DEF 14A of Merck & Co., Inc.
Filed Apr 8, 2026 · FY20250001193125-26-147704
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| “ | My conviction is stronger than ever in the sustainable, long-term value we are positioned | | | | to deliver for patients and our shareholders. | ” |
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| Summary Compensation Table | 62 | | CEO Pay Ratio | 65 | | Pay Versus Performance | 66 | | Grants of Plan-Based Awards | 71 | | Outstanding Equity Awards | 73 | | Option Exercises and Stock Vested | 75 | | Pension Benefits | 76 | | Nonqualified Deferred Compensation | 79 | | Potential Payments Upon Termination or a Change in Control | 80 | | Proposal 3. Ratification of Appointment of Independent Registered Public Accounting Firm for 2026 | 87 | | Audit Committee’s Report | 88 | | Pre-Approval Policy for Services of Independent Registered Public Accounting Firm | 88 | | Fees for Services Provided by the Independent Registered Public Accounting Firm | 89 | | Proposals 4. – 6. Shareholder Proposals | 90 | | Questions and Answers About the 2026 Annual Meeting and Voting | 95 | | Shareholder Proposals and Director Nominations for the 2027 Annual Meeting of Shareholders | 99 | | Forward-Looking Statements | 100 | | Other Matters | 100 | | Appendix A — Non-GAAP Income and Non-GAAP EPS | 101 | | Appendix B — Explanation of Adjustments to Non-GAAP Results for Incentive Plans | 103 |
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| Year End 2025 | | | 1-Year | 3-Year | | 9.8% | 1.3% | | 5-Year | | | 9.6% | | | (1) Relative Total Shareholder Return, a component of our Performance Share Unit program that is described on page 56, is calculated on a different basis. | |
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| | | Annual Base Salary $(1) | Target Annual Incentive % | Target Long-Term Incentive $ | Target TDC Increase %(2) | | | 2025 NEOs | | | | | | | Robert M. Davis Chairman, Chief Executive Officer, and President | $1,650,000 | 150% | $16,900,000 | +7.6% | | | | ............................................................................................................................................................................. | | | | | | Caroline Litchfield Executive Vice President and Chief Financial Officer | 1,170,000 | 100 | 5,000,000 | +11.4 | | | | ............................................................................................................................................................................. | | | | | | Sanat Chattopadhyay Executive Vice President and President, Merck Manufacturing Division(3) | 979,479 | 100 | 3,300,000 | +0.0 | | | | ............................................................................................................................................................................. | | | | | | Dean Li, M.D., Ph.D. Executive Vice President and President, Merck Research Laboratories | 1,456,000 | 100 | 6,000,000 | +4.7 | | | | ............................................................................................................................................................................. | | | | | | Jennifer Zachary Executive Vice President and General Counsel(4) | 1,059,307 | 100 | 3,750,000 | —(4) |
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| (2) Target Total Direct Compensation (“TDC”) is defined as the sum of annual base salary, target annual incentive, and target long-term incentive. This column reflects the increase in target TDC from 2024 to 2025. |
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Annual Cash Incentive The Company Scorecard (described in more detail on page 52) focuses on our most critical business drivers — the Company’s revenue (“Revenue”), non-GAAP pre-tax income (“Pre-Tax Income”), the Company’s research and development goals (“Pipeline”), and the Company’s focus on driving greater access to health for patients around the world and on the engagement and inclusion of our employees (“Sustainability”) — and is used to determine the payout of our annual incentive for most employees, including our NEOs under the Executive Incentive Plan. Our Company Scorecard performance during 2025 resulted in an achievement of 94% of target. Long-Term Incentive The Long-Term Incentive (“LTI”) program, consisting of a mix of Performance Share Units (“PSUs”), Restricted Stock Units (“RSUs”) and stock options, provides our NEOs with the opportunity to own Company common stock, directly linking a substantial portion of their compensation to the returns realized by our shareholders. The 2023 PSU program (described in more detail on page 56) paid out at 94% of target based on achievement of three-year Earnings Per Share (“EPS”) and three-year R-TSR metrics during the performance period (2023-2025), weighted at 50% and 50%, respectively.
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| • | Be committed to building sound, long-term Company growth. |
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| Corporate Governance Compensation Consultants | ÷ ÷ ÷ ÷ | 29 |
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| • | Competitive market data with respect to the compensation of the CEO and other senior executives; |
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| • | Design and setting of performance goals in the variable incentive plans; |
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| • | Target TDC and payouts under the Executive Incentive Plan for the CEO; |
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| • | Preparation of public filings related to executive compensation, including the CD&A, CEO pay ratio, Pay versus Performance disclosure, and the accompanying tables and footnotes; and |
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| • | Review of the Company’s primary and supplemental peer groups. |
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| (1) The shares shown in this column include the following shares of the Company’s common stock that our current Directors and executive officers have the right to acquire within 60 days after February 28, 2026: (1) through the exercise of vested stock options: Mr. Davis — 769,873, Mr. Chattopadhyay — 355,817, Dr. Li — 307,746, Ms. Litchfield — 283,374, and Ms. Zachary — 52,813, and all Directors and executive officers as a group — 2,436,714; and (2) pursuant to the vesting of RSUs: Mr. Davis — 13,300, Mr. Chattopadhyay — 2,597, Dr. Li — 4,722, Ms. Litchfield — 3,935, and Ms. Zachary — 2,951 and all Directors and executive officers as a group — 14,990. In addition, this column reflects the equivalent shares of common stock held by the Trustee of the Merck U.S. Savings Plan, for all Directors and executive officers as a group — 1,369 shares. |
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| (2) This column reflects phantom shares denominated in Company common stock under the Merck & Co., Inc. Plan for Deferred Payment of Directors’ Compensation. |
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| (3) Includes all Directors and Executive Officers as of February 28, 2026. As such, Mr. Romanelli, who retired from the Company after February 28, 2026, is included, and Mr. Foard and Dr. Maraldo, who became, or will become, executive officers of the Company after February 28, 2026, are excluded. For more information, see “Management Succession Planning” on page 22. |
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| Stock Ownership Information Insider Trading Policy | ÷ ÷ ÷ ÷ | 31 |
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Insider Trading Policy The Company has adopted an insider trading policy governing the purchase, sale, and other dispositions of its securities by its directors, officers, employees, and the Company itself, that it believes is reasonably designed to promote compliance with insider trading laws, rules and regulations, and any applicable listing standards. A copy of the insider trading policy was incorporated by reference as an exhibit to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Hedging and Pledging As part of our insider trading policy, our Company prohibits Directors and management level employees, including officers, from engaging in short sales, derivative transactions, hedging transactions, and pledging of Company securities. Stock Ownership of Certain Beneficial Owners The table below reflects the number of shares beneficially owned by persons or entities known to us to own more than 5% of the outstanding shares of the Company’s common stock as of the dates indicated in the footnotes below. Information is based on a review of the most recently available filings made with the SEC on Schedule 13G. Applicable percentage ownership is based on 2,471,284,780 shares of the Company’s common stock issued and outstanding as of February 28, 2026, and is rounded.
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| Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | | BlackRock, Inc. 50 Hudson Yards, New York, NY 10001 | 201,836,434 (1) | 8.17% |
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| (1) As reported on Amendment No. 14 to Schedule 13G (the “BlackRock filing”) filed with the SEC on January 26, 2024, which is the most recently filed Schedule 13G with respect to the Company. According to the BlackRock filing, of the 201,836,434 shares of Company common stock beneficially owned by BlackRock, Inc. (“BlackRock”) as of December 31, 2023, BlackRock has the sole power to vote or direct the vote with respect to 182,531,000 shares and sole power to dispose or to direct the disposition of 201,836,434 shares. |
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| 32 | ç ç ç ç |
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Proposal 1 – Election of Directors The Board has recommended 13 nominees for election as Directors at the 2026 Annual Meeting: Mr. Douglas M. Baker, Jr., Ms. Mary Ellen Coe, Ms. Pamela J. Craig, Mr. Robert M. Davis, Mr. Thomas H. Glocer, Mr. Surendralal L. Karsanbhai, Dr. Risa J. Lavizzo-Mourey, Dr. Stephen L. Mayo, Dr. Paul B. Rothman, Ms. Patricia F. Russo, Dr. Christine E. Seidman, Mr. Inge G. Thulin, and Ms. Kathy J. Warden. All nominees, other than Mr. Davis, our Chairman and Chief Executive Officer, satisfy the New York Stock Exchange independence requirements. All Director nominees currently serve on the Board and were elected by the shareholders at the 2025 Annual Meeting of Shareholders. In addition, all Director nominees meet the Board’s criteria for membership and were recommended by the Governance Committee, and approved by the Board, for election by shareholders at the 2026 Annual Meeting. All of them hold, or have held, senior leadership positions in large, complex organizations, including multi-national corporations, medical or academic institutions, or charitable organizations. In these positions, our Director nominees have demonstrated their leadership, intellect, and analytical skills and have gained deep experience in core disciplines significant to their oversight responsibilities at the Company. Their varied roles and experiences reflect a variety of perspectives, skills, and expertise to address the Company’s current and anticipated needs as the Company’s opportunities and challenges evolve. If elected, each nominee will serve until the 2027 Annual Meeting of Shareholders or until a successor has been duly elected and qualified, subject to their earlier resignation, death, or removal. Any Director nominee who does not receive a majority of the votes cast with respect to his or her election will not be re-elected as a Director of the Company. However, under the New Jersey Business Corporation Act, incumbent Directors who are not re-elected in an uncontested election because of a failure to receive a majority of the votes cast in favor of their re-election will be “held over” and continue as Directors of the Company until they resign, or their successors are elected at the next election of directors. Our Incumbent Director Resignation Policy, included in the Policies of the Board, provides that an incumbent Director who is not re-elected must promptly submit a resignation. The Governance Committee will evaluate whether to accept such resignation and make a recommendation to the full Board. The Board must act on the recommendation no later than 90 days following certification of the shareholder vote and publicly disclose its decision and rationale. If any Director nominee becomes unavailable for election (which we do not expect), votes will be cast for such substitute Director nominee or nominees as may be designated by the Board, unless the Board reduces its size. There are no family relationships among the Company’s executive officers and Directors. Provided below is biographical information for each Director nominee, including key experience, qualifications, and skills such Director nominee contributes to the Board in light of our current needs and business priorities.
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| FOR | | The Board of Directors recommends that the shareholders vote FOR the election of each of the Director Nominees. |
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| Proposal 1 Election of Directors | ÷ ÷ ÷ ÷ | 33 |
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Nominees for Director
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| Douglas M. Baker, Jr. Independent | | | Age: 67 | | | Director Since: 2022 | | | Committees: | | | | | | Audit | Research |
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| Experience | | Mr. Baker has wide-ranging expertise in corporate governance and general and organizational management, including a deep understanding of global marketing, sales, financial management, and operations of public companies. Mr. Baker is a Founding Partner of E2SG Partners, a company that invests in environmentally sustainable technologies. Previously, Mr. Baker was Chairman & Chief Executive Officer of Ecolab Inc., a provider of water and hygiene services and technologies for the food, hospitality, industrial, and energy markets. Mr. Baker is also a member of the Board of Target Corporation and served as their Lead Independent Director from 2015 to 2021. This directorship as well as his previous directorship at U.S. Bancorp provide him with deep experience on governance issues facing large public companies. |
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| Career Highlights | | E2SG Partners • Founding Partner (2022-present) Ecolab Inc. • Executive Chairman (2021-2022) • Chairman and Chief Executive Officer (2006-2020) • Chief Executive Officer (2004-2006) | | Other Public Directorships | | Current • Target Corporation (2013-present) Former • Ecolab Inc. (2006-2022) • U.S. Bancorp (2008-2018) |
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| Mary Ellen Coe Independent | | | Age: 59 | | | Director Since: 2019 | | | Committees: | | | | | | C&MD | Research |
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| Experience | | Ms. Coe has a deep understanding of the digital, media, and technology landscape, as well as global strategy and operations, based on her experience as the Chief Business Officer at YouTube Inc. as well as her experience at Google Inc. At YouTube, Ms. Coe leads all global business operations, business development, and partnerships across product and content licensing and distribution, support operations, and YouTube’s monetization, including advertising and subscription revenue. At Google, Ms. Coe served as the President of Google Customer Solutions, overseeing the global ads business for mid-market and small businesses, serving millions of customers and thousands of partners worldwide. She also has extensive marketing, sales and commercial strategy expertise from her tenure as a partner at McKinsey, and leader of the consumer marketing practice. |
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| Career Highlights | | YouTube Inc. • Chief Business Officer (2022-present) Google Inc. • President, Google Customer Solutions (2017-2022) • Vice President, Go-to-Market Vice President, Go-to-Market Operations and Strategy (2012-2017) | | Other Public Directorships | | Current • None Former • Whole Foods Market, Inc. (2016-2017) |
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| 34 | ç ç ç ç | Proposal 1 Election of Directors |
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| Pamela J. Craig Independent | | | Age: 69 | | | Director Since: 2015 | | | Committees: | | | | | | Audit (Chair) | Governance |
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| Experience | | Ms. Craig has extensive finance, management, operational, technology, and international business expertise, including her history of accomplishment and executive ability as Chief Financial Officer of Accenture plc. In addition, her directorships at other public companies, including her service as chair of the Audit Committee and as a member of the Information Technology Committee of Corning Incorporated, and as chair of the Technology Committee and a member of the Compensation and Talent Committee of Progressive Insurance as well as her previous service as a member of the Audit Committee and Chair of the Compensation & Talent Committee of 3M Company, provide her with valuable experience on governance issues facing public companies. |
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| Career Highlights | | Accenture plc, global management consulting, technology services, and outsourcing company • Chief Financial Officer (2006-2013) • Senior Vice President, Finance (2004-2006) • Group Director, Business Operations and Services (2003-2004) • Managing Partner, Global Business Operations (2001-2003) | | Other Public Directorships | | Current • Progressive Insurance (2018-present) • Corning Incorporated (2021-present) Former • 3M Company (2019-2023) • Akamai Technologies, Inc. (2011-2019) • Wal-Mart Stores, Inc. (2013-2017) |
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| Robert M. Davis Management | | Age: 59 | | Director Since: 2021 |
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| Experience | | Mr. Davis, the Company’s Chairman, Chief Executive Officer, and President, has extensive management, financial, and operational expertise. Previously, Mr. Davis served as the Company’s President, with responsibility for its operating divisions, Human Health, Animal Health, Manufacturing, and Merck Research Laboratories. Prior to that, he served as the Company’s Chief Financial Officer and Executive Vice President, Global Services, with broad responsibilities, including with respect to finance, risk management, real estate operations, corporate strategy, business development, information technology, and procurement. In addition, Mr. Davis’s service on the board of directors of Duke Energy, including his roles as Chair of the Finance & Risk Management Committee and member of the Corporate Governance Committee, has provided him with valuable experience on governance issues facing public companies. |
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| Career Highlights | | Merck & Co., Inc. • Chairman (2022-present) • Chief Executive Officer and President (2021-present) • Chief Financial Officer and Executive Vice President, Global Services (2016-2021) • Chief Financial Officer and Executive Vice President (2014-2016) Baxter International, Inc. • Corporate Vice President and President, Medical Products (2010-2014) • Corporate Vice President and Chief Financial Officer (2006-2010) • Corporate Vice President and Treasurer (2004-2006) | | Other Public Directorships | | Current • Duke Energy (2018-present) Former • C.R. Bard (2015-2017) |
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| Proposal 1 Election of Directors | ÷ ÷ ÷ ÷ | 35 |
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| Thomas H. Glocer Independent Lead Director | | | Age: 66 | | | Director Since: 2007 | | | Committees: | | | | | | C&MD | Governance (Chair) |
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| Experience | | Mr. Glocer has extensive management, operational, technology, and international business expertise. This includes Mr. Glocer’s history of accomplishment and executive ability as CEO and a Director of Thomson Reuters Corporation, a news and information provider for businesses and professionals. In addition, his directorships at other public companies, including his service as Lead Director and as a member of the Governance Committee at Morgan Stanley, provide him with valuable experience on governance issues facing public companies. |
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| Career Highlights | | Angelic Ventures LP, a family office investing in early-stage technology and data companies • Founder and Managing Partner (2012-present) Thomson Reuters Corporation, multi-national media and information firm • Chief Executive Officer (2008-2011) • Chief Executive Officer, Reuters Group PLC (2001-2008) | | Other Public Directorships | | Current • Morgan Stanley (2013-present) • Publicis Groupe (2016-present) Former • None |
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| Surendralal L. Karsanbhai Independent | | | Age: 56 | | | Director Since: 2025 | | | Committees: | | | | | | Audit | Governance |
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| Experience | | Mr. Karsanbhai has broad experience in global business leadership as President and Chief Executive Officer of Emerson Electric Co., a global technology and software company that provides innovative solutions for customers in a wide range of markets around the world. Mr. Karsanbhai has extensive expertise in strategy, technologies, manufacturing, and business development in diverse markets globally, as evident in varied leadership positions he has held since joining Emerson in 1995. These positions include lead for Emerson’s Automation Solutions business, where he elevated Emerson’s software profile and digital transformation business, and President of Emerson’s Rosemount business. In addition, Mr. Karsanbhai currently serves as the Chair of the Federal Reserve Bank of St. Louis and is a Trustee of Washington University. He is fluent in Portuguese, French, and English, and has lived and worked in Europe, Africa, and North America. |
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| Career Highlights | | Emerson Electric Co. • President and Chief Executive Officer (2021-present) • Executive President, Emerson Automation Solutions (2018-2021) | | Other Public Directorships | | Current • Emerson Electric Co. (2021-present) Former • None |
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| 36 | ç ç ç ç | Proposal 1 Election of Directors |
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| Risa J. Lavizzo-Mourey, M.D. Independent | | | Age: 71 | | | Director Since: 2020 | | | Committees: | | | | | | C&MD | Research |
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| Experience | | Dr. Lavizzo-Mourey has extensive health policy experience, serving as Robert Wood Johnson Foundation Population Health and Health Equity Professor Emerita at the University of Pennsylvania and formerly as President and Chief Executive Officer of Robert Wood Johnson Foundation, the nation’s largest healthcare-focused philanthropic organization. Her role at Robert Wood Johnson Foundation provided her with deep management, strategic, human capital, and talent development expertise. In addition, her directorships at other public companies, including her service as Lead Director and Chair of the Governance Committee of GE Healthcare Technologies, Inc., provide her with extensive experience on corporate governance matters. Dr. Lavizzo-Mourey was elected to the National Academy of Medicine, American Academy of Arts and Sciences and The American Philosophical Society. |
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| Career Highlights | | University of Pennsylvania • Robert Wood Johnson Foundation Population Health and Health Equity Professor Emerita (2021-present) • Penn Integrates Knowledge Professor of Health Equity and Health Policy (2018-2021) Robert Wood Johnson Foundation • President Emerita (2017-present) • President and Chief Executive Officer (2003-2017) • Senior Vice President and Director (2001-2002) | | Other Public Directorships | | Current • GE HealthCare Technologies, Inc. (2023-present) Former • Better Therapeutics (2021-2023) • General Electric Company (2017-2023) • Hess Corporation (2004-2020) • Intel Corporation (2018-2025) |
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| Stephen L. Mayo, Ph.D. Independent | | | Age: 64 | | | Director Since: 2021 | | | Committees: | | | | | | Audit | Research |
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| Experience | | Dr. Mayo has extensive scientific experience relevant to the biopharmaceutical industry, including being the Bren Professor of Biology and Chemistry, Merkin Institute Professor and former Chair of the Division of Biology and Biological Engineering at the California Institute of Technology (“Caltech”) and co-founder of Xencor, a public antibody engineering company. In addition, in his role as the former Vice Provost at Caltech, Dr. Mayo oversaw Caltech’s technology licensing program. Elected to the National Academy of Sciences in 2004 for his pioneering contributions in the field of protein design, Dr. Mayo has also served as a presidential appointee on the National Science Foundation’s National Science Board and as an elected board member for the American Association for the Advancement of Science. Dr. Mayo also serves as a member of the board of directors of Sarepta Therapeutics, Inc. and Allogene Therapeutics, Inc. |
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| Career Highlights | | California Institute of Technology • Merkin Institute Professor (2021-present) • Bren Professor of Biology and Chemistry (2007–present) • Chair, Division of Biology and Biological Engineering (2010–2020) • Vice Provost for Research (2007–2010) Howard Hughes Medical Institute, non-profit medical research organization • Investigator (1994–2007) | | Other Public Directorships | | Current • Allogene Therapeutics (2021-present) • Sarepta Therapeutics (2021-present) Former • None |
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| Proposal 1 Election of Directors | ÷ ÷ ÷ ÷ | 37 |
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| Paul B. Rothman, M.D. Independent | | | Age: 68 | | | Director Since: 2015 | | | Committees: | | | | | | Audit | Research (Chair) |
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| Experience | | Dr. Rothman has extensive expertise in patient care, science and medicine relevant to the pharmaceutical industry, including through his past experiences as (a) the CEO of Johns Hopkins Medicine and the Dean of Medical Faculty and Vice President for Medicine, The Johns Hopkins University, and (b) Dean and Head of Internal Medicine at Carver College of Medicine at the University of Iowa. His vast operational and management experience leading a large-scale medical organization provide him with a deep understanding of the complexities of the U.S. healthcare delivery system and policy environment. In addition, Dr. Rothman’s directorship at Labcorp, including his service as Chair of the Quality & Compliance Committee, provides him with additional experience on corporate governance matters and risk oversight. |
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| Career Highlights | | Johns Hopkins University • Dean of the Medical Faculty and Vice President for Medicine (2012-2022) Johns Hopkins Medicine • Chief Executive Officer (2012-2022) Carver College of Medicine at the University of Iowa • Dean (2008-2012) • Head of Internal Medicine (2004-2008) | | Other Public Directorships | | Current • Labcorp (2023-present) Former • None |
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| Patricia F. Russo Independent | | | Age: 73 | | | Director Since: 1995(1) | | | Committees: | | | | | | C&MD (Chair) | Governance |
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| Experience | | Ms. Russo has extensive management, operational, international business and financial expertise, as well as a broad understanding of the technology industry, which includes her career achievements during her tenure as CEO and Director of Alcatel-Lucent and Lucent Technologies Inc. In addition, her directorships at other public companies, including her roles as the Non-executive Chair of Hewlett Packard Enterprise Company and Chair of the Governance and Corporate Responsibility Committee of General Motors, provide her with deep experience on governance issues facing large public companies. |
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| Career Highlights | | Hewlett Packard Enterprise Company, technology company • Non-executive Chair (2015-present) Alcatel-Lucent, global telecommunications equipment company • Chief Executive Officer and Director (2006-2008) • Chairman, Lucent Technologies Inc. (2003-2006) • President and Chief Executive Officer, Lucent Technologies Inc. (2002-2006) | | Other Public Directorships | | Current • General Motors Company (2009-present), Independent Lead Director (2010-2014; 2021-present) • Hewlett Packard Enterprise Company (2015-present), Non-executive Chair (2015-present) • KKR Management Inc. (the managing partner of KKR & Co., L.P.) (2011-present) Former • Arconic, Inc. (2016-2018) formerly Alcoa, Inc. (2008-2016) |
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| (1) Ms. Russo was on the Board of Directors of Schering-Plough Corporation from 1995 until 2009 when it became Merck & Co., Inc. |
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| 38 | ç ç ç ç | Proposal 1 Election of Directors |
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| Christine E. Seidman, M.D. Independent | | | Age: 73 | | | Director Since: 2020 | | | Committees: | | | | | | Audit | Research |
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| Experience | | Dr. Seidman has extensive scientific experience relevant to the biopharmaceutical industry. She also has managerial experience relevant to scientific research, including through her role leading the Seidman Laboratory, a research laboratory focusing on integrating clinical medicine and molecular technologies to define disease-causing gene mutations and genetic variations that increase disease risk. The recipient of many honors, Dr. Seidman was elected to the American Society for Clinical Investigation, the National Academy of Sciences, American Academy of Arts and Sciences, and the National Academy of Medicine. Awards • The Ray C. Fish Award for Scientific Achievement (2020) • American Heart Association Medal for Genomic and Precision Medicine (2019) • Vanderbilt Prize in Biomedical Sciences (2019) |
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| Career Highlights | | Harvard Medical School/Brigham and Women’s Hospital (Harvard University) • Thomas W. Smith Professor of Medicine and Genetics (2005-present) • Professor of Genetics and Medicine (1998-2005) • Professor of Medicine (1997-1998) Howard Hughes Medical Institute, non-profit medical research organization • Investigator (1994-present) Brigham and Women’s Hospital • Director, Cardiovascular Genetics Center (1992-present) • Attending Physician, Cardiovascular Division (1987-present) | | Other Public Directorships | | Current • None Former • None |
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| Inge G. Thulin Independent | | | Age: 72 | | | Director Since: 2018 | | | Committees: | | | | | | C&MD | Governance |
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| Experience | | Mr. Thulin has extensive management, operational, technology, and international business expertise, as demonstrated by a track record of success leading 3M Company. Mr. Thulin possesses broad industry experience drawn from 3M’s diverse businesses, commitment to research and strong life sciences division. He also brings valuable insight into driving innovation, based on his experience with new product development and manufacturing. In addition, his previous directorships at other public companies provide him with deep experience on governance issues facing large public companies. |
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| Career Highlights | | 3M Company, global technology company • Executive Chairman (2018-2019) • Chairman, President and Chief Executive Officer (2012-2018) • President and Chief Executive Officer (2012) • Executive Vice President and Chief Operating Officer (2011-2012) • Executive Vice President, International Operations (2004-2011) | | Other Public Directorships | | Current • None Former • 3M Company (2012-2019) • Chevron Corporation (2015-2019) |
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| Proposal 1 Election of Directors | ÷ ÷ ÷ ÷ | 39 |
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| Kathy J. Warden Independent | | | Age: 54 | | | Director Since: 2020 | | | Committees: | | | | | | C&MD | Governance |
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| Experience | | Ms. Warden has broad experience in operational leadership as Chair, CEO and President of Northrop Grumman Corporation, an innovative company using science, technology, and engineering to create and deliver products and services. Ms. Warden has extensive expertise in strategy, performance, and business development in government and commercial markets, as well as cybersecurity expertise. Prior to joining Northrop Grumman, Ms. Warden held leadership roles at General Dynamics and General Electric. In addition, Ms. Warden is a former chair of the board of the Richmond Federal Reserve Bank. |
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| Career Highlights | | Northrop Grumman Corporation, global security company • Chair, Chief Executive Officer and President (2019-present) • President and Chief Operating Officer (2018) • Corporate Vice President and President, Mission System Sector (2016-2017) • Corporate Vice President and President, Information Systems Sector (2013-2015) • Vice President, Cyber Intelligence Division (2011-2012) | | Other Public Directorships | | Current • Northrop Grumman Corporation (2018-present) Former • None |
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| 40 | ç ç ç ç |
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Director Compensation Our non-employee Directors receive cash compensation, as well as cash-settled equity compensation in the form of deferred stock units, for their Board service. During 2025, non-employee Directors were compensated for their Board service as shown in the chart below. Schedule of Director Fees
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| Compensation Element(1) | Director Compensation Program | | Annual Retainer | $120,000 | | Annual Mandatory Deferral | $220,000 credit to Director’s Company common stock account under the Plan for Deferred Payment of Directors’ Compensation | | Committee Chair Retainer | $35,000 for the Audit Committee(2) | | | $25,000 for the Governance Committee(3) | | | $25,000 for the C&MD Committee | | | $25,000 for the Research Committee | | Audit Committee Member Retainer | $10,000(2) | | Lead Director Retainer | $50,000(3) |
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| Director Compensation 2025 Director Compensation | ÷ ÷ ÷ ÷ | 41 |
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| | Director Compensation for Fiscal Year Ended December 31, 2025 | | | | Name | Fees Earned or Paid in Cash ($) | All Other Compensation(1) ($) | Total ($) | | Douglas M. Baker, Jr. | $130,000 | $220,000 | $350,000 | | Mary Ellen Coe | 120,000 | 220,000 | 340,000 | | Pamela J. Craig | 155,000 | 250,000 | 405,000 | | Thomas H. Glocer | 195,000 | 220,000 | 415,000 | | Surendralal L. Karsanbhai | 130,000 | 275,000(2) | 405,000 | | Risa J. Lavizzo-Mourey, M.D. | 120,000 | 220,000 | 340,000 | | Stephen L. Mayo, Ph.D. | 130,000 | 220,000 | 350,000 | | Paul B. Rothman, M.D. | 155,000 | 250,000 | 405,000 | | Patricia F. Russo | 145,000 | 220,000 | 365,000 | | Christine E. Seidman, M.D. | 130,000 | 255,000 | 385,000 | | Inge G. Thulin | 120,000 | 220,000 | 340,000 | | Kathy Warden | 120,000 | 220,000 | 340,000 |
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| PSU Performance (2023-2025)(2) |
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| We do… | | We do not... | | | | Utilize a Relative Total Shareholder Return (“R-TSR”) metric in the Performance Share Unit (“PSU”) program to align the payout with long-term stock performance and shareholder experience | | Allow Directors and management employees, including officers, to engage in transactions involving short sales, derivative transactions, hedging, or pledging of Company securities Grant stock options with an exercise price less than fair market value Re-price underwater stock options without shareholder approval Pay tax gross-ups on any payments made in connection with a change in control event | | | Monitor Long-Term Incentive (“LTI”) program share utilization relative to industry standards and our primary and supplemental peer groups | | | | | Conduct annual competitive benchmarking to ensure executive officer compensation is aligned to market | | | | | Include caps on annual cash incentive and PSU program payouts and thresholds below which no payouts are earned | | | | | Offer limited perquisites that are supported by business interests | | | | | Retain an independent compensation consultant that reports directly to the C&MD Committee | | | | | Maintain robust stock ownership requirements and share retention policies | | | | | Maintain rigorous incentive recoupment (i.e., clawback) policies that exceed the NYSE listing requirements | | | | | Conduct assessments to identify and mitigate risk in our compensation programs | | | | | Provide dividend equivalents only on earned Restricted Stock Units (“RSUs”) and PSUs | | | | | Require double-trigger vesting of equity in the event of a change in control (i.e., there must be both a change in control and an involuntary termination) | | | | | Avoid employment agreements | | |
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| Compensation Discussion and Analysis Peer Groups | ÷ ÷ ÷ ÷ | 47 |
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Peer Groups Primary Peer Group Individual executive officer compensation levels and opportunities are compared to a peer group of large multinational pharmaceutical companies approved by the C&MD Committee that participate in a pharmaceutical industry compensation survey conducted by Willis Towers Watson, an independent consulting firm. In setting compensation levels for 2025, the C&MD Committee reviewed the survey results for the following peer companies that the Company competes with to attract talented, high-performing executives (the “primary peer group”). The C&MD Committee regularly reviews segmented information focused on the companies in the primary peer group that are headquartered in the U.S. because practices outside the U.S. can differ based on the geographic region.
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| Primary Peer Group Companies AbbVie Amgen AstraZeneca Bristol-Myers Squibb Eli Lilly Gilead Sciences GlaxoSmithKline Johnson & Johnson Novartis Pfizer Roche Holding AG Sanofi All numbers are as of 12/31/2025 | |
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Supplemental Peer Group In addition to the primary peer group described above, we also use a supplemental peer group consisting of the companies that comprise the Dow Jones Industrial Average (excluding the financial services companies) as a secondary reference for CEO compensation and for other compensation-related practices (for example, share usage and dilution, change in control policy design, and stock ownership and retention guidelines). The Company is a member of the Dow Jones Industrial Average, and we believe this group provides insight into practices among companies of similar scale and complexity that operate across a variety of industries, providing us with a broader view of market pay, policies, and practices.
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| Supplemental Peer Group Companies(1) | | | | 3M Amazon Amgen Apple Boeing Caterpillar Chevron Cisco Systems Coca-Cola Home Depot Honeywell IBM Johnson & Johnson | McDonald’s Microsoft Nike Nvidia Procter & Gamble salesforce.com Sherwin-Williams UnitedHealth Group Verizon Visa Walmart Walt Disney | | | All numbers are as of 12/31/2025 | | | | (1) Reflects Dow Jones Industrial Average companies (excluding the financial services companies) as of the beginning of 2025. | | |
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| 48 | ç ç ç ç | Compensation Discussion and Analysis Detailed Discussion and Analysis |
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Our overarching strategy is to position executive compensation competitively relative to the market for comparable roles. In evaluating target Total Direct Compensation (“TDC”), the C&MD Committee considers the median level of compensation as a reference point. It then determines appropriate compensation for each executive based on a range of factors, including the scope and complexity of the role, market availability of proven talent, experience, leadership, sustained performance over time, potential for advancement as part of succession planning, and other unique factors that may exist from time to time. As a result, target compensation levels may vary above or below market benchmarks based on these factors, and realized compensation ultimately depends on the achievement of longer-term goals and changes in shareholder value. This approach helps ensure compensation outcomes are aligned with performance and that costs are reasonable and sustainable relative to market practices. Detailed Discussion and Analysis Additional information regarding our 2025 NEOs and the material elements of their compensation, as reported in the Summary Compensation table on page 62, is described below(1).
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| | Compensation Decisions for 2025 | | | Robert M. Davis Chairman, Chief Executive Officer, and President | • Increased annual base salary by $35,000 • Maintained annual incentive target percentage • Increased LTI target by $1,400,000 • Change resulted in a 7.6% increase in target TDC | | | Age: 59 | | | | Tenure: 12 Years | | | | | Compensation Decisions for 2025 | | | Caroline Litchfield Executive Vice President and Chief Financial Officer | • Maintained annual base salary • Maintained annual incentive target percentage • Increased LTI target by $750,000 • Change resulted in an 11.4% increase in target TDC | | | Age: 57 | | | | Tenure: 35 Years | | |
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| (1) Compensation shown for each executive is rounded to the nearest dollar and age/tenure is rounded to the nearest year. |
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| Compensation Discussion and Analysis Detailed Discussion and Analysis | ÷ ÷ ÷ ÷ | 49 |
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| | Compensation Decisions for 2025 | | | Sanat Chattopadhyay(2) Executive Vice President and President, Merck Manufacturing Division | • Maintained annual base salary • Maintained annual incentive target percentage • Maintained LTI target | | | Age: 66 | | | | Tenure: 16 Years | | |
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| | Compensation Decisions for 2025 | | | Dean Li, M.D., Ph.D. Executive Vice President and President, Merck Research Laboratories | • Maintained annual base salary • Maintained annual incentive target percentage • Increased LTI target by $400,000 • Change resulted in a 4.7% increase in target TDC | | | Age: 64 | | | | Tenure: 9 Years | | |
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| (2) As discussed in “Management Succession Planning” on page 22, Mr. Chattopadhyay will retire from the Company and will cease to be an executive officer on July 1, 2026 and May 1, 2026, respectively. Mr. Chattopadhyay will not be eligible for severance benefits in connection with his retirement. For information on payments and benefits in connection with a retirement, see “Potential Payments Upon Termination or a Change in Control” on page 80. |
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| What We Reward | How We Link Pay To Performance | How We Pay | | • Top and bottom-line performance that meets or exceeds the Board approved annual and long-term operating plans • Pipeline accomplishments that advance our position as an industry-leading biopharmaceutical company • Achievement of strategic sustainability priorities that focus on greater access to health and on the engagement and inclusion of employees • Decision-making that yields long-term value creation for shareholders • Executing on our growth strategy by consistently seeking opportunities that complement or supplement our broad portfolio in key areas, including Oncology, Vaccines, Cardiometabolic and Respiratory, Immunology, Infectious Diseases, and Animal Health | • Inclusion of key financial and non-financial metrics in our annual cash incentive plan to ensure executives are rewarded for top and bottom-line performance, pipeline advancement that leads to longer-term revenue opportunities, and metrics focusing on driving sustainable business outcomes • LTIs comprised of a mix of PSUs, RSUs, and stock options, linking a substantial amount of pay opportunity to long-term company performance and increased shareholder value • Majority of total target pay opportunity is at-risk and tied to company performance and/or long-term stock value | • Overall target total pay opportunity, as well as each pay element, is assessed for competitiveness relative to primary and/or supplemental peer groups, which include similarly-sized pharmaceutical peers and Dow Jones Industrial Average companies, excluding financial services companies • Competitive positioning is targeted to median of market; actual positioning varies based on a variety of factors, including scope and complexity of role, years of experience, sustained leadership, demonstrated performance over time, and other factors |
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| (1) Rounded based on full year LTI and annual incentive targets (excluding one-time special awards). |
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| The C&MD Committee must balance the need to deliver a competitive level of base salary with ensuring the appropriate mix of fixed to variable compensation for each NEO. The table shows adjustments made to base salaries in 2025. Adjustments are made based on competitive positioning and are aligned with an assessment of performance and leadership. | Named Executive Officer | Annual Base Salary Increase % | New Annual Base Salary(1) | | | Davis | 2.2% | $1,650,000 | | | Litchfield | No change | 1,170,000 | | | Chattopadhyay | No change(2) | 979,479 | | | Li | No change | 1,456,000 | | | Zachary | —(3) | 1,059,307 | | | (1) Reflects annual base salary as of December 31, 2025. (2) Although Mr. Chattopadhyay was not an NEO in 2024, he was an NEO in 2023. As such, pursuant to SEC rules, we have included his 2024 compensation information in the Summary Compensation table. (3) Ms. Zachary was not an NEO in 2024. | | | | Annual Cash Incentive | | | | | The NEOs participate in the Executive Incentive Plan (“EIP”). Award amounts under the EIP are determined based upon achievement of Company performance measures as reflected by the Company Scorecard. The overall EIP award cannot exceed 200% of the annual incentive target for the executive. The maximum award amount for each NEO for 2025, excluding the impact of the Company Scorecard, is listed in the Grants of Plan-Based Awards table on page 71. | Named Executive Officer | 2024 Target Annual Incentive % of Base Salary(1) | 2025 Target Annual Incentive % of Base Salary(1) | | | Davis | 150% | 150% | | | Litchfield | 100 | 100 | | | Chattopadhyay | 100(2) | 100 | | | Li | 100 | 100 | | | Zachary | —(3) | 100 | | | (1) Reflects annual incentive targets as of December 31 of the applicable year. (2) Although Mr. Chattopadhyay was not an NEO in 2024, he was an NEO in 2023. As such, pursuant to SEC rules, we have included his 2024 compensation information in the Summary Compensation table. (3) Ms. Zachary was not an NEO in 2024. | | |
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2025 Company Scorecard Our Company Scorecard translates our strategic priorities into operational terms that enable tracking and measurement of our progress and performance against annual operating metrics and critically important strategic drivers of long-term value creation. In 2025, these metrics focused on Revenue, Pre-Tax Income, Pipeline goals tied to our research and development programs, and Sustainability. The Company Scorecard is also measured in the context of compliance, health, safety, and environmental outcomes, and may be adjusted based on these outcomes in recognition of the important role they play in driving the Company’s values and a culture of integrity. In 2025, there was no such adjustment. Revenue and Pre-Tax Income are equally weighted at 35%, each based on the C&MD Committee’s belief that they are the key financial measures of our success during the year. The Pipeline goals are collectively weighted at 20% and are designed to ensure we are focused on internal and external early discovery opportunities, late-stage clinical development progression, and regulatory filings and approvals. Our Sustainability goals are collectively weighted at 10%.
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The target, threshold, and maximum Revenue and Pre-Tax Income goals are set in relation to the Board-approved annual operating plan and the expectations of management. Each year, the Pipeline goals are recommended by the President of Merck Research Laboratories, reviewed by the Research Committee, and approved by the C&MD Committee. The Sustainability goals are recommended by the Company’s Global Market Access, Sustainability, and Human Resources teams and approved by the C&MD Committee. Failure to achieve threshold performance for any goal results in forfeiture of the opportunity associated with that goal. If the aggregate performance across all four metrics does not reach at least 50%, no payout is earned. The overall results of the Company Scorecard are calibrated so individuals may receive between 50% and 200% of their target award opportunity established for the annual performance period. Pre-determined adjustments are applied to Revenue and Pre-Tax Income results using a consistent framework approved by the C&MD Committee to accurately reflect the operating performance of our business. For further explanation of these pre-determined adjustments to reported financial results for incentive plan purposes, please refer to Appendix B on page 103. The 2025 Company Scorecard results are summarized below. 2025 Company Scorecard(1)
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Pre-Tax Income: Consistent with the Scorecard design and the metric as defined at the beginning of the performance period, non-GAAP pre-tax income of $26.32B was adjusted to $26.37B to exclude the effect of certain business development transactions as well as the impact of currency exchange rates (versus currency exchange rates budgeted in the annual operating plan). Despite our continued discipline in expense management, we did not achieve our internal Pre-Tax Income target of $27.43B due to below target sales performance. Sustainability: Our Sustainability goals, which are directly tied to drivers of sustainable appreciation in shareholder value, measure progress in enabling access to health for people around the world and fostering an engaged and inclusive workforce. In 2025, we expanded the number of people who now have the option to access medicines and vaccines through our supply commitments to Gavi and UNICEF, innovative insurance solutions, collaborations aimed at increasing the capacity of hospital systems for cancer diagnosis and care, and expanding channels through which people can access vaccines. The engagement and inclusion of our employees, which is measured through employee surveys, remains critically important and reflects the continued strength of our company culture. Named Executive Officer 2025 Annual Incentive Payouts The table below shows the 2025 annual cash incentives paid to the NEOs. The “Final Award” for each NEO is reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation table.
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| | | Target | | | | | Named Executive Officer | Annual Base Salary (as of 12/31/25) ($) | Annual Incentive (%) | Annual Incentive ($) | Company Scorecard Result (%) | Final Award ($) | | Davis | $1,650,000 | 150% | $2,475,000 | 94% | $2,326,500 | | Litchfield | 1,170,000 | 100 | 1,170,000 | 94 | 1,099,800 | | Chattopadhyay | 979,479 | 100 | 979,479 | 94 | 920,710 | | Li | 1,456,000 | 100 | 1,456,000 | 94 | 1,368,640 | | Zachary | 1,059,307 | 100 | 1,059,307 | 94 | 995,749 |
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Long-Term Equity Incentives The long-term incentive program, which consists of a mix of PSUs, RSUs, and stock options, is designed to provide our NEOs with a meaningful ownership interest in the Company while directly linking a substantial portion of their compensation to the returns realized by our shareholders. We use these three vehicles to maintain a balanced and sustainable LTI program that supports our compensation objectives over a multi-year period.
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| | Performance Share Units | | | PSUs link realized compensation to the achievement of critical financial objectives and align executives’ interests with those of our shareholders. The earned award varies based on results versus pre-determined performance goals, as well as long-term returns to shareholders as measured by relative stock price performance and dividend yield. PSUs generally vest and become payable at the end of a three-year performance period provided that minimum performance goals are met. | | | Restricted Stock Units RSUs were introduced in 2025 to further align the interests of our executives with those of shareholders. The ultimate value realized is at risk and varies based on our stock price performance, aligning with the returns experienced by our shareholders. The time-based vesting of RSUs promotes retention and encourages continued focus on the successful execution of our long-term strategy, critical to driving shareholder value creation. RSUs generally vest and become payable in equal installments on the first, second, and third anniversaries of the grant date. | | | Stock Options Stock options align our executives’ interests with the interests of our shareholders because options only have financial value to the recipient if the price of our common stock at the time of exercise exceeds the stock price on the date of grant. As a result, we believe stock option grants encourage executives to focus on behaviors and initiatives that support sustained long-term stock price appreciation, which benefits all shareholders.Stock options generally vest and become exercisable in equal installments on the first, second, and third anniversaries of the grant date. |
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Current LTI Grant Practices All equity grants to executive officers are made under the 2019 Stock Incentive Plan (“Incentive Stock Plan”) and approved by the C&MD Committee. In the case of our CEO, grants are recommended by the C&MD Committee and approved by the independent members of the Board of Directors. Annual PSU grants, which have a three-year performance period, are generally made on the last business day in March. Annual RSU and stock option grants are made on the third business day following the announcement of our first quarter earnings. We may also selectively grant PSUs, RSUs, and stock options on the third business day following the announcement of quarterly earnings, generally as part of a new hire sign-on or for retention purposes. This timing is designed to ensure that equity awards are made during periods when there is no material nonpublic information about our Company. The C&MD Committee retains discretion to modify the timing as appropriate, consistent with its responsibility to consider all facts and circumstances to ensure alignment with our compensation philosophy and objectives. Stock options are granted at no less than fair market value on the applicable grant date or date of a specified event, with all required approvals obtained on or before the grant date. Fair market value is the closing price of a share of the Company’s common stock on the grant date. The re-pricing of stock options is not permitted under the Incentive Stock Plan without prior shareholder approval.
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2025 LTI Grant Values The 2025 annual LTI grant values for the CEO and other NEOs, as compared to the prior year, are shown in the following table. The number of shares associated with each award is set forth in the Grants of Plan-Based Awards table on page 71. The Board increased the LTI grant value for Mr. Davis based on a review of his performance and the competitive positioning of his compensation relative to the Company’s primary and supplemental peer groups. Consistent with our compensation strategy that supports a pay-for-performance culture, the Board intends to continue to evaluate and, when appropriate, adjust Mr. Davis’s compensation to ensure it remains competitive to these peer groups and reflects the Board’s assessment of his business performance and leadership.
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| (1) Grant values shown above will be different from the values shown in the Summary Compensation and Grants of Plan-Based Awards tables based on the fair value on grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”) and SEC disclosure rules, which consider factors other than share price. |
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PSU Program At the beginning of each year, we review the design of our PSU program to ensure that our metrics are focused on the long-term measures that are most relevant to driving value for the Company and its shareholders over a three-year performance period. Payouts under the PSU program are formulaic and, as such, the C&MD Committee does not consider individual performance or use discretion when determining final awards. Financial targets applicable to the PSUs are established based on our three-year financial plan, which considers a variety of factors, including management, Board, and external expectations and aspirations of our long-term performance. The financial targets for our currently outstanding PSUs are Earnings Per Share (“EPS”) and Relative Total Shareholder Return (“R-TSR”), with 50% of the payout tied to EPS and 50% tied to R-TSR. R-TSR performance versus our primary peer group is measured at the end of the three-year period and compares the Company’s average annual Total Shareholder Return (“TSR”) to the median TSR of that peer group. Each percentage point of outperformance or underperformance relative to the peer group median modifies the earned award up or down by five percentage points. In the event of underperformance by more than 10 percentage points, no payout is earned on the R-TSR portion of the award. In the event of outperformance, the payout on the R-TSR portion of the award cannot exceed 200%. In addition, if the Company’s annualized TSR is negative, the payout on the R-TSR portion of the award cannot exceed 100% even if our R-TSR outperforms the peer group median. Payouts Under the 2023-2025 PSU Program Performance Period For awards granted in 2023, 70% of each NEO’s target annual LTI opportunity was provided as PSUs based on the closing price of Company’s stock on the grant date. The number of PSUs ultimately earned was based on our performance against the pre-established EPS target and R-TSR performance.
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For the 2023-2025 performance period, EPS and three-year R-TSR versus our primary peer group each were weighted at 50%. Based on the combined results of these performance measures, the payout was 94% of target as illustrated below. The 94% payout was based on our strong EPS performance driven by continued momentum in key growth areas of the business that delivered above-plan after-tax non-GAAP net income and resulted in an EPS payout of 187%. Our TSR underperformed the median of our pharmaceutical peer group by more than 10%, resulting in a payout of 0% for the R-TSR portion of the award.
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Other Compensation Practices Stock Ownership Requirements The C&MD Committee recognizes the critical role that executive stock ownership has in aligning the interests of management with those of shareholders. As such, we maintain a formal stock ownership policy that requires the CEO and other senior executives to hold a certain amount of Company common stock for so long as they remain in office. The amount of Company common stock an executive is required to hold is based on a designated multiple of the executive’s base salary. Until the designated multiple of base salary is reached, executives are required to retain in stock a percentage of the after-tax net proceeds associated with stock option exercises and/or PSU and RSU settlements (100% for the CEO and 75% for the other NEOs). In calculating the attainment of our stock ownership requirements, we exclude (1) unexercised stock options and (2) unvested PSUs and RSUs.
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Equity Award Granting Policy We do not grant stock options in anticipation of, or immediately following, the release of material nonpublic information that is likely to result in changes to the price of our common stock, such as a significant positive or negative earnings announcement, nor do we time the public release of such information based on stock option grant dates. For additional information about our grant policy, see page 55 of this proxy statement under “Current LTI Grant Practices.” While we do not grant stock options in anticipation of, or immediately following, the release of material nonpublic information about our Company, the SEC has adopted Item 402(x) of Regulation S-K, which requires companies to disclose certain information in the event stock options were granted within four business days before or one business day after the filing of a 10-Q or 10-K, or the filing or furnishing of an 8-K that discloses material nonpublic information. As disclosed in the Grants of Plan-Based Awards table on page 71, and consistent with prior practice as described earlier, we granted stock options to our NEOs on April 29, 2025, which grant was three business days following our 8-K disclosure of Q1 2025 earnings. We subsequently filed our Q1 2025 10-Q on May 2, 2025, and as such, the following tabular disclosure of our 2025 stock options grants is required by Item 402(x).
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| (1) See the Grants of Plan-Based Awards table on page 71. |
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| Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(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 ($) | | Robert M. Davis Chairman, Chief Executive Officer and President | 2025 | $1,645,302 | $0 | $12,102,838 | $3,380,004 | $2,326,500 | $685,143 | $658,058 | $20,797,845 | | | 2024 | 1,623,874 | 0 | 13,077,541 | 4,650,010 | 2,761,650 | 511,878 | 561,112 | 23,186,064 | | | 2023 | 1,603,091 | 0 | 9,997,585 | 4,050,000 | 3,585,300 | 651,163 | 386,148 | 20,273,287 | | Caroline Litchfield Executive Vice President and Chief Financial Officer | 2025 | 1,173,214 | 0 | 3,580,681 | 1,000,008 | 1,099,800 | 532,764 | 127,618 | 7,514,085 | | | 2024 | 1,166,044 | 0 | 3,585,716 | 1,275,008 | 1,333,800 | 0 | 147,210 | 7,507,778 | | | 2023 | 1,093,063 | 0 | 3,147,375 | 1,275,003 | 1,665,000 | 792,534 | 327,410 | 8,300,385 | | Sanat Chattopadhyay Executive Vice President and President, Merck Manufacturing Division | 2025 | 982,170 | 0 | 2,363,261 | 660,004 | 920,710 | 291,064 | 191,199 | 5,408,408 | | | 2024(7) | 976,167 | 0 | 2,784,313 | 990,003 | 1,116,606 | 138,908 | 157,166 | 6,163,163 | | | 2023 | 934,923 | 0 | 2,443,907 | 989,997 | 1,393,873 | 317,466 | 160,194 | 6,240,360 | | Dean Li, M.D., Ph.D. Executive Vice President and President, Merck Research Laboratories | 2025 | 1,460,000 | 0 | 4,296,864 | 1,199,991 | 1,368,640 | 398,839 | 168,547 | 8,892,881 | | | 2024 | 1,451,077 | 0 | 4,724,760 | 1,680,000 | 1,659,840 | 400,472 | 170,183 | 10,086,332 | | | 2023 | 1,368,819 | 0 | 4,147,202 | 1,679,999 | 2,072,000 | 339,249 | 172,146 | 9,779,414 | | Jennifer Zachary Executive Vice President and General Counsel | 2025 | 1,062,217 | 0 | 2,685,571 | 750,002 | 995,749 | 254,317 | 112,722 | 5,860,578 | | | 2024(8) | — | | — | — | — | — | — | — | | | 2023(8) | — | | — | — | — | — | — | — |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| For more information on the awards granted during 2025, see the Grants of Plan-Based Awards table and related narrative and footnotes beginning on page 71. |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| Summary Compensation Table | ÷ ÷ ÷ ÷ | 63 |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| (4) Represents amounts paid under the EIP. For more information, see the Grants of Plan-Based Awards table and related narrative and footnotes beginning on page 71. Amounts shown are not reduced to reflect the NEOs’ elections, if any, to defer receipt of awards into the Merck Deferral Program. For more information, see the Nonqualified Deferred Compensation table and related notes and narrative on page 79. |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| Pay Versus Performance Pay Versus Performance Table | ÷ ÷ ÷ ÷ | 67 |
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| | Summary Compensation Table Total for CEO (Davis) | Summary Compensation Table Total for CEO (Frazier) | Compensation Actually Paid to CEO (Davis) (6) | Compensation Actually Paid to CEO (Frazier) (6) | Average Summary Compensation Table Total for Non-CEO NEOs | Average Compensation Actually Paid to Non-CEO NEOs (6) | Value of Initial Fixed $100 Investment Based on | | | | | Fiscal Year | | | | | | | Total Shareholder Return (7) | Peer Group Total Shareholder Return (8) | GAAP Net Income ($000’s) | Non-GAAP EPS (9) | | 2025 (1) | $20,797,845 | — | $15,760,172 | — | $6,918,988 | $5,356,809 | $158.08 | $198.33 | $18,254,000 | $8.98 | | 2024 (2) | 23,186,064 | — | 14,725,823 | — | 9,487,609 | 6,989,318 | 144.00 | 145.51 | 17,117,000 | 7.65 | | 2023 (3) | 20,273,287 | — | 26,701,326 | — | 7,629,512 | 9,360,664 | 153.61 | 134.12 | 365,000 | 1.51 | | 2022 (4) | 18,650,093 | — | 52,474,235 | — | 8,406,647 | 22,341,814 | 152.09 | 130.07 | 14,519,000 | 7.48 | | 2021 (5) | 13,722,121 | 15,196,920 | 14,390,893 | 13,328,924 | 6,709,905 | 7,004,950 | 101.81 | 122.48 | 12,345,000 | 5.37 |
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| 68 | ç ç ç ç | Pay Versus Performance Pay Versus Performance Table |
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| | Summary Compensation Table Total Compensation | Value of Pension Benefits Deducted from SCT (1) | Value of Equity Deducted from SCT | Value of Pension Benefits Per CAP Definition (2) | Fair Value of Equity Compensation Granted in Current Year (3) | Year-Over-Year Change in Fair Value of Unvested Equity (4) | Change in Fair Value of Equity that Vested During the Year (5) | Value of Dividends Accrued or Paid on Stock Awards (6) | Compensation Actually Paid | | CEO (Davis) | | | | | | | | | | | 2025 | $20,797,845 | $685,143 | $15,482,842 | $354,017 | $17,087,745 | ($1,794,015) | ($4,906,562) | $389,128 | $15,760,172 | | 2024 | 23,186,064 | 511,878 | 17,727,551 | 321,870 | 10,065,366 | (2,204,776) | 555,545 | 1,041,183 | 14,725,823 | | 2023 | 20,273,287 | 651,163 | 14,047,586 | 271,130 | 18,028,095 | (97,780) | 1,522,952 | 1,402,391 | 26,701,326 | | 2022 | 18,650,093 | 180,259 | 12,393,581 | 280,085 | 26,824,642 | 14,171,478 | 3,931,065 | 1,190,712 | 52,474,235 | | 2021 | 13,722,121 | 235,640 | 9,084,579 | 265,823 | 10,649,030 | (669,339) | (661,118) | 404,596 | 14,390,893 | | CEO (Frazier) | | | | | | | | | | | 2021 | 15,196,920 | — | 10,615,096 | 418,183 | 12,443,073 | (2,633,787) | (2,435,189) | 954,819 | 13,328,924 | | Average Non-CEO NEOs | | | | | | | | | | | 2025 | 6,918,988 | 369,246 | 4,134,096 | 178,265 | 4,562,640 | (460,854) | (1,442,613) | 103,724 | 5,356,809 | | 2024 | 9,487,609 | 175,334 | 6,714,011 | 130,394 | 4,223,773 | (520,745) | 281,388 | 276,243 | 6,989,318 | | 2023 | 7,629,512 | 479,834 | 4,253,332 | 152,186 | 5,458,528 | (43,471) | 475,952 | 421,122 | 9,360,664 | | 2022 | 8,406,647 | 42,041 | 5,514,804 | 122,447 | 9,133,936 | 6,336,440 | 3,346,846 | 552,343 | 22,341,814 | | 2021 | 6,709,905 | 107,732 | 4,261,734 | 122,147 | 4,829,729 | (247,588) | (208,749) | 168,972 | 7,004,950 |
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| Pay Versus Performance Pay Versus Performance Table | ÷ ÷ ÷ ÷ | 69 |
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| 70 | ç ç ç ç | Pay Versus Performance Pay Versus Performance Table |
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| 72 | ç ç ç ç | Grants of Plan-Based Awards Narrative Information Relating to the Grants of Plan-Based Awards Table |
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| 74 | ç ç ç ç | Outstanding Equity Awards |
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| Pension Benefits | ÷ ÷ ÷ ÷ | 77 |
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| 78 | ç ç ç ç | Pension Benefits |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Cash Balance Formula. For service starting January 1, 2013, benefits are calculated and shown as an account balance that grows with annual pay credits according to the following schedule:
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| Age + Cash Balance Service at 12/31 | | Percent of Total Pay credited to Account Balance | | At Least | Less Than | | | — | 40 | 4.5% | | 40 | 50 | 5.5% | | 50 | 60 | 6.5% | | 60 | 70 | 8.0% | | 70 | — | 10.0% |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
The account balance also earns interest credits every year at the annual rate of the change in the Consumer Price Index plus 3% (and not less than 3.3%). The account balance is the sum of annual pay credits and interest credits. Total Pay is generally base salary and EIP for both the FAP and Cash Balance formulas for the NEOs. Vesting. A participant is generally vested after three years of vesting service. All NEOs are vested. A participant who is vested and terminates employment can commence receiving a reduced pension benefit after attaining age 55. FAP benefits are reduced on an actuarial basis. Participants who only have vested benefits under the Cash Balance formula can commence payment of their Qualified Plan benefit immediately upon termination. Early Retirement Subsidies. Under the FAP formula, a participant who is age 55 with at least 10 years of Credited Service for eligibility is entitled to early retirement subsidies. Under this provision, unreduced benefits may begin at age 62 and benefits that begin before 62 are only reduced by 3% per year. As of December 31, 2025, Mr. Chattopadhyay is retirement eligible under the Qualified Plan and the SRP (i.e., at least age 55 and having completed at least 10 years of Credited Service for eligibility). SRP Benefits. The Qualified Plan benefits are limited by the Internal Revenue Code. The SRP is an unfunded plan maintained to provide benefits according to the formulas described above without regard to those limits. The SRP also may include benefits based on compensation deferred into the Merck Deferral Program. Forms of Benefit. In the Qualified Plan and in the SRP for accruals prior to 2005, a participant generally can choose from several annuity options or a lump sum. SRP accruals post-2004 are payable in a lump sum or installments of 5 to 10 years. All forms of benefit are actuarially equivalent to the single life annuity.
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| ÷ ÷ ÷ ÷ | 79 |
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Nonqualified Deferred Compensation The following table shows the executive contributions, earnings, and account balances for the NEOs in the Merck Deferral Program, an unfunded, nonqualified, unsecured deferred compensation plan. The Merck Deferral Program allows participants who are executive officers to defer all or a portion of annual bonus and/or up to 50% of base salary, subject to certain limitations. All dollar amounts are rounded. Nonqualified Deferred Compensation for Fiscal Year Ended December 31, 2025
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| Name | Executive Contributions in 2025 ($) | Registrant Contributions in 2025 ($)(1) | Aggregate Earnings in 2025 ($)(2) | Aggregate Withdrawals/ Distributions in 2025 ($) | Aggregate Balance at 12/31/25 ($)(3) | | Davis | $0 | $182,350 | $348,482 | $0 | $2,473,091 | | Litchfield | 0 | 96,921 | 98,747 | 0 | 666,800 | | Chattopadhyay | 0 | 78,574 | 1,750,061 | 0 | 14,479,534 | | Li | 0 | 124,463 | 167,724 | 0 | 1,110,177 | | Zachary | 0 | 86,261 | 166,178 | 0 | 1,090,660 |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| (1) The amounts disclosed in this column represent the Company’s annual 4.5% credit of eligible pay in excess of the IRS limit to the NEOs’ accounts under the Merck Deferral Program. These amounts are included within the amount disclosed in the “All Other Compensation” column of the Summary Compensation table for each applicable NEO for 2025. |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| (2) This column represents dividends earned plus changes in market and account value (investment earnings or losses) for the period of January 1, 2025 to December 31, 2025. |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| (3) This column includes deferred compensation earned in earlier years which was disclosed as “Salary,” “Non-Equity Incentive Plan Compensation”, or “All Other Compensation” in the Summary Compensation table of prior proxy statements as follows: Mr. Davis, $218,488 for 2024 and $242,730 for 2023; Ms. Litchfield, $111,583 for 2024 and $112,315 for 2023; Mr. Chattopadhyay, $99,300 for 2023, and Dr. Li, $142,653 for 2024 and $146,717 for 2023. Ms. Zachary was not an NEO in 2024 or 2023. Although Mr. Chattopadhyay was not an NEO for 2024 and his 2024 compensation information was not disclosed in prior proxy statements, pursuant to SEC rules, his 2024 compensation information is included in the Summary Compensation table in this year’s proxy and the balance listed for him in this column includes a Company credit of $90,885 for 2024. |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Deferral Program Investments. Account balances may be invested in phantom investments selected by the executive from an array of investment options that mirrors the funds in the Merck U.S. Savings Plan. Distributions. When participants elect to defer amounts into the Merck Deferral Program, they also elect when the amounts ultimately will be distributed to them. Distributions may either be made in a specific year (regardless of whether employment has then ended) or at a time that begins at or after the executive’s employment has ended. Distributions can be made in a lump sum or up to 15 annual installments. Distributions from the Company common stock fund are made in shares, with cash payable for any partial share.
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| 80 | ç ç ç ç |
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Potential Payments Upon Termination or a Change in Control The section below describes the payments and benefits that may be made to the NEOs upon termination from employment, including in connection with a change in control under the Merck & Co., Inc. U.S. Separation Benefits Plan and the Merck & Co., Inc. Change in Control Separation Benefits Plan. For payments that may be made to the NEOs upon retirement, see the Pension Benefits table and related narrative beginning on page 76. Merck & Co., Inc. U.S. Separation Benefits Plan, as amended (the “Separation Plan”) The Separation Plan provides severance pay and benefits to certain eligible employees, including the NEOs, whose employment is terminated due to organizational changes, including discontinuance of operations, location closings, corporate restructuring, or a work force reduction. For the NEOs, the following severance pay and benefits are payable under the Separation Plan:
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| u | A cash lump sum severance payment, the amount which, for the NEOs, is determined as follows: |
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| Years of Continuous Service at Separation Date | Severance Pay (base salary in weeks) | | Less than 1 year | 26 | | 1-4 years | 40 | | 5 years or more | 40 plus 2 additional weeks for each year of continuous service beyond 4 years (maximum 78 total) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| u | Continued participation in the Company’s medical, dental, and basic life insurance plans at active-employee rates for 26 to 78 weeks (determined based on years of continuous service); |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| u | Outplacement services for up to 12 months; and |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| u | Continued eligibility for the financial and tax planning allowance for the calendar year in which separation occurs. |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
To be eligible for the severance pay and benefits described above, a general release of claims is required, as well as compliance with applicable restrictive covenants. As discussed in “Management Succession Planning” on page 22, Mr. Chattopadhyay will retire from the Company effective July 1, 2026. Mr. Chattophadyay will not be eligible for severance benefits in connection with his retirement. Effects of Termination on Other Awards or Under Other Benefit Plans The NEOs may be eligible for additional payments and benefits upon termination from employment as described below.
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| • | Executive Incentive Plan Awards. The NEOs may be eligible for payments in lieu of EIP bonus payouts as follows: |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
| Timing of Termination | Eligibility for Pay in Lieu of EIP | Determination of Amount of Pay in Lieu of EIP | | Termination occurs following the end of the performance year or on December 31 | Eligibility determined in accordance with same terms and conditions as other employees participating in the EIP | Amount determined in accordance with same terms and conditions as other employees participating in the EIP | | Termination occurs between January 1 and June 30 of the performance year | Eligible for special payment if NEO is retirement eligible | Amount of the special payment is based on the NEO’s target award and the number of months worked in the performance year | | Termination occurs after June 30 and before December 31 of the performance year | Eligible for special payment | Amount of the special payment is based on the NEO’s target award and the number of months worked in the performance year |
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| Potential Payments Upon Termination or a Change in Control Merck & Co., Inc. U.S. Separation Benefits Plan, as amended (the “Separation Plan”) | ÷ ÷ ÷ ÷ | 81 |
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| 82 | ç ç ç ç | Potential Payments Upon Termination or a Change in Control Individual Agreements and Arrangements |
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| Potential Payments Upon Termination or a Change in Control Effects of Change in Control under Change in Control, Equity, and Other Benefit Plans | ÷ ÷ ÷ ÷ | 83 |
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| 84 | ç ç ç ç | Potential Payments Upon Termination or a Change in Control Effects of Change in Control under Change in Control, Equity, and Other Benefit Plans |
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| Potential Payments Upon Termination or a Change in Control Effects of Change in Control under Change in Control, Equity, and Other Benefit Plans | ÷ ÷ ÷ ÷ | 85 |
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| 86 | ç ç ç ç | Potential Payments Upon Termination or a Change in Control Effects of Change in Control under Change in Control, Equity, and Other Benefit Plans |