DEF 14A of Gilead Sciences, Inc., Mar 30, 2021

DEF 14A of Gilead Sciences, Inc.

Filed Mar 30, 2021 · FY20200001206774-21-000908

Open on EDGAR

  1. Voting

    | 2020 Grants of Plan-Based Awards | 69 | | 2020 Outstanding Equity Awards at Fiscal Year-End | 72 | | 2020 Option Exercises and Stock Vested | 74 | | 2020 Nonqualified Deferred Compensation | 74 | | 2020 Potential Payments Upon Involuntary Termination or Change in Control Termination | 75 | | CEO Pay Ratio | 76 |

  2. Nominees

    Nominees Our Nominating and Corporate Governance Committee has evaluated and recommended, and our full Board has considered and nominated for election at the Annual Meeting, each of the nine director nominees described below. The names of the nominees and certain information about them as of March 30, 2021, as well as the relevant skills and experience of the director nominees that led our Nominating and Corporate Governance Committee to conclude that the nominee should serve as a director of our Board, are set forth below:

  3. Nominees

    | Kevin E. Lofton LEAD INDEPENDENT DIRECTOR | | AGE: 66 DIRECTOR SINCE: 2009 COMMITTEES: Audit, Compensation and Talent, Nominating and Corporate Governance (Chair) EFFECTIVE MAY 2021: Compensation and Talent (Chair) | | Mr. Lofton joined our Board in 2009 and was appointed Lead Independent Director in May 2020. In June 2020, Mr. Lofton retired as the Chief Executive Officer of CommonSpirit Health (CSH), a $30 billion system of hospitals and other care centers in 21 states that resulted from the merger of Catholic Health Initiatives (CHI) and Dignity Health. Prior to leading CSH, he served as the Chief Executive Officer of CHI from 2003 to 2019. Mr. Lofton also served as Chief Executive Officer of two university hospitals, the University of Alabama at Birmingham Hospital and Howard University Hospital. He received the Healthcare Financial Management Association’s Richard L. Clarke Board of Directors Award in 2014 and an honorary Doctor of Humanities in Medicine degree from the Baylor College of Medicine in 2016. He is recognized for his extensive work in the area of heath care management, eliminating health disparities and creating healthier communities. Mr. Lofton was the chairman of the American Hospital Association in 2007. He also serves on the board of directors of Rite Aid Corporation and Medtronic plc. | | | | RELEVANT SKILLS AND EXPERIENCE: | | | | Significant leadership experience in the healthcare industry, including serving as chief executive officer of multiple organizations. Expertise and knowledge in health systems management and patient care. Demonstrated commitment to improving access to medical services, particularly for the underserved. Breadth of knowledge about Gilead’s business. | | | | OTHER PUBLIC COMPANY BOARD SERVICE: | | | | ►Rite Aid Corporation | ►Medtronic plc | |

  4. Nominees

    | Jacqueline K. Barton, Ph.D. INDEPENDENT | AGE: 68 DIRECTOR SINCE: 2018 COMMITTEES: Compensation and Talent, Science | | Dr. Barton joined our Board in January 2018. Dr. Barton is the John G. Kirkwood and Arthur A. Noyes Professor of Chemistry in the Division of Chemistry and Chemical Engineering at the California Institute of Technology, where she has been a member of the faculty for nearly 30 years and served as the Norman Davidson Leadership Chair of the division from 2009 to 2019. She is a member of the board of directors of Dow Inc., and previously served on the board of directors and Materials Advisory Committee of DowDupont Inc. and the board of directors of The Dow Chemical Company. Dr. Barton also founded and served on the board of directors of GeneOhm Sciences Inc., a molecular diagnostics company acquired by Becton, Dickinson and Company, and was a member of Gilead’s Scientific Advisory Board from 1989 to 2007. She is a member of the National Academy of Sciences, the National Academy of Medicine, and the American Philosophical Society. In 2011, Dr. Barton received the 2010 National Medal of Science for her discovery of new chemistry of the DNA helix, and in 2015, she received the Priestley Medal, the highest award of the American Chemical Society. | | | RELEVANT SKILLS AND EXPERIENCE: | | | Extensive experience in the fields of chemistry and related fields, for which she has received many awards. Accomplished academic and inventor who has performed pioneering medical research and discovery. Business experience in founding and leading a molecular diagnostics company. | | | OTHER PUBLIC COMPANY BOARD SERVICE: | | | ►Dow Inc.* | | | * Dr. Barton will retire from this role effective as of April 15, 2021. | |

  5. Nominees

    | 22 | |

  6. Nominees

    | Jeffrey A. Bluestone, Ph.D. New INDEPENDENT | AGE: 67 DIRECTOR SINCE: 2020 COMMITTEES: Science | | Dr. Bluestone joined our Board in December 2020. Since 2019, Dr. Bluestone has been the President and Chief Executive Officer of Sonoma Biotherapeutics, Inc. From 2015 to 2019, he led the Parker Institute for Cancer Immunotherapy as President and Chief Executive Officer. Dr. Bluestone is the A.W. and Mary Margaret Clausen Distinguished Professor in the Diabetes Center at University of California San Francisco, where he has been a member of the faculty and served in various other roles for over 20 years, including the Director of the Hormone Research Institute from 2000 to 2019. He is an international leader in the field of immunotherapy and has published more than 500 papers over nearly four decades focused on understanding the basic processes that control T-cell activation and immune tolerance in autoimmunity, organ transplantation and cancer. His research has led to the development of multiple immunotherapies, including the first medicine approved by the U.S. Food and Drug Administration (FDA) targeting T-cell co-stimulation to treat autoimmunity and the first FDA-approved checkpoint inhibitor for the treatment of metastatic melanoma. Dr. Bluestone was the founding director of the Immune Tolerance Network, the largest National Institutes of Health-funded multicenter clinical immunology research program, testing novel immunotherapies in transplantation, autoimmunity and asthma/allergy. He served as a member of the Blue Ribbon Panel, appointed by then Vice President Joe Biden, to guide the National Cancer Moonshot Initiative. Dr. Bluestone is a member of the National Academy of Medicine and American Academy of Arts and Sciences, was a recipient of the prestigious Guggenheim Fellowship, and previously served as the Ludwig Professor and Director of the Ben May Institute at the University of Chicago. Since 2019, he has served as a member of the board of directors of Provention Bio, Inc. | | | RELEVANT SKILLS AND EXPERIENCE: | | | Internationally-recognized leader in the field of immunotherapy and related fields, with a distinguished scientific and academic career spanning nearly four decades. Strong leadership experience in the healthcare industry. | | | OTHER PUBLIC COMPANY BOARD SERVICE: | | | ►Provention Bio, Inc. | |

  7. Nominees

    | Sandra J. Horning, M.D. New INDEPENDENT | | AGE: 72 DIRECTOR SINCE: 2020 COMMITTEES: Nominating and Corporate Governance, Science EFFECTIVE MAY 2021: Science (Chair) | | Dr. Horning joined our Board in January 2020. Dr. Horning was the Chief Medical Officer and Global Head of Product Development of Roche, Inc., until her retirement in 2019. During her 10-year career at Roche and Genentech, she helped bring 15 new medicines to patients in disease areas including cancer, multiple sclerosis, influenza and blindness. Prior to her career at Roche, Dr. Horning spent 25 years as a practicing oncologist, investigator and tenured professor at Stanford University School of Medicine, where she remains a professor of medicine emerita. From 2005 to 2006, she served as President of the American Society of Clinical Oncology. Dr. Horning was recognized as the 2020-2021 Healthcare Businesswomen’s Association Woman of the Year. She also was selected as the 2017 recipient of the Duane Roth Memorial Award, an honor dedicated to leaders in healthcare, whose work has overcome numerous scientific obstacles to create new paradigms in research and treatment. From 2015 to 2018, Dr. Horning served on the Foundation Medicine Board of Directors. She currently serves as a member of the boards of directors of Moderna, Inc. and Olema Oncology. She is also a co-founder, advisor and member of the Board of Directors of EQRx. | | | | RELEVANT SKILLS AND EXPERIENCE: | | | | Significant leadership experience in the pharmaceutical and healthcare industry, including expertise in drug development in multiple therapeutic areas. Medical professional with experience treating patients as a practicing oncologist. | | | | OTHER PUBLIC COMPANY BOARD SERVICE: | | | | ►Moderna, Inc. | ►Olema Oncology | |

  8. Nominees

    | 2021 Proxy Statement | 23 |

  9. Nominees

    | Kelly A. Kramer INDEPENDENT | AGE: 53 DIRECTOR SINCE: 2016 COMMITTEE: Audit (Chair) EFFECTIVE MAY 2021: Compensation and Talent | | Ms. Kramer joined Gilead’s Board of Directors in August 2016. Ms. Kramer was Executive Vice President and Chief Financial Officer of Cisco Systems, Inc., a worldwide technology leader, from 2015 until her retirement in 2020. Prior to that, she was Senior Vice President of Corporate Finance at Cisco. She previously served as Vice President and Chief Financial Officer of GE Healthcare Systems and Chief Financial Officer of GE Healthcare Biosciences. Ms. Kramer also has worked in GE’s Corporate Headquarters, Transportation Systems and Aerospace divisions. She currently serves as a member of the boards of directors of Snowflake Inc. and Coinbase, Inc. | | | RELEVANT SKILLS AND EXPERIENCE: | | | Significant financial expertise, including serving as a chief financial officer of major companies or divisions in the technology and healthcare industries. Experience in strategic and financial planning and corporate development. | | | OTHER PUBLIC COMPANY BOARD SERVICE: | | | ►Snowflake Inc. | |

  10. Nominees

    | Harish Manwani INDEPENDENT | | | AGE: 67 DIRECTOR SINCE: 2018 COMMITTEES: Audit, Compensation and Talent EFFECTIVE MAY 2021: Nominating and Corporate Governance | | Mr. Manwani joined our Board in May 2018. Mr. Manwani is a Senior Operating Partner at The Blackstone Group L.P., a leading global alternative asset manager, which he joined in 2015. He previously was Chief Operating Officer of the Unilever Group from 2011 until his retirement in 2014. Mr. Manwani joined Unilever in 1976 as a management trainee in India and held senior management roles around the world, including North America, Latin America, Asia, Africa and Central and Eastern Europe. Mr. Manwani is an honors graduate from Bombay University. He holds a master’s degree in Management Studies, and he attended the Advanced Management Program at Harvard Business School. Mr. Manwani is Chairman of the Board of the Indian School of Business, and also serves on the board of directors of Whirlpool Corporation, Qualcomm Incorporated, Nielsen Holdings plc, EDBI Pte Ltd. and Tata Sons Private Limited. He previously served as the non-executive Chairman of Hindustan Unilever Limited from 2005 to 2018, and as a member of the board of directors of The Economic Development Board of Singapore from 2013 to 2019 and Pearson plc from 2013 to 2018. | | | | | RELEVANT SKILLS AND EXPERIENCE: | | | | | Strong leadership skills and broad global operational, sales and marketing and human resources expertise at a multi-national, complex organization. Experience in driving growth across complex organizations on a global scale. | | | | | OTHER PUBLIC COMPANY BOARD SERVICE: | | | | | ►Whirlpool Corporation | ►Qualcomm Incorporated | ►Nielsen Holdings plc | |

  11. Nominees

    | 24 | |

  12. Nominees

    | Daniel P. O’Day CHAIRMAN OF THE BOARD | AGE: 56 DIRECTOR SINCE: 2019 | | Mr. O’Day joined Gilead Sciences in March 2019 as Chairman of the Board of Directors and Chief Executive Officer. Prior to Gilead, Mr. O’Day served as the Chief Executive Officer of Roche Pharmaceuticals. His career at Roche spanned more than three decades, during which he held a number of executive positions in the company’s pharmaceutical and diagnostics divisions in North America, Europe and Asia. He served as a member of Roche’s Corporate Executive Committee, as well as on a number of public and private boards, including Genentech, Flatiron Health and Foundation Medicine. Mr. O’Day holds a bachelor’s degree in biology from Georgetown University and an MBA from Columbia University in New York. He currently serves on the board of directors for the Pharmaceutical Research and Manufacturers of America organization and Galapagos NV. | | | RELEVANT SKILLS AND EXPERIENCE: | | | Significant leadership and international business experience in the pharmaceutical industry. Deep understanding of the evolving global healthcare environment and demonstrated commitment to driving innovation across the business. | | | OTHER PUBLIC COMPANY BOARD SERVICE: | | | ►None | |

  13. Nominees

    | Javier J. Rodriguez New INDEPENDENT | AGE: 50 DIRECTOR SINCE: 2020 COMMITTEES: Audit | | Mr. Rodriguez joined our Board in June 2020. Since 2019, Mr. Rodriguez has been the Chief Executive Officer of DaVita Inc., a Fortune 500 company providing healthcare services to kidney disease patients throughout the United States and internationally. DaVita strives to improve patients’ quality of life through clinical innovation and integrated, personalized care. From 2014 to 2019, he was the CEO of DaVita Kidney Care, the company’s business unit that treats patients with kidney failure and end-stage renal disease. Mr. Rodriguez has spent more than 20 years in various executive roles at DaVita, driving the company’s transformation for how kidney care is delivered. Mr. Rodriguez was recognized by Modern Healthcare’s list of 100 Most Influential People in Healthcare in both 2019 and 2020. In 2015, he was named one of the Top 10 Leaders by Hispanic Executive magazine. Mr. Rodriguez currently serves as a member of the boards of directors of DaVita and the Denver Metro Chamber of Commerce. | | | RELEVANT SKILLS AND EXPERIENCE: | | | Significant leadership experience in the healthcare industry, including serving as chief executive officer and in various other executive roles of a Fortune 500 public company. | | | OTHER PUBLIC COMPANY BOARD SERVICE: | | | ►DaVita, Inc. | |

  14. Nominees

    | 2021 Proxy Statement | 25 |

  15. Nominees

    | Anthony Welters New INDEPENDENT | | AGE: 66 DIRECTOR SINCE: 2020 COMMITTEES: Compensation and Talent EFFECTIVE MAY 2021: Nominating and Corporate Governance (Chair) | | Mr. Welters joined our Board in October 2020. He served as Senior Adviser to the Office of the CEO of UnitedHealth Group (UHG) until 2016. He previously was Executive Vice President and a Member of the Office of the CEO from November 2006 until April 2014, and prior to that appointment led UHG’s Public and Senior Markets Group. Mr. Welters joined UHG in June 2002 upon its acquisition of AmeriChoice, a healthcare company he founded in 1989. He currently serves on the public boards of Loews Corporation and the Carlyle Group. He is the Executive Chairman of the BlackIvy Group, an organization focused on building and growing commercial enterprises in Sub-Saharan Africa; Chairman of Somatus, Inc., a value-based care company; and a member of the Board of Directors for Parachute Health, a healthcare technology platform company for clinicians, insurance companies and medical supply distributors. Mr. Welters also is Trustee Emeritus of the Morehouse School of Medicine Board of Trustees, Chairman Emeritus of the Board of New York University School of Law, as well as Vice Chairman of the Board of New York University and a Trustee of NYU Langone Medical Center. In 2012, President Obama appointed Mr. Welters to the Board of Trustees of the John F. Kennedy Center for the Performing Arts. He also is a founding member of the National Museum of African American History and Culture. | | | | RELEVANT SKILLS AND EXPERIENCE: | | | | Extensive experience in the health insurance and managed care industry. Demonstrated commitment to delivering healthcare to underserved communities. | | | | OTHER PUBLIC COMPANY BOARD SERVICE: | | | | ►Loews Corporation | ►Carlyle Group | |

  16. Independence of the Board of Directors

    Independence of the Board of Directors The Nasdaq listing rules require that a majority of the members of a listed company’s board of directors qualify as “independent” as affirmatively determined by our Board. In addition, our Board Guidelines require that a substantial majority of our Board consist of “independent” directors as defined by the Board Guidelines. Our Board Guidelines are available on our website at www.gilead.com on the Investors page under “Corporate Governance.” After a review of all relevant transactions and relationships between each director, as well as his or her family members, and us, our senior management and independent registered public accounting firm, our Board has determined that eight of our nine nominees for director are “independent” directors as specified by applicable laws and regulations of the SEC, the listing rules of Nasdaq and our Board Guidelines. In addition, the Board previously determined that Dr. Whitley and Mr. Wold-Olsen were independent. Mr. O’Day, our Chairman of the Board, is not an independent director because he is currently an executive officer of the company.

  17. Majority Vote Standard for Election of Directors

    Majority Vote Standard for Election of Directors Our bylaws require directors to be elected by a majority of the votes cast with respect to such director in uncontested elections (number of shares voted “for” a director must exceed the number of shares voted “against” that director). In a contested election (a situation in which the number of nominees for director exceeds the number of directors to be elected), the standard for election of directors will be a plurality of the shares voting in the election of directors at any such meeting at which a quorum is present. Under our Board Guidelines, any director who fails to receive at least a majority of the votes cast in an uncontested election must tender his or her resignation to our Board. Our Nominating and Corporate Governance Committee would then evaluate the tendered resignation and make a recommendation to our Board to accept or reject the resignation or to take other action. Our Board will act on our Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision and the rationale for such decision within 90 days from the date the election results are certified. The director who tenders his or her resignation will not participate in our Board’s decision. If a nominee who was not already serving as a director does not receive at least a majority of the votes cast for such director at the annual meeting, that nominee will not become a director.

  18. Majority Vote Standard for Election of Directors

    | 26 | |

  19. 2020 Director Compensation

    2020 Director Compensation The table below summarizes the compensation paid by us to non-employee Board members for the 2020 fiscal year:

  20. 2020 Director Compensation

    | Name | Fees Earned or Paid in Cash(1) | Stock Awards(2)(3) | Option Awards(3)(4) | Total | | Jacqueline K. Barton | $115,000 | $149,982 | $149,991 | $414,973 | | Jeffrey A. Bluestone(5) | $53,356 | $63,678 | $63,754 | $180,788 | | Sandra J. Horning(6) | $159,014(7) | $190,657 | $191,368 | $541,039 | | Kelly A. Kramer | $115,000(7) | $149,982 | $149,991 | $414,973 | | Kevin E. Lofton | $190,000(7) | $149,982 | $149,991 | $489,973 | | Harish M. Manwani | $115,000 | $149,982 | $149,991 | $414,973 | | Javier J. Rodriguez(8) | $97,082 | $135,957 | $136,025 | $369,064 | | Anthony Welters(9) | $64,932 | $82,997 | $83,012 | $230,941 | | Richard J. Whitley | $130,000 | $149,982 | $149,991 | $429,973 | | Per Wold-Olsen | $150,000 | $149,982 | $149,991 | $449,973 |

  21. 2020 Director Compensation

    | (1) Represents cash retainers for serving on our Board and committees of the Board including (a) a pro-rated cash retainer for Dr. Bluestone’s serving on the Board and the Science Committee for the period from December 7, 2020 to June 30, 2021, (b) pro-rated cash retainers for Dr. Horning of $31,849 for serving on the Board for the period from January 28, 2020 to June 30, 2020 and $12,165 for serving on the Nominating and Corporate Governance Committee and the Science Committee for the period from March 12, 2020 to June 30, 2020, (c) pro-rated cash retainers for Mr. Rodriguez of $3,288 for serving on the Board for the period from June 15, 2020 to June 30, 2020 and $18,794 for serving on the Audit Committee for the period from July 23, 2020 to June 30, 2021, and (d) pro-rated cash retainers for Mr. Welters of $51,781 for serving on the Board for the period from October 17, 2020 to June 30, 2021 and $13,151 for serving on the Compensation and Talent Committee for the period from November 3, 2020 to June 30, 2021. | | (2) Represents the grant-date fair value of RSU awards granted in 2020 to each director under our 2004 Equity Incentive Plan (as amended and restated, the “2004 Plan”) including: (a) 1,936 RSUs granted to each Board member on May 6, 2020, except Dr. Bluestone, Mr. Rodriguez and Mr. Welters who were not then serving, (b) an award of 1,041 RSUs granted to Dr. Bluestone on December 8, 2020 for his partial period of 2020-2021 Board service, (c) an additional 632 RSUs granted to Dr. Horning on January 28, 2020 for her partial period of 2019-2020 Board service, (d) an award of 1,838 RSUs granted to Mr. Rodriguez on June 15, 2020 for his partial period of 2020-2021 Board service, and (e) an award of 1,368 RSUs granted to Mr. Welters on October 22, 2020 for his partial period of 2020-2021 Board service. The applicable grant-date fair value of each award was |

  22. 2020 Director Compensation

    | 38 | |

  23. 2020 Director Compensation

    | determined in accordance with Accounting Standards Codification Topic 718 (“Topic 718”) and accordingly calculated by multiplying the number of shares of our common stock subject to the award by the closing price per share of our common stock on the award date, without any adjustment for estimated forfeitures related to such service vesting. | | (3) The following table shows, for each named individual, the aggregate shares under stock awards, the aggregate shares underlying option awards and the aggregate phantom shares held by that individual as of December 31, 2020: |

  24. 2020 Director Compensation

    | Name | Aggregate Stock Awards Outstanding as of December 31, 2020(a) | Aggregate Option Awards Outstanding as of December 31, 2020 | Aggregate Phantom Shares as of December 31, 2020(b) | | Jacqueline K. Barton | 6,489 | 31,349 | — | | Jeffrey A. Bluestone | 1,041 | 5,879 | — | | Sandra J. Horning | 2,568 | 11,723 | — | | Kelly A. Kramer | 8,730 | 45,217 | — | | Kevin E. Lofton | 9,830 | 102,008 | 2,852 | | Harish M. Manwani | 1,936 | 29,230 | — | | Javier J. Rodriguez | 1,838 | 8,667 | — | | Anthony Welters | 1,368 | 7,718 | — | | Richard J. Whitley | 5,964 | 102,008 | 5,808 | | Per Wold-Olsen | 1,936 | 81,726 | — |

  25. 2020 Director Compensation

    | (a) Aggregate stock awards include both unvested RSUs and vested RSUs for which receipt of the underlying shares of our common stock has been deferred. RSU awards accrue forfeitable dividend equivalents that are subject to the same vesting and other terms and conditions as the corresponding RSU awards. Dividend equivalents are accumulated and paid in cash when the underlying shares are issued. | | (b) Dividends on phantom shares are accrued and reinvested to acquire additional phantom shares quarterly. | | (4) Represents the grant-date fair value of stock option awards granted in 2020 to each director under the 2004 Plan, including: (a) options covering 7,886 shares with an exercise price of $77.47 per share made to each Board member on May 6, 2020, except Dr. Bluestone, Mr. Rodriguez and Mr. Welters, who were not then serving, (b) options covering 5,879 shares with an exercise price of $61.17 per share granted to Dr. Bluestone on December 8, 2020 for his partial period of 2020-2021 Board service, (c) additional options covering 3,837 shares with an exercise price of $64.36 per share granted to Dr. Horning on January 28, 2020 for her partial period of 2019-2020 Board service, (d) options covering 8,667 shares with an exercise price of $73.97 per share granted to Mr. Rodriguez on June 15, 2020 for his partial period of 2020-2021 Board service, and (e) options covering 7,718 shares with an exercise price of $60.67 per share granted to Mr. Welters on October 22, 2020 for his partial period of 2020-2021 Board service. The applicable grant-date fair value of each award was calculated in accordance with Topic 718 and did not take into account any estimated forfeitures related to such service vesting. Assumptions used in the calculation of grant-date fair value are set forth in Note 16 to our Consolidated Financial Statements for the year ended December 31, 2020, included in our Annual Report on Form 10-K for such fiscal year filed with the SEC. | | (5) On December 7, 2020, the Board appointed Dr. Jeffrey A. Bluestone, Ph. D. to serve on the Board and Science Committee of the Board, effective immediately. | | (6) On January 28, 2020, the Board appointed Dr. Sandra J, Horning to serve on the Board, effective immediately. Dr. Horning was also appointed as a member of the Nominating and Corporate Governance Committee and the Scientific Committee of the Board, effective March 12, 2020. Total cash compensation paid to Dr. Horning represents the cash retainers for serving on our Board and committees of the Board from July 1, 2020 to June 30, 2021 as well as the pro-rated cash retainers for Dr. Horning of $31,849 for serving on the Board for the period from January 28, 2020 to June 30, 2020 and $12,165 for serving on the Nominating and Corporate Governance Committee and the Science Committee for the period from March 12, 2020 to June 30, 2020. | | (7) Dr. Horning, Ms. Kramer, and Mr. Lofton elected to defer their entire 2020-2021 Board period retainer fees of $115,000, $115,000 and $190,000, respectively, as a cash deferral under our Deferred Compensation Plan. | | (8) On June 14, 2020, the Board appointed Javier J. Rodriguez to serve on the Board, effective June 15, 2020. Mr. Rodriguez was also appointed as a member of the Audit Committee, effective July 23, 2020. Total cash compensation paid to Mr. Rodriguez represents the cash retainer for serving on our Board from July 1, 2020 to June 30, 2021 as well as the pro-rated cash retainers for Mr. Rodriguez of $3,288 for serving on the Board for the period from June 15, 2020 to June 30, 2020 and $18,794 for serving on the Audit Committee for the period from July 23, 2020 to June 30, 2021. | | (9) On October 17, 2020, the Board appointed Anthony Welters to serve on the Board, effective immediately. Mr. Welters was also appointed as a member of the Compensation and Talent Committee, effective November 3, 2020. |

  26. 2020 Director Compensation

    | 2021 Proxy Statement | 39 |

  27. 2020 Director Compensation

    | Ratification of the Selection of Independent Registered Public Accounting Firm Our Audit Committee has selected Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021 and has further directed that we submit the selection of our independent registered public accounting firm for ratification by the stockholders at the Annual Meeting. Ernst & Young LLP has audited our financial statements since our inception in 1987. | | | | Our Board unanimously recommends a vote “FOR” Proposal 2. |

  28. 2020 Key Program and Policy Changes

    | ► | In January 2020, the Committee approved a more formulaic annual incentive plan design with more objective and rigorous annual performance metrics for the 2020 plan year. |

  29. 2020 Key Program and Policy Changes

    | INCREASED FOCUS ON FINANCIAL SUCCESS | INCREASED ALIGNMENT WITH OUR STRATEGIC OBJECTIVES | ENHANCED RISK MITIGATION | | ►Increased the weighting of financial metrics from 30% to 50% of the total award ►Established threshold, target and maximum achievement levels for each of our financial metrics ►Introduced a Non-GAAP Operating Income metric | ►50% of the award is tied to rigorous, pre-established pipeline, product and people metrics ►Removed the +/-10% factor that was previously included in the annual incentive plan for unplanned accomplishments | ►Subjected awards to clawback/forfeiture for misconduct ►Authorized our Compensation and Talent Committee to exercise negative discretion to reduce earned payouts for all participants, including for lapses in compliance |

  30. Stockholder Engagement and 2020 Vote on Named Executive Officer Compensation

    In an effort to be responsive to feedback from our stockholders in 2019, in January 2020 the Compensation and Talent Committee proactively approved a new annual incentive plan design, which included increasing the financial metrics from 30% to 50% of the total award. The Committee also adopted rigorous performance metrics that were more formulaic than in previous years and eliminated the Committee’s discretion to increase or decrease the incentive payout by 10% for unplanned events. In addition, our Board amended our clawback policy to expand its scope. During our stockholder engagement meetings following our annual shareholder meeting in 2020 we took the opportunity to discuss the proactive changes to provide greater transparency in our short-term incentive plan and the expansion of our clawback policy. Our stockholders expressed no serious concerns regarding our pay programs and our Compensation and Talent Committee determined that no further changes were necessary in response to the voting results at our 2020 stockholder meeting. Stockholders may express their views directly to our Compensation and Talent Committee as described in our “Stockholder Communications with the Board” policy, available on our website at www.gilead.com on the Investors page under “Corporate Governance.”

  31. Compensation Philosophy

    | ►Pay-for-Performance ►Market Competitiveness | ►Short- and Long-Term Balance ►Stockholder Alignment | ►Cost-Effectiveness ►Egalitarian Approach |

  32. Compensation Philosophy

    | What We Do ✓Ongoing outreach and engagement with major stockholders on executive compensation governance ✓Robust executive stock ownership guidelines ✓Clawback policy covers both cash and equity and allows for clawback of compensation if financial results are subsequently restated or for significant misconduct, including a failure to supervise a subordinate, while forfeiture provisions further cover equity in the event of a termination for cause | ✓Cap annual cash incentive and long-term performance share unit (PSU) plan payouts at reasonable levels ✓Set pre-established grant dates for executive officers’ annual equity awards ✓Compensation and Talent Committee’s independent consultant performs no other work for Gilead ✓Conduct annual assessments to identify and mitigate risk in our compensation programs |

  33. Compensation Philosophy

    | What We Do Not Do ✕No repricing of stock options without stockholder approval ✕No single trigger change in control severance benefits ✕No change in control excise tax gross-ups | ✕Employees and directors are prohibited from hedging and pledging our stock ✕No dividend or dividend equivalent rights payable on unearned or unvested equity awards |

  34. COMPENSATION COMPONENTS

    | Base Salary Payment Criteria Fixed annual compensation reviewed annually with any increases generally effective March 1 | Annual Cash Incentive Payment Criteria Chief Executive Officer: ►100% corporate performance ►Target = 150% of base salary ►Maximum = 200% of target Other Named Executive Officers: ►Target = 100% of base salary ►Maximum = 200% of target Corporate performance assessed on: ►Financial results: 50% ►Pipeline, Product and People results: 50% Individual performance factor from 0 – 150% multiplied by corporate performance factor from 0 – 150% (up to a maximum of 200% of target) 2020 Compensation Summary ►Annual incentive earned at 190% of target for our Chief Executive Officer, based on short-term financial and pipeline, product, and people achievements ►Annual incentive earned at 179% to 193% of target for other Named Executive Officers | Long-Term Equity Compensation Payment Criteria ►50% delivered in performance share units with “performance shares” earned over three years based on relative Total Shareholder Return (“TSR”) and annual revenue targets ►There is no payout if performance falls below a minimum threshold ►Relative TSR awards are capped at target if absolute TSR is negative ►25% delivered in stock options that vest over four years beginning one year after grant, with quarterly vesting after year one ►25% delivered in restricted stock units (RSUs) that vest over four years beginning one year after grant 2020 Compensation Summary ►2018 performance shares paid out at 81.70% of target with an actual value delivered at 69% of the original target grant date due to Gilead’s ending share price on the date of settlement |

  35. COMPENSATION COMPONENTS

    Pay and Performance Alignment Our industry’s business model is characterized by significant capital investment, long lead times for discovery and development and unpredictable outcomes due to the nature of developing medicines for human use. Our business involves multi-year development cycles, in which the return on investments in our product pipeline may take up to 12 years or more. Thus, our executive compensation program focuses not only on the successful progression of research programs, clinical trials and the launch of new products, but also on performance across a range of shorter-term metrics that advance our long-term strategy and longer-term value creation for our stockholders. As a result of long development cycles, success in the early phases of development, while critical to achieving our long-term strategy and short-term goals, may not be reflected in our operating performance and share price until several years in the future. Our long-term equity incentives, awarded in the form of performance share units, stock options and restricted stock units, align executives’ compensation directly with revenue and TSR performance. As a result, a substantial portion of the target total direct compensation (“TDC”) for each Named Executive Officer is at-risk and tied directly to Gilead’s performance with an appropriate balance between the short- and long-term, as shown below. Target TDC comprises annual base salary, target annual incentive, and target annual long-term equity incentives based on their grant date fair values.

  36. COMPENSATION COMPONENTS

    | ► | As of December 31, 2020, all the stock options granted to our Named Executive Officers over the past four years were underwater, or “out of the money.” | | ► | In addition, our performance share units that vested over the same period, paid out below target. |

  37. AVERAGE 2018 LTI TARGET VERSUS AVERAGE ACTUAL LTI PAYOUT

    AVERAGE 2018 LTI TARGET VERSUS AVERAGE ACTUAL LTI PAYOUT

  38. AVERAGE 2018 LTI TARGET VERSUS AVERAGE ACTUAL LTI PAYOUT

    | (1) Andrew D. Dickinson and Brett A. Pletcher received a 2018 LTI award. | | (2) Target performance share value is based on grant-date fair value of the 2018 performance shares at 100% target level attainment. | | (3) Actual performance share award value is based on 0% payout for the relative TSR tranche and 163.4% for the absolute revenue tranches, valued at the $66.70 share price as of the release date of January 26, 2021. | | (4) Target stock option value is based on the 2018 stock option grant (which were granted with a $83.49 exercise price), valued at the grant date fair value. Stock options had no value based on the December 31, 2020 stock price of $58.26. |

  39. Named Executive Officers’ 2020 Annual Compensation

    Annual Incentive In January 2020 the Compensation and Talent Committee proactively approved a new annual incentive plan design, which included increasing the financial metrics from 30% to 50% of the total award. The Committee also adopted rigorous performance metrics that were more formulaic than in previous years and eliminated the Committee’s discretion to increase or decrease the incentive payout by 10% for unplanned events. Our annual incentive plan focuses on short-term financial, pipeline, product and people metrics, that serve as building blocks for our future product development and position us to deliver longer term value to stockholders. Our annual incentive plan is designed to complement our long-term equity program, which more directly aligns realized executive compensation with our longer-term share price performance. In 2020, our Chief Executive Officer’s annual incentive was tied solely to our corporate performance, with our Chief Executive Officer’s individual performance goals being the same as our corporate performance metrics. Our other Named Executive Officer’s annual incentive were based on the achievement of the same corporate performance metrics that applied to our Chief Executive Officer, as well as individual performance goals which differ from the corporate performance metrics, with award amounts determined by the following formula: Both the Company Performance Factor and Individual Performance Factor can range from 0% to 150% achievement, with the maximum cash incentive payout capped at 200% of target. Target Annual Incentive Opportunities The 2020 target annual incentive opportunities for our Named Executive Officers were established as a percentage of their base salaries, as set forth below, which were the same percentages established for the prior year. Actual earned amounts could range from 0% to 200% of the target opportunity, based on achievement of the relevant performance objectives.

  40. Named Executive Officers’ 2020 Annual Compensation

    | Named Executive Officer | 2020 Target Cash Incentive Opportunity (as a percentage of base salary) | | Mr. O’Day | 150% | | Mr. Dickinson | 100% | | Ms. Mercier | 100% | | Dr. Parsey | 100% | | Mr. Pletcher | 100% |

  41. Named Executive Officers’ 2020 Annual Compensation

    | Metric | Weighting | Threshold | Target | Maximum | Actual | Performance Factor | Resulting Payout Percentage | | Net Product Revenue | 30% | $20,951M | $22,054M | $22,605M | $24,355 | 150% | 45% | | Non-GAAP Operating Income(1) | 20% | $9,505M | $10,562M | $10,826M | $11,704 | 150% | 30% | | | | | | | | Financial Results 75% | |

  42. Named Executive Officers’ 2020 Annual Compensation

    | Metric | Weighting | Actual | Performance Factor | Resulting Payout Percentage | | Introduce eight (8) new molecular entities into the Development portfolio | 15% | ►Introduced a total of ten new molecular entities (NMEs) into the Development portfolio as of year-end, reaching our maximum achievement of 10 NMEs | 150% | 22.5% | | Design and implement a revised, cross-functional portfolio governance system | 5% | ►Created and implemented portfolio governance charters for the Development Review Committee and Portfolio Committee including revised governance model for the Development organization and key stakeholders | 100% | 5.0% | | Establish partnership and portfolio strategies for our key disease areas | 5% | ►Established a group to support and train Project Team Leaders to foster and maintain drug development leadership capability | 100% | 5.0% | | Increase Unaided filgotinib Awareness in 2020 launch markets | 5% | ►Increased unaided awareness in Germany from 10% to 46% and increased in Japan from 2% to 25%, exceeding target ►Unaided awareness in U.S. was not achieved due to FDA complete response letter ►Below and above target performance resulted in combined 100% achievement for goal | 100% | 5.0% | | Achieve targeted Descovy conversion of 40% in PrEP in the U.S. | 5% | ►Achieved 46% Descovy U.S. market share in PrEP, exceeding the maximum achievement of 45% | 150% | 7.5% | | Achieve targeted Biktarvy patient share of 35% in U.S. | 5% | ►Achieved 36% Biktarvy Patient share in U.S, compared to the maximum achievement of 39% | 113% | 6.0% | | Design and implement product life cycle management (LCM) plans | 5% | ►Successfully completed and rolled out LCM plans for Biktarvy, Vemlidy, and Yescarta | 100% | 5.0% | | Engagement | 5% | ►Introduced Leadership Commitments to employees to enable Gilead to achieve our corporate strategy ►Provided strong support to employees during COVID-19 ►Conducted several employee surveys throughout the year which showed engagement scores increased +8% since 2018 ►Progressed inclusion and diversity initiatives with the establishment of a Global Diversity Council chaired by our CEO and the introduction of our Advancing Black Leadership strategy to provide more access and opportunities for Black employees across Gilead | 145% | 7.0% | | | | Pipeline, Product and People Results 63.0% | | |

  43. Annual Incentive Decisions

    Annual Incentive Decisions The Committee approved final incentive awards based on our corporate performance and the evaluation of individual performance objectives for our Named Executive Officers other than our Chief Executive Officer. Based on our corporate performance, the Committee recommended, and the independent members of our Board ratified, the incentive award for our Chief Executive Officer. As a result, the following payments were approved for 2020:

  44. Annual Incentive Decisions

    | Named Executive Officer | Base Salary | Target Incentive Opportunity (as % of Salary) | Target Incentive Opportunity | Corporate Performance Factor | Individual Performance Factor | Total Award Value | | Mr. O’Day | $1,650,000 | 150% | $2,475,000 | 138% | 138%(1) | $4,713,390 | | Mr. Dickinson | $950,000 | 100% | $950,000 | 138% | 130% | $1,704,300 | | Ms. Mercier | $1,025,000 | 100% | $1,025,000 | 138% | 140% | $1,980,300 | | Dr. Parsey | $1,000,000 | 100% | $1,000,000 | 138% | 130% | $1,794,000 | | Mr. Pletcher | $950,000 | 100% | $950,000 | 138% | 130% | $1,704,300 |

  45. Annual Incentive Decisions

    | (1) CEO performance is tied 100% to corporate performance. For purposes of calculating the CEO award the corporate performance factor is also the individual performance factor. |

  46. Annual Incentive Decisions

    Long-Term Equity Compensation Our long-term equity compensation program is designed to link our Named Executive Officers’ pay with the long-term interests of our stockholders, competitively position our executives, and provide meaningful retentive value, as supported by a thorough analysis of peer practices. Consistent with 2019, our Compensation and Talent Committee granted performance shares, stock options and restricted stock units, as shown below:

  47. EQUITY AWARDS

    EQUITY AWARDS

  48. 2020 Annual Long-Term Equity Decisions

    2020 Annual Long-Term Equity Decisions Our Compensation and Talent Committee approved equity awards in the amounts set forth below that reflect grant-date accounting values and not actual delivered compensation. Our Compensation and Talent Committee evaluated each Named Executive Officer’s performance during the prior year, his or her expected future contributions and our performance compared to the competitive market.

  49. 2020 Annual Long-Term Equity Decisions

    | 56 | |

  50. 2020 Annual Long-Term Equity Decisions

    The following table sets forth the value of the equity awards approved by our Compensation and Talent Committee and for our Chief Executive Officer, ratified by the independent members of our Board of Directors.

  51. 2020 Annual Long-Term Equity Decisions

    | | Total Equity Award Value Approved by the Compensation & Talent Committee | | Named Executive | 2020 | | Mr. O’Day | $12,500,000 | | Mr. Dickinson | $3,500,000 | | Ms. Mercier | $3,500,000 | | Dr. Parsey | $4,000,000 | | Mr. Pletcher | $3,000,000 |

  52. 2020 Performance Share Awards

    2020 Performance Share Awards Consistent with prior years, the performance share awards granted by our Compensation and Talent Committee in 2020 were divided into two equally weighted tranches: one subject to three-year relative TSR performance conditions and one subject to three annual revenue-based performance goals. Our Compensation and Talent Committee selected relative TSR and revenue as our performance measures in order to drive the key behaviors that the Committee wants to reinforce and align pay with stockholder returns. At the time of grant, our Compensation and Talent Committee conducts a thorough review of the performance measures and associated payout levels, the rigor of the performance goals and their alignment with performance. Relative TSR Portion. The performance-based vesting requirement for the relative TSR performance shares is tied to the percentile level of our TSR for the three-year performance period from March 1, 2020 through December 31, 2022, relative to the companies comprising the S&P Healthcare Sub-Index. The S&P Healthcare Sub-Index was selected for comparison because it enables our Compensation and Talent Committee to assess our performance against an objective peer group.

  53. 2020 Performance Share Awards

    | TSR Percentile vs. Comparator Group | % of Target Paid | | 81st or above | 200% | | 50th | 100% | | 20th or below | 0% |

  54. 2020 Performance Share Awards

    If our absolute TSR is negative, the vesting opportunity is capped at 100% of target, regardless of our relative performance. To receive the earned shares, an executive officer must generally remain employed with us through the date when our Compensation and Talent Committee certifies performance achievement. Absolute Revenue Portion. One-third of the revenue-based performance shares is tied to achievement of our 2020 net product revenue goal, one-third is tied to a 2021 net product revenue goal and one-third is tied to a 2022 net product revenue goal. Each year’s net product revenue goal is established by our Compensation and Talent Committee in the first quarter of that year, and the payout level can range from 0% to 200% of the target allocated to each year’s goal. Revenue is a key objective used in both our short- and long-term incentive plans due to our historically high margin commercialized products and the strategic importance of investments within research and development. Revenue allows us to invest in research and development which is necessary for long-term growth. The uncertainty of many external factors that influence our business and industry, such as unanticipated pricing pressures, product-approval timing and volatility in the foreign currency exchange rates, make it difficult to forecast net product revenue beyond a one-year period. As a result, our Compensation and Talent Committee has determined that the current design appropriately measures performance over the long-term, as it provides line of sight for our executive officers while making the value of awards earned contingent on three-year absolute TSR performance. In January 2020, our Compensation and Talent Committee established the net product revenue performance goal of $22.1 billion (at target) for 2020. The same 2020 net product revenue performance goal also applies to one-third of the revenue-based performance shares granted in 2019 and 2018.

  55. 2020 Performance Share Awards

    | 2021 Proxy Statement | 57 |

  56. 2020 Performance Share Awards

    For purposes of determining the achievement level, any product revenue realized during the fiscal year by any entity that we acquired during that year and the effect of any accounting change is excluded. The 2020 performance share awards will not become vested until the final performance results are certified in early 2023. To receive the earned shares, an executive officer must generally remain employed with us through the date when our Compensation and Talent Committee certifies performance achievement.

  57. 2020 Performance Share Awards

    | | Annual Revenue Goal(1) | | | | | | Year of Grant | 2018 | 2019 | 2020 | 2021 | 2022 | | 2018 Performance Share Award | | | | | | | Absolute Revenue Tranche | $21.0B Target | $21.8B Target | $22.1B Target | | | | 2019 Performance Share Award | | | | | | | Absolute Revenue Tranche | | $21.8B Target | $22.1B Target | TBD | | | 2020 Performance Share Award | | | | | | | Absolute Revenue Tranche | | | $22.1B Target | TBD | TBD |

  58. 2020 Performance Share Awards

    | (1) Threshold and maximum performance levels for each tranche is disclosed in the table below. |

  59. 2020 Stock Options

    2020 Stock Options Our Compensation and Talent Committee believes that stock options provide an appropriate incentive for our executives because they will realize value only if our stock price appreciates, which benefits all stockholders. Stock options granted to our Named Executive Officers vest over a four-year service period. One-quarter of the shares of our common stock subject to these options vests one year from the grant date and the remaining shares vest in equal quarterly installments thereafter (assuming the continued service of the executive officer over the next three years).

  60. 2020 Restricted Stock Units

    2020 Restricted Stock Units Our Compensation and Talent Committee believes that restricted stock units promote long-term retention and alignment with shareholders. Restricted stock units granted to our Named Executive Officers vest over a four-year service period. One-quarter of the shares subject to these awards vest one year from the grant date and the remaining shares vest in equal annual installments thereafter (assuming the continued service of the executive officer over the next three years).

  61. 2018 Performance Share Awards Earned

    2018 Performance Share Awards Earned In January 2018, our Compensation and Talent Committee granted to our then-current Named Executive Officers performance share awards, that were subject to a three-year performance period and continued employment through certification of performance achievement:

  62. 2018 Performance Share Awards Earned

    | ► | The vesting requirement for the first tranche was tied to our relative TSR for the performance period from February 1, 2018 through December 31, 2020, compared to the TSR of the companies comprising the S&P Healthcare Sub-Index over such period; and | | ► | The vesting requirement for the second tranche was based on net product revenue goals established for each of 2018, 2019 and 2020 (one-third each year). |

  63. 2018 Performance Share Awards Earned

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  64. 2018 Performance Share Awards Earned

    In January 2021, our Compensation and Talent Committee certified final performance achievements for the 2018 performance share awards. While our operational and financial accomplishments in 2020 position us for long-term shareholder value creation, our total shareholder returns have been affected by the uncertainty around the pandemic as well as the fact that our portfolio contains several early-stage assets that have yet to be reflected in the price. Our three-year relative TSR was at the 9.60th percentile, resulting in a payout of 0% of target for the TSR-based awards. Our net product revenue exceeded the target revenue goal in 2018, 2019 and 2020, resulting in a payout of 163.4% of target for the revenue-based awards. Based on our TSR and three-year revenue achievements the 2018 performance awards paid out at 81.7% of target. This was the fourth consecutive year that our performance share awards paid out below target. To see the alignment of these 2018 performance share awards with stockholder value, please see the chart on page 52.

  65. 2018 Performance Share Awards Earned

    | Performance Share Awards | Weighting | Threshold | Target | Maximum | Percentage Earned | | Relative TSR Tranche | | | | | 0.0% | | Net Product Revenue Tranche: | | | | | | | 2018 Net Product Revenue | | | | | 163.4% | | 2019 Net Product Revenue(1) | | | | | 126.7% | | 2020 Net Product Revenue(2) | | | | | 200.0% | | Total Earned | | | | | 81.70% |

  66. 2018 Performance Share Awards Earned

    | (1) Also included as a sub-tranche of the 2018 performance share awards. | | (2) Also included as a sub-tranche of the 2018 and 2019 performance share awards. |

  67. 2018 PERFORMANCE SHARE AWARD

    2018 PERFORMANCE SHARE AWARD

  68. 2018 PERFORMANCE SHARE AWARD

    | Named Executive Officer(1) | Total Target Grant Value(2) | Actual Value Delivered(3) | % of Target Value Delivered | Target Number of TSR Shares | Earned TSR Shares | Target Number of Revenue Shares | Earned Revenue Shares | | Mr. Dickinson | $285,128 | $196,162 | 69% | 1,350 | 0 | 1,800 | 2,941 | | Mr. Pletcher | $1,303,397 | $896,939 | 69% | 6,170 | 0 | 8,230 | 13,447 |

  69. 2018 PERFORMANCE SHARE AWARD

    | (1) Mr. O’Day, Ms. Mercier and Dr. Parsey were not employed by the company when these awards were granted and therefore did not receive such an award. | | (2) Target performance share value is based on grant-date fair value of the 2018 performance shares at 100% target level attainment. | | (3) Actual performance share award value is based on 0% payout for the relative TSR tranche and 163.4% for the absolute revenue tranches, valued at the $66.70 share price as of the release date of January 26, 2021. |

  70. 2018 PERFORMANCE SHARE AWARD

    | 2021 Proxy Statement | 59 |

  71. Role of Compensation Consultant

    Role of Compensation Consultant Our Compensation and Talent Committee has retained Frederic W. Cook & Co., Inc. (“FW Cook”), a national compensation consulting firm, as its independent compensation consultant. FW Cook reports directly to our Compensation and Talent Committee, which has the direct authority to appoint, compensate, oversee the work of and dismiss its compensation consultant. George Paulin, Chairman of FW Cook, attends meetings of our Compensation and Talent Committee, as requested. FW Cook provides various executive compensation services to our Compensation and Talent Committee, including advising our Compensation and Talent Committee on the principal aspects of our Chief Executive Officer’s compensation and evolving industry practices, and providing market information and analyses regarding the competitiveness of our program design for both our executive officers and the non-employee members of our Board. During 2020, FW Cook served solely as a consultant to our Compensation and Talent Committee and did not provide any other services to Gilead. Our Compensation and Talent Committee has determined that FW Cook is independent and the work of FW Cook on behalf of our Compensation and Talent Committee did not raise any conflict of interest based on the six factors for assessing independence and identifying potential conflicts of interest as set forth in Exchange Act Rule 10C-1(b)(4), the listing standards of Nasdaq and such other factors as were deemed relevant under the circumstances.

  72. Use of Market Data

    Use of Market Data Individual compensation levels and opportunities for our Named Executive Officers are compared to a peer group of biopharmaceutical and pharmaceutical companies headquartered in the United States that are most similar to us in terms of business strategy, labor market competition, market capitalization, revenue and number of employees. Our compensation peer group for 2020, which was identified based on these objective selection criteria and remained unchanged from our compensation peer group for 2019, comprised these 10 companies:

  73. Use of Market Data

    | Compensation Peer Group | | | | | AbbVie Inc. | Biogen Inc. | Eli Lilly and Company | Pfizer Inc. | | Allergan plc | Bristol Myers Squibb Company | Johnson & Johnson | | | Amgen Inc. | Celgene Corporation | Merck & Co., Inc. | |

  74. Use of Market Data

    The following chart represents our position relative to our peer group on three key selection criteria at the time the 2020 compensation peer group was approved in July 2019 (based on publicly available information as of May 2019).

  75. Use of Market Data

    | | Revenue in $ Millions (as of May 31, 2019) | Market Capitalization in $ Millions (as of May 31, 2019) | | Peer Group Median | $24,217 | $106,993 | | Gilead Sciences, Inc. | $22,320 | $82,879 |

  76. Use of Market Data

    | 60 | |

  77. Use of Market Data

    Our compensation peer group includes industry competitors we believe are most like us in terms of business complexity and product life cycle. We also include companies that fall within specified revenue and market capitalization ranges. These ranges are broad enough to ensure we can maintain a sufficient number of peer companies. This is especially important as our industry experiences a number of mergers and acquisitions each year, thereby reducing the number of relevant peer company choices. Our Compensation and Talent Committee reviews the companies in our compensation peer group annually and makes adjustments as necessary so that the comparator companies properly reflect the market in which we compete for executive talent. We also review the executive pay practices of similarly situated companies as reported in industry surveys and reports. In practice, our Compensation and Talent Committee has not targeted a specific percentile relative to our compensation peer group for individual components of our total compensation. Instead, we take a holistic perspective in establishing total compensation for our executive officers, considering internal pay equity that recognizes officers’ relative experience, responsibilities and individual capabilities in addition to external market compensation practices.

  78. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation Eligible employees (including our executive officers) can enroll in our Deferred Compensation Plan and defer a portion of their base salaries and part or all their annual incentives and commissions. Gilead generally does not provide any matching contributions to the Deferred Compensation Plan; however, to compensate for pension benefits Mr. O’Day forfeited with his previous employer when he joined Gilead, we agreed as part of the negotiations over his offer letter to credit a $750,000 employer contribution to Mr. O’Day’s individual deferred compensation account for each of the first five years of his service. Each participant may direct the investment of his or her deferred compensation account balance into investment choices that mirror substantially all the investment funds available under the Gilead’s 401(k) plan. None of these investment alternatives result in “above-market” interest for disclosure purposes. For further information on the deferred compensation arrangements of our Named Executive Officers, see the 2020 Nonqualified Deferred Compensation table on page 74.

  79. Clawback Policy

    | 1. | Withholding or recouping cash incentive payments under our annual incentive plan; | | 2. | Cancelling outstanding unvested performance shares, which would otherwise vest at the end of a three-year performance period; | | 3. | Cancelling outstanding unvested stock options or RSUs which would otherwise generally vest over four years; and | | 4. | Recovering the proceeds realized from the sale of shares of Company stock issued under any equity-based incentive during or with respect to the period during which the misconduct occurred. |

  80. Severance Benefits

    Severance Benefits We maintain the Gilead Sciences, Inc. Severance Plan, as amended and restated effective May 5, 2020 (the “Severance Plan”) that offers severance payments and benefits to all our employees, including our executive officers, upon certain involuntary terminations of employment. The intent of our Severance Plan is to serve the following purposes:

  81. Severance Benefits

    | ► | Enable us to provide a standard set of payments and benefits to new and current executive officers and employees. | | ► | Align the interests of our executive officers with those of our stockholders by enabling our executive officers to consider corporate transactions that are in the best interests of our stockholders and other stakeholders without undue concern over whether a transaction may jeopardize their employment. | | ► | Assure our executive officers of fair treatment in connection with a change in control of Gilead by providing for payments and benefits under the Severance Plan subject to a “double trigger,” which means that an executive officer will be eligible to receive payments and benefits under the plan in connection with a change in control of Gilead only if he or she incurs a qualifying termination of employment. |

  82. Severance Benefits

    In addition, the Severance Plan does not provide “gross-up” payments on any excise tax imposed on any change in control benefits.

  83. Compensation-Related Risk

    | ► | Our overall compensation structure is applied uniformly throughout the organization, with the only major exception relating to the form in which equity compensation is awarded. | | ► | For our broad-based employee population with a title of Senior Director or higher, a significant component of compensation is in the form of equity awards tied to the value of our common stock. | | ► | The vesting of performance share awards is tied to our relative TSR and revenue achievement over prescribed performance periods. | | ► | Our overall compensation structure is not excessively oriented toward short-term incentives, which are less leveraged than plans used by our peers. | | ► | The performance goals for our 2020 annual incentive program were based on both financial and non-financial corporate measures as well as individual performance (except with respect to our Chief Executive Officer, whose performance is evaluated solely on corporate measures). | | ► | Our stock ownership guidelines require our executive officers to maintain a substantial ownership interest in Gilead. | | ► | Our expanded clawback policy permits us to recoup cash incentives and equity awards paid to our executive officers if financial results have to be subsequently restated as a result of their misconduct or our executive officers engage in significant misconduct resulting in a violation of significant company policy, law or regulation that caused material financial, operational or reputational harm to Gilead, including the failure to appropriately supervise a subordinate employee who engaged in misconduct. | | ► | Hedging transactions in our common stock, such as put and call options or pre-paid forward sale contracts by executive officers, employees and directors, as well as pledging of our securities, are not allowed under our insider trading policy. |

  84. Severance and Change in Control Arrangements with Named Executive Officers

    Severance and Change in Control Arrangements with Named Executive Officers Although the employment of the Named Executive Officers is “at will,” they are eligible to receive certain severance payments and benefits upon their termination of employment under certain defined circumstances. There are four general categories of termination:

  85. Severance and Change in Control Arrangements with Named Executive Officers

    | ► | Voluntary Termination/For Cause Termination: includes a voluntary termination of employment by the Named Executive Officer (other than in connection with a resignation for Good Reason) prior to reaching applicable retirement age and a termination of the Named Executive Officer’s employment by us for Cause. | | ► | Retirement: includes a termination of employment by the Named Executive Officer after reaching applicable retirement age, other than a termination of the Named Executive Officer’s employment by us for Cause. | | ► | Involuntary Termination Without Cause/Good Reason Resignation: includes a termination of the Named Executive Officer’s employment by us for reasons not constituting Cause, including a resignation as a result of a change in his or her work location by more than a specified distance. | | ► | Change in Control Termination: includes a termination of the Named Executive Officer’s employment by us without Cause, or the resignation of the Named Executive Officer for Good Reason, within the applicable change in control protection period following a change in control of Gilead (i.e., “double trigger”). |

  86. Severance and Change in Control Arrangements with Named Executive Officers

    For purposes of determining a Named Executive Officer’s eligibility for the various severance payments and benefits available under the Severance Plan, individual offer letters, and our equity plan, the following definitions are relevant: A “change in control of Gilead” will be deemed to occur upon:

  87. Severance and Change in Control Arrangements with Named Executive Officers

    | ► | a merger, consolidation or other reorganization approved by our stockholders, unless our stockholders continue to own more than 50% of the total combined voting power of the voting securities of the successor corporation; | | ► | a sale of all or substantially all our assets; or | | ► | the acquisition by any person or related group of persons of more than 50% of the total combined voting power of our outstanding securities, or a change in the majority of the members of our Board over a 12-month or shorter period by reason of one or more contested elections for Board membership. |

  88. Severance and Change in Control Arrangements with Named Executive Officers

    Under the Severance Plan and our equity plan, a “resignation for Good Reason” is defined as “Constructive Termination” and generally will be deemed to occur should a Named Executive Officer resign from his or her employment with us for any of the following reasons during the applicable change in control protection period:

  89. Severance and Change in Control Arrangements with Named Executive Officers

    | ► | an adverse change in his or her title, position or responsibilities (including reporting responsibilities) or the assignment to him or her of any duties or responsibilities which are inconsistent with his or her title, position or responsibilities; | | ► | a reduction in his or her annual base compensation; | | ► | his or her permanent relocation to any place outside a 50-mile radius of the location serving as his or her existing principal work site; | | ► | the failure by the new company to continue in effect any material compensation or employee benefit plan in which he or she was participating or to provide him or her with an aggregate level of compensation and benefits comparable to that in effect for him or her prior to the change; or | | ► | any material breach by the new company of any provision of any agreement we have with the Named Executive Officer. |

  90. Severance and Change in Control Arrangements with Named Executive Officers

    In addition, a resignation following a required relocation, without consent, to a new work location that is more than 50 miles from his or her previous work location is also a good reason trigger under our severance plan outside the context of a change in control. Mr. O’Day, Ms. Mercier and Dr. Parsey also have definitions of “Good Reason” under their individual offer letters with us, which generally allow for a “Good Reason” resignation, after a notice and cure period, upon:

  91. Severance and Change in Control Arrangements with Named Executive Officers

    | ► | an adverse change in employment status, title, position or responsibilities (including reporting responsibilities); | | ► | a reduction in annual base compensation or, for Ms. Mercier and Dr. Parsey, any reduction in target incentive or annual equity award opportunity prior to the first anniversary of the executive’s start date; | | ► | a required relocation to any place outside a specified radius of the greater Foster City, California area; or | | ► | for Mr. O’Day, a material breach by the Company or any subsidiary of the terms of his offer letter or of any written equity award agreement between him and the Company. |

  92. Severance and Change in Control Arrangements with Named Executive Officers

    | 64 | |

  93. Severance and Change in Control Arrangements with Named Executive Officers

    A Named Executive Officer’s employment will be deemed to have been terminated for “Cause” if such termination occurs by reason of:

  94. Severance and Change in Control Arrangements with Named Executive Officers

    | ► | any act or omission in bad faith and to our detriment; | | ► | dishonesty, intentional misconduct, material violation of any company policy, or material breach of any agreement with us; | | ► | commission of any crime involving dishonesty, breach of trust or physical or emotional harm to any person; or | | ► | poor performance, nonperformance, or neglect duties owed to us or insubordination. |

  95. Severance and Change in Control Arrangements with Named Executive Officers

    The following table summarizes the payments and benefits that each currently employed Named Executive Officer is eligible to receive on various termination of employment scenarios.

  96. Severance and Change in Control Arrangements with Named Executive Officers

    | Type of Termination | | | Voluntary or “For Cause” Termination | ►No severance payments. ►Accrued base salary and vacation pay. ►Vested but unpaid benefits. | | Retirement(1) | ►To the extent retirement occurs at least 12 months after grant date, continued vesting of and five-year post retirement exercise period for stock options granted in or after 2019. Three-year post retirement exercise period for vested stock options granted in or prior to 2018. ►Continued vesting of 100% of performance shares for which performance goals are attained after retirement granted in or after 2019, provided retirement occurs at least 12 months after grant date. Pro-rata vesting of any performance shares granted prior to 2019 for which performance goals are attained after retirement. ►Continued vesting of 100% restricted stock units granted in or after 2019 in accordance with the standard vesting schedule, provided retirement occurs at least 12 months after grant date. | | Type of Termination | | | Involuntary Termination without “Cause” or for “Good Reason” | ►Cash severance equal to 1.5 times (2.0 times for Mr. O’Day) base salary + 1.0 times (2.0 times for Mr. O’Day) average cash incentive for prior three fiscal years (or such fewer number of complete fiscal years of employment). ►Pro-rata annual cash incentive for year of termination based on actual results attained. ►Lump-sum payment to cover the estimated cost of COBRA premiums for 18 months (or 24 months for Mr. O’Day). ►Outplacement services for 6 months (12 months for Mr. O’Day). ►For Mr. O’Day, crediting of $3,000,000 in unpaid deferred compensation plan company contribution to his plan account(2). ►For Mr. O’Day, accelerated vesting of make whole equity awards and 2019 grants of stock options, time-based restricted stock units, and performance shares (based on actual performance for completed performance periods and target for any uncompleted performance periods)(2). ►For Ms. Mercier and Dr. Parsey, if termination occurs within the first two years of employment, accelerated vesting of make whole equity awards. |

  97. Severance and Change in Control Arrangements with Named Executive Officers

    | 2021 Proxy Statement | 65 |

  98. Severance and Change in Control Arrangements with Named Executive Officers

    | Type of Termination Cont. | | | Change in Control Termination (Involuntary Termination without “Cause” or Resignation for “Good Reason” within Change in Control Protection Period(3)) | ►Cash severance equal to 2.5 times (3.0 times for Mr. O’Day) base salary + 2.5 times (3.0 times for Mr. O’Day) average incentive for prior three fiscal years (or such fewer number of complete fiscal years of employment). ►Pro-rata annual incentive for year of termination based on average incentive paid over the prior three years (or such fewer number of complete fiscal years of employment). ►Lump-sum payment to cover the estimated cost of COBRA premiums for 30 months (36 months for Mr. O’Day). ►Outplacement services for 6 months (12 months for Mr. O’Day). ►For Mr. O’Day, crediting of $3,000,000 in unpaid deferred compensation plan company contribution to his plan account. ►100% acceleration of stock option and restricted stock unit awards. ►Acceleration of unvested performance shares as follows: ►accelerates at target if change in control occurs within first 12 months of performance period. ►If the change in control occurs following that 12-month period, then accelerates at greater of (i) target or (ii) actual performance through the end of the fiscal quarter prior to the change in control date. |

  99. Severance and Change in Control Arrangements with Named Executive Officers

    | (1) For equity awards granted in 2018 and prior years, retirement is defined as the termination of a Named Executive Officer’s employment with a combined age and years of service of not less than 70 years. For awards granted in 2019 and 2020, retirement is defined as termination of employment after the Named Executive Officer (i) attains age 55 and has completed at least ten (10) years of continuous service or (ii) attains age 65. As of December 31, 2020, no Named Executive Officers were retirement eligible. | | (2) Mr. O’Day is also entitled to these benefits upon termination because of death or disability. | | (3) The change in control protection period would begin six months prior to the consummation or a change in control transaction and continue for a specified period following the effective date of the change in control transaction (24 months for Mr. O’Day and 18 months for the other Named Executive Officers). |

  100. Severance and Change in Control Arrangements with Named Executive Officers

    A Named Executive Officer must deliver a general release of claims against Gilead as a condition of his or her receipt of payments and benefits under his or her offer letter or the Severance Plan. The cash severance component of those arrangements will be paid in a series of equal periodic installments in accordance with our normal payroll practices over a period of years corresponding to the applicable multiple of base salary indicated above for the Named Executive Officer. However, a portion of those installments may be subject to a six-month holdback to the extent required under applicable tax laws. The estimated severance payments and benefits for which a Named Executive Officer would have become eligible if his or her employment terminated under these various scenarios are set forth in the table below. The estimated amounts assume:

  101. Severance and Change in Control Arrangements with Named Executive Officers

    | ► | that the covered termination of employment occurred on December 31, 2020; and | | ► | the value of any equity vesting is based on the closing market price of our common stock on December 31, 2020. |

  102. Severance and Change in Control Arrangements with Named Executive Officers

    The table below does not include accrued wages, vacation pay, vested deferred compensation or the intrinsic value (as of December 31, 2020) of any outstanding stock options or other stock awards held by the Named Executive Officer that were vested on that date. Due to the number of different factors that affect the nature and amount of any benefits provided in connection with these events, actual amounts payable to any of the Named Executive Officers should a separation from service or change in control occur during the year will likely differ, perhaps significantly, from the amounts reported below. Factors that could affect such amounts include the timing during the year of the event, our stock price, target amounts payable under annual and long-term incentive arrangements that are in place at the time of the event, and the executive’s age and prevailing tax rates.

  103. Severance and Change in Control Arrangements with Named Executive Officers

    | 66 | |

  104. Summary Compensation Table

    Summary Compensation Table The following table shows, for the fiscal years 2020 and 2019, compensation awarded to, paid to, or earned by, our Named Executive Officers (“NEOs”). None of our NEOs were named executive officers for fiscal 2018.

  105. Summary Compensation Table

    | Name and Principal Position | Year | Salary(1) | Bonus | Stock Awards(2) | Option Awards(2) | Non-Equity Incentive Plan Compensation(1)(3) | All Other Compensation | Total | | Daniel P. O’Day Chairman and Chief Executive Officer | 2020 | $1,702,885 | $— | $8,388,056(4) | $3,125,041 | $4,713,390 | $1,068,723(5)(6) | $18,998,095 | | | 2019 | $1,267,692 | $5,675,000 | $15,500,541 | $3,000,002 | $3,120,000 | $544,619 | $29,107,854(7) | | Andrew D. Dickinson Chief Financial Officer | 2020 | $986,538 | $— | $2,260,949(4) | $874,968 | $1,704,300 | $15,000(5) | $5,841,755 | | | 2019 | $802,308 | $1,000,000 | $1,708,267 | $1,000,096 | $1,086,800 | $12,000 | $5,609,471 | | Johanna Mercier Chief Commercial Officer | 2020 | $1,059,135 | $1,600,000(8) | $2,042,265(4) | $874,968 | $1,980,300 | $220,243(5)(8) | $7,776,911 | | | 2019 | $461,538 | $1,250,000 | $3,751,166 | $1,750,097 | $650,000 | $186,585 | $8,049,386 | | Merdad V. Parsey, M.D., Ph.D. Chief Medical Officer | 2020 | $1,038,462 | $1,000,000(9) | $2,332,860(4) | $1,000,033 | $1,794,000 | $15,000(5) | $7,180,355 | | | 2019 | $119,231 | $1,000,000 | $1,000,314 | $1,000,008 | $— | $— | $3,119,553 | | Brett A. Pletcher Executive Vice President, Corporate Affairs and General Counsel | 2020 | $986,538 | $— | $2,212,188(4) | $750,025 | $1,704,300 | $15,000(5) | $5,668,051 | | | 2019 | $891,000 | $— | $2,144,734 | $749,946 | $1,235,000 | $12,000 | $5,032,680 |

  106. Summary Compensation Table

    | (1) Includes amounts earned but deferred for income tax purpose at the election of the NEOs pursuant to our 401(k) plan and our non-qualified deferred compensation plan. | | (2) Represents the aggregate grant-date fair value of the equity-based awards, including restricted stock units (RSUs), performance shares, performance-based RSUs and stock options granted to the NEOs for the applicable year under our 2004 Plan, calculated in accordance with FASB ASC Topic 718 (“Topic 718”), and does not take into account estimated forfeitures. Assumptions used in the calculation of such grant-date fair values are set forth in Note 16 to our Consolidated Financial Statements for the year ended December 31, 2020, included in our Annual Report on Form 10-K for such fiscal year. See the 2020 Grants of Plan-Based Awards table on pages 69-71 for additional information. | | (3) For 2020, represents amounts paid in early 2021 based on our Compensation & Talent Committee’s review and certification of corporate performance for Mr. O’Day and certification of corporate performance and individual achievements for all other NEOs in 2020 under our annual bonus plan. | | (4) Represents the aggregate grant-date fair value of the performance shares determined in accordance with Topic 718. The aggregate grant-date fair values of the awards reported for 2020 (the Relative TSR tranche of the 2020 performance shares and the 2020 revenue subtranches of the 2018, 2019 and 2020 performance shares, as applicable), assuming maximum attainment of the applicable performance goals in effect for those tranches and subtranches, are as follows: $7,400,615 for Mr. O’Day, $1,896,138 for Mr. Dickinson, $1,458,771 for Ms. Mercier, $1,666,392 for Dr. Parsey, and $2,173,629 for Mr. Pletcher. As described in the Compensation Discussion and Analysis, the revenue subtranches of the 2019 and 2020 performance shares for which performance objectives have not yet been set do not at present have a reportable grant-date fair value under Topic 718. The grant-date fair values assume maximum goal attainment only as to those tranches or subtranches that at present have a reportable grant-date fair value. Assumptions used in the calculation of such grant-date fair values are set forth in Note 16 to our Consolidated Financial Statements for the year ended December 31, 2020, included in our Annual Report on Form 10-K for such fiscal year. | | Performance objectives have been set for only certain tranches of the awards granted in each year and the associated grant-date fair values of those tranches have been incorporated in the table above. Tranches for which performance objectives have not been set do not have a reportable grant-date fair value under Topic 718 and therefore, are not included in the table above. Accordingly, amounts reported for 2020 reflect the grant-date fair value of awards granted in 2020 that are subject to a three-year Relative TSR performance condition and the portions of the 2018, 2019 and 2020 awards that are subject to the 2020 revenue goal. | | See footnotes 5, 6 and 9 to the 2020 Grants of Plan-Based Awards table on pages 69-71 for a detailed description of the terms of the 2020 performance shares. | | (5) Includes matching contributions of $15,000 made by us on such individual’s behalf under our 401(k) plan. | | (6) This “All Other Compensation” column amount includes $750,000 in company contributions to Mr. O’Day’s deferred compensation plan account, which was credited on March 1, 2020. Generally subject to his continued employment, Mr. O’ Day’s deferred compensation plan account will be credited with $750,000 on each of the next four anniversaries of March 1, 2020, for an aggregate contribution of $3,750,000. These contributions were provided to compensate him for the forfeiture of his pension benefits with his former employer. This amount also includes (i) $279,131 of relocation subsidy reimbursement, which includes tax reimbursements of $174,993, and (ii) $24,592, which reflects the aggregate incremental cost incurred by Gilead for Mr. O’Day’s personal use of our corporate aircraft, which is calculated based on variable operating costs including fuel, landing fees, parking costs, crew travel expenses, on-board catering, and other trip-related maintenance costs. Because our aircraft are used primarily for business travel, this amount does not include any fixed costs that do not change based on usage, such as pilots’ salaries or general maintenance costs. |

  107. Summary Compensation Table

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  108. Summary Compensation Table

    | (7) Mr. O’Day’s 2019 pay also included one-time make-whole payments, which parallel the form and timing of payments Mr. O’Day forfeited at his former employer of 30 years and offset other economic consequences of accepting employment with us. | | (8) This “Bonus” column amount includes (i) the remaining $1,250,000 installment of Ms. Mercier’s sign-on bonus, which was paid on the first anniversary of her start date and intended to offset the value of the annual bonus and unvested equity awards forfeited from her prior employer and to compensate her for other economic consequences of accepting our offer; and (ii) a one-time $350,000 cash payment to help cover the costs of extending Ms. Mercier’s temporary housing, which full gross payment is subject to repayment in the event of Ms. Mercier’s termination for cause or resignation without good reason on or prior to June 19, 2021. The first fifty percent of her sign-on bonus was paid in 2019. This “All Other Compensation” column amount includes $205,243 of relocation subsidy, which includes tax reimbursements of $106,008. The relocation subsidy is repayable if Ms. Mercier’s employment terminates within two years of her start date. | | (9) This “Bonus” column amount reflects the remaining $1,000,000 installment of Dr. Parsey’s sign-on bonus, which was paid on the first anniversary of his start date and was intended to offset the value of his annual bonus and unvested equity awards forfeited from his prior employer. The first fifty percent of his sign-on bonus was paid in 2019. |

  109. Summary Compensation Table

    | 68 | |

  110. 2020 Grants of Plan-Based Awards

    2020 Grants of Plan-Based Awards The following table sets forth certain additional information regarding grants of plan-based awards to our Named Executive Officers for the 2020 fiscal year:

  111. 2020 Grants of Plan-Based Awards

    | | | Grant Date | Approval Date | Estimated Future 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 Options | Exercise or Base Price of Option Award | Grant-Date Fair Value of Stock and Option Award(3) | | Name | Award Type | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | | Daniel P. | 2019 | 3/10/2020 | 1/29/2020 | — | — | — | 3,030 | 15,150(4)(5) | 30,300 | — | — | $1,095,951 | | O’Day | performance | | | | | | | | | | | | | | shares | | | | | | | | | | | | | | 2020 | 3/10/2020 | 1/29/2020 | — | — | — | 2,887 | 44,220(4)(6) | 88,440 | — | — | $4,167,017 | | | performance | | | | | | | | | | | | | | shares | | | | | | | | | | | | | | 2020 option | 3/10/2020 | 1/29/2020 | — | — | — | — | — | — | 256,620(7) | 72.34 | $3,125,041 | | | awards | | | | | | | | | | | | | | 2020 restricted | 3/10/2020 | 1/29/2020 | | | | | 43,200(8) | | | | $3,125,088 | | | stock unit awards | | | | | | | | | | | | | | Corporate bonus | N/A | NA | — | $2,475,000 | $4,950,000 | — | — | — | — | — | — | | Andrew D. | 2018 | 3/10/2020 | 1/29/2020 | — | — | — | 120 | 600(4)(9) | 1,200 | — | — | $43,404 | | Dickinson | performance | | | | | | | | | | | | | | shares | | | | | | | | | | | | | | 2019 | 3/10/2020 | 1/29/2020 | — | — | — | 485 | 2,423(4)(5) | 4,846 | — | — | $175,280 | | | performance | | | | | | | | | | | | | | shares | | | | | | | | | | | | | | 2020 | 3/10/2020 | 1/29/2020 | — | — | — | 809 | 12,384(4)(6) | 24,768 | — | — | $1,166,951 | | | performance | | | | | | | | | | | | | | shares | | | | | | | | | | | | | | 2020 option | 3/10/2020 | 1/29/2020 | — | — | — | — | — | — | 71,850(7) | 72.34 | $874,968 | | | awards | | | | | | | | | | | | | | 2020 restricted | 3/10/2020 | 1/29/2020 | — | — | — | — | 12,100(8) | — | — | — | $875,314 | | | stock unit awards | | | | | | | | | | | | | | Corporate bonus | N/A | NA | — | $950,000 | $1,900,000 | — | — | — | — | — | — | | Johanna | 2020 | 3/10/2020 | 1/29/2020 | — | — | — | 809 | 12,384(4)(6) | 24,768 | — | — | $1,166,951 | | Mercier | performance | | | | | | | | | | | | | | shares | | | | | | | | | | | | | | 2020 option | 3/10/2020 | 1/29/2020 | — | — | — | — | — | — | 71,850(7) | 72.34 | $874,968 | | | awards | | | | | | | | | | | | | | 2020 restricted | 3/10/2020 | 1/29/2020 | — | — | — | — | 12,100(8) | — | — | — | $875,314 | | | stock unit awards | | | | | | | | | | | | | | Corporate bonus | N/A | NA | — | $1,025,000 | $2,050,000 | — | — | — | — | — | — | | Merdad | 2020 | 3/10/2020 | 1/29/2020 | — | — | — | 924 | 14,147(4)(6) | 28,294 | — | — | $1,333,121 | | V. Parsey, | performance | | | | | | | | | | | | | M.D., Ph.D. | shares | | | | | | | | | | | | | | 2020 option | 3/10/2020 | 1/29/2020 | — | — | — | — | — | — | 82,120(7) | 72.34 | $1,000,033 | | | awards | | | | | | | | | | | | | | 2020 restricted | 3/10/2020 | 1/29/2020 | — | — | — | — | 13,820(8) | — | — | — | $999,739 | | | stock unit awards | | | | | | | | | | | | | | Corporate bonus | N/A | NA | — | $1,000,000 | $2,000,000 | — | — | — | — | — | — | | Brett A. | 2018 | 3/10/2020 | 1/29/2020 | — | — | — | 549 | 2,743(4)(9) | 5,486 | — | — | $198,429 | | Pletcher | performance | | | | | | | | | | | | | | shares | | | | | | | | | | | | | | 2019 | 3/10/2020 | 1/29/2020 | — | — | — | 727 | 3,637(4)(5) | 7,274 | — | — | $263,101 | | | performance | | | | | | | | | | | | | | shares | | | | | | | | | | | | | | 2020 | 3/10/2020 | 1/29/2020 | — | — | — | 693 | 10,617(4)(6) | 21,234 | — | — | $1,000,492 | | | performance | | | | | | | | | | | | | | shares | | | | | | | | | | | | | | 2020 option | 3/10/2020 | 1/29/2020 | — | — | — | — | — | — | 61,590(7) | 72.34 | $750,025 | | | awards | | | | | | | | | | | | | | 2020 restricted | 3/10/2020 | 1/29/2020 | — | — | — | — | 10,370(8) | — | — | — | $750,166 | | | stock unit awards | | | | | | | | | | | | | | Corporate bonus | N/A | NA | — | $950,000 | $1,900,000 | — | — | — | — | — | — |

  112. 2020 Grants of Plan-Based Awards

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  113. 2020 Grants of Plan-Based Awards

    | (1) Actual amounts paid in early 2021 were based on our Compensation & Talent Committee’s review and certification of corporate performance and individual achievements in 2020 under our annual incentive program and are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on pages 67-68. | | (2) Performance shares and RSU awards (both time-based and performance-based) granted under the 2004 Plan accrue forfeitable dividend equivalents that are subject to the same vesting and other terms and conditions as the corresponding performance shares and RSU awards. Dividend equivalents are accumulated and paid in cash when and to the extent the underlying shares are issued. Amounts in the “Threshold” column represent the number of shares of our common stock issuable (e.g., 20% of the target number of performance shares allotted to the revenue subtranche and 0.025% of the target number of performance shares allotted to the Total Shareholder Return (Relative TSR) tranche) upon threshold-level achievement of the performance goals described in footnotes 5, 6 and 9 below. If threshold level performance is not achieved, no shares are issuable. | | (3) Represents the grant-date fair value of each equity award, calculated in accordance with Topic 718, and does not take into account estimated forfeitures. The grant-date fair value of the performance shares awarded is based on the probable outcome at 100% target level attainment of one or more pre-established performance objectives and the assumptions used in the calculation of the grant-date fair value of options are set forth in Note 16 to our Consolidated Financial Statements for the year ended December 31, 2020, included in our Annual Report on Form 10-K for such fiscal year. | | (4) Performance objectives were set for certain tranches of performance shares which were approved in prior years by our Compensation & Talent Committee and the associated grant-date fair value of those tranches has been incorporated in the table above (i.e., the performance objectives for the third subtranche of the 2018 revenue-based performance shares, for Mr. Dickinson and Mr. Pletcher, and the second subtranche of the 2019 revenue-based performance shares for Mr. O’Day, Mr. Dickinson and Mr. Pletcher). Performance shares that had no grant date as the performance objectives had not yet been defined as of the close of the 2020 fiscal year, and therefore, do not have a reportable 2020 grant-date fair value under Topic 718 are excluded from the Summary Compensation Table and the table above (i.e., the performance objectives for the third subtranche of the 2019 revenue-based performance shares and the second and third subtranches of the 2020 revenue-based performance shares). | | Because of changes in our stock price between the date of the approval by our Compensation & Talent Committee and the time when the performance objectives are established, the reported grant-date fair value of the performance shares differs from the award value approved by our Compensation & Talent Committee. As a result, only approximately two-thirds of the value of performance shares awarded in 2020 is included in the Summary Compensation Table and the table above. The value of the relevant performance shares awarded to our NEOs is as set forth below: |

  114. 2020 Grants of Plan-Based Awards

    | | Performance Share Award Value Approved by Our Compensation & Talent Committee | Performance Shares at Target Based on Compensation & Talent Committee Approval (# of Shares) | | | Executive Officer | | Relative TSR | Revenue | | Mr. O’Day | $6,250,000 | 29,820 | 43,200 | | Mr. Dickinson | $1,750,000 | 8,350 | 12,100 | | Ms. Mercier | $1,750,000 | 8,350 | 12,100 | | Dr. Parsey | $2,000,000 | 9,540 | 13,820 | | Mr. Pletcher | $1,500,000 | 7,160 | 10,370 |

  115. 2020 Grants of Plan-Based Awards

    | (5) Represents the grant-date fair value of the 2020 revenue subtranche of performance shares awarded in 2019 under the 2004 Plan, as that value was measured on March 10, 2020, the date on which the revenue target for that particular subtranche was first communicated to the NEOs (following approval by our Compensation & Talent Committee). Although such subtranche was part of the performance share awards originally made on February 6, 2019 and March 1, 2019, no grant-date fair value could be determined for that subtranche under Topic 718 until March 10, 2020. | | The 2019 performance shares were divided into two equally-weighted Relative TSR and revenue tranches based on award value approved by the Compensation & Talent Committee similar to the description of the 2020 performance shares in footnote 6 below. Based on the terms of the awards, any shares accrued on the basis of the applicable level of Relative TSR goal attainment are also subject to a service-vesting condition that generally requires continued service with us through the date following the completion of the performance period on which our Compensation & Talent Committee certifies the Relative TSR level attained (the “Relative TSR-based Awards Certification Date”). The Relative TSR three-year performance period is from February 1, 2019 through December 31, 2021. Based on the terms of the awards, any shares accrued on the basis of the applicable level of revenue goal attainment are also subject to a service-vesting condition that requires continued service with us through the date following the completion of the third subtranche performance period on which our Compensation & Talent Committee certifies the attained level of the consolidated net product revenue goal applicable to the third subtranche (the “Revenue-based Awards Certification Date”), subject to pro-rata vesting in the event of death, disability or retirement before that date. | | Since the revenue goal for the third subtranche of the 2019 performance share award had not been set by our Compensation & Talent Committee as of the close of the 2020 fiscal year, that subtranche does not have a determinable grant-date fair value under Topic 718 for the 2020 fiscal year. | | (6) Represents the grant-date fair value of the 2020 performance shares awarded on March 10, 2020. | | The 2020 performance shares were divided into two equally-weighted Relative TSR and revenue tranches based on award value approved by the Compensation & Talent Committee. The performance-based vesting requirement for the Relative TSR tranche was set by our Compensation & Talent Committee on January 29, 2020 and is tied to the percentile level of our Relative TSR for the three-year performance period from March 1, 2020 through December 31, 2022 relative to the Relative TSR realized for that same period by the companies comprising three subsets of the S&P Health Sub-Index. Based on the terms of the awards, to receive any shares of our common stock accrued pursuant to this Relative TSR tranche, an executive officer must remain employed with us through the Relative TSR-based Awards Certification Date, subject to pro-rata vesting in the event of death, disability or retirement before that date. |

  116. 2020 Grants of Plan-Based Awards

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  117. 2020 Grants of Plan-Based Awards

    | The performance-based vesting requirement for the revenue tranche of each performance award is divided into three equal subtranches, each with its own one-year performance period and applicable service period of one or more specified years, as follows: | | The performance-based vesting requirement for the first subtranche was the achievement of the target level of consolidated net product revenue for the 2020 fiscal year as set by our Compensation & Talent Committee. The grant-date fair value of that particular subtranche was measured on March 10, 2020, in accordance with Topic 718. Based on the terms of the awards, any shares accrued on the basis of revenue goal attainment for this subtranche are also subject to a service-vesting condition that requires continued service through the Revenue-based Awards Certification Date. | | Since the revenue goals for the second and third subtranches of the revenue tranche of the 2020 performance shares had not been set by our Compensation & Talent Committee as of the close of the 2020 fiscal year, those subtranches do not have a determinable grant-date fair value under Topic 718 for the 2020 fiscal year. | | (7) Reflects option awards granted under our 2004 Plan, the terms of which are consistent with those of options granted to other employees under the 2004 Plan. The options vest at the rate of 25% on the first anniversary of the grant date and 6.25% each quarter thereafter during the optionee’s employment over the next 36 months. Subject to earlier forfeiture, the maximum term of options granted under the 2004 Plan is 10 years. The exercise price per share of each option granted was equal to the closing market price of our common stock on the grant date or the closing market price on the day before the grant date if the grant date is not on a business day. | | (8) Represents time-based RSU awards under the 2004 Plan that vest in a series of four successive annual installments upon completion of each year of continued service over the four-year period measured from the grant date. | | (9) Represents the grant-date fair value of the 2020 revenue subtranche of performance shares awarded in 2018 under our 2004 Plan, as that value was measured on March 10, 2020, the date on which the revenue target for that particular subtranche was first communicated to the NEOs (following approval by our Compensation & Talent Committee). Although such subtranche was part of the performance share award originally made on February 1, 2018, no grant-date fair value could be determined for that subtranche under Topic 718 until March 10, 2020. | | The 2018 performance shares were divided into two equally-weighted Relative TSR and revenue tranches based on award value approved by the Compensation & Talent Committee similar to the description of the 2020 performance shares in footnote 5 above. Based on the terms of the awards, any shares accrued on the basis of the applicable level of Relative TSR and revenue goal attainment are also subject to a service-vesting condition that requires continued service with us through the awards certification date, subject to pro-rata vesting in the event of death, disability or retirement before that date. |

  118. 2020 Grants of Plan-Based Awards

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  119. 2020 Outstanding Equity Awards at Fiscal Year-End

    2020 Outstanding Equity Awards at Fiscal Year-End The following table sets forth information regarding each unexercised option award and unvested stock award held by each of our NEOs as of December 31, 2020. Market values are based on our closing stock price on December 31, 2020 of $58.26:

  120. 2020 Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards(1) | | | | Stock Awards(3) | | | | | | Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unexercised Options | Option Exercise Price(2) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | Name | Exercisable | Unexercisable | | | | | | | | Daniel P. O’Day | 101,185 | 130,095 | $66.01 | 3/1/2029 | — | | — | — | | | — | 256,620 | $72.34 | 3/10/2030 | — | — | — | — | | | — | — | — | — | 19,204(4) | $1,118,833 | 45,850(5) | $2,671,221 | | | — | — | — | — | 30,300(6) | $1,765,278 | — | — | | | — | — | — | — | 28,800(7) | $1,677,888 | 29,820(8) | $1,737,313 | | | — | — | — | — | — | — | 34,087 | $1,985,909 | | | — | — | — | — | — | — | 85,845 | $5,001,330 | | | — | — | — | — | — | — | 43,200 | $2,516,832 | | Andrew D. Dickinson | 65,960 | — | $72.70 | 12/10/2026 | — | — | — | — | | | 43,340 | — | $72.70 | 8/10/2027 | — | — | — | — | | | 18,630 | — | $73.77 | 11/10/2027 | — | — | — | — | | | 12,519 | 5,691 | $83.49 | 2/1/2028 | — | — | — | — | | | 10,725 | 4,875 | $80.72 | 3/10/2028 | — | — | — | — | | | 38,053 | 22,832 | $71.91 | 6/10/2028 | — | — | — | — | | | 14,726 | 18,934 | $68.75 | 2/6/2029 | — | — | — | — | | | 11,040 | 33,120 | $65.38 | 11/10/2029 | — | — | — | — | | | — | 71,850 | $72.34 | 3/10/2030 | — | — | — | — | | | — | — | — | — | 980(9) | $57,118 | — | — | | | — | — | — | — | 761(10) | $44,310 | — | — | | | — | — | — | — | 1,200(11) | $69,912 | — | — | | | — | — | — | — | 3,073(4) | $179,013 | 6,260(5) | $364,708 | | | — | — | — | — | 4,846(6) | $282,328 | — | — | | | — | — | — | — | 8,068(7) | $470,042 | 8,350(8) | $486,471 | | | — | — | — | — | — | — | 1,537 | $89,546 | | | — | — | — | — | — | — | 7,292 | $424,832 | | | — | — | — | — | — | — | 5,452 | $317,634 | | | — | — | — | — | — | — | 5,737 | $334,238 | | | — | — | — | — | — | — | 12,100 | $704,946 | | Johanna Mercier | 46,284 | 101,826 | $66.64 | 7/24/2029 | — | — | — | — | | | — | 71,850 | $72.34 | 3/10/2030 | — | — | — | — | | | — | — | — | — | 8,068(7) | $470,042 | 8,350(8) | $486,471 | | | — | — | — | — | — | — | 22,515 | $1,311,724 | | | — | — | — | — | — | — | 12,100 | $704,946 | | Merdad V. Parsey M.D., Ph.D. | 22,079 | 66,236 | $65.38 | 11/10/2029 | — | — | — | — | | | — | 82,120 | $72.34 | 3/10/2030 | — | — | — | — | | | — | — | — | — | 9,214(7) | $536,808 | 9,540(8) | $555,800 | | | — | — | — | — | — | — | 10,199 | $594,194 | | | — | — | — | — | — | — | 13,820 | $805,153 |

  121. 2020 Outstanding Equity Awards at Fiscal Year-End

    | 72 | |

  122. 2020 Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards(1) | | | | Stock Awards(3) | | | | | | Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unexercised Options | Option Exercise Price(2) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | | Name | Exercisable | Unexercisable | | | | | | | | Brett A. | 25,780 | — | $80.65 | 2/1/2024 | — | — | — | — | | Pletcher | 23,460 | — | $104.83 | 2/1/2025 | — | — | — | — | | | 14,830 | — | $116.58 | 8/10/2025 | — | — | — | — | | | 53,590 | — | $84.05 | 2/1/2026 | — | — | — | — | | | 68,887 | 4,593 | $72.25 | 2/2/2027 | — | — | — | — | | | 47,575 | 21,625 | $83.49 | 2/1/2028 | — | — | — | — | | | 22,085 | 28,395 | $68.75 | 2/6/2029 | — | — | — | — | | | — | 61,590 | $72.34 | 3/10/2030 | — | — | — | — | | | — | — | — | — | — | — | — | — | | | — | — | — | — | 4,484(9) | $261,220 | — | — | | | — | — | — | — | 3,477(10) | $202,572 | — | — | | | — | — | — | — | 5,486(11) | $319,614 | — | — | | | — | — | — | — | 4,610(4) | $268,594 | 9,380(5) | $546,479 | | | — | — | — | — | 7,274(6) | $423,783 | — | $— | | | — | — | — | — | 6,914(7) | $402,810 | 7,160(8) | 417,142 | | | — | — | — | — | — | — | 8,182 | $476,683 | | | — | — | — | — | — | — | 10,370 | $604,156 |

  123. 2020 Outstanding Equity Awards at Fiscal Year-End

    | (1) The options granted under the 2004 Plan vest over a four-year period at the rate of 25% on the first anniversary of the grant date and 6.25% each quarter thereafter during the optionee’s employment. Each option is exercisable over a period not to exceed the contractual term of ten years from the grant date. | | (2) The exercise price per share of each option granted was equal to the closing market price of our common stock on the grant date or the closing market price on the day before the grant date if the grant date was not a trading day. | | (3) Stock awards granted under the 2004 Plan accrue forfeitable dividend equivalents that are subject to the same vesting and other terms and conditions as the corresponding stock awards. Dividend equivalents are accumulated and paid in cash when and to the extent that the underlying shares vest. | | (4) Represents the number of shares of our common stock that have accrued under the first revenue subtranche of the 2019 performance shares, as described in footnote 5 to the 2020 Grants of Plan-Based Awards table on pages 69-71, based on attainment of the applicable revenue goal at the 126.7% of the target level. The shares are now subject only to a service-vesting condition that requires continued service through certification by our Compensation & Talent Committee, subject to pro-rata vesting in the event of death, disability or retirement before that date. | | (5) Represents the number of shares of our common stock that will vest and become issuable pursuant to the Relative TSR tranche of the 2019 performance shares, as described in footnote 5 to the 2020 Grants of Plan-Based Awards table on pages 69-71, assuming the established performance goal is attained at the target level. | | (6) Represents the number of shares of our common stock that have accrued under the second revenue subtranche of the 2019 performance shares, as described in footnote 5 to the 2020 Grants of Plan-Based Awards table on pages 69-71, based on attainment of the applicable revenue goal at the 200% of the target level. The shares are now subject only to a service-vesting condition that requires continued service through certification by our Compensation & Talent Committee, subject to pro-rata vesting in the event of death, disability or retirement before that date. | | (7) Represents the number of shares of our common stock that have accrued under the first revenue subtranche of the 2020 performance shares, as described in footnote 6 to the 2020 Grants of Plan-Based Awards table on pages 69-71, based on attainment of the applicable revenue goal at the 200% of the target level. The shares are now subject only to a service-vesting condition that requires continued service through certification by our Compensation & Talent Committee, subject to pro-rata vesting in the event of death, disability or retirement before that date. | | (8) Represents the number of shares of our common stock that will vest and become issuable pursuant to the Relative TSR tranche of the 2020 performance shares, as described in footnote 6 to the 2020 Grants of Plan-Based Awards table on pages 69-71, assuming the established performance goal is attained at the target level. | | (9) Represents the number of shares of our common stock that have accrued under the first revenue subtranche of the 2018 performance shares, as described in footnote 9 to the 2020 Grants of Plan-Based Awards table on pages 69-71, based on attainment of the applicable revenue goal at the 163.4% of the target level. The shares were released on January 26, 2021. | | (10) Represents the number of shares of our common stock that have accrued under the second revenue subtranche of the 2018 performance shares, as described in footnote 9 to the 2020 Grants of Plan-Based Awards table on pages 69-71, based on attainment of the applicable revenue goal at the 126.7% of the target level. The shares were released on January 26, 2021. | | (11) Represents the number of shares of our common stock that have accrued under the third revenue subtranche of the 2018 performance shares, as described in footnote 9 to the 2020 Grants of Plan-Based Awards table on pages 69-71, based on attainment of the applicable revenue goal at the 200% of the target level. The shares were released on January 26, 2021. The Relative TSR tranche of the 2018 Performance Shares was earned at 0% and thus is not reflected in the table above. |

  124. 2020 Outstanding Equity Awards at Fiscal Year-End

    | 2021 Proxy Statement | 73 |

  125. 2020 Outstanding Equity Awards at Fiscal Year-End

    2020 Option Exercises and Stock Vested The following table shows the number of shares acquired upon exercise of stock options and vesting of RSUs or performance shares or both for each of our NEOs during the year ended December 31, 2020:

  126. 2020 Outstanding Equity Awards at Fiscal Year-End

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise | Value Realized on Exercise(1) | Number of Shares Acquired on Vesting | Value Realized on Vesting(2) | | Daniel P. O’Day | — | $— | 54,288 | $3,765,416 | | Andrew D. Dickinson | — | $— | 11,585 | $803,265 | | Johanna Mercier | — | $— | 33,775 | $2,098,132 | | Merdad V. Parsey, M.D., Ph.D. | — | $— | 5,101 | $309,223 | | Brett A. Pletcher | 27,060 | $1,062,530 | 17,756 | $1,152,377 |

  127. 2020 Outstanding Equity Awards at Fiscal Year-End

    | (1) Option awards value realized is determined by multiplying (i) the amount by which the market price of our common stock at the time of exercise exceeded the exercise price by (ii) the number of shares of common stock for which the options were exercised. | | (2) Stock awards value realized is determined by multiplying (i) the closing market price of our common stock on the vesting date by (ii) the number of shares of common stock that vested on that date. |

  128. 2020 Outstanding Equity Awards at Fiscal Year-End

    2020 Nonqualified Deferred Compensation The following table shows the contributions, earnings and account balances as of 2020 fiscal year end for our NEOs under our Deferred Compensation Plan:

  129. 2020 Outstanding Equity Awards at Fiscal Year-End

    | Name | Executive Contributions in Last Fiscal Year | Company Contributions in Last Fiscal Year | Aggregate Earnings in Last Fiscal Year(1) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last Fiscal Year-End | | Daniel P. O’Day | $— | $750,000(2) | $152,898 | $ — | $902,898(2) | | Andrew D. Dickinson | $— | $— | $— | $ — | $— | | Johanna Mercier | $— | $— | $— | $ — | $— | | Merdad V. Parsey, M.D., Ph.D. | $300,000(3) | $— | $6,979 | $ — | $306,979(3) | | Brett A. Pletcher | $— | $— | $496,985 | $ — | $5,490,340 |

  130. 2020 Outstanding Equity Awards at Fiscal Year-End

    | (1) The reported amount corresponds to a composite of the actual market earnings on a group of investment funds selected by the applicable NEOs for purposes of tracking the notional investment return on his or her balance for the 2020 fiscal year. | | (2) Includes $750,000 of deferred other compensation reported for such individual in the Summary Compensation Table. | | (3) Includes $300,000 of deferred salary reported for such individual in the Summary Compensation Table. |

  131. 2020 Outstanding Equity Awards at Fiscal Year-End

    | 74 | |

  132. 2020 Potential Payments Upon Involuntary Termination or Change in Control Termination

    2020 Potential Payments Upon Involuntary Termination or Change in Control Termination

  133. 2020 Potential Payments Upon Involuntary Termination or Change in Control Termination

    | Executive Benefits and Payments Upon Separation | Involuntary Termination without Cause or Resignation for Good Reason(1) without a Change in Control | Involuntary Termination without Cause or Resignation for Good Reason within Change in Control Protection Period | Death/ Disability | | Daniel P. O’Day | | | | | Cash severance | $9,540,000 | $14,310,000 | $— | | Pro-rata bonus | $4,713,390(2) | $3,120,000(2) | $— | | Equity award vesting acceleration | $13,425,201(3) | $18,518,291(3) | $14,495,472(3) | | Benefits and perquisites: | | | | | Lump sum to cover COBRA costs | $45,618 | $68,428 | $— | | Outplacement services | $14,500 | $14,500 | $— | | Deferred Compensation Plan contribution | $3,000,000 | $3,000,000 | $3,000,000 | | Total | $30,738,709 | $39,031,219 | $17,495,472 | | Andrew D. Dickinson | | | | | Cash severance | $2,223,673 | $4,371,682 | $— | | Pro-rata bonus | $1,704,300(2) | $798,673(2) | $— | | Equity award vesting acceleration | $—(3) | $3,590,098(3) | $981,707(3) | | Benefits and perquisites: | | | | | Lump sum to cover COBRA costs | $47,847 | $79,745 | $— | | Outplacement services | $5,250 | $5,250 | $— | | Total | $3,981,070 | $8,845,448 | $981,707 | | Johanna Mercier | | | | | Cash severance | $2,187,500 | $4,187,500 | $— | | Pro-rata bonus | $1,980,300(2) | $650,000(2) | $— | | Equity award vesting acceleration | $1,311,724(3) | $2,738,162(3) | $299,760(3) | | Benefits and perquisites: | | | | | Lump sum to cover COBRA costs | $293 | $488 | $— | | Outplacement services | $5,250 | $5,250 | $— | | Total | $5,485,067 | $7,581,400 | $299,760 | | Merdad V. Parsey, M.D., Ph.D. | | | | | Cash severance | $2,500,000 | $5,000,000 | $— | | Pro-rata bonus | $1,794,000(2) | $1,000,000(2) | $— | | Equity award vesting acceleration | $594,194(3) | $2,223,551(3) | $342,407(3) | | Benefits and perquisites: | | | | | Lump sum to cover COBRA costs | $39,151 | $65,252 | $— | | Outplacement services | $5,250 | $5,250 | $— | | Total | $4,932,595 | $8,294,053 | $342,407 | | Brett A. Pletcher | | | | | Cash severance | $2,461,877 | $4,967,193 | $— | | Pro-rata bonus | $1,704,300(2) | $1,036,877(2) | $— | | Equity award vesting acceleration | $—(3) | $3,721,649(3) | $1,806,053(3) | | Benefits and perquisites: | | | | | Lump sum to cover COBRA costs | $42,618 | $71,031 | $— | | Outplacement services | $5,250 | $5,250 | $— | | Total | $4,214,045 | $9,802,000 | $1,806,053 |

  134. 2020 Potential Payments Upon Involuntary Termination or Change in Control Termination

    | (1) Per the terms of their applicable offer letters, all such amounts are also payable to Mr. O’Day in the event of his resignation for Good Reason and the Equity award vesting acceleration is payable to Ms. Mercier and Dr. Parsey in the event of a resignation for Good Reason. The other items are payable to all executive officers on a resignation following a required relocation, without consent, to a new work location that is more than 50 miles from his or her previous work location under the Severance Plan. |

  135. 2020 Potential Payments Upon Involuntary Termination or Change in Control Termination

    | 2021 Proxy Statement | 75 |

  136. 2020 Potential Payments Upon Involuntary Termination or Change in Control Termination

    | (2) Amount reflects the pro-rated amount of the bonus payable for the year of termination based on 2020 actual performance pursuant to the Severance Plan (as amended and restated May 5, 2020) in the event of a termination outside the context of a change in control, and a pro-rated annual incentive for year of termination based on the average bonus paid over the prior three years (or such fewer number of complete fiscal years of employment) in the context of a termination within the change in control protection period. | | (3) Amount reflects $58.26 (our closing stock price on December 31, 2020) multiplied by the number of shares covered by each accelerating award. All unvested options that would accelerate were out-of-the money on December 31, 2020, and thus are not reflected. 2018 performance awards tied to Relative TSR reflect payout at 0% of target. 2018 performance awards tied to revenue reflect payout at 163.4% of target (163.4% for first subtranche, 126.7% for second subtranche, 200% for third subtranche). 2019 performance awards tied to Relative TSR assume payout at 100% of target. 2019 performance awards tied to revenue assume only first subtranche and second subtranche are outstanding at time of change of control (per award agreement terms) with payout at 126.7% of target for first subtranche and 200% of target for second subtranche. 2020 performance awards tied to Relative TSR assume payout at 100% of target. 2020 performance awards tied to revenue assume only first subtranche are outstanding at time of change of control (per award agreement terms) with payout at 200% of target. |

  137. CEO Pay Ratio

    CEO Pay Ratio We present below the ratio of annual total compensation of our median compensated employee to the annualized total compensation of Mr. O’Day. The ratio presented below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported below, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. For 2020, we used the same median employee identified for purposes of calculating our 2019 pay ratio because we believe there has been no change in our employee population or employee compensation arrangements that would significantly impact the pay ratio disclosure. In identifying such median paid employee, we applied the following steps:

  138. CEO Pay Ratio

    | ► | We identified our median compensated employee from the 11,486 full-time and part-time workers who were included as employees on our payroll records as of October 1, 2019 based on year-to-date base salary, incentive, commissions and equity, with conforming adjustments for employees who were hired during that period but did not work the full nine months. | | ► | We then excluded employees at the median who had anomalous compensation characteristics to determine the median compensated employee. |

  139. CEO Pay Ratio

    The 2020 total compensation for Mr. O’Day was $18,998,905. The 2020 annual total compensation as determined under Item 402 of Regulation S-K for our median employee was $250,190. The ratio of Mr. O’Day’s total compensation to our median employee’s total annual compensation for fiscal year 2020 is 76 to 1.

  140. CEO Pay Ratio

    | 76 | |

  141. CEO Pay Ratio

    | Stockholder Proposal Requesting that the Board Adopt a Policy that the Chairperson of the Board of Directors be an Independent Director United Church Funds and co-filers have submitted a stockholder proposal for consideration at the Annual Meeting. United Church Funds’ address is 475 Riverside Drive, Suite 1020, New York, NY 10115. We have been notified that United Church Funds has continuously held shares our common stock worth at least $2,000 since at least October 23, 2019. We will provide the name, address and known share holdings of the co-filers of this proposal upon written or oral request to the Corporate Secretary at the address set forth in question 17 in “Questions and Answers.” If properly presented at the Annual Meeting, our Board unanimously recommends a vote “AGAINST” the following proposal. The resolution being submitted by United Church Funds and co-filers to the stockholders for approval is as follows: Stockholder Proposal RESOLVED: Gilead Sciences (“Gilead” or the “Company”) shareholders request the Board of Directors adopt as policy (the “Policy”), and amend the bylaws as necessary, to require henceforth that the Chair of the Board of Directors, whenever possible, be an independent member of the board. The Policy shall apply prospectively so as not to violate any contractual obligations. If the board determines that a Chair who was independent when selected is no longer independent, the board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chair. Supporting Statement We believe our board of directors should be chaired by an independent director. A chair is better positioned to represent shareholder interests when the role is held by a director that is independent of corporate management. The Company’s recent performance relative to peers as well as controversies involving the pricing of its products makes this an opportune time to adopt a policy requiring an independent director serve as board chair. At our Company, the CEO Daniel O’Day also serves as Chairman of the Board. Shareholders manifested opposition to Gilead’s executive pay at the 2020 annual general meeting, where 16.3% voted against the advisory vote on executive compensation. Proxy advisor ISS found a misalignment in pay for performance with Gilead underperforming its peer group on a one, three and five year basis while compensating its CEO well above the peer median. On September 23, 2020, the Department of Justice reported that Gilead agreed to pay $97 million to resolve allegations that it violated the False Claims Act by paying kickbacks. Eleven State Treasurers have questioned Gilead on price gouging on its Remdesivir anti-viral during a global pandemic. The current Lead Independent Director, Kevin Lofton, is not a sufficient substitute for an independent Chair. Mr. Lofton appears overstretched with directorships at two other Fortune 500 companies (Rite Aid and Medtronic) and several non-profit boards. We also question Mr. Lofton’s independence after serving on the board for over 11 years. An independent chair is a fundamental corporate governance best practice and is preferred by many investors. ISS reported in September 2020 that 85 percent of investors responding to its policy survey indicated that an independent chair is their preferred model. Thirty-four percent of S&P 500 boards have an independent chair, according to a 2019 Spencer Stuart report, up from 31 percent the previous year. The Council of Institutional Investors’ corporate governance policies favor independent board chairs. A similar proposal filed with Gilead last year saw significant support with a vote in favor of 43.39%. In order to ensure that our Board can provide rigorous oversight for our Company with greater independence and accountability, we urge a vote FOR this shareholder proposal. |

  142. CEO Pay Ratio

    | 2021 Proxy Statement | 77 |