award | May 4, 2023 | 3,946 | 205,000 | May 2, 2024 | | David S. Wichmann | Restricted Stock Award | May 4, 2023 | 3,946 | 205,000 | May 2, 2024 | | Ellen M. Zane | Restricted Stock Award | May 4, 2023 | 3,946 | 205,000 | May 2, 2024 |
Director Compensation Table
The following table reports the outstanding Restricted Stock and Deferred Restricted Stock Units held by our non-employee directors at December 31, 2023:
Director Compensation Table
| Name | Outstanding Restricted Stock | Outstanding Deferred Restricted Stock Units | | Nelda J. Connors | 3,946 | 77,569 | | Charles J. Dockendorff | 3,946 | — | | Yoshiaki Fujimori | — | 36,697 | | Edward J. Ludwig | — | 44,366 | | Jessica L. Mega | 3,253 | — | | Susan E. Morano | 2,082 | 2,082 | | David J. Roux | 3,946 | — | | John E. Sununu | 3,946 | 81,757 | | David S. Wichmann | 3,946 | 6,389 | | Ellen M. Zane | 3,946 | — |
Director Compensation Table
For more information on the beneficial ownership of our directors, please see the section titled “Certain Beneficial Ownership Matters.” (5)The outstanding, unexercised stock options as of December 31, 2023, pursuant to stock option awards previously granted to non-employee directors, all of which have vested, are shown below and will expire May 5, 2025.
Director Compensation Table
| Name | Outstanding Stock Options | | Edward J. Ludwig | 16,818 |
Director Compensation Table
(6)The amounts in this column represent the “above-market” portion of 2023 earnings under the interest crediting investment option available under the Non-Employee Director Deferred Compensation Plan. The interest rate used under the plan each year is the Moody’s Composite Yield on Seasoned Corporate Bonds for the month of September of the preceding year. For 2023, the interest rate used under the plan was 5.18%, the Moody’s rate in September 2022. Under SEC rules, interest on non-qualified deferred compensation is considered “above-market” if the interest rate exceeds 120% of the federal long-term interest rate, with compounding at the rate that corresponds most closely to the rate under the plan, at the time the interest rate or formula is set. For 2023, 120% of the applicable federal long-term interest rate was 3.77%. (7)Ms. James did not stand for reelection to our Board at our May 4, 2023 Annual Meeting of Stockholders when her term ended. (8)Dr. Mega and Ms. Morano joined our Board in June 2023, and compensation for their service during the term reflects proration from the effective date of her appointment until the date of the next annual meeting.
Director Compensation Table
| 2024 Proxy Statement | 43 |
Director Compensation Table
Below we provide biographical information for each of our Executive Officers other than Mr. Mahoney, whose biographical information is presented in Proposal 1: Election of Directors.
Director Compensation Table
| Daniel J. Brennan Executive Vice President and Chief Financial Officer | Mr. Brennan, age 58, is our Executive Vice President and Chief Financial Officer, a position he has held since January 2014. In this role, he is responsible for several Company functions, including Global Controllership, Global Internal Audit, Corporate Finance, Treasury, Corporate Tax, Investor Relations, and Corporate Business Development. Prior to that, he was the Company’s Senior Vice President and Corporate Controller, a role he served in from January 2010 to January 2014. Since joining the Company in December 1996, Mr. Brennan has held roles with increasing responsibilities, including Vice President and Assistant Corporate Controller, Vice President of Finance for Worldwide Financial and Strategic Planning, Investor Relations, International Finance and Cardiovascular, Group Controller of the Non-Vascular Business and Controller of the Meditech Vascular business. Mr. Brennan is the Co-Chair of our Global Council for Inclusion. He holds a B.S. degree in Finance and Investments and an M.B.A. from Babson College. Mr. Brennan is also a certified public accountant. He is currently a member of the board of directors of Waters Corporation, a publicly-traded analytical laboratory instrument and software company, and a former board member of Nuance Communications and Overseers of Babson College. | | Vance R. Brown Senior Vice President, General Counsel, Corporate Secretary | Mr. Brown, age 54, is our Senior Vice President, General Counsel and Corporate Secretary, a position he has held since June 2021. In this role, he is responsible for providing global legal leadership across all of our businesses, regions and functions, and for overseeing the Company’s global compliance function. Prior to this role, Mr. Brown served as our Vice President, Chief Corporate Counsel and Assistant Secretary, a position he held from 2010 to June 2021. In that role, he was responsible for leadership and oversight over our international legal teams and various corporate legal functions, including mergers and acquisitions, venture capital, corporate governance and securities. Prior to that, Mr. Brown held a variety of legal and compliance roles of increasing responsibility for the Company. Mr. Brown is a member of our Global Council for Inclusion. Before joining the Company, he was an attorney with Skadden, Arps, Slate, Meagher and Flom. He earned his B.A. from University of Western Ontario and his J.D. from Harvard Law School. | | Arthur C. Butcher Executive Vice President and Group President, MedSurg and Asia Pacific | Mr. Butcher, age 53, is our Executive Vice President and Group President, MedSurg and Asia Pacific, a position he has held since May 2022. In this role, he is responsible for oversight of Asia Pacific, as well as our Urology, Endoscopy and Neuromodulation businesses. Prior to his current role, Mr. Butcher served as our Executive Vice President and President, Asia Pacific from February 2020 to May 2022, and was responsible for commercialization of our full portfolio of products across all divisions in the Asia Pacific region. Previously, Mr. Butcher served as our Senior Vice President and President, Endoscopy, a position he held from July 2016 until February 2020. In this role, he was responsible for developing and bringing to market less invasive devices for treating gastrointestinal and pulmonary conditions. He also served as Vice President & General Manager, Japan Endoscopy from August 2014 to June 2016. Mr. Butcher has held a variety of marketing and strategic planning management positions within the Endoscopy and Urology businesses, including Vice President of Global Marketing, Endoscopy Division from April 2011 to August 2014, and Vice President of New Business Development and Strategic Planning, Urology & Women’s Health. Since joining the Company in 1997, Mr. Butcher has held management roles with increasing responsibility and has deep experience across divisions. Mr. Butcher is a member of our Global Council for Inclusion and a member of the board of directors of Acotec Scientific, a publicly traded Chinese medical device company. He holds a B.A. in International Relations from the University of Pennsylvania and an M.B.A. from Columbia University. |
Director Compensation Table
| Wendy Carruthers Executive Vice President, Human Resources | Ms. Carruthers, age 55, is our Executive Vice President, Human Resources, a position she has held since February 2022. In this role, she is responsible for overseeing the Company’s human resources activities globally, including human resources operations and services, total rewards, talent management, diversity and inclusion and community engagement. Prior to her current role, Ms. Carruthers served as Senior Vice President, Human Resources from December 2012 until February 2022, the Head of Human Resources on an interim basis from August 2012 to November 2012, as well as our Vice President of Global Talent Management from January 2011 to November 2012. Ms. Carruthers has been with the Company since 2004 and has held various positions such as, Vice President of Human Resources for our Europe, Middle East and Africa region; Vice President of Human Resources for Europe and Director of Human Resources for Europe. Ms. Carruthers serves as a Co-Chair of our Global Council for Inclusion. Prior to joining the Company, Ms. Carruthers was Vice President of Human Resources, Europe for Cable & Wireless. Ms. Carruthers holds a B.A. First Class Honors Degree in Modern Languages from the University of Salford and is a Fellow of the Chartered Institute of Personnel and Development. She serves on the board of directors of Envista Holdings Corporation, a publicly traded dental manufacturing and marketing company, the Boston Scientific Foundation, and the Greater Boston Food Bank Emeriti Board. | | Joseph M. Fitzgerald Executive Vice President and Group President, Cardiology | Mr. Fitzgerald, age 60, is our Executive Vice President and Group President, Cardiology, a position he has held since May 2022. In this role, he is responsible for developing and bringing to market rhythm management technologies and innovative solutions that diagnose and treat coronary artery disease and structural heart disorders. He previously served as Executive Vice President and President, Cardiology from January 2022 to April 2022, Executive Vice President and President, Interventional Cardiology, from July 2020 to January 2022, Executive Vice President and President, Rhythm Management from February 2014 until July 2020, and Senior Vice President and President, Cardiac Rhythm Management from July 2011 until February 2014. Prior to that, he was Senior Vice President and President, Endovascular from February 2010 until July 2011 and President and General Manager of Peripheral Interventions and President of Electrophysiology. Mr. Fitzgerald held a variety of management positions in our Neurovascular and Peripheral Interventions businesses. These included numerous regional and divisional sales management assignments up to and including his roles as Vice President, Global Marketing for the Neurovascular business and Vice President of U.S. sales for the Neurovascular business. Mr. Fitzgerald is a member of our Global Council for Inclusion and is executive sponsor of our EmpowHER employee resource group. Prior to joining the Company in 1990 as a sales representative, Mr. Fitzgerald was with Anheuser Busch, Inc., where he held a variety of sales, marketing and training assignments. Mr. Fitzgerald holds a B.S. in Business from Indiana University and an M.B.A. from Southern Illinois University with a concentration in Marketing and Finance. |
Director Compensation Table
| 2024 Proxy Statement | 45 |
Director Compensation Table
| Jeffrey B. Mirviss Executive Vice President and President, Peripheral Interventions | Mr. Mirviss, age 58, is our Executive Vice President and President, Peripheral Interventions, a position he has held since February 2020. In this role, he is responsible for developing and bringing to market innovative solutions for treating patients with arterial and venous system blockages and cancer. In addition, Mr. Mirviss oversees our Latin America, Canada, and Government Affairs teams. Prior to his current role, he was our Senior Vice President and President, Peripheral Interventions, from January 2013 until January 2020, and President, Peripheral Interventions, from July 2011 to January 2013. Mr. Mirviss has more than 31 years of experience in medical device and pharmaceutical general management, marketing and sales. Since joining the Company in 1997, Mr. Mirviss has also served as our Vice President, Group Global Marketing, Cardiology, Rhythm and Vascular and Vice President, Global Cardiology Marketing. Mr. Mirviss is a member of our Global Council for Inclusion and is the executive sponsor of our BRIDGE employee resource group, an organization dedicated to recruitment, development, and retention of Black employees. Prior to joining the Company, Mr. Mirviss worked for companies ranging in size from a pre‐revenue, venture‐backed, medical device startup to Dow 30 companies. He holds a bachelor degree from the University of Minnesota and an M.B.A. from the University of St. Thomas. | | John Bradley Sorenson Executive Vice President, Global Operations | Mr. Sorenson, age 56, is our Executive Vice President, Global Operations, a position he has held since May 2022. In this role, he is responsible for oversight of Global Supply Chain, Quality and Regulatory Affairs, Global Enterprise Excellence, Information Technology, Security, Corporate Research and Development, Aviation, Global Facilities, Real Estate and Environmental Health and Safety. Prior to his current role, he served as Senior Vice President, Manufacturing and Supply, later changed to Senior Vice President, Global Supply Chain, from November 2014 to May 2022. In this role he was responsible for global manufacturing and distribution of our products. Mr. Sorenson has held a variety of operations positions at the Company, supporting the Cardiac Rhythm Management, Neuromodulation, Interventional Cardiology, Peripheral Interventions and Structural Heart businesses and has more than 20 years of medical device manufacturing experience. He is a member of our Global Council for Inclusion and serves as the executive sponsor for our Young Professionals Network employee resource group. Before joining the Company, he was president and chief operating officer of QRS Diagnostic and held manufacturing management positions at Federal Cartridge. Mr. Sorenson earned a B.A. in Economics from Gustavus Adolphus College and an M.B.A. from the University of Minnesota. | | Eric Thépaut Executive Vice President and President, Europe, Middle East and Africa | Mr. Thépaut, age 62, is our Executive Vice President and President, Europe, Middle East and Africa, a position he has held since February 2020. Prior to his current role, he was Senior Vice President and President, Europe, Middle East and Africa from December 2017 to January 2020, and Senior Vice President and President, Europe from January 2015 to December 2017. He also served as Vice President, Interventional Cardiology & Structural Heart, Europe from December 2012 to December 2015. He joined Boston Scientific Europe in 1996 as a business finance manager and earned roles of increasing responsibility in marketing and finance including Vice President, Finance, Europe, General Manager and Vice President, France, and General Manager and Vice President of the France Group, comprised of France, Benelux and Middle East North Africa. Mr. Thépaut is a member of our Global Council for Inclusion. Before joining the Company, Mr. Thépaut held management positions in Treasury Operations and Auditing at Nestlé and Financial Planning and Analysis at Apple, Inc. (then Apple Computer, Inc.). Mr. Thépaut earned his M.B.A. at Paris Dauphine University. |
Strategic Imperatives Linked to 2023 Executive Compensation
Strategic Imperatives Linked to 2023 Executive Compensation During 2023, our management team continued to execute our strategy of category leadership, innovation and investing in our capabilities for the future, while navigating economic and geopolitical uncertainty and continued supply chain challenges. To keep with our commitment to pay for performance, the Compensation Committee set ambitious but achievable targets based on our internal plan, reflecting relevant internal and external factors, with a goal of motivating employees to drive stockholder value. In 2023, we achieved outstanding financial performance while positioning the Company well for the year ahead and for the future. We are proud of our global team, their focus on our core mission and values, and their unwavering commitment to supporting our customers and their patients. In setting our compensation program goals for the year, the Compensation Committee continued to focus on executing our strategic imperatives, to help drive innovation, improve the health of patients across the globe, accelerate profitable revenue growth, continue progress towards our Environmental, Social and Governance (ESG) goals, and increase stockholder value in 2023 and beyond. These strategic imperatives are to: •strengthen category leadership to grow share in our served markets; •expand into high growth adjacencies that complement our core businesses; •drive global expansion; •fund the journey to fuel growth through optimization and cost reduction initiatives and a reallocation of spending to support growth initiatives; and •develop and expand key capabilities, including attracting and retaining key talent, and accelerating digital capabilities. We believe that continued focus on these strategic imperatives will benefit patients and customers and lead to strong performance across key financial metrics, including those incorporated into our short- and long-term incentive compensation programs, described in further detail on the following page of this Proxy Statement.
Pay for Performance
Pay for Performance Our short- and long-term incentive plans incorporate metrics designed to align with the objectives of driving profitable growth and rewarding Company and individual progress related to our strategic imperatives. Significant portions of pay pursuant to our executive compensation programs are tied to Company performance across a variety of key metrics, and ultimately, value delivered under these programs is closely aligned with stockholder value. Specifically, the metrics are linked to our strategic imperatives as set forth below. 2023 Annual Bonus Plan: Pursuant to our 2023 Annual Bonus Plan, a single Company-wide Total Bonus Pool is funded by the Company’s performance measured against Company-level financial metrics of adjusted net sales and adjusted earnings per share (EPS), as well as ESG targets.
Pay for Performance
2023 Long-Term Incentives: Fifty percent (50%) of our 2023 long-term incentive awards granted to our executive officers was in the form of Organic Net Sales Growth and relative Total Shareholder Return (rTSR) performance-based RSUs.
Pay for Performance
| Performance Share Programs | | | 2023 Organic Net Sales Growth Performance Share Program (ONSG PSP) | The ONSG PSP is a new program beginning in fiscal year 2023, and replaced our prior Adjusted Free Cash Flow Performance Share Program (FCF PSP). The ONSG PSP compares our organic net sales growth performance over a three-year period against our financial plan. A focus on organic net sales growth provides incentives for the achievement of a key business performance objective critical to the Company’s success. | | 2023 rTSR Performance Share Program (rTSR PSP) | The rTSR PSP is a measure of the long-term success of our business and strategy relative to peers and helps to further align executive compensation and stockholder value. The 2023 rTSR PSP is substantially similar to the 2022 rTSR PSP, with the funding schedule updated to align with above median performance and the threshold and maximum payouts to align with the common practice of our proxy peers. |
Pay for Performance
| Financial Performance Metrics | Reported Financial Performance Metrics | | | | | $14.240 billion GAAP Net Sales | $1.07 GAAP Net Income Per Share | 12.3% GAAP Net Sales Growth versus 2022 | | | Adjusted Financial Performance Metrics | | | | | $14.257 billion Adjusted Net Sales(1)(2) for Annual Bonus Plan | $2.05 Adjusted Net Income Per Share (Adjusted EPS)(1)(2) for Annual Bonus Plan | 12.3% Organic Net Sales Growth(1) versus 2022, for 2023 ONSG Performance Share Program(3) | | | 56.70% 3-year rTSR(4) For 2021 rTSR Performance Share Program | | |
Pay for Performance
(1)Adjusted Net Sales, Adjusted EPS and Organic Net Sales Growth are not prepared in accordance with generally accepted accounting principles in the United States (GAAP). For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and insight into how these non-GAAP financial measures are considered by management, please see Annex A. (2)Adjusted Net Sales as used in our 2023 Annual Bonus plan excludes foreign currency fluctuations and the impact of net sales from acquisitions completed after the establishment of the internal financial plan, as applicable. Adjusted EPS excludes the impact of certain charges (credits) which may include amortization expense, goodwill and intangible asset impairment charges, acquisition/divestiture-related net charges (credits), investment portfolio gains and losses, restructuring and restructuring-related net charges (credits), and certain litigation-related net charges (credits), European Union (EU) Medical Device Regulation (MDR) implementation costs, debt extinguishment charges, deferred tax expenses (benefits) and discrete tax items. Organic net sales growth excludes the impact of foreign currency fluctuations and acquisitions and divestitures for which there is less than a full period of comparable net sales. (3)2023 ONSG PSP has a three-year performance period, comparing actual organic net sales growth performance against financial plan for the period from January 1, 2023 to December 31, 2025. (4)3-year TSR for the period from January 1, 2021 to December 31, 2023. Please see the Executive Compensation section titled “2023 Relative Total Shareholder Return Performance Share Program” for how we calculate TSR. We also maintain a disciplined approach to management of the programs. We set ambitious but achievable program targets, taking into consideration relevant, foreseeable company-specific and macroeconomic circumstances, to appropriately motivate employees. In general, we strive to set targets consistent with corporate goals, including our operating plan and external guidance, which typically increase year-over-year. In 2021, the Compensation Committee set Annual Bonus Plan targets above 2020 performance but below 2020 targets, which were finalized before the magnitude of the impact of the COVID-19 pandemic was known. In 2022, we returned to our historical approach of increasing targets year-over-year. Below is a historical view of our approach to setting targets and actual achieved results under our Annual Bonus Plan.
Pay for Performance
(1)“Adjusted EPS” and “Adjusted Net Sales” are non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and insight into how these non-GAAP financial measures are considered by management, please see Annex A to this Proxy Statement. When performance is below target, we have not had a practice of resetting targets, funding schedules, or vesting schedules to generate higher payouts. Against a backdrop of macroeconomic challenges and uncertainties, our pay-for-performance philosophy and the Compensation Committee’s disciplined approach to stewardship of the executive compensation program were evidenced by: •the Compensation Committee approving a 0% payout of target shares under our 2020 rTSR program because rTSR was beneath the threshold level required for payout under the plan, which resulted in cancellation of awards valued at approximately $5.4 million in the aggregate for our 2022 NEOs (calculated based on the closing price of our common stock on the last trading day of 2022); •we have not adjusted funding schedules under our other active performance share programs and starting in 2023, we updated target rTSR payout to align with above median performance and threshold and maximum payouts to align with the common practice of our proxy peers; and •where below-target performance necessitates a lower payout, we do not supplement executive compensation with off-cycle grants to offset this impact. We have also made structural adjustments to our programs over time to reinforce our pay-for-performance philosophy, including in 2023 replacing our FCF PSP with the ONSG PSP, which has a three-year rather than a one-year performance period. In addition, we have made structural adjustments to our Annual Bonus Plan over time, including, starting with our 2021 Annual Bonus Plan, adding an ESG scorecard to help focus performance on DE&I, Employee Engagement, and Environmental metrics. This reflects our commitment to our performance on these sustainability metrics as part of our strategic initiatives. In 2024, we will continue to measure our performance against Global Sales, Adjusted EPS, ESG Scorecard and Quality. In addition, we have added a measure of adjusted operating income margin for the 2024 Annual Bonus Plan, reflecting our continued focus on adjusted operating margin expansion. We will also return to a focus on leadership within the organization for our DE&I goals, as further set forth below.
Summary Compensation Table CEO Total Direct Compensation versus 3-Year TSR(1)(2)
Summary Compensation Table CEO Total Direct Compensation versus 3-Year TSR(1)(2)
2023 CEO Compensation Target vs. Summary Compensation Table vs. Realizable ($ in 000s)
| | Valuation of Compensation Component | | | | | Base Salary | Annual Bonus Plan Award | Long-Term Incentives | | Target | Annual base salary approved in February 2023 | Target 2023 Annual Bonus Plan Award | Annual equity awards granted on February 14, 2023, with (a) stock options valued in accordance with FASB ASC Topic 718 and (b) service based restricted stock units (RSUs)(1) and performance-based RSUs valued at target (the number of units and target units awarded multiplied by the closing price of our common stock on the date of grant). | | Summary Compensation Table | Annual base salary earned in 2023 | Actual 2023 Annual Bonus Plan Award | Annual equity awards granted on February 14, 2023, with the value of each award determined in accordance with FASB ASC Topic 718. | | Realizable | Annual base salary earned in 2023 | Actual 2023 Annual Bonus Plan Award | Annual equity awards granted on February 14, 2023, with: (a) stock options valued at their intrinsic value (number of options awarded multiplied by the closing price of our common stock on the last trading day of 2023 less the exercise price of such options); (b) service-based RSUs valued using the number of units awarded multiplied by the closing price of our common stock on the last trading day of 2023; (c) rTSR performance-based RSUs valued using 200% of the target rTSR performance-based RSUs due to the Company’s rTSR rank being 90th percentile (200% of the target number of units multiplied by the closing price of our common stock on the last trading day of 2023); and (d) Organic Net Sales Growth performance-based RSUs valued using 200% (200% of the target number of units multiplied by the closing price of our common stock on the last trading day of 2023). |
2023 CEO Compensation Target vs. Summary Compensation Table vs. Realizable ($ in 000s)
(1)Under our Company’s 2011 LTIP as in effect prior to May 2020, RSUs were referred to as “Deferred Stock Units” or “DSUs.” References in this Proxy Statement to “Restricted Stock Units” and “RSUs” include both units granted under our 2011 LTIP as RSUs and DSUs. Neither term relates to compensation paid to our directors in the form of DSUs, also referred to as “Deferred Restricted Stock Units” elsewhere in this Proxy Statement.
2023 CEO Compensation Target vs. Summary Compensation Table vs. Realizable ($ in 000s)
The difference in value of the long-term incentive compensation portion of our CEO’s TDC reflected in the “Realizable,” “Target,” and “Summary Compensation Table” columns is primarily due to three factors: •the increase in the closing price of our common stock on the last trading day of fiscal year 2023 ($57.81) compared to the closing price of our common stock on February 14, 2023 ($47.28), the date of grant for the 2023 annual equity awards; •the rTSR performance-based RSUs granted in 2023 tracking at 200% of target as of December 31, 2023 due to the Company’s 90th percentile rTSR rank; and •the Organic Net Sales Growth performance-based RSUs granted in 2023 tracking at 200% of target as of December 31, 2023 due to 2023 performance being between target and maximum. This demonstrates the relationship between CEO pay and the achievement of performance criteria, and, therefore, the linkage between our executive compensation program and the long-term interests of our stockholders. The long-term incentive portion of the CEO’s compensation will remain “at-risk” and the value will vary until the completion of the vesting periods or until the exercise date for each of the equity awards. The following chart provides a longer-term view of our CEO’s Realizable pay, which is a measure of the value that might be awarded to Mr. Mahoney based on performance as of a given date. Realizable pay is calculated in accordance with the methodology described in the “Valuation of Compensation Component” table above, for each of the years in question, except that equity awards are valued at December 31 of each respective year, rather than December 31, 2023; TSR is calculated in accordance with the methodology described in the Executive Compensation section titled “2023 Relative Total Shareholder Return Performance Share Program,” and based on $100 invested on December 31, 2019. The chart below demonstrates the relationship between CEO pay and Company performance, most clearly evidenced by the decline in realizable pay in 2020 compared to other years. This was driven by, and corresponds to, a decline in the Company’s performance and stock price, as well as a voluntary reduction in base salary taken by Mr. Mahoney in 2020. Similarly, as Company performance recovered, realizable pay recovered to more normalized levels in 2021 through 2023.
A Significant Portion of Our NEOs’ 2023 Target TDC is At-Risk, Performance-Based Compensation
| | Base Salary | | Target Annual Bonus | | Target Long-Term Equity Incentives |
Executive Compensation Program Best Practices
| Use mix of short- and long-term incentive compensation and emphasize long-term. Use mix of fixed and variable compensation, and emphasize variable, at-risk performance-based compensation. Employ a “double-trigger” (both a change in control and termination without cause or for good reason) for cash payments and accelerated vesting of equity awards where the surviving or acquiring entity substitutes or assumes outstanding equity awards. Maintain stock ownership guidelines for executives and directors. | Have policies for the recovery (“clawback”) of all or a portion of certain incentive compensation awards under certain circumstances. Analyze internal pay equity and performance in formulating compensation decisions. Compare practices, levels, and mix of compensation against peer group companies. Engage an independent compensation consultant reporting directly to the Compensation Committee. Assess risk of incentive compensation policies and programs. |
Executive Compensation Program Best Practices
| Do not provide income tax gross-ups (except on relocation benefits). Do not provide any excise tax gross-ups on severance or other payments in the event of a change in control. | Do not permit pledging or hedging of the economic value of our common stock by our executives or directors. Do not permit repricing of underwater stock options without stockholder approval. |
Competitive Market Analysis
Competitive Market Analysis Our Compensation Committee uses competitive market analysis as a decision-making reference. The Compensation Committee primarily considers executive compensation comparative data for our peer group companies to better understand trends and comparative practices, program design in the market within which we compete for top talent, and competitive levels and mix of target compensation opportunities provided to our executives. Our peer group includes companies (i) operating in a comparable industry with respect to customer base and/or product offerings, such as healthcare equipment and services companies, pharmaceuticals, and biotechnology and life sciences; and (ii) that, in the aggregate, approximate our size as measured by revenue and market capitalization. Each year, with the assistance of its independent compensation consultant, our Compensation Committee reviews the composition and appropriateness of our peer group. The Compensation Committee considers the size, performance, and business focus of these companies in comparison to us. The peer companies used to establish 2023 compensation levels include: 2023 Peer Companies(1)(2)
Competitive Market Analysis
| | Revenue ($ in billions)(1) | | Market Cap ($ in billions)(2) | | | Total Shareholder Return (%)(3) | | | | | | | | | One Year | Three Year | | Abbott Laboratories | | 40.1 | | 191.1 | | 3.9 | 5.9 | | Agilent Technologies, Inc. | | 6.7 | | 38.1 | | (6.4) | 19.8 | | Baxter International Inc. | | 14.8 | | 19.6 | | (21.9) | (48.8) | | Becton, Dickinson and Company | | 19.5 | | 70.6 | | (2.7) | 4.3 | | Danaher Corporation | | 23.9 | | 170.9 | | (1.2) | 18.8 | | Edwards Lifesciences Corporation | | 6.0 | | 46.2 | | 2.2 | (16.4) | | Hologic, Inc. | | 4.0 | | 17.1 | | (4.5) | (1.9) | | Intuitive Surgical, Inc. | | 7.1 | | 118.8 | | 27.1 | 23.7 | | Medtronic plc | | 32.3 | | 115.1 | | 9.6 | (23.4) | | Quest Diagnostics Incorporated | | 9.3 | | 15.5 | | (10.1) | 22.6 | | Stryker Corporation | | 20.5 | | 113.8 | | 23.8 | 26.3 | | Thermo Fisher Scientific, Inc. | | 42.9 | | 205.1 | | (3.4) | 14.7 | | Zimmer Biomet Holdings, Inc. | | 7.4 | | 25.4 | | (3.8) | (16.7) | | Boston Scientific Corporation | | 14.2 | | 84.7 | 24.9 | | 60.8 | | Ranking Relative to Peers | 8 of 14 | | | 7 of 14 | | 2 of 14 | 1 of 14 |
Competitive Market Analysis
(1)Unless otherwise specified, revenue is for the trailing four quarters as of December 31, 2023. Agilent Technologies, Inc. revenue is provided for the trailing four quarters as of January 31, 2024. Medtronic plc revenue is provided for the trailing four quarters as of January 26, 2024. (2)Unless otherwise specified, market cap is calculated using the closing price of each company’s common stock on the last trading day of 2023 multiplied by the number of outstanding shares of common stock as reported by the company in its most recent periodic report filed with the SEC. Agilent Technologies, Inc. market cap is calculated using the common stock price on January 26, 2024. Medtronic plc market cap is calculated using the common stock price on January 26, 2024. (3)One-Year and Three-Year Total Shareholder Return represents cumulative total shareholder return on a fixed investment for the period beginning on the last trading day of 2022 and 2020, respectively, through December 31, 2023, and assumes the reinvestment of dividends. In establishing 2023 pay levels for our NEOs, the Compensation Committee reviewed comparative pay information for the peer group companies through proxy research and survey data as reported in the Equilar, Radford, and Willis Towers Watson surveys. Where peer group information was unavailable, the Compensation Committee reviewed industry-specific survey data which was calibrated to include companies comparable to our size and scope of each individual’s responsibilities. The Company considers market data without regard for any particular percentile positioning. This allows us to retain flexibility to make individual decisions that reflect both market and internal considerations, including those described on the following page under “Internal Pay Equity and Other Considerations.”
Competitive Market Analysis
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Chief Executive Officer and Compensation Committee Judgment
Chief Executive Officer and Compensation Committee Judgment We do not employ a purely formulaic approach to our executive compensation program. Target market guidelines and individual target TDC, financial and operational targets, including ESG metrics, and individual performance objectives and funding formulae are established in advance; however, other Company and individual performance and other considerations may also be taken into account. Therefore, the application of CEO and Compensation Committee judgment is an important factor in setting and determining executive pay. For example, under the 2023 Annual Bonus Plan, while the funding formula tied to Company-level financial performance targets is set in advance, our Compensation Committee is able to reduce the total Annual Bonus Plan funding percentage (Total Bonus Pool), based on its assessment of the Company’s progress toward achievement of our quality objectives, which is critical to our commitment to providing high quality products to our customers and patients.
Short-Term Incentives — Annual Bonus Plan Awards
Short-Term Incentives — Annual Bonus Plan Awards Our Compensation Committee annually reviews the design of our Annual Bonus Plan to help ensure that the program continues to support our executive compensation philosophy and core compensation program objectives. In finalizing the design for 2023, our Compensation Committee retained many of the provisions of our 2022 Annual Bonus Plan, which was designed to reinforce the concept of “pay for performance,” align our short-term incentives with important financial and operational measures and the long-term interests of our stockholders, and to incentivize and reward individual performance. Since 2021, our Annual Bonus Plan contains an ESG scorecard, which allows management and the Compensation Committee to consider progress toward DE&I, Employee Engagement, and Environmental goals, in addition to retaining important financial and quality/operational measures in making total bonus pool funding decisions. The ESG scorecard reflects the Company’s commitment to these goals and is designed to incentivize Company-wide progress in these areas. As with prior plans, the Compensation Committee retained the discretion to reduce the Total Bonus Pool funding percentage, regardless of financial achievements, based on its assessment of the Company’s achievement of our quality objectives.
Calculation of Awards Under the 2023 Annual Bonus Plan
Calculation of Awards Under the 2023 Annual Bonus Plan After funding the Total Bonus Pool, the actual amount of an executive’s Annual Bonus Plan award is ultimately determined as follows:
Calculation of Awards Under the 2023 Annual Bonus Plan
| Annual Base Salary (as of December 31) | | Target Award Opportunity (70% - 155% of Base Salary) | | One Company Funding Performance Percentage (0% - 150%) | | Individual Performance Percentage (0% - 150%) | | Annual Bonus Plan Award (0% - 225% of Target Award Opportunity) |
Total Bonus Pool Funded Based on Company Performance Against Financial and ESG Goals
Total Bonus Pool Funded Based on Company Performance Against Financial and ESG Goals As contemplated under the 2023 Annual Bonus Plan, a single Company-wide Total Bonus Pool is funded by the Company’s performance measured against important Company-level financial, operational, and ESG targets, thereby reinforcing the importance of the Company’s performance as a whole (which reflects the performance of each of our regions, businesses and functions). The Compensation Committee selected Adjusted EPS and Adjusted Net Sales as our Company-level financial metrics and set the performance targets as follows:
Company-Level ESG Targets
| Financial Metrics: 85% Total Weight | | | Adjusted EPS / Adjusted Net Sales (As a Percent of Target) | Total Bonus Pool Funding Range (Unweighted) | | 105%+ | 135% to 155% | | 102% to <105% | 115% to 135% | | 98% to <102% | 85% to 115% | | 95% to <98% | 55% to 85% | | 90% to <95% | 25% to 55% | | <90% | 0% | | Linear Interpolation between points. | |
Funded Total Bonus Pool Allocated to Participating Units
Funded Total Bonus Pool Allocated to Participating Units Under the 2023 Annual Bonus Plan, the Total Bonus Pool, as funded, is allocated by the Compensation Committee to each participating regional, business, and functional unit. Starting with the 2023 Annual Bonus Plan, each participating unit was funded equally at 130%, reflecting a single company-wide funding approach.
Short-Term Incentive Awards Paid to Our NEOs Under Our 2023 Annual Bonus Plan
Short-Term Incentive Awards Paid to Our NEOs Under Our 2023 Annual Bonus Plan
Short-Term Incentive Awards Paid to Our NEOs Under Our 2023 Annual Bonus Plan
| Name | Individual Target Award Opportunity (As a % of Annual Base Salary) | 2023 Target Award(1) | Participating Unit Performance Percentage | Individual Performance Percentage | 2023 Actual Annual Bonus Plan Award(1) | Actual as % of Target | | Michael F. Mahoney | 155% | $2,170,000 | 130% | 115% | $3,244,000 | 150% | | Daniel J. Brennan | 110% | $886,000 | 130% | 115% | $1,324,000 | 150% | | Arthur C. Butcher | 75% | $506,000 | 130% | 115% | $757,000 | 150% | | Joseph M. Fitzgerald | 85% | $680,000 | 130% | 115% | $1,017,000 | 150% | | Jeffrey B. Mirviss | 75% | $491,000 | 130% | 115% | $734,000 | 150% |
Short-Term Incentive Awards Paid to Our NEOs Under Our 2023 Annual Bonus Plan
(1)2023 Target and Annual Bonus Plan awards are rounded to the nearest thousand.
Long-Term Incentives
Long-Term Incentives Our Compensation Committee annually reviews the design of our Long-Term Incentive Program (LTI Program) to help ensure that the program continues to support our executive compensation philosophy and core compensation program objectives. In setting the design for 2023, our Compensation Committee retained the mix of equity award opportunities for our executives under our prior LTI Program that were designed to further reinforce “pay for performance” and align the interests of our executives and their compensation with important Company financial measures and the long-term interests of our stockholders. The key features and objectives of each of our 2023 equity vehicles are summarized in the table below.
Long-Term Incentives
| Performance-Based RSUs (50% of total mix) 50% rTSR; 50% Organic Net Sales Growth |
Long-Term Incentives
Performance-based RSUs are intended to complement the performance orientation of our other equity vehicles — which are linked to the appreciation of our share price — and further align the interests of our stockholders and executives. This linkage is achieved by tying vesting opportunities to the attainment of goals that are leading indicators of our financial health and ability to create substantial value for our stockholders. Based on engagement with our stockholders, we replaced our prior Adjusted Free Cash Flow Performance Share Program with the ONSG PSP beginning in 2023. The ONSG PSP has a three-year performance period and is designed to reinforce the concept of pay for performance by providing incentives for the achievement of key long-term business performance objectives critical to the Company’s success. The Compensation Committee also increased the target performance for 100% payout from 50th to 55th percentile in our 2023 rTSR PSP and the threshold and maximum payouts to align with the common practice of our proxy peers. The Compensation Committee views rTSR and ONSG as appropriate measures of long-term success, as they promote strong capital discipline, prioritize sustainable value creation, align our executive compensation program with the interests of our stockholders, and reinforce pay for performance.
Long-Term Incentives
| rTSR RSUs(1) rTSR performance-based RSUs align our executive compensation program with the interests of our stockholders by measuring our total value creation against the S&P 500 Health Care Index, which includes the majority of our peer companies, and encourages our executives to think like owners and make long-term oriented decisions. Performance is measured across three years, and shares vest between 0% and 200% of target based upon actual achievement. The rTSR performance-based RSUs typically vest upon satisfaction of both performance and service criteria at the end of the three-year performance period. For 2023 rTSR RSUs, the performance schedule was as follows: | | | | •Participants earn 30% of the rTSR RSUs if our performance is at the 25th percentile of the index (our payout threshold value). •All shares are forfeited for performance below the 25th percentile, and a maximum of 200% of shares are earned for achievement at or above the 75th percentile. •Payouts are linearly interpolated between points on the payout grid. | Performance | Payout (% of Target) | | | >=75th percentile | 200% | | | 55th percentile | 100% | | | 25th percentile | 30% | | | <25th percentile | 0% | | Organic Net Sales Growth RSUs(1)(2) Organic Net Sales Growth performance-based RSUs align our executive compensation program with the interests of our stockholders by measuring a key financial objective against our internal financial plan. Performance is measured across three years, and shares vest between 0% and 200% of target based upon actual achievement of organic net sales growth rates as compared to plan organic net sales growth rates. The Organic Net Sales Growth performance-based RSUs typically vest upon satisfaction of both performance and service criteria at the end of the three-year performance period. For 2023 Organic Net Sales Growth RSUs, the performance schedule was as follows: | | | | •Participants earn 50% of the Organic Net Sales Growth RSUs if our performance is at 61.5% of plan. •All shares are forfeited for performance below 61.5% of plan, and a maximum of 200% of shares are earned for achievement at or above 138.5% of plan. •Payouts are linearly interpolated between points on the payout grid. | Performance | Payout (% of Target) | | | >=138.5% of plan | 200% | | | 100% of the plan | 100% | | | 61.5% of plan | 50% | | | <61.5% of plan | 0% |
Long-Term Incentives
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Long-Term Incentives
| Service-Vesting Equity Vehicles (50% of total mix)(1) 50% Service-Based RSUs; 50% Non-Qualified Stock Options | | Service-Based RSUs Service-based RSUs reinforce pay for performance by linking the ultimate value of the award to performance of our stock. The vesting period acts as a retention tool and promotes executives having a long-term share owner perspective. •For awards granted in 2023, RSUs vest in four equal annual installments subject to continued service •Service-based RSUs granted under programs prior to 2019 vested in five equal annual installments •Promote executive ownership and linkage to our share price | | Non-Qualified Stock Options Non-qualified stock options represent the right to purchase our common stock at an exercise price equal to the closing price of our common stock on the date of grant. As such, executives only receive value to the extent that our share price increases through the exercise period. •Vest in four equal annual installments subject to continued service •Provide value only to the extent that our share price increases •Are exercisable from the vesting date through the tenth anniversary of the grant date |
Long-Term Incentives
(1)We do not pay dividends on stock options, unvested Company performance-based RSUs or unvested Company service-based RSUs. (2)Organic Net Sales are reported net sales excluding the impact of foreign currency fluctuation and acquisitions and divestitures for which there are less than a full period of comparable sales. For a reconciliation of this non-GAAP financial measure to the most directly comparable GAAP financial measure and insight into how this non-GAAP financial measure is considered by management, please see Annex A to this Proxy Statement. For further discussion of the performance share programs for our Company performance-based RSUs and the equity awards granted pursuant to our long-term incentive plans and a description of how we calculate Organic Net Sales Growth, please see the Executive Compensation sections titled “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table —2023 Relative Total Shareholder Return Performance Share Program,” “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — 2023 Organic Net Sales Growth Performance Share Program” and “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table — Amended and Restated 2011 Long-Term Incentive Plan” and Annex A.
2023 Long-Term Incentive Awards for Our NEOs
2023 Long-Term Incentive Awards for Our NEOs In February 2023, our Compensation Committee approved the grant of long-term equity incentive awards to our NEOs in the amounts in the following table, which were based on the target dollar values of the long-term equity incentive awards for our NEOs considered by the Compensation Committee, as set forth in the table below. In approving the following grants, the Compensation Committee considered external market data and internal factors, including internal equity, performance, and potential. In evaluating internal equity between the CEO and non-NEOs, the Compensation Committee focused in particular on competitive market data and the Company’s organizational structure.
2023 Long-Term Incentive Awards for Our NEOs
| Name | Target Organic Net Sales Growth Performance- Based RSUs(1)(2) | | Target rTSR Performance- Based RSUs(1)(2) | Stock Options(1) | | Service-Based RSUs(1) | | Total Long-Term Incentive Award Target Value(3) | | Michael F. Mahoney | | 66,095 | 66,095 | | 171,984 | | 66,095 | $12,500,000 | | Daniel J. Brennan | | 17,449 | 17,449 | | 45,404 | | 17,449 | $3,300,000 | | Arthur C. Butcher | | 12,690 | 12,690 | | 33,021 | | 12,690 | $2,400,000 | | Joseph M. Fitzgerald | | 17,449 | 17,449 | | 45,404 | | 17,449 | $3,300,000 | | Jeffrey B. Mirviss | | 11,104 | 11,104 | | 28,893 | | 11,104 | $2,100,000 |
2023 Long-Term Incentive Awards for Our NEOs
(1)Our NEOs’ 2023 long-term equity incentive awards were granted as on February 14, 2023. The stock options have an exercise price of $47.28 per share, the closing price of our common stock on the date of grant. (2)The number of shares of our common stock issuable to our NEOs based on our performance under our ONSG PSP and rTSR PSP for the periods ended December 31, 2023 is discussed below under the section titled “Company Performance-Based RSUs — Results for Performance Periods Ended December 31, 2023.” (3)Total Long-Term Incentive Award Target Value is rounded to the nearest thousand. The number of Organic Net Sales Growth and rTSR performance-based RSUs and service-based RSUs were calculated by dividing the target dollar value of those awards by the closing price of our common stock on the date of grant, and the numbers of stock options were determined by dividing the target dollar value of that award by the stock option value determined in accordance with FASB ASC Topic 718 Stock Compensation, as described in the footnotes to the Executive Compensation section titled “Summary Compensation Table.”
Company Performance-Based RSUs — Results for Performance Period ended December 31, 2023
Company Performance-Based RSUs — Results for Performance Period ended December 31, 2023 In February 2024, our Compensation Committee determined the number of restricted stock units earned pursuant to our performance-based RSUs under the 2021 rTSR PSP presented in the table below. In commitment to our pay-for-performance philosophy, 200% of shares were awarded under our 2021 rTSR PSP based on performance for the three-year period ended December 31, 2023.
Company Performance-Based RSUs — Results for Performance Period ended December 31, 2023
| Grant Year | Performance Metric | Achievement | RSUs Earned based on Achievement of Performance | | 2021 | rTSR Percentile Performance Rank for the three-year period ended December 31, 2023 | 84th percentile rank relative to other companies in the S&P 500 Health Care Index 200% of target rTSR performance-based RSUs earned | Michael F. Mahoney 146,666 RSUs Daniel J. Brennan 36,666 RSUs Arthur C. Butcher 22,666 RSUs Joseph M. Fitzgerald 33,332 RSUs Jeffrey B. Mirviss 26,666 RSUs |
Our Post-Employment and Change in Control Arrangements
Our Post-Employment and Change in Control Arrangements None of our NEOs has an employment agreement with the Company. However, we provide post-employment and change in control payments and benefits to our executives under certain circumstances. We believe that offering our executives these payments and benefits facilitates the operation of our business, allows them to better focus their time, attention and capabilities on our business, and assists the Company in recruiting and retaining key executives. The primary elements of and objectives for our NEOs’ 2023 post-employment and change in control agreements are summarized below.
Severance Plans
Severance Plans We maintain severance plans for eligible employees, including our NEOs, under which participants are entitled to receive certain severance payments, subsidized COBRA health benefits and dental benefits for specified periods of time following certain qualifying terminations of employment. For further discussion of our severance plans, please see the Executive Compensation section titled “Potential Payments Upon Termination or Change in Control — Severance Plans.”
Change in Control Agreements
Change in Control Agreements We have entered into change in control agreements with our executives, including our NEOs, and other key employees (Change in Control Agreements). The possibility of a change in control and the uncertainty it may raise for our executives as to their continued employment after or in connection with a change in control may result in their departure or distraction. Our objective in providing Change in Control Agreements is to retain and encourage the continued attention and dedication of our executives during a potentially critical time, even if they are concerned their position will be eliminated after or in connection with the change in control. Our Change in Control Agreements require both a change in control and termination without cause or resignation for good reason within two years after the change in control event, commonly referred to as a “double-trigger,” for cash payments to be made under the agreement and vesting to be accelerated under the agreements for equity awards where the surviving or acquiring entity substitutes or assumes outstanding equity awards. For further discussion of our Change in Control Agreements (including the modifications noted above), and other plans and arrangements under which a change in control and/or termination of employment triggers payments or benefits, and potential payments to our NEOs under the foregoing, please see the narrative and tables in the Executive Compensation section titled “Potential Payments Upon Termination or Change in Control — Change in Control Agreements,” on page 93 of this Proxy Statement.
Our Equity Award Grant Policy and Practices
Our Equity Award Grant Policy and Practices Under our Equity Award Grant Policy, grants of equity awards to our executives are approved and effective as follows: •Annual equity awards (if any) for our employees, including our executives, are generally approved by our Compensation Committee at a regularly scheduled meeting. Such awards are effective on the date of approval or, for administrative reasons, shortly thereafter; •New hire, promotion, retention and other special or ad hoc awards for our executive officers are generally approved by our Compensation Committee. New hire or promotion awards for executive officers are effective on the first trading day of the month following both the date of hire or promotion and the date of approval. Retention and other special or ad hoc awards for our executive officers are effective on the first trading day of the month following approval; and •Stock options are granted with an exercise price equal to the closing price of our common stock on the date of grant.
Accounting Considerations
Accounting Considerations The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, Stock Compensation, which requires the Company to recognize compensation expense for share-based payments (including stock options and other forms of equity compensation). FASB ASC Topic 718 is taken into account by the Compensation Committee in determining to use a portfolio approach to equity grants, awarding both stock options and restricted stock awards.
Summary Compensation Table
Summary Compensation Table The table below summarizes the total compensation for each of our NEOs for the years ended December 31, 2023, 2022 and 2021. For a narrative description of material factors helpful to understand the information disclosed in the table below for 2023, please see the Compensation Discussion & Analysis and the narrative to this table.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Stock Awards ($)(2) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($)(7) | | Michael F. Mahoney | 2023 | 1,400,000 | 10,472,753 | 3,124,984 | 3,244,150 | 291,667 | 190,181 | 18,723,735 | | Chairman of the Board, President and Chief Executive Officer | 2022 | 1,395,178 | 9,924,100 | 2,874,985 | 2,278,500 | 376,667 | 92,530 | 16,941,961 | | | 2021 | 1,344,329 | 9,126,292 | 2,749,999 | 2,346,000 | 360,000 | 137,419 | 16,064,039 | | Daniel J. Brennan | 2023 | 801,528 | 2,764,794 | 825,000 | 1,323,938 | 90,210 | 23,677 | 5,829,147 | | Executive Vice President and Chief Financial Officer | 2022 | 765,959 | 2,588,909 | 749,991 | 900,240 | 225,001 | 22,106 | 5,252,206 | | | 2021 | 692,183 | 2,281,542 | 687,497 | 684,250 | 59,859 | 24,496 | 4,429,827 | | Arthur C. Butcher(8) | 2023 | 672,077 | 2,010,731 | 599,998 | 756,872 | 171,680 | 62,299 | 4,273,657 | | Executive Vice President and Group President, MedSurg and Asia Pacific | 2022 | 634,329 | 1,903,298 | 799,984 | 471,120 | 69,302 | 2,078,934(6e) | 5,956,967 | | Joseph M. Fitzgerald | 2023 | 793,560 | 2,764,794 | 825,000 | 1,016,657 | 165,136 | 27,372 | 5,592,519 | | Executive Vice President and Group President, Cardiology | 2022 | 740,178 | 2,416,234 | 699,996 | 764,649 | 120,000 | 23,529 | 4,764,586 | | | 2021 | 699,130 | 2,074,084 | 624,999 | 843,180 | 44,951 | 23,191 | 4,309,535 | | Jeffrey B. Mirviss | 2023 | 652,646 | 1,759,429 | 524,992 | 734,422 | 60,008 | 51,498 | 3,782,995 | | Executive Vice President and President, Peripheral Interventions | 2022 | 631,986 | 1,812,175 | 524,989 | 482,251 | 75,000 | 35,843 | 3,562,244 | | | 2021 | 598,249 | 1,659,292 | 499,992 | 573,546 | 89,981 | 35,085 | 3,456,145 |
Summary Compensation Table
(1)The amounts in this column for 2023 reflect an amount calculated by prorating the 2022 base salary until mid-February. These figures differ from those in the Compensation Discussion & Analysis for the applicable year, which lists amounts approved by the Compensation Committee for 2023. (2)The amounts included in the “Stock Awards” column represent the aggregate grant date fair value of all service-based and performance-based RSUs granted in 2021, 2022, and 2023 under our 2011 LTIP, as effective on the respective dates of grant. These values have been determined in accordance with FASB ASC Topic 718. The attainment of the performance metric for performance-based RSUs awarded to our NEOs in 2023 is based on either (i) the TSR of our common stock relative to the TSR of the common stock of the other companies in the S&P 500 Health Care Index over a three-year performance and service period or (ii) our organic net sales growth over a three-year performance and service period, comparing actual organic net sales growth performance against the financial plan for the period beginning on January 1, 2023 and ending on December 31, 2025. For additional information with respect to these performance-based RSUs, including the vesting schedule thereof, please see the sections titled “2023 Relative Total Shareholder Return Performance Share Program” and “2023 Organic Net Sales Growth Performance Share Program” in the narrative to this table.
Summary Compensation Table
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Summary Compensation Table
The grant date fair value of the 2023 rTSR performance-based RSUs was determined using a Monte Carlo simulation methodology, utilizing the following key assumptions:
Summary Compensation Table
| Stock price on date of grant | $47.28 | | Risk-free rate | 4.31% | | Measurement period (in years) | 2.88 |
Summary Compensation Table
The rTSR performance metric for the 2023 rTSR performance-based RSUs is a market condition as defined under FASB ASC Topic 718. Because these awards do not have performance conditions as defined under FASB ASC Topic 718, such awards have no maximum grant date fair values that differ from the fair values presented in this Summary Compensation Table. The grant date fair value of the 2023 Organic Net Sales Growth performance-based RSUs was determined based on management’s evaluation of the Company’s financial plan for organic net sales growth, assuming target achievement of the ONSG performance criteria and utilizing the closing price of our common stock on the date of grant. The fair value of the 2023 target Organic Net Sales Growth performance-based RSUs at the grant date assuming achievement of the highest level of performance (as required to be disclosed by the SEC), which assumes organic net sales growth for the period January 1, 2023 through December 31, 2023 (instead of through the end of the 2023 ONSG PSP performance period of December 31, 2025) at or above 138.5% of the financial plan, are as follows: $6,249,943 for Mr. Mahoney, $1,649,977 each for Messrs. Brennan and Fitzgerald, $1,199,966 for Mr. Butcher and $1,049,994 for Mr. Mirviss. We value service-based RSUs based on the closing price of shares of our common stock on the date of grant. For more information regarding the stock awards we granted in 2023, please see the Grants of Plan-Based Awards table. For a more detailed description of the assumptions used in determining grant date fair values of RSUs granted in 2023, please see Note K— Stock Incentive and Purchase Plans to our 2023 consolidated financial statements included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023. (3)The amounts included in the “Option Awards” column represent the aggregate grant date fair value of all stock options granted during each of 2021, 2022, and 2023 under our 2011 LTIP, on the date of grant. These values have been determined in accordance with FASB ASC Topic 718. For a more detailed description of the assumptions used in determining grant date fair values of stock options granted in 2023, please see Note K — Stock Incentive and Purchase Plans to our 2023 consolidated financial statements included in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023. For more information regarding the stock option awards we granted in 2023, please see the Grants of Plan-Based Awards table. (4)Amounts in the “Non-Equity Incentive Plan Compensation” column represent cash awards made under our Annual Bonus Plan to our NEOs paid in February of the following year. Such amounts may be deferred under the Deferred Bonus Plan. For further information regarding the 2023 ABP Awards, please see the Compensation Discussion & Analysis section titled “Short-Term Incentives,” the narrative to this table, and “Nonqualified Deferred Compensation.” (5)The amounts shown in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column reflect the change in the actuarial present value of the accumulated benefit under our Executive Retirement Plan for each retirement plan measurement date used for financial statement reporting purposes with respect to the Company’s audited financial statements as compared to the prior retirement plan measurement date. Please see the narrative and related footnotes to the table in the section titled “Defined Benefit Retirement Plan” for more information regarding the accrued benefits for each NEO under this plan. No amount is included with respect to nonqualified deferred compensation earnings because there were no above-market or preferential earnings on nonqualified deferred compensation. (6)The amounts shown for 2023 in the “All Other Compensation” column are composed of the following components:
Summary Compensation Table
| Name | Match (401(k) Plan) ($)(a) | Aircraft ($)(b) | Term Life Insurance ($)(c) | Financial Planning ($)(d) | Overseas & Relocation Expenses ($)(e) | Overseas & Relocation Expense Tax Gross-Up ($)(f) | Other ($)(g) | Total All Other Compensation ($) | | Michael F. Mahoney | 19,800 | 150,000 | 4,902 | 13,255 | — | — | 2,224 | 190,181 | | Daniel J. Brennan | 19,800 | — | 3,877 | — | — | — | — | 23,677 | | Arthur C. Butcher | 19,800 | — | 1,717 | 10,600 | 23,691 | — | 6,491 | 62,299 | | Joseph M. Fitzgerald | 19,800 | — | 5,881 | — | — | — | 1,691 | 27,372 | | Jeffrey B. Mirviss | 19,800 | — | 3,111 | 13,255 | — | — | 15,332 | 51,498 |
Summary Compensation Table
(a)The amounts shown in this column represent matching contributions made by the Company for each NEO under our 401(k) Retirement Savings Plan. All individual and matching contributions to the 401(k) Retirement Savings Plan are fully vested upon contribution. (b)Mr. Mahoney is permitted reasonable personal use of our corporate aircraft up to $150,000 per year in aggregate incremental cost to us, but he is not entitled to reimbursement by us for any taxes resulting from imputed income attributable to his personal use of the corporate aircraft. Spouse and/or other guests may accompany Mr. Mahoney on some flights, and any incremental costs associated with such guests are in included in Mr. Mahoney’s aggregate personal use amount. In light of the fact that Mr. Mahoney’s travel plans are subject to change on short notice, the Company agreed that he may use our corporate aircraft for his service on the board of directors of Baxter International, Inc., which service ended in September 2023, so long as he fully reimburses us for the incremental costs associated with such travel or such costs are counted against his annual personal use amount. The amount reflected in the “Aircraft” column represents the aggregate incremental costs to us for personal use by Mr. Mahoney of our corporate aircraft, as well as any incremental costs associated with persons accompanying such officer on business travel. We calculate the incremental cost to us by dividing the total annual variable operating costs for the corporate aircraft by the number of in-flight hours during the year. The resulting dollar per hour amount is then multiplied by the number of hours flown for personal use by the executive officer during the year, including the “dead head” costs of flying the aircraft to and from locations for personal use. Our corporate aircrafts are used predominantly for business travel. We do not include the fixed operating costs, such as pilot salary, general taxes and insurance, in the incremental cost calculation. The incremental cost does not include amounts attributable to the NEO for increased income taxes we incurred in 2023 as a result of disallowed deductions related to personal use under Internal Revenue Service rules. For 2023, the reflected amounts exclude $908,035 of disallowed corporate income tax deductions attributable to the personal use of the corporate aircraft during the year by Mr. Mahoney. Mr. Mahoney was taxed on the imputed income attributable to his respective personal use of the corporate aircraft and did not receive tax assistance from the Company with respect to this amount. (c)Amounts in the “Term Life Insurance” column consist of imputed income for Company-paid term life insurance attributable to our NEOs. (d)Amounts in the “Financial Planning” column reflect fees paid to a service provider for financial planning services which are available for our executive officers, including our NEOs. The program provides financial counseling and planning, investment and retirement management, insurance planning, and income tax planning and preparation services through a single service provider for US-based executive officers. Executive officers located outside of the United States are eligible for reimbursement. In approving the program in 2019, the Compensation Committee considered the overall cost of the benefit, prevalence of the benefit in the market, and benefit to the Company of reducing potential distraction to executive officers of complex personal financial situations. (e)Mr. Butcher received benefits in 2023 relating to his overseas assignment in 2022 and a prior overseas assignment in Japan. The benefits were valued on the basis of the aggregate incremental cost to the Company and represent the amount accrued for payment or paid to the service provider or Mr. Butcher, as applicable. The amount consists of $23,691 in local tax payments, bank fees, and tax-related services incurred during fiscal year 2023. Separately, in connection with Mr. Butcher’s repatriation to the United States in 2022, the Company made Singapore tax payments on Mr. Butcher’s behalf equal to (i) $325,005, which amount was reported as income in Mr. Butcher’s 2022 taxes, and (ii) a $1,344,080 exit tax on unvested equity awards, which amount was reported as income in Mr. Butcher’s 2023 taxes. Mr. Butcher also received a tax gross-up of $7,821 from the Company in 2022 and a tax gross-up of $106,627 from the Company in 2023, in each case, related to benefits he received in 2022. These 2022 Singapore tax payments and tax-gross up were omitted from the Summary Compensation Table and corresponding Pay Versus Performance Table in the Company’s Proxy Statement for fiscal year 2022 (in part inadvertently and in part as a result of certain amounts becoming available after the 2022 proxy was filed) and are corrected and included in both tables in this Proxy Statement. (f)Mr. Butcher did not receive a tax gross-up payment in 2023 related to benefits received from January through October 2023, the overseas tax year in Singapore. Mr. Butcher made a tax equalization payment of $148,238 to the Company in 2023 for overseas benefits he received in 2022. (g)Amounts in the “Other” column consist of the costs of miscellaneous gifts/prizes and annual physical examinations, where applicable. (7)The sum of the components reported may not equal the total amount reported due to rounding. (8)Mr. Butcher was not a NEO during 2021. In accordance with SEC rules, we are reporting data only for the fiscal years in which he was a NEO.
Summary Compensation Table
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Grants of Plan-Based Awards
Grants of Plan-Based Awards The table below presents information regarding awards granted under the Company’s 2023 Annual Bonus Plan and 2011 LTIP, including those pursuant to the Company’s 2023 Performance Share Programs, during the year ended December 31, 2023. For a description of material factors helpful for an understanding of the information in the table below, please see the Compensation Discussion & Analysis and the narrative to this table.
Grants of Plan-Based Awards
| | | | Estimated Future Payouts under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | All Other Option Awards: Number of Securities Underlying Options (#)(4) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(5) | | Name | Grant Date(3) | Date Approved | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Michael F. Mahoney | | | — | 2,170,000 | 4,882,500 | | | | | | | | | 2/14/2023(6) | | 2/8/2023 | | | | 19,828 | 66,095 | 132,190 | | | | 4,222,810 | | 2/14/2023(7) | | 2/8/2023 | | | | 33,047 | 66,095 | 132,190 | | | | 3,124,972 | | 2/14/2023(8) | | 2/8/2023 | | | | | | | 66,095 | | | 3,124,972 | | 2/14/2023(8) | | 2/8/2023 | | | | | | | | 171,984 | 47.28 | 3,124,984 | | Daniel J. Brennan | | | — | 885,577 | 1,992,548 | | | | | | | | | 2/14/2023(6) | | 2/8/2023 | | | | 5,234 | 17,449 | 34,898 | | | | 1,114,817 | | 2/14/2023(7) | | 2/8/2023 | | | | 8,724 | 17,449 | 34,898 | | | | 824,989 | | 2/14/2023(8) | | 2/8/2023 | | | | | | | 17,449 | | | 824,989 | | 2/14/2023(8) | | 2/8/2023 | | | | | | | | 45,404 | 47.28 | 825,000 | | Arthur C. Butcher | | | — | 506,269 | 1,139,105 | | | | | | | | | 2/14/2023(6) | | 2/8/2023 | | | | 3,807 | 12,690 | 25,380 | | | | 810,764 | | 2/14/2023(7) | | 2/8/2023 | | | | 6,345 | 12,690 | 25,380 | | | | 599,983 | | 2/14/2023(8) | | 2/8/2023 | | | | | | | 12,690 | | | 599,983 | | 2/14/2023(8) | | 2/8/2023 | | | | | | | | 33,021 | 47.28 | 599,998 | | Joseph M. Fitzgerald | | | — | 680,038 | 1,530,086 | | | | | | | | | 2/14/2023(6) | | 2/8/2023 | | | | 5,234 | 17,449 | 34,898 | | | | 1,114,817 | | 2/14/2023(7) | | 2/8/2023 | | | | 8,724 | 17,449 | 34,898 | | | | 824,989 | | 2/14/2023(8) | | 2/8/2023 | | | | | | | 17,449 | | | 824,989 | | 2/14/2023(8) | | 2/8/2023 | | | | | | | | 45,404 | 47.28 | 825,000 | | Jeffrey B. Mirviss | | | — | 491,252 | 1,105,318 | | | | | | | | | 2/14/2023(6) | | 2/8/2023 | | | | 3,331 | 11,104 | 22,208 | | | | 709,435 | | 2/14/2023(7) | | 2/8/2023 | | | | 5,552 | 11,104 | 22,208 | | | | 524,997 | | 2/14/2023(8) | | 2/8/2023 | | | | | | | 11,104 | | | 524,997 | | 2/14/2023(8) | | 2/8/2023 | | | | | | | | 28,893 | 47.28 | 524,992 |
Grants of Plan-Based Awards
(1)The amounts in these columns reflect target and maximum payouts under the 2023 Annual Bonus Plan. There is no threshold-level payout under the 2023 Annual Bonus Plan. The maximum possible payout under the 2023 Annual Bonus Plan is 225% of the target payout, representing the product of (i) a maximum of 150% of the target payout based on Company performance metrics and (ii) a maximum of 150% of the target payout based on individual performance objectives. The actual amount earned by each NEO under the 2023 Annual Bonus Plan is reported under the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table. For additional information about our 2023 Annual Bonus Plan and a discussion of how these amounts are determined, please see the Compensation Discussion & Analysis section titled “Short-Term Incentives” and the section titled “2023 Annual Bonus Plan” in the narrative to this table. (2)The amounts in these columns reflect threshold, target and maximum share issuance under our 2023 rTSR PSP and 2023 ONSG PSP. The target performance-based RSUs awarded under these programs were granted to our NEOs in February 2023 as part of our annual review process and were awarded under our 2011 LTIP, as effective on the date of grant. For additional details regarding the awards to our NEOs pursuant to our 2023 rTSR PSP and 2023 ONSG PSP, please see footnotes 6 and 7 to this Grants of Plan-Based Awards table, respectively. (3)The Compensation Committee approved the awards in this table on February 8, 2023, with a grant date of February 14, 2023. (4)The amounts in these columns reflect the number of service-based RSUs and stock options granted to our NEOs under our 2011 LTIP as effective on the date of grant during 2023. (5)The amounts in this column have been determined in accordance with FASB ASC Topic 718. See footnotes 2 and 3 to the Summary Compensation Table for a description of the assumptions used in determining the grant date fair value of these awards. (6)These awards were granted pursuant to our 2023 rTSR PSP. The threshold award level represents the minimum share issuance for each award that a participant may receive based on performance, which is 30% of the target rTSR performance-based RSUs awarded under the program. The maximum share issuance for each award is 200% of the target rTSR performance-based RSUs awarded under the 2023 rTSR PSP. For additional information about our 2023 rTSR PSP and a discussion of how these amounts are determined, please see the section titled “2023 Relative Total Shareholder Return Performance Share Program” in the narrative to this table. (7)These awards were granted pursuant to our 2023 ONSG PSP. The threshold award level represents the minimum share issuance for each award that a participant may receive based on performance, which is 50% of the target Organic Net Sales Growth performance-based RSUs awarded under the program. The maximum share issuance for each award is 200% of the target Organic Net Sales Growth performance-based RSUs awarded under the 2023 ONSG PSP. For additional information about our 2023 ONSG PSP and a discussion of how these amounts are determined, please see the section titled “2023 Organic Net Sales Growth Performance Share Program” in the narrative to this table. (8)These awards were granted as part of our annual review process and awarded under our 2011 LTIP, as effective on the respective date of grant.
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table The following provides information about the terms of our 2023 Annual Bonus Plan, 2023 Performance Share Programs and our 2011 LTIP, pursuant to which our NEOs were awarded short- and long-term incentive compensation, as applicable and detailed in the tables above. For additional information regarding the awards granted pursuant to these plans and programs to our NEOs in 2023, please see the Compensation Discussion & Analysis in this Proxy Statement.
Outstanding Equity Awards at Fiscal Year End
Outstanding Equity Awards at Fiscal Year End The following table provides information with respect to outstanding unexercised non-qualified stock options and unvested restricted stock units for each NEO as of December 31, 2023.
Outstanding Equity Awards at Fiscal Year End
| Name | Option Awards | | | | | Stock Awards | | | | | | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock that Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | | Michael F. Mahoney | 2/23/2015 | 167,026 | — | 16.31 | 2/23/2025 | | | | | | | 2/22/2016 | 337,268 | — | 17.26 | 2/22/2026 | | | | | | | 2/28/2017 | 296,442 | — | 24.55 | 2/28/2027 | | | | | | | 2/15/2018 | 278,086 | — | 27.09 | 2/15/2028 | | | | | | | 2/21/2019 | 217,917 | — | 40.12 | 2/21/2029 | | | | | | | 2/18/2020 | 182,521 | 60,841 | 42.16 | 2/18/2030 | | | | | | | 2/17/2021 | 117,924 | 117,925 | 37.50 | 2/17/2031 | | | | | | | 2/16/2022 | 46,507 | 139,522 | 44.19 | 2/16/2032 | | | | | | | 2/14/2023 | — | 171,984 | 47.28 | 2/14/2033 | | | | | | | 2/18/2020 | | | | | 16,307 | 942,708 | | | | | 2/17/2021 | | | | | 36,667 | 2,119,719 | | | | | 2/16/2022 | | | | | 48,795 | 2,820,839 | | | | | 2/14/2023 | | | | | 66,095 | 3,820,952 | | | | | 2/17/2021 | | | | | 95,919(4) | 5,545,077 | | | | | 2/17/2021 | | | | | 146,666(5) | 8,478,761 | | | | | 2/16/2022 | | | | | 57,121(6) | 3,302,165 | | | | | 2/14/2023 | | | | | | | 132,190(7) | 7,641,904 | | | 2/16/2022 | | | | | | | 130,118(8) | 7,522,122 | | | 2/14/2023 | | | | | | | 132,190(9) | 7,641,904 | | Daniel J. Brennan | 2/24/2014 | 13,662 | — | 13.08 | 2/24/2024 | | | | | | | 2/23/2015 | 30,173 | — | 16.31 | 2/23/2025 | | | | | | | 2/22/2016 | 33,728 | — | 17.26 | 2/22/2026 | | | | | | | 2/28/2017 | 72,463 | — | 24.55 | 2/28/2027 | | | | | | | 2/15/2018 | 62,569 | — | 27.09 | 2/15/2028 | | | | | | | 2/21/2019 | 47,417 | — | 40.12 | 2/21/2029 | | | | | | | 2/18/2020 | 41,481 | 13,828 | 42.16 | 2/18/2030 | | | | | | | 2/17/2021 | 29,480 | 29,482 | 37.50 | 2/17/2031 | | | | | | | 2/16/2022 | 12,132 | 36,397 | 44.19 | 2/16/2032 | | | | | | | 2/14/2023 | — | 45,404 | 47.28 | 2/14/2033 | | | | | | | 2/18/2020 | | | | | 3,706 | 214,244 | | | | | 2/17/2021 | | | | | 9,167 | 529,944 | | | | | 2/16/2022 | | | | | 12,729 | 735,863 | | | | | 2/14/2023 | | | | | 17,449 | 1,008,727 | | | | | 2/17/2021 | | | | | 23,979(4) | 1,386,226 | | | | | 2/17/2021 | | | | | 36,666(5) | 2,119,661 | | | | | 2/16/2022 | | | | | 14,901(6) | 861,427 | | | | | 2/14/2023 | | | | | | | 34,898(7) | 2,017,453 | | | 2/16/2022 | | | | | | | 33,944(8) | 1,962,303 | | | 2/14/2023 | | | | | | | 34,898(9) | 2,017,453 |
Outstanding Equity Awards at Fiscal Year End
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Outstanding Equity Awards at Fiscal Year End
| Name | Option Awards | | | | | Stock Awards | | | | | | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock that Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | | Arthur C. Butcher | 2/22/2016 | 8,072 | — | 17.26 | 2/22/2026 | | | | | | | 6/1/2016 | 25,412 | — | 22.71 | 6/1/2026 | | | | | | | 2/28/2017 | 24,703 | — | 24.55 | 2/28/2027 | | | | | | | 2/15/2018 | 27,808 | — | 27.09 | 2/15/2028 | | | | | | | 2/21/2019 | 22,195 | — | 40.12 | 2/21/2029 | | | | | | | 2/18/2020 | 26,548 | 8,850 | 42.16 | 2/18/2030 | | | | | | | 2/17/2021 | 18,224 | 18,225 | 37.50 | 2/17/2031 | | | | | | | 2/16/2022 | 7,279 | 21,838 | 44.19 | 2/16/2032 | | | | | | | 5/2/2022 | 5,566 | 16,701(10) | 41.63 | 5/2/2032 | | | | | | | 2/14/2023 | — | 33,021 | 47.28 | 2/14/2033 | | | | | | | 2/18/2020 | | | | | 2,372 | 137,125 | | | | | 2/17/2021 | | | | | 5,667 | 327,609 | | | | | 2/16/2022 | | | | | 7,638 | 441,553 | | | | | 2/14/2023 | | | | | 12,690 | 733,609 | | | | | 5/2/2022 | | | | | 6,306(10) | 364,550 | | | | | 2/17/2021 | | | | | 14,823(4) | 856,918 | | | | | 2/17/2021 | | | | | 22,666(5) | 1,310,321 | | | | | 2/16/2022 | | | | | 8,940(6) | 516,821 | | | | | 2/14/2023 | | | | | | | 25,380(7) | 1,467,218 | | | 2/16/2022 | | | | | | | 20,366(8) | 1,177,358 | | | 2/14/2023 | | | | | | | 25,380(9) | 1,467,218 | | Joseph M. Fitzgerald | 2/22/2016 | 59,021 | — | 17.26 | 2/22/2026 | | | | | | | 3/3/2017 | 57,618 | — | 24.98 | 3/3/2027 | | | | | | | 12/1/2017 | 306,372 | — | 26.15 | 12/1/2027 | | | | | | | 2/15/2018 | 69,521 | — | 27.09 | 2/15/2028 | | | | | | | 2/21/2019 | 50,443 | — | 40.12 | 2/21/2029 | | | | | | | 2/18/2020 | 41,481 | 13,828 | 42.16 | 2/18/2030 | | | | | | | 7/1/2020 | 116,959(11) | — | 35.28 | 7/1/2030 | | | | | | | 2/17/2021 | 26,800 | 26,802 | 37.50 | 2/17/2031 | | | | | | | 2/16/2022 | 11,323 | 33,971 | 44.19 | 2/16/2032 | | | | | | | 2/14/2023 | — | 45,404 | 47.28 | 2/14/2033 | | | | | | | 2/18/2020 | | | | | 3,706 | 214,244 | | | | | 2/17/2021 | | | | | 8,334 | 481,789 | | | | | 2/16/2022 | | | | | 11,880 | 686,783 | | | | | 2/14/2023 | | | | | 17,449 | 1,008,727 | | | | | 2/17/2021 | | | | | 21,799(4) | 1,260,200 | | | | | 2/17/2021 | | | | | 33,332(5) | 1,926,923 | | | | | 2/16/2022 | | | | | 13,907(6) | 803,964 | | | | | 2/14/2023 | | | | | | | 34,898(7) | 2,017,453 | | | 2/16/2022 | | | | | | | 31,680(8) | 1,831,421 | | | 2/14/2023 | | | | | | | 34,898(9) | 2,017,453 |
Outstanding Equity Awards at Fiscal Year End
| Name | Option Awards | | | | | Stock Awards | | | | | | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock that Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | | Jeffrey B. Mirviss | 2/23/2015 | 30,172 | — | 16.31 | 2/23/2025 | | | | | | | 2/22/2016 | 33,726 | — | 17.26 | 2/22/2026 | | | | | | | 2/28/2017 | 32,938 | — | 24.55 | 2/28/2027 | | | | | | | 2/15/2018 | 30,589 | — | 27.09 | 2/15/2028 | | | | | | | 12/3/2018 | 29,114 | — | 38.51 | 12/03/2028 | | | | | | | 2/21/2019 | 36,319 | — | 40.12 | 2/21/2029 | | | | | | | 2/18/2020 | 31,526 | 10,509 | 42.16 | 2/18/2030 | | | | | | | 2/17/2021 | 21,440 | 21,441 | 37.50 | 2/17/2031 | | | | | | | 2/16/2022 | 8,492 | 25,478 | 44.19 | 2/16/2032 | | | | | | | 2/14/2023 | — | 28,893 | 47.28 | 2/14/2033 | | | | | | | 2/18/2020 | | | | | 2,817 | 162,851 | | | | | 2/17/2021 | | | | | 6,667 | 385,419 | | | | | 2/16/2022 | | | | | 8,910 | 515,087 | | | | | 2/14/2023 | | | | | 11,104 | 641,922 | | | | | 2/17/2021 | | | | | 17,439(4) | 1,008,149 | | | | | 2/17/2021 | | | | | 26,666(5) | 1,541,561 | | | | | 2/16/2022 | | | | | 10,430(6) | 602,958 | | | | | 2/14/2023 | | | | | | | 22,208(7) | 1,283,844 | | | 2/16/2022 | | | | | | | 23,760(8) | 1,373,566 | | | 2/14/2023 | | | | | | | 22,208(9) | 1,283,844 |
Outstanding Equity Awards at Fiscal Year End
(1)All stock options are non-qualified stock options and vest in four equal annual installments beginning on the first anniversary of the date of grant, subject to continued service on each applicable vesting date. (2)Unless otherwise noted, all service-based RSUs vest in four equal annual installments beginning on the first anniversary of the date of grant, subject to continued service on each applicable vesting date. (3)Unless otherwise noted, the amounts reflected in this column are based on the closing price of our common stock on the last trading day of 2023, which was $57.81. (4)In February 2021, each of our NEOs was awarded FCF performance-based RSUs under our 2021 FCF PSP. Our Adjusted FCF performance over the one-year performance period that ended December 31, 2021 was 115.4% relative to target performance for the same period. Accordingly, in February 2022, the Compensation Committee determined that pursuant to the terms of the 2021 FCF PSP, 130.8% of the target number of FCF performance-based RSUs had satisfied the performance criteria under the program. These awards were settled in January 2024. (5)In February 2021, each of our NEOs was awarded TSR performance-based RSUs under our 2021 rTSR PSP. Our rTSR performance was 84th percentile relative to that of the other companies in the S&P 500 Health Care Index over the performance cycle comprising the three-year period that ended December 31, 2023. Accordingly, in February 2024, the Compensation Committee determined that pursuant to the terms of the 2021 rTSR PSP, 200% of the target number of rTSR performance-based RSUs had been earned based on the performance criteria under the program. These awards were settled in February 2024. (6)In February 2022, each of our NEOs was awarded FCF performance-based RSUs under our 2022 FCF PSP. Our Adjusted FCF performance over the one-year performance period that ended December 31, 2022 was 93.9% relative to target performance for the same period. Accordingly, in February 2023, the Compensation Committee determined that pursuant to the terms of the 2022 FCF PSP, 87.8% of the target number of FCF performance-based RSUs had satisfied the performance criteria under the program. Amounts for these awards represent the number of shares of our common stock that will be delivered or otherwise made available to our NEOs no later than January 15, 2025 in settlement of the units awarded to them in 2022 so long as the service criteria is also satisfied. As of December 31, 2023, such units were unearned and remained subject to forfeiture under the terms of the 2022 FCF PSP. (7)In February 2023, each of our NEOs was awarded Organic Net Sales Growth performance-based RSUs under our 2023 ONSG PSP. In accordance with the SEC rules, the number of performance-based RSUs shown represents the number of units that may be earned as of December 31, 2023 based on the maximum performance. The SEC rules require that the maximum number of units be disclosed because
Outstanding Equity Awards at Fiscal Year End
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Outstanding Equity Awards at Fiscal Year End
the number of units that would have been earned based on actual results under the performance conditions for the one-year period from January 1, 2023 through December 31, 2023 (instead of through the end of the performance period on December 31, 2025) was between the target and maximum level of performance under the program. (8)In February 2022, each of our NEOs was awarded rTSR performance-based RSUs under our 2022 rTSR PSP. In accordance with the SEC rules, the number of performance-based RSUs shown represents the number of units that may be earned as of December 31, 2023 based on the maximum performance. The SEC rules require that the maximum number of units be disclosed because the number of units that would have been earned based on actual results under the performance conditions for the two-year period from January 1, 2022 through December 31, 2023 (instead of through the end of the performance period on December 31, 2024) was between the target and maximum level under the program. (9)In February 2023, each of our NEOs was awarded rTSR performance-based RSUs under our 2023 rTSR PSP. In accordance with SEC rules, the number of performance-based RSUs shown represents the number of units that may be earned as of December 31, 2023 based on the maximum performance. The SEC rules require that the maximum number of units be disclosed because the number of units that would have been earned based on actual results under the performance conditions for the one-year period from January 1, 2023 through December 31, 2023 (instead of through the end of the performance period on December 31, 2025) was between the target and maximum level of performance under the program. (10)On May 2, 2022, Mr. Butcher was granted stock awards in connection with his promotion to Executive Vice President, Group President, MedSurg and Asia Pacific. The RSU and non-qualified stock option awards for Mr. Butcher each vest in four equal annual installments, beginning on the first anniversary of the date of each grant. (11)Mr. Fitzgerald was granted an equity incentive award in the form of a non-qualified stock option, which vested in one single installment on January 1, 2023, in connection with his offer of employment as the Executive Vice President and President, Interventional Cardiology.
Options Exercised and Stock Vested
Options Exercised and Stock Vested The following table sets forth information regarding stock options that were exercised and RSUs that vested for our NEOs during the year ended December 31, 2023:
Options Exercised and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Michael F. Mahoney | 340,066 | 12,979,359 | 143,977 | 6,692,737 | | Daniel J. Brennan | 53,182 | 1,712,363 | 33,480 | 1,556,338 | | Arthur C. Butcher | 18,893 | 626,042 | 21,816 | 1,027,110 | | Joseph M. Fitzgerald | 115,110 | 4,703,150 | 33,476 | 1,556,443 | | Jeffrey B. Mirviss | — | — | 24,585 | 1,148,197 |
Options Exercised and Stock Vested
(1)The amounts shown in this column represent the number of shares acquired on exercise multiplied by the difference between the option exercise price and the average sale price of the shares sold on the date of sale. (2)The amounts shown in this column represent the number of shares vested or earned multiplied by the closing price of our common stock on the vesting date.
Nonqualified Deferred Compensation
Nonqualified Deferred Compensation The Company’s Deferred Bonus Plan (Deferred Bonus Plan) provides certain of our management, including our NEOs, an opportunity to defer a portion of their annual award under our Annual Bonus Plan. The Deferred Bonus Plan provides participants the opportunity to defer up to 75% of their annual award under our Annual Bonus Plan until the earlier of (i) termination of employment or (ii) an elected distribution date, such election to be made by June 30th of each year. Investment choices under the Deferred Bonus Plan are generally the same as those under our 401(k) Retirement Savings Plan, except that, among other things, participants may not elect to invest in the BSC Stock Fund. Distributions under the Deferred Bonus Plan are in either lump sum payments or annual installments over a period of two to five years, as specified by the participant. Under our Deferred Bonus Plan, there were no deferral elections by any of our NEOs in 2021. In 2022 and 2023, Mr. Butcher elected to defer 30% and 60%, respectively, of his 2022 and 2023 Annual Bonus Plan Awards payable in 2023 and 2024. Messrs. Fitzgerald and Mahoney elected to defer 75% of their 2022 and 2023 Annual Bonus Plan Awards payable in 2023 and 2024.
Nonqualified Deferred Compensation
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Nonqualified Deferred Compensation
In September 2004, we committed to fund a special one-time contribution to our 401(k) Retirement Savings Plan for the benefit of our employees. In June 2005, we adopted an Excess Benefit Plan, a non-qualified deferred compensation plan designed to provide specific supplemental benefits to those employees who would have exceeded the 2004 Internal Revenue Code contribution limits if the special contribution had been made to their 401(k) Retirement Savings Plan accounts. Accordingly, the historic Excess Benefit Plan was established to accept the “overflow” contributions resulting from the special one-time contribution on behalf of participating employees, including certain of our NEOs. Investment choices under the historic Excess Benefit Plan are generally the same as those under our 401(k) Retirement Savings Plan, except that, among other things, executive officers may not elect to invest in the BSC Stock Fund. The investment elections are made by each participant and may be changed daily. Generally, a lump sum cash payment of their respective account balances under the Excess Benefit Plan is made to participants determined to be “specified employees,” including certain of our NEOs, commencing no earlier than six months and one day following their “separation from service.” The table below shows the aggregate earnings and balances for each of our NEOs under our historic Excess Benefit Plan and Deferred Bonus Plan as of December 31, 2023.
Nonqualified Deferred Compensation
| Name | Plan Name | Executive Contributions in Last Fiscal Year ($) | Registrant Contributions in Last Fiscal Year ($) | Aggregate Earnings in Last Fiscal Year ($)(1) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($)(1) | | Michael F. Mahoney(2) | Excess Benefit Plan | — | — | — | — | — | | | Deferred Bonus Plan | — | 1,708,875 | 429,075 | — | 2,960,827 | | Daniel J. Brennan | Excess Benefit Plan | — | — | 16,436 | — | 89,074 | | | Deferred Bonus Plan | — | — | — | — | — | | Arthur C. Butcher | Excess Benefit Plan | — | — | 11,642 | — | 73,764 | | | Deferred Bonus Plan | — | 141,336 | 310,476 | — | 1,831,529 | | Joseph M. Fitzgerald | Excess Benefit Plan | — | — | 18,419 | — | 105,833 | | | Deferred Bonus Plan | 82,485 | 573,487 | 847,587 | — | 5,542,602 | | Jeffrey B. Mirviss | Excess Benefit Plan | — | — | 3,286 | — | 22,068 | | | Deferred Bonus Plan | — | — | 549,215 | — | 3,250,689 |
Nonqualified Deferred Compensation
(1)No portion of the amounts in this column is included in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column for 2021, 2022 and 2023 in the Executive Compensation section titled “Summary Compensation Table,” as the earnings were neither above-market nor preferential. (2)Mr. Mahoney was not employed by the Company when the one-time 401(k) contribution was made to our historic Excess Benefit Plan. The investment choices under the historic Excess Benefit Plan and the Deferred Bonus Plan and their annual rates of return for the year ended December 31, 2023 are contained in the following table.
Nonqualified Deferred Compensation
| Name of Investment Option | 2023 Rate of Return (%) | | American Funds EuroPacific Growth Fund Class R-6 | 16.05 | | Metropolitan West Total Return Bond Fund Class I | 6.00 | | PRIMECAP Odyssey Growth Fund | 23.87 | | T. Rowe Price Institutional Small-Cap Stock Fund | 17.55 | | T. Rowe Price Value Fund I Class | 12.27 | | Vanguard Extended Market Index Fund Institutional Plus Shares | 25.42 | | Vanguard Federal Money Market Fund Investor Shares | 5.09 | | Vanguard Institutional 500 Index Trust Shares | 26.28 | | Vanguard Institutional Index Fund Institutional Plus Shares | 26.26 | | Vanguard Total Bond Market Index Fund Institutional Shares | 5.72 | | Vanguard Total International Stock Index Fund Institutional Shares | 15.54 | | Vanguard Wellington Fund Admiral Shares | 14.43 |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control
CEO Pay Ratio
CEO Pay Ratio We strive to pay our employees competitively compared to similar positions in the applicable labor market. We follow that approach worldwide, whether for an executive position or an hourly job at a local facility. We take into account location, job level and pay grade, time with us and time in current role, experience and skill set, and adjust compensation annually to match the applicable market. By doing so, we believe we maintain a high-quality, stable workforce. We determined the compensation we paid to the median employee in accordance with this philosophy. Under rules adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are required to calculate and disclose the total compensation paid to our median employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to Michael F. Mahoney, our CEO. The following paragraphs describe our methodology and the resulting CEO Pay Ratio. For 2023, our last completed fiscal year: •the annual total compensation of the employee identified at median of our Company (other than our CEO), was $54,147; and •the annual total compensation of our CEO was $18,723,735.
CEO Pay Ratio
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CEO Pay Ratio
Based on this information, for 2023 the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees (other than our CEO) was estimated to be approximately 346 to 1. The pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described below. The SEC rules for identifying the “median employee” and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported by us, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios. To identify the median of the annual total compensation of all our employees and the annual total compensation of the median employee, the methodology and the material assumptions, adjustments and estimates that we used were as follows: •We determined that, as of December 25, 2023, our employee population, excluding our CEO, consisted of approximately 48,000 individuals. We selected October 30, 2023, which is within the last three months of 2023, as the date we would use to identify the “median employee” to allow sufficient time to identify the median employee given the global scope of our operations. •With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for 2023 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $54,147. We calculated the median employee’s actual salary for the 12-month period ended December 31, 2023. In addition, the median employee’s total compensation for 2023 includes a bonus that was paid in early 2024, Company matching contributions to the employee’s 401(k) plan, and premiums and the imputed income for Company-paid term life insurance; and •With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column for 2023 in the Summary Compensation Table included in this Proxy Statement. This section should be read in conjunction with the Compensation Discussion & Analysis in this Proxy Statement, which includes additional discussion of the objectives of our executive compensation program and how they are aligned with the Company's financial and operational performance. As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (as defined by SEC rules) (CAP) and certain financial performance measures of the Company. For further information concerning our pay-for-performance philosophy and how we align executive compensation with the Company’s performance, refer to the Compensation Discussion & Analysis section of this Proxy Statement.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| Year(1) | Summary Compensation Table Total for CEO/PEO ($) | Compensation Actually Paid to CEO/PEO ($)(2) | Average Summary Compensation Table for Non-PEO Named Executive Officers ($) | Average Compensation Actually Paid to Non-PEO Named Executive Officers ($)(3) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($ millions) | Adjusted Net Sales ($ millions)(5) | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($)(4) | | | | 2023 | 18,723,735 | 38,596,387 | 4,869,580 | 9,125,774 | 127.84 | 143.18 | 1,592 | 14,257 | | 2022** | 16,941,961 | 21,632,710 | 4,884,001 | 5,984,751 | 102.32 | 140.29 | 698 | 13,206 | | 2021 | 16,064,039 | 20,440,299 | 3,905,481 | 4,972,710 | 93.94 | 143.09 | 1,041 | 11,646 | | 2020 | 13,773,795 | (5,088,265) | 3,705,762 | (443,641) | 79.50 | 113.45 | (82) | 9,955 |
Pay Versus Performance Table
(1)The CEO/PEO and NEO/Non-PEO Named Executive Officers included in the above compensation columns reflect the following:
Pay Versus Performance Table
| Year | CEO/PEO | Non-PEO NEOs | | 2023 | Michael F. Mahoney | Daniel J. Brennan, Joseph M. Fitzgerald, Jeffrey B. Mirviss and Arthur C. Butcher | | 2022 | Michael F. Mahoney | Daniel J. Brennan, Joseph M. Fitzgerald, Jeffrey B. Mirviss and Arthur C. Butcher | | 2021 | Michael F. Mahoney | Daniel J. Brennan, Joseph M. Fitzgerald, Jeffrey B. Mirviss and David A. Pierce | | 2020 | Michael F. Mahoney | Daniel J. Brennan, Joseph M. Fitzgerald, Jeffrey B. Mirviss and Edward F. Mackey |
Pay Versus Performance Table
(2)"Compensation Actually Paid" to the CEO/PEO reflect the following adjustments from Total Compensation reported in the Summary Compensation Table:
Pay Versus Performance Table
| Adjustments to Determine Compensation “Actually Paid” for CEO/PEO | 2023 ($) | 2022 ($) | 2021 ($) | 2020 ($) | | Total Reported in Summary Compensation Table | 18,723,735 | 16,941,961 | 16,064,039 | 13,773,795 | | Less Change in Actuarial Present Value reported under the “Change in Pension Value and Non-qualified Deferred Compensation Earnings” Column of the SCT | 291,667 | 376,667 | 360,000 | 399,686 | | Plus “Service Cost” for Pension Plans | — | — | — | 375,972 | | Less Amounts Reported under the “Stock Awards” Column of the SCT | 10,472,753 | 9,924,100 | 9,126,292 | 8,395,367 | | Less Amounts Reported under the “Option Awards” Column of the SCT | 3,124,984 | 2,874,985 | 2,749,999 | 2,749,991 | | Plus the Fair Value of Awards Granted during covered year that Remain Unvested as of Year-end | 22,483,365 | 13,748,034 | 14,273,008 | 7,458,564 | | Plus the Change in Fair Value from prior Year-end to current Year-end of Awards Granted prior to covered year that were Outstanding and Unvested as of Year-end | 11,223,191 | 4,283,677 | 2,596,137 | (13,208,804) | | Plus the Change in Fair Value from prior Year-end to Vesting Date of Awards Granted prior to covered year that Vested during covered year | 55,500 | 315,254 | 903,733 | (1,942,748) | | Less the Fair Value as of prior Year-End of Awards Granted prior to covered year that were Forfeited during covered year | — | 480,464 | 1,160,327 | — | | Total Adjustments | 19,872,652 | 4,690,749 | 4,376,260 | (18,862,060) | | Compensation Actually Paid | 38,596,387 | 21,632,710 | 20,440,299 | (5,088,265) |
Pay Versus Performance Table
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Pay Versus Performance Table
“Compensation Actually Paid” does not correlate to the total amount of cash or equity compensation realized during each fiscal year and is different from “realizable” or “realized” compensation as reported in the Compensation Discussion & Analysis. Instead, it is a nuanced calculation that includes the increase or decrease in value of certain elements of compensation over each fiscal year, including compensation granted in a prior year, in accordance with Item 402(v) of Regulation S-K. The amount of compensation ultimately received may, in fact, be different from the amounts disclosed in these columns of the PVP Table. (3)The average "Compensation Actually Paid" to the Non-PEO NEOs reflect the following adjustments from Total Compensation reported in the Summary Compensation Table, which adjustments include 2022 benefits received by non-PEO Art Butcher that were inadvertently excluded from the “2022 Average” in the Company’s Proxy Statement for fiscal 2022, which amounts are disclosed in footnote 6(e) to the Summary Compensation Table to this Proxy Statement:
Pay Versus Performance Table
| Adjustments to Determine Average Compensation “Actually Paid” for Non-PEO NEOs | 2023 Average ($) | 2022 Average ($)** | 2021 Average ($) | 2020 Average ($) | | Total Reported in Summary Compensation Table | 4,869,580 | 4,884,001 | 3,905,481 | 3,705,762 | | Less Change in Actuarial Present Value reported under the “Change in Pension Value and Non-qualified Deferred Compensation Earnings” Column of the SCT | 121,759 | 122,326 | 59,942 | 121,136 | | Plus “Service Cost” for Pension Plans | 15,308 | 16,435 | — | 67,192 | | Less Amounts Reported under the “Stock Awards” Column of the SCT | 2,324,937 | 2,180,154 | 1,918,553 | 1,852,695 | | Less Amounts Reported under the “Option Awards” Column of the SCT | 693,748 | 693,740 | 578,120 | 774,993 | | Plus the Fair Value of Awards Granted during covered year that Remain Unvested as of Year-end | 4,991,284 | 3,103,987 | 3,000,519 | 1,937,832 | | Plus the Change in Fair Value from prior Year-end to current Year-end of Awards Granted prior to covered year that were Outstanding and Unvested as of Year-end | 2,367,857 | 1,004,348 | 636,900 | (2,652,595) | | Plus the Change in Fair Value from prior Year-end to Vesting Date of Awards Granted prior to covered year that Vested during covered year | 22,189 | 65,014 | 208,010 | (753,008) | | Less the Fair Value as of prior Year-End of Awards Granted prior to covered year that were Forfeited during covered year | — | 92,814 | 221,585 | — | | Total Adjustments | 4,256,194 | 1,100,750 | 1,067,229 | (4,149,403) | | Compensation Actually Paid | 9,125,774 | 5,984,751 | 4,972,710 | (443,641) |
Pay Versus Performance Table
“Compensation Actually Paid” does not correlate to the total amount of cash or equity compensation realized during each fiscal year and is different from “realizable” or “realized” compensation as reported in the Compensation Discussion & Analysis. Instead, it is a nuanced calculation that includes the increase or decrease in value of certain elements of compensation over each fiscal year, including compensation granted in a prior year, in accordance with Item 402(v) of Regulation S-K. The amount of compensation ultimately received may, in fact, be different from the amounts disclosed in these columns of the PVP Table. **2022 “Total Reported in Summary Compensation Table” for Non-PEO NEOs and resulting 2022 “Compensation Actually Paid” have been adjusted due to tax payments and a tax gross-up paid by the Company on Mr. Butcher’s behalf in connection with his overseas assignment and repatriation to the United States in 2022, discussed in footnote 6(e) to the Summary Compensation Table in this Proxy Statement. (4)We selected the Standard & Poor (S&P) 500 Health Care Index (referred to herein as the “Health Care Index”) as our peer group for purposes of this disclosure, which was comprised of 63-64 companies for the years 2020 through 2023 included in the S&P 500 that are classified as members of the GICS® Health Care sector primarily engaged in Health Care Equipment and Services, Pharmaceuticals, Biotechnology and Life Sciences, including the Company and other mid-cap and large-cap healthcare companies. The Health Care Index is the same performance peer group selected by the Compensation Committee for determining the achievement of targets of TSR performance-based RSUs granted to our NEOs, including our CEO, between 2020 and 2023. See the Compensation Discussion & Analysis section titled “Long Term Incentives” for additional information. (5)Adjusted Net Sales represents the most important financial performance measure (that is not otherwise required to be disclosed in the table) used by the Company to link compensation actually paid to our NEOs, including our CEO, for the most recently completed fiscal year to the Company’s performance. Adjusted Net Sales is a non-GAAP financial measure and is calculated as net sales on a GAAP basis excluding the impact of revenue from acquisitions completed after the establishment of the internal financial plan, as applicable, and foreign currency fluctuations. For a reconciliation of Adjusted Net Sales to the most directly comparable GAAP financial measure and insight into how Adjusted Net Sales is considered by management, please see Annex A to this Proxy Statement.
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table As described in more detail in the Compensation Discussion & Analysis section of this Proxy Statement, the Company’s executive compensation program reflects our commitment to pay-for-performance. We selected Adjusted Net Sales as our Company Selected Measure for purposes of evaluating Pay versus Performance because it is a key performance metric within our Annual Bonus Plan and underlying factor in achieving the performance targets for our long-term incentive compensation programs. While the Company utilizes several performance measures to align executive compensation with Company performance, not all of those Company measures are presented in the Pay versus Performance table above. In accordance with Item 402(v) of Regulation S-K, we are providing the following graphic depictions of the relationships between information presented in the PVP Table.
Relationship Between Compensation Actually Paid and Company/Peer Group Total Shareholder Return
Relationship Between Compensation Actually Paid and Company/Peer Group Total Shareholder Return
Relationship Between Compensation Actually Paid and Company/Peer Group Total Shareholder Return
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Relationship Between Compensation Actually Paid and Net Income
Relationship Between Compensation Actually Paid and Net Income
Relationship Between Compensation Actually Paid and Adjusted Net Sales
Relationship Between Compensation Actually Paid and Adjusted Net Sales
Pay Versus Performance Tabular List of Most Important Financial Performance Measures for All NEOs for Fiscal Year 2023
Pay Versus Performance Tabular List of Most Important Financial Performance Measures for All NEOs for Fiscal Year 2023 As described in greater detail in the Compensation Discussion & Analysis section of this Proxy Statement, the Company’s executive compensation program reflects a pay-for performance philosophy. We utilize metrics for our short- and long-term incentive compensation programs based on an objective of driving profitable growth and increasing shareholder value. Listed below are the financial and non-financial performance measures which in our assessment represent the most important performance measures we used to link compensation actually paid to our NEOs, including our CEO, for 2023, to Company performance.
Pay Versus Performance Tabular List of Most Important Financial Performance Measures for All NEOs for Fiscal Year 2023
| Adjusted EPS* | | Adjusted Net Sales* | | DE&I Targets | | Employee Engagement Targets | | Environmental Targets | | Organic Net Sales Growth* | | Relative Total Shareholder Return |
Pay Versus Performance Tabular List of Most Important Financial Performance Measures for All NEOs for Fiscal Year 2023
* Adjusted EPS, Adjusted Net Sales and Organic Net Sales Growth are not prepared in accordance with GAAP. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and insight into how these non-GAAP financial measures are considered by management, please see Annex A to this Proxy Statement.
Pay Versus Performance Tabular List of Most Important Financial Performance Measures for All NEOs for Fiscal Year 2023
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