DEF 14A of Labcorp Holdings Inc.
Filed Apr 4, 2025 · FY20240001193125-25-072853
Sandra D. van der Vaart
| PAY VERSUS PERFORMANCE | 86 | | PROPOSAL TWO - Advisory Vote To Approve Executive Compensation | 90 | | MANAGEMENT PROPOSALS | 92 | | PROPOSAL THREE - Vote to Approve the 2025 Omnibus Incentive Plan | 92 | | Annex A (2025 Omnibus Incentive Plan) | | | PROPOSAL FOUR - Vote to Approve the 2025 Employee Stock Purchase Plan | 103 | | Annex B (2025 Employee Stock Purchase Plan) | | | PROPOSAL FIVE - Ratification Of Independent Registered Public Accounting Firm | 108 | | AUDIT COMMITTEE REPORT | 110 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT | 111 | | OTHER MATTERS | 113 | | Shareholder Proposals and Director Nominations for 2026 Annual Meeting | 113 | | Householding | 114 | | Additional Information | 114 | | USE OF NON-GAAP FINANCIAL MEASURES | 115 |
Snapshot of 2025 Director Nominees
Snapshot of 2025 Director Nominees
Our Director Nominees Exhibit an Effective Mix of Skills, Experiences, Diversity, and Fresh Perspectives
Our Director Nominees Exhibit an Effective Mix of Skills, Experiences, Diversity, and Fresh Perspectives
Our Director Nominees Exhibit an Effective Mix of Skills, Experiences, Diversity, and Fresh Perspectives
| TENURE OF DIRECTORS | | | 9 Years Average Tenure | | | AGE OF DIRECTORS | | | 61.6 Years Average Age | | | DIVERSITY OF DIRECTORS | | | 60% Total Diversity | |
Our Director Nominees Exhibit an Effective Mix of Skills, Experiences, Diversity, and Fresh Perspectives
| All Director Nominees Exhibit: • personal and professional integrity; • diverse skill sets and experience to advise the Company regarding its medical, scientific, operational, strategic, technology, and governance goals; • interest, capacity, and willingness to serve the long-term interests of the Company’s shareholders; • ability and willingness to devote the required amount of time and intellectual effort to the Company’s affairs, including attendance at Board and Committee meetings; • exceptional ability and judgment; and • freedom from personal and professional relationships that would adversely affect the ability to serve the best interests of the Company and its shareholders. |
SKILLS AND EXPERTISE
SKILLS AND EXPERTISE Business Strategy Experience Corporate Finance and M&A Corporate Governance Experience Executive Leadership Experience Healthcare/Clinical Research Background International Experience Risk Management Experience Sales and Marketing Background Talent Management Expertise Technology/Cybersecurity Expertise
Director Nominees (page 35)
Director Nominees (page 35)
Related Party Transactions
| Name | Fees Earned or Paid in Cash ($)(1) | Restricted Stock Unit Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | | KERRII B. ANDERSON | $120,000 | $209,832 | $168 | $330,000 | | JEAN-LUC BÉLINGARD | $44,505 | $52,458 | $196 | $97,159 | | JEFFREY A. DAVIS | $145,000 | $209,832 | $168 | $355,000 | | D. GARY GILLILAND, M.D., Ph.D. | $120,000 | $209,832 | $168 | $330,000 | | KIRSTEN M. KLIPHOUSE | $120,000 | $209,832 | $168 | $330,000 | | GARHENG KONG, M.D., Ph.D. | $185,000 | $209,832 | $168 | $395,000 | | PETER M. NEUPERT | $120,000 | $209,832 | $168 | $330,000 | | RICHELLE P. PARHAM | $140,000 | $209,832 | $168 | $350,000 | | PAUL B. ROTHMAN, M.D. | $131,429 | $209,832 | $168 | $341,429 | | KATHRYN E. WENGEL | $120,000 | $209,832 | $168 | $330,000 | | R. SANDERS WILLIAMS, M.D. | $51,923 | $52,458 | $42 | $104,423 |
Related Party Transactions
| Adam H. Schechter Chairman, President and Chief Executive Officer Age: 60 Director Since: April 2013 |
Related Party Transactions
| Kerrii B. Anderson Independent Director Age: 67 Director Since: May 2006 |
Related Party Transactions
| Jeffrey A. Davis Independent Director Age: 61 Director Since: December 2019 |
Related Party Transactions
| D. Gary Gilliland, M.D., Ph.D. Independent Director Age: 70 Director Since: April 2014 |
Related Party Transactions
| Kirsten M. Kliphouse Independent Director Age: 58 Director Since: October 2022 |
Related Party Transactions
| Garheng Kong, M.D., Ph.D. Independent Director Age: 49 Director Since: December 2013 |
Related Party Transactions
| Professional Highlights Garheng Kong has served as a director of the Company since December 2013 and Lead Independent Director since June 2023. Dr. Kong also serves as the Chair of the Nominating and Corporate Governance Committee for the Company. Dr. Kong is the managing partner of HealthQuest Capital, a healthcare-focused investment firm, a role he has held since he founded HealthQuest Capital in 2012. He was previously a general partner at Sofinnova Capital, a position he held from 2010 to 2013. Before joining Sofinnova, Dr. Kong was a general partner from 2000 to 2010 at Intersouth Partners, a venture capital firm, where he was a founding investor or board member for various life science ventures, several of which were acquired by large pharmaceutical companies. Prior to his investing career, Dr. Kong was employed by GlaxoSmithKline, McKinsey & Company, and TherOx. Dr. Kong received undergraduate degrees in both Chemical Engineering and Biological Sciences from Stanford, and earned a Doctor of Medicine, and Doctor of Philosophy and Master of Business Administration from Duke University. Skills and Qualifications • Knowledge and experience in both the healthcare and finance fields • Executive leadership experience • Life science-related venture capital experience • Corporate governance expertise through service on public company boards Committees: • Lead Independent Director • Compensation and Human Capital Committee • Nominating and Corporate Governance Committee (Chair) Current Public Company Board Experience: • Lunit Inc. (KOSDAQ: 328130) • Xeris Biopharma Holdings, Inc. (formerly Strongbridge Biopharma plc) Previous Public Company Board Experience: • Venus Concept Inc. • Histogenics Corporation • Avedro, Inc. • Melinta Therapeutics, Inc. • Alimera Sciences, Inc. Other Current Relevant Experiences: • Duke University School of Medicine Board of Visitors • Be the Match, Board of Directors • Dell Children’s Foundation, Board of Trustees • Austin Healthcare Council | Skills | | | | Business Strategy | Corporate Finance and M&A | | | Corporate Governance | Executive Leadership | | | Healthcare/ Clinical Research | Risk Management | | | Talent Management | |
Related Party Transactions
| Peter M. Neupert Independent Director Age: 69 Director Since: January 2013 |
Related Party Transactions
| Richelle P. Parham Independent Director Age: 57 Director Since: February 2016 |
Related Party Transactions
| Paul B. Rothman, M.D. Independent Director Age: 66 Director Since: June 2023 |
Related Party Transactions
| Kathryn E. Wengel Independent Director Age: 59 Director Since: March 2021 |
Compensation Program Overview and Alignment with Company Performance and Shareholder Interests
| • | Long-term performance oriented. Equity-based compensation comprises the largest part of total compensation and vests over a multi-year period to align the long-term interests of executive officers and shareholders; |
Compensation Program Overview and Alignment with Company Performance and Shareholder Interests
| • | Sensitive to performance variability. The size and the realizable values of incentive awards provided to executive officers varies significantly with performance achievements; |
Compensation Program Overview and Alignment with Company Performance and Shareholder Interests
| • | Benchmarked to industry peers. Compensation opportunities for executive officers are evaluated against those offered by companies that are in similar industries and are similar in size and scope of operations; and |
OTHER NEO PAY MIX BASED ON TARGET AWARD OPPORTUNITIES(1)
Labcorp seeks to achieve outstanding performance for our shareholders through focusing our executives on adjusted operating income, revenues, adjusted EPS, net orders for our BLS segment, and relative TSR (compared against our peer group). Our compensation program rewards our executives for achieving goals set for these financial metrics, as well as provides them a direct incentive to both preserve and create shareholder value and increase the Company’s stock price. A substantial majority of the executives’ 2024 compensation opportunity was in the form of variable and performance-based awards, including performance-based cash compensation under our LBP, performance shares, non-qualified stock options, and restricted stock units, all of which provide our executives a strong incentive to drive Company performance and increase shareholder value. Incentive compensation is guided by the following principles:
OTHER NEO PAY MIX BASED ON TARGET AWARD OPPORTUNITIES(1)
| • | executives receive payments only if performance goals are met or exceeded; |
OTHER NEO PAY MIX BASED ON TARGET AWARD OPPORTUNITIES(1)
| • | by granting performance shares on overlapping cycles, the Company can adjust multi-year performance goals each year, as appropriate; |
OTHER NEO PAY MIX BASED ON TARGET AWARD OPPORTUNITIES(1)
| • | a significant portion of long-term incentive target value (approximately 60%) is earned only if three-year financial performance goals are met; and |
OTHER NEO PAY MIX BASED ON TARGET AWARD OPPORTUNITIES(1)
| • | both LBP payouts and the earned number of performance shares are capped at 200% of target. |
OTHER NEO PAY MIX BASED ON TARGET AWARD OPPORTUNITIES(1)
| (1) Amounts shown reflect adjustments made to performance goals upon completion of the Spin-Off. |
OTHER NEO PAY MIX BASED ON TARGET AWARD OPPORTUNITIES(1)
The graph above shows the cumulative total return assuming an investment of $100 on December 31, 2019, in the Company’s common stock. For the purpose of this graph, the distribution of 100% of the outstanding common stock of Fortrea to our shareholders, pursuant to which Fortrea became an independent company, is treated as a non-taxable cash dividend of $33.11 per share, an amount equal to the opening price of the common stock of Fortrea when it began trading on June 20, 2023, that was deemed reinvested in the Company’s common stock at the closing price on June 20, 2023. The graph also shows our annual incentive plan payout to our CEO at the time. The relationship reflects the Company’s commitment to aligning our annual incentive payouts with performance.
Compensation Practices
| | Provide an annual target mix of performance oriented long-term incentives that includes performance shares (generally 60% of target grant value), with the remainder split between non-qualified stock options (20% of target grant value) and restricted stock units (20% of target grant value) with multi-year vesting | | | Conduct annual shareholder outreach to engage on a variety of matters, including executive compensation | | | Accrue dividend equivalent rights on restricted stock units and performance shares, which are only paid if and when the underlying shares vest | | | Maintain an insider trading policy that, among other things, requires pre-clearance of all Company common stock transactions and limits transactions to a specified trading window for key employees |
Compensation Practices
| What We Don’t Do | | | | Allow pledging or hedging of Company common stock | | | Provide tax gross-ups, including on severance or change-in-control payments | | | Use employment agreements except in connection with the hiring of our Chief Executive Officer |
Compensation Practices
| | Offer excessive change-in-control benefits | | | Pay dividends on unvested performance awards and restricted stock units that are not earned |
The Role of the Independent Consultant
The Role of the Independent Consultant FW Cook, the CHC Committee’s independent compensation consultant, plays an integral role in supporting the CHC Committee in the compensation-setting process, and one or more of its representatives typically attends the CHC Committee meetings to serve as a resource for the CHC Committee. FW Cook provides insight and advice related to the Company’s compensation plans and policies, and provides recommendations based on compensation trends and regulatory and compliance developments. To encourage independent review and discussion of executive compensation matters, the CHC Committee and its Chair regularly meet with FW Cook in executive sessions without management present. The CHC Committee has sole authority to retain or replace the independent compensation consultant. To maintain consultant independence, the CHC Committee’s pre-approval is required for all services performed by the independent compensation consultant. The CHC Committee assesses the independence of its consultant annually, considering, among other factors, the independence factors established by the NYSE. Specifically, FW Cook provides no services to the Company or its management other than the services provided to the CHC Committee in its capacity as the CHC Committee’s independent adviser on executive compensation matters. FW Cook affirmed that no member of the consulting team has any business or personal relationship with the CEO or any member of the Company’s CHC Committee. FW Cook also affirmed that neither FW Cook nor any member of the consulting team serving the Company’s CHC Committee owns any stock of the Company. In addition, the CHC Committee evaluated the work of FW Cook and determined that its work raised no conflict of interest, including under applicable NYSE independence factors. Considering all of these factors, the CHC Committee concluded FW Cook was independent.
Use of Peer Group
Use of Peer Group In evaluating executive compensation, the CHC Committee considers both absolute performance of the Company, as well as external comparisons relative to an established peer group. The peer group is used as a reference to evaluate market pay levels for certain of our NEOs, understand peer market pay practices, and provide a comparison for the relative TSR component of our performance share awards. Annually, FW Cook prepares a review of competitive total compensation for certain of the Company’s executives versus total compensation for similar positions at our peer group companies. FW Cook also utilizes national general industry and life sciences survey data for executives for whom there is insufficient comparable information in the peer company proxy statements. The combination of the peer group data and survey data are used by the CHC Committee as market data for purposes of assessing the competitiveness of compensation. With input from FW Cook, and recognizing that the Company has limited directly comparable competitors, the comparative peer group is selected by the CHC Committee from public companies in the life science and healthcare industries that are close to Labcorp in terms of scope of services, have similar business characteristics, have connecting peer relationships (i.e., companies viewing Labcorp as a peer), and are of a similar size in terms of revenue and market capitalization. Each year, with the support of FW Cook, the CHC Committee reviews the previous year’s peer group to ensure it remains appropriate for benchmarking purposes and makes adjustments as needed to reflect changes in business strategy and other circumstances (e.g., mergers and acquisitions). In August 2023, the CHC Committee updated the peer group used for setting 2024 compensation, taking into account an annual review by FW Cook. The CHC Committee removed DaVita Inc., Syneos Health, and Thermo Fisher Scientific, and added Edwards Life Sciences and Universal Health Services. DaVita was removed to avoid any potential conflict of interest resulting from Mr. Schechter serving on the compensation committee of DaVita’s board of directors. Syneos Health was removed because it was no longer a business fit following the Spin-Off and because it was in the process of being acquired by a private equity group. Thermo Fisher Scientific was removed due to its significantly larger size compared to Labcorp in terms of revenue and market capitalization. The CHC Committee added Edwards Life Sciences and Universal Health Services to the peer group because they both align well with the Company in terms of revenue and market capitalization and reflect industry alignment. No other changes were made to the peer group at that time. The companies included in the 2024 comparative peer group were: Agilent Technologies, Inc. Baxter International Inc. Becton, Dickinson and Company Incorporated Boston Scientific Corporation Charles River Laboratories Edwards Life Sciences Henry Schein, Inc. IQVIA Holdings, Inc. Molina Healthcare Quest Diagnostics Incorporated Stryker Corporation Universal Health Services Viatris Zimmer Biomet Holdings, Inc. In April 2024, the CHC Committee established the 2025 comparative peer group considering, among other things, FW Cook’s annual review of the peer group and changes to the Company’s size and business profile following the Spin-Off. The CHC Committee removed IQVIA Holdings because it was no longer aligned with the operations of the Company following the Spin-Off. The CHC Committee added Hologic, Inc. and Tenet Healthcare Corporation to the peer group as they both align well with the Company in terms of revenue and market capitalization and reflect industry alignment.
2024 Elements of Compensation
| LABCORP—2024 EXECUTIVE COMPENSATION STRUCTURE AND ACTIONS | | | | | BASE SALARY | In February 2024, the CHC Committee approved base salary increases of 2.9% for Mr. Schechter, 3.0% for Ms. Graham, and 3.1% for each of Dr. Caveney, Mr. Schroeder, and Mr. Eisenberg, effective as of June 2024. | | | | LABCORP BONUS PLAN (LBP) | PERFORMANCE METRICS | | | | | Consolidated Revenues Consolidated Adjusted Operating Income Segment Specific Metrics Subject to modification based on individual performance and Company-wide ESG performance | | Payouts to the CEO and other NEOs under the LBP ranged from 91.4% to 102.7% of target performance. The payout factor for the enterprise pool was 99.5%. | | LONG-TERM INCENTIVE (LTI) | PERCENT OF TARGET LTI | PERFORMANCE METRICS | | | | 60% – Performance Shares | 70% – EPS | Payouts of the 2022-2024 performance share cycle were 114.2% of Target for the NEOs who received awards in 2022. | | | | 30% – Revenue | | | | | Total Shareholder Return (25% Modifier) | | | | 20% – Restricted Stock Units | Service During Vesting Period | | | | 20% – Non-qualified Stock Options | Service During Vesting Period | |
Base Salary
Base Salary While the CHC Committee generally targets salary levels of the NEOs at the median of the peer group, it retains the flexibility to adjust individual compensation to take into account variations in the individual’s job experience and responsibilities, including as reviewed and recommended to the CHC Committee by the CEO. Annual changes in base salaries are determined using several factors, including Company performance, the individual’s performance and experience in the role, increases generally provided to our employees, and how specific executive responsibilities compare to other executives within Labcorp, as well as to the most appropriate market reference data provided by FW Cook. In February 2024, the CHC Committee approved base salary increases for each of the NEOs (excluding Ms. Wang) as set forth in the table below. Ms. Wang’s base salary of $725,000 was established as part of her overall compensation package when she joined the Company in December 2024. In establishing Ms. Wang’s compensation package, the CHC Committee considered, among other things, her track record as a seasoned public company chief financial officer with relevant industry experience and the compensation levels for other chief financial officers within our peer group, provided by FW Cook. For more details regarding Ms. Wang’s compensation package refer to “Other Compensation Arrangements” on page 83. The table below sets forth the base salary changes for the NEOs during 2024, effective June 16, 2024, unless otherwise noted.
Annual Cash Incentive Pay (LBP)
Annual Cash Incentive Pay (LBP) The LBP is an enterprise-wide bonus plan that covers the majority of our executives and other management eligible for bonuses, including the NEOs. The LBP is designed to reward participants for achieving annual goals that further the Company’s strategy and create shareholder value. The LBP was originally introduced in 2021 to better (i) support the Company strategy through its strong focus on enterprise-wide performance; (ii) harmonize practices across the enterprise; and (iii) align with the range of performance opportunity observed with peer group and market practice. In 2022, an enterprise ESG modifier (“the ESG Modifier” as described in more detail below) that applies specifically to Section 16 officers, including the NEOs, was incorporated into the design. For 2024, the LBP design remained in place with minor changes to account for the Spin-Off and changes to the Company’s continuing operations, including revision of the weighting of metrics applicable to the Biopharma Laboratory Services segment from 50% Adjusted Operating Income and 50% Net Orders to 70% Adjusted Operating Income and 30% Net Orders, and specific objectives applicable to the ESG Modifier, as well as to reflect 2024 financial targets. Bonus awards for NEOs under the LBP are based on three performance factors:
Annual Cash Incentive Pay (LBP)
| • | a Business Performance Factor, which is based on Company financial metrics; |
Annual Cash Incentive Pay (LBP)
| • | the ESG Modifier based on overall Company performance; and |
Annual Cash Incentive Pay (LBP)
| • | the executive’s Individual Performance Modifier. |
Annual Cash Incentive Pay (LBP)
Each NEO’s Business Performance Factor is based entirely on enterprise financial metrics, or on a combination of enterprise financial and segment financial and operating metrics, depending on the executive’s responsibility. The table below shows the metrics and weightings that determine the Business Performance Factor for each NEO, except for Ms. Wang, who was not eligible to participate in the LBP in 2024 due to the timing of her start date with the Company.
Annual Cash Incentive Pay (LBP)
| Metrics | Enterprise Group | Diagnostics Segment Group | Biopharma Laboratory Services Segment Group | | Executives | ADAM H. SCHECHTER ANITA Z. GRAHAM GLENN A. EISENBERG | MARK S. SCHROEDER | BRIAN J. CAVENEY | | Consolidated Revenues | 50% | 25% | 35% | | Consolidated Adjusted Operating Income | 50% | 25% | 35% | | Diagnostics Segment Revenues | - | 25% | - | | Diagnostics Segment Adjusted Operating Income | - | 25% | - | | Biopharma Laboratory Services Segment Net Orders | - | - | 9% | | Biopharma Laboratory Services Segment Adjusted Operating Income | - | - | 21% | | Total | 100% | 100% | 100% |
Setting and Evaluating Performance Targets
Setting and Evaluating Performance Targets Company financial goals may be achieved by the NEOs at a threshold, target, or superior level. If actual performance for Company financial goals falls between either the threshold and target levels or the target and superior levels, the payouts are interpolated accordingly based on payout levels shown below. Each goal is measured separately and if the threshold level of performance for a particular goal is not achieved, the payout for that goal is zero. The Business Performance Factor is calculated based on the weighted average for each metric.
Setting and Evaluating Performance Targets
| Performance Level | Payout Level | | Threshold | 50% of Target | | Target | 100% of Target | | Superior | 200% of Target |
Setting and Evaluating Performance Targets
In addition, there is an Individual Performance Modifier that increases or decreases the executive’s bonus based on individual performance, which may address individual, strategic, and operational objectives, as well as soft skills such as leadership and collaboration. The Individual Performance Modifier may range from 0% to 150%, provided that the modifier may not increase the payout to more than 200% of target under the LBP, the overall plan cap on payouts. If one or more of the individual performance metrics are not achieved (resulting in 0%), then the corresponding LBP payout could result in an amount less than the threshold level amount. The threshold, target, and superior goals for the revenues, adjusted operating income, and BLS net orders measures were based on various outcomes considered by the CHC Committee, with the target amounts aligning to the Company’s and segment’s operating budget approved by the Board. Our 2024 goals took into consideration the Company’s and each segment’s internal outlook and expectations, and the outlook for 2024 provided to the public markets in early 2024.
Results for 2024 Company and Segment Financial Goals
| Company Goals | Threshold | Target | Superior | 2024 Result | Achievement(7) | | Consolidated Revenues(1) | $11.6 billion | $12.9 billion | $14.2 billion | $13.1 billion | 101.0% | | Consolidated Adjusted Operating Income(2) | $1.5 billion | $1.9 billion | $2.1 billion | $1.8 billion | 95.0% | | Diagnostics Segment | Threshold | Target | Superior | 2024 Result | Achievement(7) | | Segment Revenues(3) | $8.9 billion | $9.9 billion | $10.8 billion | $10 billion | 102.0% | | Segment Adjusted Operating Income(4) | $1.3 billion | $1.7 billion | $1.8 billion | $1.6 billion | 97.0% | | Biopharma Laboratory Services Segment | Threshold | Target | Superior | 2024 Result | Achievement(7) | | Segment Net Orders(5) | $3.1 billion | $3.4 billion | $4.7 billion | $2.9 billion | 86.0% | | Segment Adjusted Operating Income(6) | $416.1 million | $462.3 million | $647.2 million | $468.9 million | 101.0% |
Results for 2024 Company and Segment Financial Goals
| Executive | Prorated Salary(1) | Bonus Target (%) of Salary | Target Opportunity | Business Performance Factor(2) | Business Performance Factor Payout % | ESG Modifier | Individual Performance Modifier | Bonus Payout $ | | ADAM H. SCHECHTER | $1,416,292 | 150% | $2,124,438 | Enterprise | 99.5% | 100.0% | 100.0% | $2,113,816 | | BRIAN J. CAVENEY | $660,874 | 100% | $660,874 | Enterprise and BLS | 91.4% | 100.0% | 100.0% | $604,039 | | ANITA Z. GRAHAM | $569,243 | 85% | $483,857 | Enterprise | 99.5% | 100.0% | 100.0% | $481,437 | | MARK S. SCHROEDER | $660,874 | 100% | $660,874 | Enterprise and Diagnostics | 102.7% | 100.0% | 100.0% | $678,718 | | GLENN A. EISENBERG | $830,593 | 100% | $830,593 | Enterprise | 99.5% | 100.0% | 100.0% | $826,440 |
Long-Term Incentive Awards
Long-Term Incentive Awards LTI awards for 2024 continued to be comprised of a mix of performance shares, non-qualified stock options, and restricted stock units. Performance shares vest based on performance at the end of a three-year performance measurement period. Non-qualified stock options and restricted stock units generally vest in equal one-third increments on the first, second, and third anniversary of the grant date. Performance shares are intended to comprise 60% or more of the target value on the grant date, with the remainder split between restricted stock units and non-qualified stock options (based on the Black-Scholes option pricing model). In setting 2024 long-term compensation, the CHC Committee determined that a balanced program using performance-based awards, non-qualified stock options, and restricted stock units would achieve all of the following:
Long-Term Incentive Awards
| • | reward stock-price growth; |
Long-Term Incentive Awards
| • | deliver performance-based, at-risk compensation through performance shares; |
Long-Term Incentive Awards
| • | ensure longer-term business focus through the use of multi-year operational performance goals to determine the number of performance shares ultimately earned; |
Long-Term Incentive Awards
| • | provide retention features through multi-year vesting of equity awards; |
Long-Term Incentive Awards
| • | align interests of executive officers, including the NEOs, with interests of all shareholders; and |
Long-Term Incentive Awards
| • | align with practices of the market and peer group. |
Long-Term Incentive Awards
The CHC Committee annually evaluates the size of LTI award values to assess whether when combined with base salary and the target LBP payout, the total target pay opportunity generally aligns with the median of the peer group and/or other applicable market comparisons. In addition to the review of market comparisons, the CHC Committee retains the flexibility to adjust individual award levels, taking into account variations in the individual’s job experience and responsibility, including as reviewed and recommended to the CHC Committee by Mr. Schechter for executives other than himself. In 2024, the CHC Committee applied a target LTI mix of 60% performance shares, 20% non-qualified stock options, and 20% restricted stock units. In determining the target LTI award values for 2024, the CHC Committee considered whether total target pay opportunities for all of our NEOs would be within what the CHC Committee considered to be a competitive range of within 15% of the market median. The values ultimately selected were based on the Company’s desire to attract and retain executive talent; the Company’s stated objective of placing a greater emphasis on performance-based pay; internal equity; and the CHC Committee’s assessment of the executive’s individual contribution; and the Company’s performance. Each year, the CHC Committee assesses the appropriateness of the metrics used to determine the actual number of performance shares to be earned, if any, at the end of the next three-year period. This assessment takes into consideration a number of factors, including alignment with long-term business objectives, feedback from shareholders, ability to establish meaningful long-term goals, and alignment to shareholder value creation, among others. For the 2024-2026 performance cycle, the CHC Committee determined that EPS, revenue, and relative TSR remained appropriate because they (i) are critical to the long-term success of the Company; (ii) are transparent to shareholders and the NEOs; (iii) reinforce alignment between the NEOs and shareholders through the TSR modifier; and (iv) create an appropriate balance between profitability and top-line growth, which is important to shareholder value and discourages unnecessary risk taking. In setting Mr. Schechter’s 2024 compensation in February 2024, the CHC Committee approved an 18% increase to his LTI award value in recognition of his outstanding leadership of the Company and its strong performance under his tenure, as well as to position his pay more competitively relative to peers. As disclosed in the Company’s 2024 Proxy Statement, the CHC Committee also approved for Mr. Schechter a 15% increase to his annual LTI award of $2,000,000 to recognize his efforts contributing to the successful Spin-Off. This one-time increase had the same vehicle mix as other LTI awards, with approximately 60% in the form of performance shares. The incremental amount for Mr. Schechter is not part of his total target compensation for 2025. The table below presents an overview of the 2024-2026 performance share awards, which are based on cumulative three-year EPS, cumulative three-year revenue, and a modifier based on TSR relative to our peer group in effect at the time of the grant. 2024-2026 Performance Share Award Targets
Long-Term Incentive Awards
| Goal | Weighting | Threshold | Target | Superior | | EPS (three-year cumulative EPS) | 70% | $44.25 | $48.25 | $52.25 | | REVENUE (three-year cumulative revenue) | 30% | $38.4 billion | $40.1 billion | $41.8 billion | | RELATIVE TOTAL SHAREHOLDER RETURN MODIFIER(1) | N/A | Bottom 25th Percentile -25% | Between the 26th and 75th Percentile No adjustment | Top 25th Percentile +25% |
Long-Term Incentive Awards
| (1) Refers to the percentile among our peer group based on TSR. |
Long-Term Incentive Awards
Performance shares are earned based on EPS and revenue performance as set forth in the below table. The calculation payout is based on a weighted average of the EPS and revenue performance. If the three-year cumulative relative TSR falls below the 26th percentile of our comparative peer group, the calculated payout of the performance shares will be reduced by 25%. If the three-year cumulative relative TSR is above the 75th percentile, the calculated payout of the performance shares will be increased by 25%, subject to an overall cap at 200%.
Long-Term Incentive Awards
| Performance Level | Proportion of Performance Shares Earned (Prior to application of the relative TSR Modifier) | | Below Threshold | 0% | | Threshold | 50% | | Target | 100% | | Superior | 200% |
Long-Term Incentive Awards
Details related to the grant size for each NEO can be found in the Grants of Plan-Based Awards table on page 72.
2022-2024 Performance Shares Earned
2022-2024 Performance Shares Earned We granted performance shares in 2022 that would be earned only to the extent the stated performance goals over the three-year performance period ending December 31, 2024, were realized. The awards were based on cumulative three-year EPS and cumulative three-year revenue, with a modifier based on TSR relative to the peer group at the time of the grant. The awards provided that achievement at the Threshold level would result in earning 50% of the related portion of the award, achievement at the Target level would result in earning 100% of the related portion of the award, and achievement at the Superior level would result in earning 200% of the related portion of the award. In light of the Spin-Off, the Labcorp performance targets were revised to remove CDCS business forecast incorporated in the original targets and to exclude CDCS business results after the first quarter of 2023 as further described in footnote 1 to the below table. As a result of the performance, and as described below, awards were earned at 114.2% of target and vested on March 27, 2025.
2022-2024 Performance Shares Earned
| Goal | Weighting | Threshold | Target | Superior | 2022-2024 Result | | EPS(1) (three-year cumulative EPS) | 70% | $43.44(1) | $48.93(1) | $54.53(1) | $48.69 | | REVENUE(1) (three-year cumulative revenue) | 30% | $39.5 billion(1) | $40.7 billion(1) | $41.9 billion(1) | $41.3B | | RELATIVE TOTAL SHAREHOLDER RETURN MODIFIER(2) | N/A | Bottom 25th Percentile -25% | Between the 26th and 75th Percentile No adjustment | Top 25th Percentile +25% | 47th Percentile |
2022-2024 Performance Shares Earned
| (1) The 2022-2024 performance share award goal amounts shown were adjusted to remove the CDCS business forecast for the second quarter of 2023 through the fourth quarter of 2024, which had been included in the January 2022 five-year forecast used to set the original targets. The first quarter of 2023 was the last time Fortrea was treated as part of continuing operations, and thus the CDCS business was included in measuring performance against the targets through the first quarter of 2023. Following the first quarter of 2023, the CDCS business was treated as discontinued operations for purposes of the award and excluded from the measurement of performance against the targets. |
2022-2024 Performance Shares Earned
| (2) Refers to the percentile among our peer group based on TSR. The performance share awards provided that if the three-year cumulative relative TSR was below the 26th percentile of our peer group, the calculated payout of the performance share awards earned would be reduced by 25%; if the three-year cumulative relative TSR was above the 75th percentile, the calculated payout of the performance share awards earned would be increased by 25%; and if the three-year cumulative relative TSR was in range from the 26th to the 75th percentile, then no adjustment would be made. |
2022-2024 Performance Shares Earned
The chart below shows the total payout of the performance share awards earned by our NEOs who received grants in each three-year period from 2020 to 2024.
Equity Grant Practices; Clawback Requirement
Equity Grant Practices; Clawback Requirement Generally, the CHC Committee approves equity grants, including grants of non-qualified stock options, each February at its first regularly scheduled meeting of year, with the date of such meeting generally determined in the prior year. This timing is intended to provide for a routine and regular grant practice. Equity grants are awarded under the Labcorp Holdings Inc. Amended and Restated 2016 Omnibus Incentive Plan, and the grant date of an award is the date the CHC Committee approves the award. Non-qualified stock options are also granted from time-to-time by the CHC Committee at other points during the year in connection with new hires, or employees receiving promotions, or in other special circumstances. The CHC Committee does not take the disclosure of material non-public information into account when considering awards or determining the timing and terms of such awards. Similarly, the Company does not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. Options are granted under a shareholder-approved plan and at an exercise price equal to the closing market price of the Company’s common stock on the grant date. Awards that have been made pursuant to the Labcorp Holdings Inc. Amended and Restated 2016 Omnibus Incentive Plan are subject to any recoupment policy adopted by the Company to comply with the requirements of any applicable laws. In October 2023, the CHC Committee approved our amended and restated Incentive Compensation Recoupment Policy, which we originally adopted in December 2018 (the “Recoupment Policy”). The Recoupment Policy generally provides for clawback of cash and equity awards from covered executives upon the occurrence of certain events, including the filing of an accounting restatement, overpayment of an award based on an accounting error, and employee misconduct. In accordance with SEC and NYSE rules, the Recoupment Policy requires reasonably prompt recovery of excess incentive compensation from covered executives (which include our NEOs) if (i) the Audit Committee, the Board, or another committee of the Board, as applicable, concludes or reasonably should have concluded that the Company is required to effect an accounting restatement; or (ii) a court, regulator, or other legally authorized body directs the Company to prepare an accounting restatement. Our updated Recoupment Policy expands the definition of accounting restatements to include accounting restatements caused by material non-compliance with any reporting requirement, as well as accounting restatements required to correct an error in previously issued financial statements that is material to the previously issued financial statements or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. Our updated Recoupment Policy also permits the Board to recover excess incentive compensation from all employees following the aforementioned accounting restatement triggers. In addition to what is required under the SEC and NYSE rules, our Recoupment Policy also empowers the Company to recover any incentive compensation (including any cash or equity-based compensation) from all current and former employees for certain acts of misconduct. Pursuant to our Recoupment Policy, the Company may recover incentive compensation from all current and former employees if they (i) are terminated for cause as defined in their employment agreement with the Company, or as defined under the Severance Plan or Labcorp Holdings Inc. Amended and Restated 2016 Omnibus Incentive Plan; (ii) engage in certain misconduct, including a failure to supervise, resulting in material harm to the Company; (iii) materially violate, breach or participate in activities that conflict with any employment agreement, confidentiality obligation or other restrictive covenant; (iv) commit or aid and abet an act of fraud or dishonesty, or intentional misconduct during the course of their employment; or (v) materially breach a written policy applicable to employees of the Company. Our Recoupment Policy also requires reasonably prompt recovery of excess incentive compensation from covered executives upon an overpayment of an award based on an accounting error. In the event that an employee other than a covered executive receives excess incentive compensation upon an overpayment of an award based on an accounting error, the Board has discretion to seek recoupment of such excess compensation.
Termination and Change-in-Control Payments
Termination and Change-in-Control Payments The Severance Plan provides participants with financial protection in circumstances involving a qualifying termination. The Severance Plan was established to provide a competitive benefit necessary to attract and retain executives, and so that in the context of a change in control the executive would consider corporate actions that would benefit shareholders without regard to personal finances. We believe that the Severance Plan is appropriately structured and consistent with current market practice. For example, the Severance Plan provides for severance payments, a portion of which is based on the executive’s average actual annual incentive payouts over a three-year period prior to the termination of employment, rather than target, and does not have tax gross-up payments associated with change-in-control payments. For additional information on the termination and change-in-control benefits under the Severance Plan, see “Potential Payments Upon Termination or Change-in-Control” on page 77. The Labcorp Holdings Inc. Amended and Restated 2016 Omnibus Incentive Plan provides that if awards are assumed or substituted in connection with a change in control, only a qualifying termination event will result in accelerated vesting (i.e., “double trigger”). The plan does not provide for any tax gross-ups. We believe these provisions are consistent with current compensation trends. Mr. Schechter does not participate in the Severance Plan. For a discussion of Mr. Schechter’s severance arrangements, which are governed by the provisions of his employment agreement, see the section “Mr. Schechter’s Severance Arrangements” on page 82.
COMPENSATION AND HUMAN CAPITAL COMMITTEE REPORT
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2) | Non-Qualified Stock Options ($)(3) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | | ADAM H. SCHECHTER President and Chief Executive Officer | 2024 | $1,416,077 | $- | $3,015,965 | $12,162,271 | $2,113,816 | $- | $619,225 | $19,327,354 | | | 2023 | $1,373,692 | $- | $2,250,072 | $9,071,320 | $2,346,018 | $- | $938,253 | $15,979,355 | | | 2022 | $1,317,500 | $- | $2,142,125 | $9,063,244 | $1,675,221 | $- | $729,207 | $14,927,297 | | JULIA A. WANG Executive Vice President and Chief Financial Officer | 2024 | $55,769 | $- | $638,067 | $2,668,417 | $- | $- | $133 | $3,362,386 | | BRIAN J. CAVENEY Executive Vice President and President, Early Development Research Laboratories and Chief Medical and Scientific Officer | 2024 | $660,769 | $- | $451,666 | $1,825,122 | $604,039 | $- | $26,161 | $3,567,757 | | | 2023 | $617,635 | $- | $432,955 | $1,745,352 | $609,719 | $- | $70,782 | $3,476,443 | | | 2022 | $538,000 | $- | $343,045 | $1,440,880 | $641,792 | $- | $44,750 | $3,008,467 | | ANITA Z. GRAHAM Executive Vice President and Chief Human Resources Officer | 2024 | $569,154 | $500,000 | $218,548 | $890,976 | $481,437 | $- | $25,432 | $2,685,547 | | | 2023 | $420,000 | $500,000 | $196,708 | $1,012,330 | $405,331 | $- | $21,622 | $2,555,991 | | MARK S. SCHROEDER Executive Vice President and President, Diagnostics Laboratories and Chief Operations Officer | 2024 | $660,769 | $- | $502,661 | $2,027,426 | $678,718 | $280 | $116,453 | $3,986,307 | | | 2023 | $617,635 | $- | $461,625 | $1,892,720 | $718,807 | $13,815 | $90,506 | $3,795,108 | | | 2022 | $538,000 | $- | $343,045 | $1,440,880 | $456,051 | $- | $65,079 | $2,843,055 | | GLENN A. EISENBERG Executive Vice President and Former Chief Financial Officer | 2024 | $830,462 | $- | $655,645 | $2,634,274 | $826,440 | $- | $55,087 | $5,001,908 | | | 2023 | $805,462 | $- | $615,878 | $2,473,816 | $917,054 | $- | $144,567 | $4,956,777 | | | 2022 | $780,500 | $- | $586,988 | $6,551,496 | $661,630 | $- | $101,879 | $8,682,493 |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The table below outlines the restricted stock units, performance shares, non-qualified stock options, and annual cash incentive awards pursuant to the LBP that were made to the NEOs during 2024.
Grants of Plan-Based Awards
| | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Option Awards Number of Securities Underlying | Exercise or Base Price of Option | All Other Stock Awards Number of Shares of Stock or | Grant Date Fair Value of Stock | | Name | Award Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Options (#)(3) | Awards ($/SH) | Units (#)(4) | Awards ($)(5) | | ADAM H. SCHECHTER | Restricted Stock Units | 2/6/2024 | | | | | | | | | 13,380 | $2,974,106 | | | Performance Shares | 2/6/2024 | | | | 20,065 | 40,130 | 80,260 | | | | $9,188,165 | | | Stock Options | 2/6/2024 | | | | | | | 41,400 | $222.28 | | $3,015,965 | | | LBP | 3/31/2024 | $1,065,129 | $2,130,259 | $4,260,518 | | | | | | | | | JULIA A. WANG | Restricted Stock Units | 12/2/2024 | | | | | | | | | 2,680 | $644,888 | | | Performance Shares | 12/2/2024 | | | | 4,025 | 8,050 | 16,100 | | | | $2,023,529 | | | Stock Options | 12/2/2024 | | | | | | | 8,100 | $240.63 | | $638,067 | | BRIAN J. CAVENEY | Restricted Stock Units | 2/6/2024 | | | | | | | | | 2,010 | $446,783 | | | Performance Shares | 2/6/2024 | | | | 3,010 | 6,020 | 12,040 | | | | $1,378,339 | | | Stock Options | 2/6/2024 | | | | | | | 6,200 | $222.28 | | $451,666 | | | LBP | 3/31/2024 | $331,343 | $662,685 | $1,325,370 | | | | | | | | | ANITA Z. GRAHAM | Restricted Stock Units | 2/6/2024 | | | | | | | | | 980 | $217,834 | | | Performance Shares | 2/6/2024 | | | | 1,470 | 2,940 | 5,880 | | | | $673,142 | | | Stock Options | 2/6/2024 | | | | | | | 3,000 | $222.28 | | $218,548 | | | LBP | 3/31/2024 | $242,591 | $485,182 | $970,364 | | | | | | | | | MARK S. SCHROEDER | Restricted Stock Units | 2/6/2024 | | | | | | | | | 2,230 | $495,684 | | | Performance Shares | 2/6/2024 | | | | 3,345 | 6,690 | 13,380 | | | | $1,531,742 | | | Stock Options | 2/6/2024 | | | | | | | 6,900 | $222.28 | | $502,661 | | | LBP | 3/31/2024 | $331,343 | $662,685 | $1,325,370 | | | | | | | | | GLENN A. EISENBERG | Restricted Stock Units | 2/6/2024 | | | | | | | | | 2,900 | $644,612 | | | Performance Shares | 2/6/2024 | | | | 4,345 | 8,690 | 17,380 | | | | $1,989,662 | | | Stock Options | 2/6/2024 | | | | | | | 9,000 | $222.28 | | $655,645 | | | LBP | 3/31/2024 | $402,747 | $832,868 | $1,610,986 | | | | | | | |
Grants of Plan-Based Awards
| (1) Amounts represent the range of possible payouts denominated in dollars pursuant to the LBP, as established by the CHC Committee in February 2024. Pursuant to the LBP, base salary amounts used to calculate target bonus amounts are prorated to reflect base salary increases effective June 2024 for Mr. Schechter, Dr. Caveney, Ms. Graham, Mr. Schroeder and Mr. Eisenberg. Actual amounts paid out pursuant to the plan are included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table above. For a discussion of the performance criteria applicable to these awards, see “Compensation Discussion and Analysis – Annual Cash Incentive Pay (LBP)” above. |
Grants of Plan-Based Awards
| (2) Amounts represent the range of estimated potential shares to be earned under performance share awards. The performance share awards vest at the end of three years provided that certain performance metrics are met. For a discussion of the performance criteria applicable to these awards, see “Compensation Discussion and Analysis – Long-Term Incentive Awards” above. |
Grants of Plan-Based Awards
| (3) Amounts represent stock option awards that vest ratably over three years, beginning on the first anniversary of the grant date, based on continued service, including Ms. Wang’s December 2, 2024 grant, which will vest ratably over three years, beginning with the first vesting on February 6, 2025. |
Grants of Plan-Based Awards
| (4) Amounts represent restricted stock unit awards that vest ratably over three years, beginning on the first anniversary of the grant date, based on continued service, including Ms. Wang’s December 2, 2024 grant, which will vest ratably over three years, beginning with the first vesting on February 6, 2025. |
Grants of Plan-Based Awards
| (5) Amounts represent the full grant date fair value of restricted stock unit, non-qualified stock option, and performance share awards as computed in accordance with accounting standards for stock-based compensation, but excluding the effect of estimated forfeitures. The amounts shown in this column will likely vary from the amount actually realized by any NEO based on a number of factors, including the number of shares that ultimately vest, the satisfaction or failure to meet any performance criteria, the timing of any exercise or sale of shares, and the price of the Company’s Common Stock. The value for non-qualified stock options is calculated using the Black-Scholes option pricing model. The value of the performance share awards granted in 2024 as of the grant date if they are achieved at the maximum payout, is as follows: Mr. Schechter – $18,376,330; Ms. Wang—$4,047,057; Dr. Caveney—$2,756,678; Ms. Graham—$1,346,285; Mr. Schroeder—$3,063,485, and Mr. Eisenberg—$3,979,325. |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table shows, as of December 31, 2024, the number of outstanding non-qualified stock options, restricted stock units, and performance shares held by the NEOs.
Outstanding Equity Awards at Fiscal Year-End
| | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | 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 ($)(3) | Equity Incentive Plan Awards: Number Unearned Shares, Units or Other Rights That Have Not Vested (#)(4,5,6) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | | ADAM H. SCHECHTER | 11/1/2019 | 27,661 | - | $149.31 | 10/31/2029 | | | | | | | 11/1/2019 | 72,612 | - | $171.70 | 10/31/2029 | | | | | | | 2/4/2020 | 50,862 | - | $163.63 | 2/3/2030 | | | | | | | 2/2/2021 | 32,346 | - | $209.25 | 2/1/2031 | | | | | | | 2/11/2022 | 20,893 | 10,449 | $247.68 | 2/10/2032 | | | | | | | 2/7/2023 | 10,186 | 20,375 | $221.67 | 2/6/2033 | | | | | | | 2/6/2024 | - | 41,400 | $222.28 | 2/5/2034 | | | | | | | 2/11/2022 | | | | | 2,963 | $679,475 | | | | | 2/7/2023 | | | | | 6,499 | $1,490,351 | | | | | 2/6/2024 | | | | | 13,380 | $3,068,302 | | | | | 2/11/2022 | | | | | | | 30,469 | $6,987,151 | | | 2/7/2023 | | | | | | | 58,470 | $13,408,340 | | | 2/6/2024 | | | | | | | 80,260 | $18,405,223 | | JULIA A. WANG | 12/2/2024 | - | 8,100 | $240.63 | 12/1/2034 | | | | | | | 12/2/2024 | | | | | 2,680 | $614,578 | | | | | 12/2/2024 | | | | | | | 16,100 | $3,692,052 | | BRIAN J. CAVENEY | 2/12/2018 | 3,011 | - | $151.06 | 2/11/2028 | | | | | | | 2/12/2019 | 3,903 | - | $131.43 | 2/11/2029 | | | | | | | 2/4/2020 | 8,142 | - | $163.63 | 2/3/2030 | | | | | | | 2/2/2021 | 5,130 | - | $209.25 | 2/1/2031 | | | | | | | 2/11/2022 | 3,346 | 1,673 | $247.68 | 2/10/2032 | | | | | | | 2/7/2023 | 1,635 | 3,272 | $221.67 | 2/6/2033 | | | | | | | 5/5/2023 | 371 | 744 | $200.70 | 5/4/2033 | | | | | | | 2/6/2024 | - | 6,200 | $222.28 | 2/5/2034 | | | | | | | 2/11/2022 | | | | | 473 | $108,468 | | | | | 2/7/2023 | | | | | 1,034 | $237,117 | | | | | 5/5/2023 | | | | | 223 | $51,138 | | | | | 2/6/2024 | | | | | 2,010 | $460,933 | | | | | 2/11/2022 | | | | | | | 4,840 | $1,109,909 | | | 2/7/2023 | | | | | | | 9,304 | $2,133,593 | | | 5/5/2023 | | | | | | | 1,986 | $455,430 | | | 2/6/2024 | | | | | | | 12,040 | $2,761,013 |
Outstanding Equity Awards at Fiscal Year-End
| | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | 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 ($)(3) | Equity Incentive Plan Awards: Number Unearned Shares, Units or Other Rights That Have Not Vested (#)(4,5,6) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) | | ANITA Z. GRAHAM | 4/5/2023 | 1,115 | 2,231 | $209.80 | 4/4/2033 | | | | | | | 2/6/2024 | - | 3,000 | $222.28 | 2/5/2034 | | | | | | | 4/5/2023 | | | | | 736 | $168,780 | | | | | 2/6/2024 | | | | | 980 | $224,734 | | | | | 4/5/2023 | | | | | | | 6,604 | $1,514,429 | | | 2/6/2024 | | | | | | | 5,880 | $1,348,402 | | MARK S. SCHROEDER | 2/12/2018 | 3,011 | - | $151.06 | 2/11/2028 | | | | | | | 2/12/2019 | 3,903 | - | $131.43 | 2/11/2029 | | | | | | | 2/4/2020 | 8,142 | - | $163.63 | 2/3/2030 | | | | | | | 2/2/2021 | 5,130 | - | $209.25 | 2/1/2031 | | | | | | | 2/11/2022 | 3,346 | 1,673 | $247.68 | 2/10/2032 | | | | | | | 2/7/2023 | 1,635 | 3,272 | $221.67 | 2/6/2033 | | | | | | | 5/5/2023 | 519 | 1,042 | $200.70 | 5/4/2033 | | | | | | | 2/6/2024 | - | 6,900 | $222.28 | 2/5/2034 | | | | | | | 2/11/2022 | | | | | 473 | $108,468 | | | | | 2/7/2023 | | | | | 1,034 | $237,117 | | | | | 5/5/2023 | | | | | 328 | $75,217 | | | | | 2/6/2024 | | | | | 2,230 | $511,384 | | | | | 2/11/2022 | | | | | | | 4,840 | $1,109,909 | | | 2/7/2023 | | | | | | | 9,304 | $2,133,593 | | | 5/5/2023 | | | | | | | 2,968 | $680,622 | | | 2/6/2024 | | | | | | | 13,380 | $3,068,302 | | GLENN A. EISENBERG | 2/11/2022 | 5,725 | 2,863 | $247.68 | 2/10/2032 | | | | | | | 2/7/2023 | - | 5,577 | $221.67 | 2/6/2033 | | | | | | | 2/6/2024 | - | 9,000 | $222.28 | 2/5/2034 | | | | | | | 2/11/2022 | | | | | 807 | $185,061 | | | | | 2/7/2023 | | | | | 1,770 | $405,896 | | | | | 2/6/2024 | | | | | 2,900 | $665,028 | | | | | 2/11/2022 | | | | | | | 8,305 | $1,904,503 | | | 2/7/2023 | | | | | | | 15,952 | $3,658,113 | | | 2/6/2024 | | | | | | | 17,380 | $3,985,582 |
Outstanding Equity Awards at Fiscal Year-End
| (1) Stock option awards vest ratably over three years, beginning on the first anniversary of the grant date, except for Dr. Caveney and Mr. Schroeder’s May 5, 2023 grants and Ms. Graham’s April 5, 2023 grant, each of which vest ratably over three years, beginning with the first vesting on February 7, 2024. Ms. Wang’s December 2, 2024 grant vests ratably over three years beginning with the first vesting on February 6, 2025. |
Outstanding Equity Awards at Fiscal Year-End
| (2) Restricted stock units vest ratably over three years, beginning on the first anniversary of the grant date, except for Dr. Caveney and Mr. Schroeder’s May 5, 2023 grants and Ms. Graham’s April 5, 2023 grant, each of which vest ratably over three years, beginning with the first vesting on February 7, 2024. Ms. Wang’s December 2, 2024 grant vests ratably over three years beginning with the first vesting on February 6, 2025. |
Outstanding Equity Awards at Fiscal Year-End
| (3) Aggregate market value is calculated based on the Company’s common stock price on December 31, 2024, which was $229.32 per share, multiplied by the number of shares or units, respectively, for each unvested performance share or stock award. |
Outstanding Equity Awards at Fiscal Year-End
| (4) Represents the number of shares subject to the February 11, 2022, performance awards that vested on March 27, 2025, following the performance period ending December 31, 2024. |
Outstanding Equity Awards at Fiscal Year-End
| (5) Based on performance to date, represents the number of shares subject to the February 7, 2023, performance share awards, or, in the case of Dr. Caveney and Mr. Schroeder, the May 5, 2023, performance share awards, or in the case of Ms. Graham, the April 5, 2023, performance share award, for the performance period ending December 31, 2025, as adjusted to account for the Spin-Off, assuming achievement at superior. Information on the threshold, target, and superior awards are provided in the “Grants of Plan-Based Awards” table in the Company’s Proxy Statement for its 2024 Annual Meeting of Shareholders. |
Outstanding Equity Awards at Fiscal Year-End
| (6) Based on performance to date, represents the number of shares subject to the February 6, 2024 performance share awards, or, in the case of Ms. Wang the December 2, 2024 performance share award, assuming achievement at superior. Information on the threshold, target, and superior awards are provided in the “Grants of Plan-Based Awards” table above. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table shows, for 2024, the number and value of non-qualified stock options exercised and the number and value of vested restricted stock units and performance shares for each of the NEOs.
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#)(1) | Value Realized on Exercise ($)(2) | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($) | | ADAM H. SCHECHTER(3) | - | $- | 81,743 | $17,773,912 | | BRIAN J. CAVENEY(4) | - | $- | 13,152 | $2,860,415 | | ANITA Z. GRAHAM(5) | - | $- | 369 | $82,549 | | MARK S. SCHROEDER(4) | 2,119 | $214,782 | 13,203 | $2,871,824 | | GLENN A. EISENBERG(6) | 25,765 | $1,077,509 | 43,039 | $9,049,294 |
Option Exercises and Stock Vested
| (1) The numbers in this column reflect the equity award adjustments made in connection with the Spin-Off for those stock option awards that vested after the date of the Spin-Off. For additional information about the effect of the Spin-Off on equity awards, see “Compensation Discussion and Analysis - Summary of Spin-Off Equity Award Adjustments” in the 2024 Annual Proxy Statement. |
Option Exercises and Stock Vested
| (2) The value realized on exercise was based on the price at which these shares were sold, which occurred simultaneously with the exercise. Consequently, the value realized was the sale price minus the strike price, multiplied by the number of shares exercised and sold. |
Option Exercises and Stock Vested
| (3) Represents one-third of the restricted stock units granted on February 2, 2021 that vested on February 2, 2024 at $221.54 per share, the closing price on that date; one-third of the restricted stock units granted on February 11, 2022 that vested on February 11, 2024 at $227.45 per share, the closing price on February 12, 2024; one-third of the restricted stock units granted on February 7, 2023 that vested on February 7, 2024 at $223.71 per share, the closing price on that date; and the performance shares granted on February 2, 2021 that converted into restricted stock units upon completion of the Spin-Off that vested on March 27, 2024 at $216.57 per share, the closing price on that date. |
Option Exercises and Stock Vested
| (4) Represents one-third of the restricted stock units granted on February 2, 2021 that vested on February 2, 2024 at $221.54 per share, the closing price on that date; one-third of the restricted stock units granted on February 11, 2022 that vested on February 11, 2024 at $227.45 per share, the closing price on February 12, 2024; one-third of the restricted stock units granted on February 7, 2023 that vested on February 7, 2024 at $223.71 per share, the closing price on that date; one-third of the restricted stock units granted on May 5, 2023 that vested on February 7, 2024 at $223.71 per share, the closing price on that date; and the performance shares granted on February 2, 2021 that converted into restricted stock units upon completion of the Spin-Off that vested on March 27, 2024 at $216.57 per share, the closing price on that date. |
Option Exercises and Stock Vested
| (5) Represents one-third of the restricted stock units granted on April 5, 2023 that vested on February 7, 2024 at $223.71 per share, the closing price on that date. |
Option Exercises and Stock Vested
| (6) Represents one-third of the restricted stock units granted on February 2, 2021 that vested on February 2, 2024 at $221.54 per share, the closing price on that date; one-third of the restricted stock units granted on February 11, 2022 that vested on February 11, 2024 at $227.45 per share, the closing price on February 12, 2024; all of the restricted stock units granted on November 1, 2022 that vested on April 15, 2024 at $203.32 per share, the closing price on that date; all of the performance shares granted on November 1, 2022 that vested on April 30, 2024 at $201.37, the closing price on that date; one-third of the restricted stock units granted on February 7, 2023 that vested on February 7, 2024 at $223.71 per share, the closing price on that date; and the performance shares granted on February 2, 2021 that converted into restricted stock units upon completion of the Spin-Off that vested on March 27, 2024 at $216.57 per share, the closing price on that date. |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The tables that follow provide information related to compensation payable to each NEO, assuming termination of such executive’s employment on December 31, 2024, or assuming a change in control with a corresponding qualifying termination occurred on December 31, 2024. Amounts also assume the price of Common Stock was $229.32, the closing price on December 31, 2024.
Potential Payments Upon Termination or Change in Control
| Adam H. Schechter | Voluntary Termination | Early Retirement | Normal Retirement | Involuntary Not for Cause or Good Reason Termination | For Cause Termination | Change-in- Control(1) | Disability(2) | Death | | Severance (Related to Base Compensation) | $- | $- | $- | $2,870,000 | $- | $4,305,000 | $- | $- | | Severance (Related to Annual Incentive Cash Payments) | $- | $- | $- | $5,215,538 | $- | $7,823,307 | $- | $- | | Stock Options | $175,075 | $175,075 | $175,075 | $175,075 | $- | $447,325 | $447,325 | $447,325 | | Restricted Stock Units | $2,500,977 | $2,500,977 | $2,500,977 | $2,500,977 | $- | $5,335,494 | $5,335,494 | $5,335,494 | | Performance Shares | $18,771,442 | $18,771,442 | $18,771,442 | $18,771,442 | $- | $22,506,255 | $22,506,255 | $22,506,255 | | Health & Welfare Benefits | $- | $- | $- | $- | $- | $- | $2,100,000 | $1,500,000 | | TOTAL | $21,447,494 | $21,447,494 | $21,447,494 | $29,533,032 | $- | $40,417,381 | $30,389,074 | $29,789,074 | | Julia A. Wang | Voluntary Termination | Early Retirement | Normal Retirement | Involuntary Not for Cause or Good Reason Termination | For Cause Termination | Change-in- Control | Disability(2) | Death | | Severance (Related to Base Compensation) | $- | $- | $- | $1,450,000 | $- | $1,450,000 | $- | $- | | Severance (Related to Annual Incentive Cash Payments) | $- | $- | $- | $1,450,000 | $- | $1,450,000 | $- | $- | | Stock Options | $- | $- | $- | $- | $- | $- | $- | $- | | Restricted Stock Units | $- | $- | $- | $- | $- | $614,578 | $614,578 | $614,578 | | Performance Shares | $- | $- | $- | $- | $- | $1,846,026 | $1,846,026 | $1,846,026 | | Health & Welfare Benefits | $- | $- | $- | $- | $- | $- | $3,600,000 | $1,450,000 | | TOTAL | $- | $- | $- | $2,900,000 | $- | $5,360,604 | $6,060,604 | $3,910,604 |
Potential Payments Upon Termination or Change in Control
| Brian J. Caveney | Voluntary Termination | Early Retirement | Normal Retirement | Involuntary Not for Cause or Good Reason Termination | For Cause Termination | Change-in- Control | Disability(2) | Death | | Severance (Related to Base Compensation) | $- | $- | $- | $1,340,000 | $- | $1,340,000 | $- | $- | | Severance (Related to Annual Incentive Cash Payments) | $- | $- | $- | $1,524,259 | $- | $1,524,259 | $- | $- | | Stock Options | $- | $- | $- | $37,678 | $- | $89,972 | $89,972 | $89,972 | | Restricted Stock Units | $- | $- | $- | $415,309 | $- | $873,923 | $873,923 | $873,923 | | Performance Shares | $- | $- | $- | $3,193,910 | $- | $3,727,467 | $3,727,467 | $3,727,467 | | Health & Welfare Benefits | $- | $- | $- | $24,700 | $- | $24,700 | $4,525,000 | $1,340,000 | | TOTAL | $- | $- | $- | $6,535,856 | $- | $7,580,321 | $9,216,362 | $6,031,362 | | Anita Z. Graham | Voluntary Termination | Early Retirement | Normal Retirement | Involuntary Not for Cause or Good Reason Termination | For Cause Termination | Change-in- Control | Disability(2) | Death | | Severance (Related to Base Compensation) | $- | $- | $- | $1,154,000 | $- | $1,154,000 | $- | $- | | Severance (Related to Annual Incentive Cash Payments) | $- | $- | $- | $810,662 | $- | $810,662 | $- | $- | | Stock Options | $- | $- | $- | $28,805 | $- | $64,669 | $64,669 | $64,669 | | Restricted Stock Units | $- | $- | $- | $162,148 | $- | $399,990 | $399,990 | $399,990 | | Performance Shares | $- | $- | $- | $1,132,966 | $- | $1,456,278 | $1,456,278 | $1,456,278 | | Health & Welfare Benefits | $- | $- | $- | $24,700 | $- | $24,700 | $3,775,000 | $1,154,000 | | TOTAL | $- | $- | $- | $3,313,281 | $- | $3,910,299 | $5,695,937 | $3,074,937 | | Mark S. Schroeder | Voluntary Termination | Early Retirement | Normal Retirement | Involuntary Not for Cause or Good Reason Termination | For Cause Termination | Change-in- Control | Disability(2) | Death | | Severance (Related to Base Compensation) | $- | $- | $- | $1,340,000 | $- | $1,340,000 | $- | $- | | Severance (Related to Annual Incentive Cash Payments) | $- | $- | $- | $1,473,157 | $- | $1,473,157 | $- | $- | | Stock Options | $43,589 | $43,589 | $43,589 | $43,589 | $- | $103,428 | $103,428 | $103,428 | | Restricted Stock Units | $444,444 | $444,444 | $444,444 | $444,444 | $- | $949,608 | $949,608 | $949,608 | | Performance Shares | $3,386,978 | $3,386,978 | $3,386,978 | $3,386,978 | $- | $3,998,075 | $3,998,075 | $3,998,075 | | Health & Welfare Benefits | $- | $- | $- | $24,700 | $- | $24,700 | $750,000 | $1,340,000 | | TOTAL | $3,875,011 | $3,875,011 | $3,875,011 | $6,712,868 | $- | $7,888,968 | $5,801,111 | $6,391,111 |
Potential Payments Upon Termination or Change in Control
| Glenn A. Eisenberg | Voluntary Termination | Early Retirement | Normal Retirement | Involuntary Not for Cause or Good Reason Termination | For Cause Termination | Change-in- Control | Disability(2) | Death | | Severance (Related to Base Compensation) | $- | $- | $- | $1,684,000 | $- | $1,684,000 | $- | $- | | Severance (Related to Annual Incentive Cash Payments) | $- | $- | $- | $2,052,920 | | $2,052,920 | $- | $- | | Stock Options | $106,024 | $106,024 | $106,024 | $106,024 | $- | $106,024 | $106,024 | $106,024 | | Restricted Stock Units | $1,280,362 | $1,280,362 | $1,280,362 | $1,280,362 | $- | $1,280,362 | $1,280,362 | $1,280,362 | | Performance Shares | $7,712,987 | $7,712,987 | $7,712,987 | $7,712,987 | $- | $5,614,362 | $5,614,362 | $5,614,362 | | Health & Welfare Benefits | $- | $- | $- | $24,700 | $- | $24,700 | $900,000 | $1,500,000 | | TOTAL | $9,099,373 | $9,099,373 | $9,099,373 | $12,860,993 | $- | $10,762,368 | $7,900,748 | $8,500,748 |
Potential Payments Upon Termination or Change in Control
| (1) The amounts payable to Mr. Schechter in the event of a change-in-control may be subject to reduction, including for the excise tax imposed on “excess parachute payments” under Sections 280G and 4999 of the Internal Revenue Code. |
Potential Payments Upon Termination or Change in Control
| (2) Reflects the expected total of the executive’s disability income benefits as of December 31, 2024 payable over time determined by assuming full disability at December 31, 2024 and continuing until the NEOs’ normal retirement age in effect under the Social Security Act as of the effective date of the Disability Plan. |