DEF 14A of West Pharmaceutical Services Inc
Filed Mar 13, 2024 · FY20230001558370-24-003056
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| Payments on Death | 68 | | Estimated Payments Following Termination | 69 | | Estimated Additional Severance Payments | 69 | | Payments on Termination in Connection with a Change-in-Control | 70 | | CEO Pay Ratio | 73 | | Pay Versus Performance | 73 | | Proposal 2—Advisory Vote to Approve Named Executive Officer Compensation | 77 | | Independent Auditors and Fees | 78 | | Audit Committee Report | 79 | | Proposal 3—Amend and Restate Our Amended and Restated Articles of Incorporation to Eliminate Supermajority Transaction Requirement | 80 | | Proposal 4—Amend and Restate Our Amended and Restated Articles of Incorporation to Eliminate Supermajority Amendment Requirement | 81 | | Proposal 5—Ratification of the Appointment of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm | 82 | | Proposal 6—Shareholder Proposal Entitled “Simple Majority Vote” | 83 | | Voting and Other Information | 85 | | APPENDIX 1 - Proposed Changes to Amended and Restated Articles of Incorporation | A-1 |
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| Proxy Summary |
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Below is a summary of important information you will find in this Proxy Statement. This summary does not contain all the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Summary of Shareholder Voting Matters Our Board of Directors is soliciting your vote on matters that will be presented at our 2024 Annual Meeting of Shareholders and at any adjournment or postponement thereof. This Proxy Statement contains information to assist you in voting your shares. The Notice, the accompanying proxy card or voting instruction card and our 2023 Annual Report, including our annual report wrap, are being mailed starting on or about March 13, 2024.
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| | | | Recommended | | | Proposal 1: Election of Directors | | Page 11 | ✔ | FOR | | Mark A. Buthman William F. Feehery Robert F. Friel Eric M. Green Thomas W. Hofmann Molly E. Joseph | Deborah L. V. Keller Myla P. Lai-Goldman Stephen H. Lockhart Douglas A. Michels Paolo Pucci | | Each Nominee | | | Proposal 2: Advisory Vote to Approve Named Executive Officer Compensation | | Page 77 | ✔ | FOR | | Proposal 3: Amend and Restate Our Amended and Restated Articles of Incorporation to Eliminate Supermajority Transaction Requirement | | Page 80 | ✔ | FOR | | Proposal 4: Amend and Restate Our Amended and Restated Articles of Incorporation to Eliminate Supermajority Amendment Requirement | | Page 81 | ✔ | FOR | | Proposal 5: Ratification of the Appointment of PricewaterhouseCoopers LLP as our Independent Registered Public Accounting Firm for 2024 | | Page 82 | ✔ | FOR | | Proposal 6: Shareholder Proposal entitled “Simple Majority Vote” | | Page 83 | X | AGAINST |
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2023 Business Highlights* The pillars of our Company’s market-led approach, global operations and One West philosophy have served as the foundation to our success in 2023 both in net sales growth and operating cash flow. We continue to see favorable trends in the pharmaceutical and biotech industries that enable the Company to pursue its long-term growth strategy and fulfill our vision for the future, including:
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| ● | Biotechnology continues to be a promising source of therapies and products for patient care, requiring specialized packaging and delivery solutions due to the sensitive nature of these large molecules. We maintain a high participation rate in providing primary containment components for approved new molecular entities, especially large-molecule injectable drugs. |
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| * Certain forward-looking statements are included in this Proxy Statement. They use such words as “will,” “continue,” “estimate,” “expect,” “looking to the future,” and other similar terminology. These statements reflect Management’s current expectations regarding future events and operating performance and speak only as of the date of this document. These statements are based on Management’s beliefs and assumptions, current expectations, estimates, and forecasts. There are many factors that can influence the Company’s future results that are beyond the ability of the Company to control or predict. Because of these known or unknown risks or uncertainties, actual results could differ materially from past results and those expressed or implied in any forward-looking statement. For a description of factors that could cause the Company’s future results to differ from those expressed in any such forward-looking statements, see Item 1A, entitled “Risk Factors,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and as revised or supplemented by our quarterly reports on Form 10-Q or Form 8-K. Except as required by law or regulation, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. |
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| ● | The regulatory landscape is evolving with global regulatory bodies updating guidance on review and approval protocols of newer, self-administered combination products with increased attention on quality and documentation. |
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| ● | Ongoing research of subcutaneous administration, as an alternative to intravenous administration, prompted by its cost-effectiveness and increased patient adherence, provides more opportunities to develop self-administration technology that places easy-to-use delivery systems in the hands of patients. |
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Each year, we have seen growing interest and demand for our high value product offerings, delivery device platforms and services. Customers are turning to West for our scientific expertise and insight into the regulatory landscape that governs our industry. This expertise helps us to build positive relationships with our customers. In 2023, we reported:
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| ● | Full-year 2023 net sales of $2.950 billion, a 2.2% increase; organic net sales growth of 1.6%; currency translation increased net sales growth by 100 basis points |
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| ● | Full-year 2023 reported-diluted EPS of $7.88, an increase of 1.9%, and full-year 2023 adjusted-diluted EPS of $8.08 decreased 5.8% |
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| ● | Full-year 2023 operating profit margin of 22.9%, a decline of 250 basis points, and full-year 2023 adjusted operating profit margin of 23.4%, a decline of 300 basis points |
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| ● | Full-year 2023 operating cash flow was $776.5 million, an increase of 7.3%; capital expenditures were $362.0 million, compared to $284.6 million over the same period last year, and represented 12.3% of full-year 2023 net sales; free cash flow (operating cash flow minus capital expenditures) was $414.5 million, a decrease of 5.7% |
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Long-Term Shareholder Return Examining our results over the past five years, West has consistently delivered against its objectives, posting long-term sales growth and EPS improvements. The Company has outperformed both the S&P 500 Index and S&P 500 Health Care Index in Total Shareholder Return (“TSR”) during this same period.
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| (1) Please refer to our 2023 Form 10-K, February 15, 2024 Earnings Release on Form 8-K and prior year earnings releases for the reconciliation of Non-U.S. GAAP financial measures. |
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| (2) Sources: IR Insight |
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| (3) Non-proprietary products |
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Our Director Nominees You are being asked to vote on the directors nominated on page 11. All directors are elected annually by a majority of votes cast, except in the case of a contested election where the number of nominees exceeds the number of open positions, in which case plurality voting is used. The chart below summarizes some key characteristics of the members of our Board of Directors. All data is as of March 13, 2024. Detailed information about each director’s background and areas of expertise can be found beginning on page 11. Corporate Governance Highlights
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| Corporate Governance Features | | | | Annual director elections with majority voting in uncontested elections | | Active shareholder engagement program on corporate governance and compensation matters | | Proxy access bylaws permit shareholders who meet required thresholds and holding periods to nominate up to two (or 20% if greater) directors for election to the Board | | Significant risk management oversight by the Board and its Committees | | Flexible Board leadership structure which permits a director as non-executive Chair or appointment of Lead Independent Director | | Board commitment to Environmental, Social and Governance (“ESG”) issues, including Environmental Sustainability addressing Climate and Waste Reduction strategies, Talent Attraction, Retention and Engagement (including Diversity, Equity and Inclusion) and a Responsible Supply Chain | | Strong culture of Compliance and Ethics, Philanthropy, Health and Safety and Quality built into our Mission, Vision and Values | | Three new directors appointed within the past four years | | Effective self-assessment and evaluation procedures that include individual interviews with Board members | | Annual evaluation of all directors to ensure the right mix of experience and diversity of opinion and background | | Robust executive officer and Board succession planning | | Comprehensive curriculum of topics regularly presented to the Board to aid in their understanding of our business, the markets in which we operate and the Board’s responsibilities with respect to all our stakeholders | | Effective executive and Board stock ownership guidelines | | Prohibition on pledging or hedging of securities by members of the Board and executive officers |
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| 2023 Board Governance Activities and Accomplishments | | Approved and monitored Management’s enterprise business strategy | | Reviewed performance of Chief Executive Officer against pre-established goals and strategy | | Monitored enhancements to our Enterprise Risk Management, Business Continuity and Cyber-risk management processes | | Monitored Management’s human resources strategy to create a pipeline of talent to ensure the continuance of first-rate teams; oversaw efforts to further drive a culture of diversity and inclusivity at the Company | | Reviewed the Company’s capital allocation strategy, increasing the annual dividend and continuing strategic share buyback program | | Broad assessment and updating of Board succession planning and committee membership and leadership rotation schedules to ensure diversity of opinion, breadth of experience and refreshment of ideas | | Multiple awards, increased rankings and international recognition of our ESG and philanthropic efforts | | Continued development of ESG Strategy and key actions consistent with Task Force on Climate-Related Financial Disclosures and other best practices | | Directors attended 100% of the combined Board and Committee meetings assigned in 2023 | | Directors received an average of 98.9% support from shareholders in 2023 |
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2023 Executive Compensation Highlights
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| Executive Compensation Program Features | | Strong linkage between pay and performance and support by shareholders regarding our performance metrics, targets and goals as evidenced by a 95.5% shareholder Say-on-Pay approval rate of our executive compensation program | | Competitive total direct compensation (“TDC”), which is the sum of an officer’s base salary, short-term incentive target and long-term incentive target, targeted at the median level and appropriately adjusted by our Compensation Committee based on individual performance, skills and experience | | Formulaic Annual Incentive Plan (“AIP”) based on EPS, net sales and Operating Cash Flow (“OCF”) is intended to encourage Management to improve shareholder value in day-to-day decision making | | Challenging long-term incentive (“LTI”) plan utilizing stock options and performance share units based upon return on invested capital (“ROIC”) and sales consolidated annual growth rate (“CAGR”) to ensure long-term profitable growth and alignment with shareholders’ interests | | Use of two comparator groups to benchmark competitive pay standards to ensure Company can attract and retain the best talent | | Robust share ownership guidelines for all officers and directors | | Standard Change in Control (“CIC”) agreements for our current officers containing double trigger provisions requiring termination of the executive following a CIC before payments are made; payments are reduced if excise tax threshold is exceeded | | Strong incentive compensation recovery (clawback) that exceeds legal requirements, anti-hedging and anti-pledging policies | | Rigorous use of realizable pay analysis, performance metric difficulty analysis and similar tools to ensure our compensation programs remain linked to performance and consistent with Board expectations | | Active engagement with shareholders throughout the year regarding executive pay and Company performance issues | | Executive Compensation Actions & Results | | Appointed a new Compensation Committee Chair, aligning to best practices of rotating Board members to provide new insight and leadership | | Reviewed and approved revised Incentive Compensation Recovery policies for Executive Officers and Non-Officers, in adherence with SEC rules mandated by Dodd-Frank Act, while also reaffirming and enhancing discretionary recovery policies that go beyond what is required by law | | Strengthened Rule 10b5-1 trading plan rules, policies and procedures and provided education to executives on insider trading | | Reaffirmed West’s commitment to a pay-for-performance philosophy that aligns executives’ incentive compensation with Company performance and stakeholder interests on both a short and long-term basis, while mitigating excessive risk | | Confirmed the ongoing use of a two-comparator group approach for executive and director pay and pay-for-performance benchmarking; conducted a thorough review of the Business Segment Comparator Group resulting in the removal of CONMED in 2024 | | Executed compensation payouts to our corporate executives at 121.5% of target amount based on 2023 AIP performance payout levels of 114.0% for EPS, 84.6% for Net Sales and 180.7% for OCF | | Awarded LTI plan PSUs for the 2021-23 period at 107.64% of target amount based on a CAGR performance payout level of 56.81% and an ROIC payout level of 50.83% |
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| Election of Directors |
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Director Nominations, Skills and Criteria Candidates for nomination to our Board are recommended by the Nominating and Corporate Governance Committee (“NCGC”) in accordance with the NCGC’s charter, our Articles, our Bylaws, and our Corporate Governance Principles. All persons recommended for nomination to our Board, regardless of the source of the recommendation, are evaluated by this Committee with the Board determining the final slate of nominees. The Board and the NCGC consider, at a minimum, the following factors in recommending potential new Board members or the continued service of existing members:
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| ● | A director is nominated based on his or her professional experience. A director’s traits, expertise and experience add to the skill-set of the Board as a whole and provide value in areas needed for the Board to operate effectively. |
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| ● | A director must have high standards of integrity and commitment, and exhibit independence of judgment, a willingness to ask hard questions of Management and the ability to work well with others. |
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| ● | A director should be willing and able to devote enough time to the affairs of the Company and be free of any disabling conflict. |
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| ● | All the non-employee directors should be “independent” as outlined in our independence determination standards (“Independence Standards”). |
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| ● | A director should actively participate in the decision-making process, demonstrate a willingness to express ideas and engage in constructive discussion with other Board members, Management and relevant persons, be willing to make difficult decisions and demonstrate diligence and faithfulness in attending Board and Committee meetings. |
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| ● | The Board generally seeks active or former senior executives of public companies, particularly those with backgrounds in international operations, healthcare or public health fields, science or technology backgrounds and individuals with financial expertise. |
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When reviewing nominees, the NCGC considers whether the candidate possesses the qualifications, experience and skills it considers appropriate in the context of the Board’s overall composition and needs. We also strive for a Board composition that reflects a diverse mix of backgrounds, experiences, expertise, skill sets, perspectives and opinions. Therefore, our director nomination process seeks candidates who bring a diversity of professional experiences and personal backgrounds, which includes consideration of a candidate’s age, gender, race and ethnicity, where appropriate. The NCGC also reviews annually with the Board the size and composition of the Board and its committees to determine the qualifications and areas of expertise needed to further enhance the composition of the Board. In determining whether to add new directors, we review our skills matrix annually to determine the targeted skills that we believe will most significantly enhance the diversity of experience and expertise on our Board. We balance the current skill sets versus the desired optimal mix of skill sets given their relative importance to the Company. The Board uses a skills matrix, which was substantially updated and verified during 2022, to assess those skills needed to guarantee we have the requisite mix of skills. In 2023, we incorporated the skills matrix into our succession planning, to ensure that we are replacing skills that may be lost as directors retire or otherwise leave the Board. The Board considers the defined skills below as most vital to help a director provide value and leadership to help drive West’s success.
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| Skills Definitions | | | Corporate Development | Material experience in analyzing, identifying and executing significant corporate development opportunities, including mergers and acquisitions, divestitures, joint ventures and large, complex strategic business partnerships | | Executive Leadership | Officer or senior level experience at a large, complex publicly traded or private company or organization with responsibility for multiple material business functions | | Financial Expertise | Accounting degree, certification or significant experience requiring financial knowledge & analysis, including ownership of accounting, treasury and financial risk management | | Global Supply Chain & Operations | Significant experience managing the operations, supply chain and logistics of producing products for commercial sale globally to maximize profit and minimize waste | | Healthcare Industry | Management experience in healthcare, life sciences, medical products, devices or services | | International Experience | Leadership in a company with significant international presence that includes ownership of a material corporate function or a considerable overseas assignment | | Marketing Strategy | Strategic management experience involving the sales, marketing and branding of products or services | | Regulatory/Drug Development | Material work experience in a heavily regulated industry including working on responses to government and customer filings and audits and/or significant work in pharmaceutical drug delivery or diagnostic processes and approaches | | Science & Technology | Scientific degree used in performing services or certification and significant oversight or involvement with scientific, technological or research and development endeavors |
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Board members must be well-versed in our Mission, Vision and Values, as well as our corporate strategy. West’s mission is to contain and deliver injectable therapies that improve patient lives, and it aspires to be the world leader in integrated containment and delivery of injectable medicines, both of which rely on the Company’s core values of:
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| ● | Passion for Customers—We innovate to continuously improve our product and service offerings to meet future customer and patients’ needs. |
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| ● | Leadership in Quality—We never compromise on quality. Every dose, every time. 100% commitment. |
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| ● | One West Team—Our diverse team spans the globe, but we are united by our integrity and mutual respect for one another, the safety of our work environment and the communities in which we operate. |
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Board members are expected to oversee and support Management in driving the success of the business by focusing on the following five strategic imperatives, while simultaneously requiring that the organization uphold its commitment to ESG principles, cultural values and ethics:
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| ● | Continuing to execute our market-led strategy with enhanced commercial effectiveness |
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| ● | Innovating new product offerings and expanding into emerging markets |
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| ● | Optimizing global operations and supply chain networks, including automation enablement |
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| ● | Accelerating digitization to drive performance |
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| ● | Building and supporting our global team, including enhanced efforts regarding diversity, equity and inclusion |
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Under the heading “Director Nominee Biographies,” we provide an overview of each nominee’s principal occupation, business experience and other directorships of publicly traded companies, together with the qualifications, experience, key attributes and skills the NCGC and the Board believe will best serve the interests of the Company and our shareholders. Shareholders who wish to recommend or nominate director candidates must provide information about themselves and their candidates and comply with procedures and timelines contained in our Bylaws. These procedures are described under “Shareholder Proposals or Nominations” in this Proxy Statement. Board Commitment to Diversity, Equity and Inclusion Board diversity is critical to the success of the Company. Our Corporate Governance Principles reflect the Board’s commitment to a diverse membership with varied experiences, skills and personal characteristics to support the long-term success of the Company. As presently constituted, the Board represents a deliberate mix of members who have a deep understanding of our business, as well as members who have different skill sets and perspectives. Therefore, the NCGC’s evaluation of director nominees includes consideration of candidates’ professional experiences and personal backgrounds, including characteristics such as age, gender, race and ethnicity. In future director searches, the Board will continue to actively seek candidates with diverse racial, gender and/or ethnic backgrounds. West has a long-standing commitment to Diversity, Equity and Inclusion (“DEI”), which is inherent in our core value of One West Team. We are committed to helping our customers bring new medicines and treatments that advance life for patients who represent all dimensions of diversity. Our purpose is an important reminder that we must continue to listen and learn from one another with safe and inclusive environments to create the path to a better future. The Board oversees and encourages Management’s DEI efforts across the Company. For example, West’s Chief Executive Officer and executive leadership team review DEI objectives throughout the year to ensure continuous focus and improvement. Today, 33% of West’s elected Officers are women, and 67% are women and/or people of color. West has made great strides over the past several years in sourcing team members from diverse backgrounds for leadership roles across the organization. Company-wide, 43% of our senior leaders were women and/or people of color as of December 31, 2023. The Board acknowledges its role in overseeing the Company’s culture and holding Management accountable for the creation and stewardship of a culture that values DEI. Building a diverse and inclusive workforce where team members are respected and feel confident in bringing their unique ideas to the table is a top priority and one of our six ESG priorities. The Company understands that to attract and retain talented team members, we must continue providing exceptional employee experiences for all team members, including during the onboarding of new team members, in our recruiting materials, management training, succession planning, affirmative action plans, global mentoring and our employee engagement survey. To foster transparency and continued growth in this area, the Company publishes its annual Consolidated EEO-1 Reports on its website, www.westpharma.com/about-west/corporate-responsibility. Board Refreshment and Retirement Age We are committed to board refreshment and have added three new directors over the past four years. These additions are the result of a thoughtful process designed to ensure an effective balance of historical perspective and an understanding of the evolution of our business with fresh viewpoints and insights. In 2023, we critically examined our refreshment practices and incorporated a review that also examined potential retirement horizons for directors and our director skills matrix. We are using this information to continue to develop our current directors through role rotation and education and also develop a more robust talent pipeline. The Board believes that a diverse mix of long-tenured and new Board members provides a good and appropriate balance of experience to enhance shareholder value. The Board believes that directors provide meaningful, independent oversight and advice at any age. Our Corporate Governance Principles include a retirement age of 75. This means that a non-employee director generally must retire on the date of the Annual Meeting of Shareholders immediately following his or her 75th birthday; provided, however, that the Board may review individual contributions, continuity and tenure in making a determination as to whether a member who has already attained age 75 must retire. An employee director must submit his or her resignation from the Board upon the date he or she ceases to be an executive officer of the Company. Board Evaluation Process Each year, the Board and each of its committees review their performance during executive sessions. This review centers around questions directors are asked regarding their individual performance and the performance of the Board/Committee. These questions include topics such as contributions made to Board deliberations, the relationship between members, quality of the materials provided, the relationship with Management, contributions to key functions/responsibilities of the Board and topics that they would like to see added or deleted to meeting agendas. Additionally, the NCGC assesses the evaluation process annually and adjusts the process when desirable improvements are identified. Members of the NCGC reach out to each director individually to discuss performance and any concerns and relays them to the Board using an interview template approved by the NCGC. This process assists the full Board with obtaining different perspectives, encourages the collection of candid information and ensures a high level of engagement. In 2023, the NCGC updated its evaluation questions to ensure directors received more individualized feedback. Additionally, the process included more in-depth discussion of board succession and development issues. The NCGC reviews several matters, including the issues to focus on in the evaluation and the form and manner of assessment. The Board believes this evaluation system, coupled with our strong Chair of the Board and open-door policy, which promotes sharing of ideas among all directors, makes for a robust process that ensures the Board’s effectiveness.
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| Proposal 1 — Election of Directors |
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Our shareholders are asked to consider eleven nominees for election to our Board to serve for a one-year term until the 2025 Annual Meeting of Shareholders, or until their successors, if any, are elected or appointed, or their earlier death, resignation, retirement, disqualification or removal. The names of the nominees for director, their current positions and offices, tenure as a Company director, their qualifications and other characteristics are set forth in the biographies below. The table below also lists each nominee’s current Board committees. All the nominees are current Company directors and all non-employee directors have been determined by our Board to be independent. Our NCGC reviewed the qualifications of each of the nominees, finding that each nominee possesses the required attributes and that all nominees collectively strike the appropriate balance of diversity of knowledge, age, skills, expertise, gender and race, and recommended to our Board that each nominee be submitted to a vote of our shareholders at the Annual Meeting. The Board approved the Committee’s recommendation at its meeting on February 19, 2024. Each of the nominees has agreed to be named and to serve, and we expect each nominee to be able to serve if elected. If any nominee is unable to serve, the NCGC will recommend to our Board a replacement nominee. The Board may then designate the replacement nominee to stand for election. If you voted for the unavailable nominee, your vote will be cast for his or her replacement.
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| Mark A. Buthman, 63 Independent | | | | | Title Retired Executive Vice President & Chief Financial Officer Kimberly-Clark Corporation, a global producer of branded products for the consumer, professional and healthcare markets (2003-2015) | Director Since 2011 | Committees Finance (Chair) Innovation & Technology | | | Prior Relevant Professional Experience • Kimberly-Clark (1982-2015), holding a wide range of leadership roles in finance, strategy and operations | | | | | Director Qualifications | | | | | • Global financial expertise gained at Kimberly-Clark, a Fortune 150 company with significant international operations | | | | | • Holds a degree in Finance and has led Finance professionals globally | | | | | • Executive leadership of global finance, investor relations, real estate, global procurement, shared services and information technology services teams for a publicly-traded company | | | | | • Led or participated in 50 acquisitions over the course of his career | | | | | Role on West’s Board Mr. Buthman possesses deep financial and accounting management expertise, as well as experience in managing real estate, investor relations, information technology, shared services and global procurement from his time at Kimberly-Clark. His extensive corporate insight and financial background guide him in his role as Chair of the Finance Committee and as a member of the Innovation and Technology Committee. | | | | | Other Public Company Directorships | | | | | Current IDEX Corporation | | Former (within prior 5 years) None | | | Other Relevant Information Mr. Buthman holds a Bachelor of Arts in Finance from the University of Iowa. He serves as a board member at Pavillon International, a not-for-profit treatment center for individuals suffering from substance use disorder. | | | |
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| William F. Feehery, Ph.D., 53 Independent | | | | | Title Chief Executive Officer Certara, Inc., public company which provides services and software to assist the drug development lifecycle 2019-present | Director Since 2012 | Committees Audit Compensation Finance | | | Prior Relevant Professional Experience • DuPont (previously E.I. du Pont de Nemours & Company) (2002-2019), occupying multiple business unit leadership roles | | | | | Director Qualifications | | | | | • Comprehensive healthcare industry experience through his CEO role at Certara | | | | | • Holds a Ph.D. degree in chemical engineering and has significant experience in managing R&D and commercializing cutting edge technologies | | | | | • In-depth international supply chain knowledge, including direct responsibility for global manufacturing | | | | | • Extensive experience marketing to customers and promoting goods and services through roles at Certara and DuPont | | | | | • Active in Business Development, including several mergers and acquisitions, strategic business partnerships and divestitures | | | | | • Executive leadership background including as CEO of a publicly-traded company and senior roles at multinational company | | | | | Role on West’s Board Dr. Feehery is the only independent member of our Board who currently serves as a public company CEO, experience we believe significantly enhances our Board capabilities. His deep corporate insight, scientific expertise and extensive experience in the healthcare industry contribute to his membership on the Committees he serves on. | | | | | Other Public Company Directorships | | | | | Current Certara, Inc. | | Former (within prior 5 years) None | | | Other Relevant Information Before joining DuPont, Dr. Feehery was engaged in venture capital and was a management consultant for the Boston Consulting Group. Dr. Feehery holds both a Ph.D. in chemical engineering and a Master of Business Administration from MIT, was a Churchill Scholar at Cambridge University and received his BSE in chemical engineering from the University of Pennsylvania. He currently serves as a Trustee of the Winston Churchill Foundation. | | | |
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| Robert F. Friel, 68 Independent | | | | | Title Retired Chair, President & Chief Executive Officer PerkinElmer, Inc. (now Revvity, Inc.), a global business dedicated to serving the diagnostics, life sciences, food and applied markets 2009-2019 | Director Since 2020 | Committees Compensation (Chair) Innovation & Technology Nominating & Corporate Governance | | | Prior Relevant Professional Experience • Perkin Elmer (1999-2019), serving as Chief Operating Officer, Chief Financial Officer and in other senior leadership roles | | | | | Director Qualifications | | | | | • Comprehensive healthcare industry experience through his leadership of Perkin Elmer and his Board position at NuVasive | | | | | • Holds economics undergraduate and graduate taxation degrees | | | | | • Possesses deep finance and tax expertise along with training and degrees in finance | | | | | • International leadership experience in setting growth strategy and overseeing operational and financial risks | | | | | • Business Development experience in several mergers and acquisitions, strategic business partnerships and divestitures | | | | | • Executive leadership experience gained as Chair, CEO, COO and CFO for PerkinElmer | | | | | Role on West’s Board Mr. Friel’s experience serving as both the Chair and CEO of a global business focused on improving human health is well-aligned with West’s mission and with the pharmaceutical and medical device customers we serve. His tenured leadership at a successful public company and service on Boards, together with his in-depth finance and tax expertise, training and education, make him a strong contributor to the Board and in his new role as Chair of the Compensation Committee. | | | | | Other Public Company Directorships | | | | | Current Xylem, Inc. | | Former (within prior 5 years) PerkinElmer, Inc. (through 2019) NuVasive, Inc. (through 2023) | | | Other Relevant Information Mr. Friel holds a Master of Science degree in taxation from Fairleigh Dickinson University and a Bachelor of Arts degree in economics from Lafayette College. In addition to the public board membership listed above, Mr. Friel is a director of New York Life Insurance Company, one of the largest life insurers in the world. | | | |
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| Eric M. Green, 54 Chair Non-Independent | | | | | Title President and Chief Executive Officer West Pharmaceutical Services, Inc., a leading provider of innovative, high-quality injectable solutions and services 2015-present | Director Since 2015 | Committees Chair of the Board of Directors | | | Prior Relevant Professional Experience • Sigma-Aldrich Corporation (1993-2015), various roles of increasing responsibility of a leading life science and technology company focused on human health and safety | | | | | Director Qualifications | | | | | • Comprehensive healthcare industry experience through his CEO role at West and former senior executive roles at Sigma-Aldrich | | | | | • Holds a degree in chemistry and has worked exclusively in life sciences companies | | | | | • Complex, international supply chain and business operations oversight across 50 locations and 26 manufacturing sites | | | | | • International executive leadership experience over more than 30-year career | | | | | • Extensive marketing experience in prior role as VP of Global Marketing at Sigma-Aldrich | | | | | • Business Development experience through several mergers and acquisitions, strategic partnerships and divestitures | | | | | Role on West’s Board Mr. Green has significant public company experience having served as a corporate officer and member of the senior executive team of Sigma-Aldrich prior to joining West. As West’s President and CEO, Mr. Green is our only non-independent director and also serves as Chair. In addition to the aforementioned experience, he brings insight to the Board as the Company’s executive leader. | | | | | Other Public Company Directorships | | | | | Current Ecolab Inc. | | Former (within prior 5 years) None | | | Other Relevant Information Mr. Green holds a Master of Business Administration from Olin Business School at Washington University in St. Louis and a Bachelor’s degree in Chemistry from Bethel University. | | | |
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| Thomas W. Hofmann, 72 Independent | | | | | Title Retired Chief Financial Officer & Senior Vice President Sunoco, Inc., a diversified energy company 2002-2008 | Director Since 2007 | Committees Audit (Chair) Compensation | | | Prior Relevant Professional Experience • Sunoco, Inc. (1977-2008), serving in multiple senior management and Board-facing roles and ultimately led Sunoco’s finance function as CFO | | | | | Director Qualifications | | | | | • Deep financial expertise developed over time managing accounting, auditing, investor relations, strategic planning, tax and treasury functions | | | | | • Holds an accounting degree, a Master’s degree in taxation and is a Certified Public Accountant | | | | | • Business Development experience gained through several mergers and acquisitions, strategic business partnerships and divestitures throughout his career at Sunoco | | | | | • Served as executive leader as CFO for a publicly-traded company | | | | | Role on West’s Board Mr. Hofmann possesses substantial financial, corporate governance and management experience with a global, publicly-traded company. He is well-versed in strategic planning, risk management and capital-market issues, including acquisitions and divestitures. His long tenure as a West board member allows him to bring a strong historical perspective in addition to his comprehensive financial background to his role on the Board, as Chair of the Audit Committee and as a member of the Compensation Committee. | | | | | Other Public Company Directorships | | | | | Current None | | Former (within prior 5 years) None | | | Other Relevant Information Mr. Hofmann has a degree in accounting from the University of Delaware and a Master’s degree in taxation from Villanova University. He now serves on the University of Delaware’s President’s Leadership Council. He is on the boards of Fox Chase Cancer Center and The Island School Foundation, and previously served on the board of the Temple University Health System. Over the course of his career, Mr. Hofmann served on the board of five other publicly-traded companies, including serving as the Chair of the Audit Committee on four of those boards. | | | |
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| Molly E. Joseph, 50 Independent | | | | | Title Founder and Managing Director Cypress Pass Ventures, an investment and advisory firm focused on health modernization 2001-present | Director Since 2021 | Committees Compensation Finance Innovation & Technology | | | Prior Relevant Professional Experience • UnitedHealth Group (2005-2021), serving in increasing levels of executive leadership roles at this healthcare and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone | | | | | Director Qualifications | | | | | • Thorough international healthcare industry experience through her roles at UnitedHealth Group, one of the largest health benefits and medical delivery businesses outside the United States | | | | | • Holds a law degree which she leveraged in various corporate development roles | | | | | • International supply chain oversight of complex purchasing networks across the healthcare ecosystem and operations | | | | | • Executive leadership gained through management of 55 hospitals and several hundred ambulatory centers, with over 9 million patients and 7 million insurance members in a highly-regulated insurance and healthcare delivery industry | | | | | • Developed skills in financial management, health system delivery/funding and knowledge of global health systems during her career at UnitedHealth Group | | | | | • Extensive experience marketing services to both business customers and consumers through her roles at UnitedHealth Group | | | | | • Gained more than two decades of mergers and acquisitions experience across roles in corporate development, investment banking and corporate law | | | | | Role on West’s Board Ms. Joseph possesses significant expertise and knowledge of healthcare and international business, having long served as CEO of a multinational healthcare company. She understands diverse business environments and economic conditions, as well as organizations, processes, strategic planning and risk management. She brings her corporate management, transactional expertise and critical legal thinking to her role on the Board and each of the Committees she serves on. | | | | | Other Public Company Directorships | | | | | Current First Solar, Inc. | | Former (within prior 5 years) None | | | Other Relevant Information Ms. Joseph graduated from Santa Clara University with a Bachelor of Science degree and received a Juris Doctorate from Georgetown Law Center. Prior to joining UnitedHealth Group, she focused on business transactions as an investment banker and corporate attorney. She serves on the Board of Directors of First Solar, US Radiology Specialists, AMSURG and Bend Health and is Vice Chair of the Board of Trustees at Santa Clara University. | | | |
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| Deborah L. V. Keller, 61 Independent | | | | | Title Founder and Principal Black Frame Advisors, LLC, a global healthcare advisory firm 2017-present | Director Since 2017 | Committees Audit Compensation Nominating & Corporate Governance (Chair) | | | Prior Relevant Professional Experience • Covance Drug Development (1987-2017), retired as CEO after holding various executive leadership roles in this business segment of Laboratory Corporation of America Holdings | | | | | Director Qualifications | | | | | • Broad international healthcare industry experience, including leading the world’s largest provider of research and clinical laboratory services | | | | | • Holds dual degrees in chemistry and accounting; led R&D and technical teams | | | | | • Oversaw complex, international operations and supply chain in more than 200 countries | | | | | • Has extensive experience marketing to customers and promoting goods and services through her role at Covance Drug Development, including leading the Global Marketing function | | | | | • International executive leadership experience as CEO and other senior roles for a publicly-traded, multinational company | | | | | • Regulatory and Quality Assurance experience in the U.S., EU, China and Japan in drug development and manufacturing | | | | | Role on West’s Board Ms. Keller possesses substantial global public company management experience from her time at Covance. She brings her drug development and corporate management expertise in the heavily-regulated life sciences industry to her role on the Board, serving on the Audit and Compensation Committees. Dealing with complexity in these environments, as well as her critical, forward-thinking approach to problem solving is essential as our new Nominating & Corporate Governance Committee Chair. | | | | | Other Public Company Directorships | | | | | Current None | | Former (within prior 5 years) None | | | Other Relevant Information Ms. Keller holds a Master of Business Administration degree from the University of Wisconsin, as well as a Bachelor of Science degree in chemistry and a Bachelor of Business Administration degree in accounting, both from Nazareth College. She is a trustee of the Wisconsin Alumni Research Foundation, Chair of Avalere Healthcare, Chair of WiCell and Director of the Morgridge Institute for Research. | | | |
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| Myla P. Lai-Goldman, M.D., 66 Independent | | | | | Title Chair and Former Chief Executive Officer and President GeneCentric Therapeutics, Inc., a precision medicine company 2011-present | Director Since 2014 | Committees Finance Innovation & Technology (Chair) | | | Prior Relevant Professional Experience • Personalized Science, LLC. (2009-present), managing partner and founder of this clinical diagnostic consulting company | | | | | Director Qualifications | | | | | • Expansive healthcare industry experience through her former roles at GeneCentric Therapeutics, Labcorp and Roche Biomedical | | | | | • Holds a medical degree and is board certified in anatomic and clinical pathology | | | | | • Strong scientific background leading cutting edge precision medicine and clinical diagnostic companies, in addition to serving in senior medical/scientific roles at Labcorp | | | | | • Skillfully navigated the regulatory landscape of the healthcare industry as Chief Medical Officer at Labcorp | | | | | • Executive leadership experience through serving in senior roles at large multinational companies | | | | | Role on West’s Board Dr. Lai-Goldman is a recognized author and speaker on clinical diagnostics and has substantial leadership experience at companies like those that our Company serves. She brings her unique perspective as a physician, researcher and corporate executive to the Board as Chair of the Innovation and Technology Committee. She provides important scientific and market context to the Finance Committee as well. | | | | | Other Public Company Directorships | | | | | Current Akoya Biosciences, Inc. | | Former (within prior 5 years) None | | | Other Relevant Information Dr. Lai-Goldman earned her medical degree at Columbia University, and a Bachelor’s degree in Biology from the University of Pennsylvania. She is Board-certified in anatomic and clinical pathology. She has also served as a venture partner at Hatteras Venture Partners since August 2011. | | | |
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| Stephen H. Lockhart, M.D., Ph.D., 65 Independent | | | | | Title Former Chief Medical Officer Sutter Health, a not-for-profit system of hospitals, physician organizations and research institutions in Northern California 2015-2021 | Director Since 2022 | Committees Finance Innovation & Technology | | | Prior Relevant Professional Experience • Sutter Health (2009-2021), serving first as a regional Chief Medical Officer before acting as CMO for this not-for-profit system of hospitals, physician organizations and research institutions in Northern California | | | | | Director Qualifications | | | | | • Comprehensive healthcare industry experience as former CMO at a major healthcare system of providers | | | | | • Holds M.D. and Ph.D. degrees and is a board-certified anesthesiologist | | | | | • Created a regulatory framework for drug testing and drug development for precision medicine and served on CA Governor’s Advisory Committee on Precision Medicine, including as Chair of the Legal and Regulatory subcommittee | | | | | • Gained business development experience as he managed mergers of various hospital systems in his role as CMO at one of the nation’s largest healthcare networks | | | | | • Executive leadership experience developed as CMO and other senior administrative roles for large hospital care systems | | | | | Role on West’s Board As a veteran physician and administrator, Dr. Lockhart’s wealth of leadership, experience and knowledge enhances the impact of West’s role to deliver healthcare to millions of patients every day. Dr. Lockhart’s significant board expertise, healthcare background and passion for improving the well-being and diversity of our communities make him a uniquely valuable member of each of the Committees he serves on. | | | | | Other Public Company Directorships | | | | | Current Molina Healthcare National Research Corporation Health | | Former (within prior 5 years) None | | | Other Relevant Information Dr. Lockhart’s non-profit board service has included the ECRI Institute, REI, The David and Lucile Packard Foundation, EO Wilson Biodiversity Foundation and Parks California, a state-wide nonprofit dedicated to supporting California’s parks and public lands. A Rhodes Scholar, Dr. Lockhart earned his Master’s degree in economics from Oxford University, and M.D. and Ph.D. degrees from Cornell University. | | | |
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| Douglas A. Michels, 67 Independent | | | | | Title Retired President & Chief Executive Officer OraSure Technologies, Inc., a leader in development, manufacture and distribution of oral fluid diagnostic and collection devices and other detection technologies 2004-2018 | Director Since 2011 | Committees Audit Nominating & Corporate Governance | | | Prior Relevant Professional Experience • Johnson & Johnson (1985-2004), serving in various leadership roles at one of the world’s largest and most broadly-based healthcare company | | | | | Director Qualifications | | | | | • Brings comprehensive healthcare industry experience through his CEO role at OraSure Technologies, Inc. and prior roles at Ortho-Clinical Diagnostics (President of Ortho-Clinical Diagnostics International, Group Vice President, Global Marketing of Ortho-Clinical Diagnostics, President of Johnson and Johnson Healthcare Systems Inc.) | | | | | • Holds a graduate degree in business administration | | | | | • Gained international supply chain experience through his role as CEO at OraSure Technologies, Inc. and as President of Ortho-Clinical Diagnostics International | | | | | • Experienced in marketing to customers and promoting goods and services through his prior roles, including as Vice President of Global Marketing at Ortho-Clinical Diagnostics | | | | | • Gained regulatory experience through overseeing the development of the nation’s first FDA-approved over-the-counter home rapid HIV self-test and the first and only FDA-approved rapid hepatitis C test | | | | | • Participated in several mergers and acquisitions, strategic business partnerships and divestitures throughout his career | | | | | • Developed his executive leadership skills through various roles, including the role of CEO for a publicly-traded company | | | | | Role on West’s Board Mr. Michels possesses considerable expertise and executive leadership skills in the pharmaceutical, medical device and diagnostic industry, having spent 19 years with Johnson & Johnson and 13 years as CEO of OraSure Technologies, Inc. Mr. Michels brings his in-depth corporate leadership perspective and financial acumen to his work on the Committees that he serves on. | | | | | Other Public Company Directorships | | | | | Current None | | Former (within prior 5 years) Tyme Technologies, Inc. (through 2022) | | | Other Relevant Information In February 2010, Mr. Michels was appointed to the Presidential Advisory Council on HIV/AIDS. He previously served on the Board of the National Blood Foundation, the Board of the National Committee for Quality Health Care and the Coalition to Protect America’s Health Care. He recently served on the board of Tyme Technologies Inc. He received a Bachelor’s degree from the University of Illinois and earned his Master of Business Administration from Rutgers University. | | | |
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| Paolo Pucci, 62 Lead Independent Director | | | | | Title Retired Chief Executive Officer ArQule, Inc., a biopharmaceutical company engaged in the research and development of targeted therapeutics 2008-2020 | Director Since 2016 | Committees Audit Nominating & Corporate Governance | | | Prior Relevant Professional Experience • Bayer A.G. (2001-2008), served in executive leadership role of this global business with core competencies in the life science fields of health care and nutrition | | | | | Director Qualifications | | | | | • Extensive healthcare industry experience through his CEO role at ArQule and senior management roles at prior multinational companies | | | | | • Holds both undergraduate and graduate degrees in accounting and finance | | | | | • International work experience at two major global companies | | | | | • Experienced in operations oversight for several major pharmaceutical companies including the management of Regulatory Affairs associated with each company’s portfolio of products | | | | | • Extensive experience marketing to customers and promoting goods and services through his career | | | | | • Actively participated in several mergers and acquisitions, strategic business partnerships and divestitures during his career at ArQule, including its acquisition by Merck & Co. | | | | | • Developed executive leadership skills as CEO of a publicly-traded company and various senior roles at large multinational companies | | | | | Role on West’s Board Mr. Pucci’s recent service as a public company CEO and his service as a Board member of several emerging biotech companies brings experience that we believe is important in terms of Board diversity. His international background also adds to the knowledge base of our Board. Mr. Pucci’s expertise in new drug development, his executive experience working for large multinationals and his U.S. and non-U.S. training are valuable additions to our Board, especially in his role as Lead Independent Director. | | | | | Other Public Company Directorships | | | | | Current Merus N.V. Replimune Group Inc. | | Former (within prior 5 years) ArQule Inc. (through 2020) Trillium Therapeutics Inc. (through 2021) | | | Other Relevant Information Mr. Pucci previously served on the Board of Directors for Dyax, Inc., Algeta ASA, New Link Genetics Inc., Arqule, Inc. and was also Lead Independent Director at Trillium Therapeutics until it was acquired by Pfizer Inc. in November 2021. He now is a member of the publicly-held life sciences companies Merus N.V. and Replimune Group Inc. Mr. Pucci holds an undergraduate degree in economics and accounting from the Università degli Studi di Napoli Federico II and Master of Business Administration from the University of Chicago Booth. | | | |
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| The Board unanimously recommends a vote FOR the election of each of these nominees as directors. |
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| Board and Director Information and Policies |
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Our Board structure reflects our Corporate Governance Principles and commitment to good governance. The Board believes the governance structure we have created among the Board, its Committees, the Board Chair, the Lead Independent Director, the CEO and Management is supporting the sustainable growth of the Company. During 2023, our full Board met five times. All eleven directors attended all the Board meetings and their assigned Committee meetings in 2023. Our Board is committed to ensuring that directors attend meetings and that the Board and its Committees devote sufficient time necessary for the effective oversight of the Company and its Management. Additionally, during the annual performance review process, the Board assesses the time commitments for our Board against the time commitments of each member’s outside positions to ensure each director has ample time to devote to their duties as a West director. Our Board also holds regular executive sessions of only independent directors to review, among other things, the Company’s strategy and Management’s operating plans, the criteria by which our CEO and other senior executives are measured, Management’s performance against those criteria and other related issues, and to conduct a self-assessment of its performance. Last year, our independent directors held five executive sessions. All then-serving directors attended the 2023 Annual Meeting and all continuing directors are expected to attend the 2024 Annual Meeting. Board Leadership Structure The current governance structure of the Board follows:
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| ● | The offices of Chair and CEO are combined |
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| ● | We have a strong Lead Independent Director |
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| ● | The Board has established and follows robust Corporate Governance Principles |
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| ● | All Board members, other than Mr. Green, are independent |
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| ● | All Board Committees are composed solely of independent directors |
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| ● | Our independent directors meet regularly in executive session both at the Board and committee levels |
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| ● | Our directors as a group possess a broad range of skills and experience sufficient to provide the leadership and strategic direction the Company requires as it seeks to enhance long-term value for shareholders |
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The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure to ensure both independent oversight of senior management and a highly engaged and high-functioning Board. The Board does not have a policy as to whether the Chair should be an independent director, an affiliated director or a member of management. Under our Bylaws and Corporate Governance Principles, the Board can and will change its leadership structure if it determines that doing so is in the best interest of West and its shareholders at any given time. The independent Directors do not view any particular board leadership structure as preferred and consider the Board’s leadership structure on at least an annual basis. This consideration includes the evaluation of alternative leadership structures in light of the Company’s current operating and governance environment, a review of peer company leadership structures and investor feedback, with the goal of achieving the optimal model for Board leadership and effective oversight of senior leaders by the Board. The independent directors annually appoint a Chair of the Board. To ensure robust independent leadership on the Board, if the individual appointed as Chair is not an independent director, or when the independent directors determine that it is in the best interests of the Company, the independent directors will also annually appoint a Lead Independent Director. The Board recognizes that in circumstances where the positions of Chair and CEO are combined or the Chair is not independent, it is imperative that the Board elect a strong Lead Independent Director with a clearly defined role and set of responsibilities. Our Corporate Governance Principles align with the Board’s goal of achieving the optimal model for Board leadership and investor preferences. See “Lead Independent Director” below. Additionally, maintaining an independent board with a Lead Independent Director permits open discussion and assessment of the Company’s ability to manage these risks and provides the appropriate balance between strategy development and independent oversight of management. Chair of the Board of Directors The responsibilities of the Chair include:
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| ● | Presiding at all meetings of the shareholders |
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| ● | Chairing Board meetings |
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| ● | Consulting with the Lead Independent Director regarding agendas and schedules for each Board meeting; each independent director may add items to the agenda |
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| ● | Making reports to the Board and shareholders and ensuring that all orders and resolutions of the Board or its Committees are carried into effect |
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Our current Chair, Mr. Green, has been serving as Chair since May 24, 2022. Each year, the Board considers the role of the Chair and who is sitting in that role. Given the Company’s strong financial and operational growth during his tenure as CEO, and because of his day-to-day involvement with and intimate understanding of our business, industry and management team, the Board believes that Mr. Green continues to be best situated to serve as Chair. Lead Independent Director Our Corporate Governance Principles provide that if our Chair is not independent, our independent directors shall annually elect an independent director to serve as Lead Independent Director to preside over executive sessions of the Company’s independent directors, facilitate the flow of information and communication between the independent directors and the Chair of the Board and perform such other duties as may be specified from time to time by the Board. The responsibilities of the Lead Independent Director will include:
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| ● | Presiding at all sessions of the independent directors or whenever the Chair is not present |
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| ● | Calling meetings of and setting agendas for the independent directors whenever he or she deems appropriate |
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| ● | Approving agendas and schedules for each Board meeting in consultation with the Chair, assuring that (1) board agendas contain those items that the independent directors believe are important to their understanding and evaluation of the Company and its affairs; and (2) information provided to and presentations made to the Board, and other communications, are in keeping with the Board’s needs and wishes |
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| ● | Approving and reviewing minutes of meetings of the Board |
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| ● | Leading the Board’s process for selecting the CEO |
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| ● | Overseeing the independent directors’ annual performance evaluation of the Chair and CEO |
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| ● | Together with the Chair and Chair of the NCGC, conducting the annual board assessment process |
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| ● | Acting as lead for Board discussion of any subject where the CEO would not, in the judgment of the Lead Independent Director, be the appropriate person to chair such discussion |
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| ● | Serving as principal liaison between the CEO and the independent directors |
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| ● | Performing such other duties as the Board may from time-to-time delegate to assist the Board in fulfilling its responsibilities |
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The Lead Independent Director provides important counsel to the Chair by offering input regarding key strategic ideas and suggestions proposed by the Chair and Management. This helps to bring about a strong two-way discussion among the independent directors and Management. Paolo Pucci has served as Lead Independent Director since May 24, 2022. Mr. Pucci is an independent director who possesses a wealth of knowledge regarding biopharmaceutical markets from his experience as an executive leader of several large biopharmaceutical companies. Mr. Pucci encourages frank and open dialogue with other Board members and Management, including Mr. Green. Mr. Pucci’s recent service as a public company CEO and his service as a Board member of several emerging biotech companies brings experience that we believe is important. His international background also adds to the diverse knowledge base of our Board. Mr. Pucci’s expertise in new drug development, his executive experience working for large multinationals and his non-U.S. training are valuable additions to our Board. Committees The Board has five standing committees:
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| ● | Audit Committee |
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| ● | Compensation Committee |
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| ● | Finance Committee |
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| ● | Innovation and Technology Committee |
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| ● | Nominating and Corporate Governance Committee |
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From time to time, the Board may form ad hoc committees to address specific situations as they arise. Each committee consists solely of independent directors. All directors may attend any committee meeting, even if he or she is not a member of that committee. Our Board Chair attends all Board meetings and attends virtually all Committee meetings unless there is a scheduling conflict. Each standing committee has a written charter, which is posted in the “Investors—Corporate Governance” section of our website at www.westpharma.com. You may also request a copy of each committee’s charter from our Corporate Secretary. Below we set forth the current members of each Committee (as of the date of this Proxy Statement) and its core functions.
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| Audit Committee | | | Thomas W. Hofmann (Chair) William F. Feehery Deborah L. V. Keller Douglas A. Michels Paolo Pucci | The Audit Committee assists our Board in its oversight of: (1) the integrity of our financial statements; (2) the independence and qualifications of our independent auditors; (3) the performance of our internal audit function and independent auditors; (4) our compliance with legal and regulatory requirements and (5) the Company’s system of disclosure controls and procedures over financial reporting. In carrying out these responsibilities, the Audit Committee, among other things: ● Reviews and discusses our annual and quarterly financial statements with Management and the independent auditors ● Manages our relationship with the independent auditors, including having sole authority for their appointment, retention and compensation; reviewing the scope of their work; approving non-audit and audit services; and confirming their independence ● Oversees Management’s implementation and maintenance of disclosure controls and procedures and internal control over financial reporting ● Regularly meets with our Chief Financial Officer, internal auditors, Corporate Controller, Chief Technology Officer, Chief Information Officer, VP of Cybersecurity and Infrastructure Support and Chief Compliance Officer to assess financial and cyber-risks The Board has affirmatively determined that Mr. Hofmann is an “Audit Committee Financial Expert” as defined in SEC regulations. Past Audit Committee members Mr. Buthman and Mr. Friel also remain Audit Committee Financial Experts. In 2023, the Audit Committee met six times. All members of the Audit Committee are independent as defined in the listing standards of the New York Stock Exchange (“NYSE”) and the Company’s Corporate Governance Principles. | | Compensation Committee | | | Robert F. Friel (Chair) William F. Feehery Thomas W. Hofmann Molly E. Joseph Deborah L. V. Keller | The Compensation Committee co-develops with Management our overall compensation philosophy, and determines and approves our executive compensation programs, makes all decisions about the compensation of our executive officers, reviews our talent management and succession planning for key positions and oversees our cash and equity-based incentive compensation plans. Additional information about the roles and responsibilities of the Compensation Committee can be found under the heading “Compensation Discussion and Analysis.” In 2023, the Compensation Committee met five times. All members of the Compensation Committee are independent as defined in the listing standards of the NYSE and the Company’s Corporate Governance Principles. |
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| Finance Committee | | | Mark A. Buthman (Chair) William F. Feehery Molly E. Joseph Myla P. Lai-Goldman Stephen H. Lockhart | The Finance Committee assists the Board by monitoring progress against approved major capital investments, overseeing the significant financial matters of the Company, monitoring execution of integration and transition plans for strategic transactions and reviewing and providing feedback on the Company’s capital structure, including debt levels, dividend policy and share repurchase plans. In 2023, the Finance Committee met five times. | | Innovation and Technology Committee | | | Myla P. Lai-Goldman (Chair) Mark A. Buthman Robert F. Friel Molly E. Joseph Stephen H. Lockhart | The Innovation and Technology Committee provides guidance to our Board on the Company’s product, service and technology portfolio and its effects on the Company’s growth, performance and competitive position. This Committee also reviews, evaluates and makes recommendations related to the Company’s research and development programs and initiatives and their alignment with the Company’s overall strategy, including the assessment of emerging gaps or opportunities identified by Management, and assists the Company in reviewing emerging science and technology trends and in helping the Board make well-informed choices about investments in new technology. Importantly, this Committee also reviews changes in the quality and regulatory landscapes that may impact our existing product portfolio and future development projects. Lastly, this Committee reviews the Company’s intellectual property portfolio and strategy. In 2023, the Innovation and Technology Committee met five times. | | Nominating and Corporate Governance Committee | | | Deborah L. V. Keller (Chair) Robert F. Friel Douglas A. Michels Paolo Pucci | The Nominating and Corporate Governance Committee identifies qualified individuals to serve as board members, recommends nominees for director and officer positions, reviews our commitment to DEI, determines the appropriate size and composition of our Board and its committees, monitors a process to assess Board effectiveness, reviews related-party transactions and considers matters of corporate governance. The Committee further monitors and oversees the Company’s efforts related to ESG matters. The Committee also reviews and makes recommendations to the Board regarding compensation for non-employee directors and administers director equity-based compensation plans. In 2023, the Nominating and Corporate Governance Committee met five times. |
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The Board’s Role in Risk Oversight The Board and its Committees play an active role in overseeing Management’s day-to-day responsibility for assessing and managing our risk exposure. The Board regularly reviews and monitors the risks associated with our enterprise strategy, financial condition and operations and specifically reviews the enterprise risks associated with our five-year plan. In particular, the Board reviews our risk portfolio, confirms that Management has established risk management processes that are functioning effectively and efficiently and are consistent with our corporate strategy, reviews the most significant risks and determines whether Management is responding appropriately to these risks. The Board performs its risk oversight role by using several different levels of review. Each Board meeting begins with an overview by the CEO that describes the most significant issues, including risks affecting the Company, as well as business updates from each reportable segment. In addition, the Board reviews in detail the business and operations of each reportable business segment quarterly, including the department-level risks associated with that segment. Our Enterprise Risk Management (“ERM”) program enables a portfolio view of the risks inherent in our business to confirm they are appropriately measured, managed and addressed. The principles of the ERM program allow for a hybrid top-down and bottom-up approach to identifying threats and opportunities most likely to impact our ability to meet business objectives and achieve strategic initiatives. This integrated approach to risk management ensures the Company meets or exceeds the expectations of all stakeholders, including investors and regulators. Since 2022, we have tailored our approach to ERM based on the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) ERM framework, which is a top benchmark for public companies. The COSO ERM framework outlines the process by which an organization can view any risk by way of governance and culture, integration into strategy, risk assessments, reviewing capabilities and practices, monitoring and reporting. This framework includes five interrelated components focused on (1) developing a strong governance and risk-aware culture; (2) embedding ERM concepts into strategic planning; (3) identifying ERM risks, scoring and prioritizing; (4) reviewing and revising critical response plans; and (5) continuously identifying and sharing information across the network. Based on the continuous evolution and complexity of risks within our industry, West’s ERM function partners with Internal Audit and Compliance to enhance its risk intelligence and increase visibility, accountability and communication. This aligned approach to risk management ensures the Board receives the information necessary to remain knowledgeable of and have oversight of the Company’s overall risk profile. In 2023, ERM became a standing agenda item for Board and Committee meetings, furthering directors’ awareness of the Company’s current and evolving strategies and the related enterprise risks. Overall, the Board focuses on the enterprise risks affecting the Company. Each Board Committee has been delegated the responsibility for the oversight of specific risks that fall within its areas of responsibility, as cataloged through the RIM process, including:
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| ● | The Audit Committee oversees the processes used in our ERM program and also oversees the management of financial reporting, compliance, litigation and cybersecurity risks, as well as the steps Management has taken to monitor and control such exposures |
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| ● | The Compensation Committee is responsible for overseeing the management of risks relating to our executive compensation policies, plans and arrangements and the extent to which those policies or practices increase or decrease risk for the Company |
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| ● | The Finance Committee assesses the risks associated with allocation of our capital, potential acquisitions, divestitures and major business partnerships |
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| ● | The Innovation and Technology Committee reviews risks associated with emerging, and potentially disruptive, science and technology trends, quality and regulatory landscapes changes, intellectual property and our innovation, research and development and technology strategy |
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| ● | The Nominating and Corporate Governance Committee manages risks associated with the independence of the Board, potential conflicts of interest, communications with shareholders, ESG and the effectiveness of the Board |
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Although each Committee is responsible for evaluating certain risks and overseeing the management of those risks, the full Board is regularly informed about those risks through regular Committee reports.
Cybersecurity
| ● | The Board’s policy on setting director compensation and director share ownership guidelines |
Cybersecurity
| Director Compensation |
2023 Non-Employee Director Compensation
2023 Non-Employee Director Compensation
2023 Non-Employee Director Compensation
| | Fees Earned or Paid | | All Other | | | Name | in Cash ($) | Stock Awards ($) | Compensation ($) | Total ($) | | Mark A. Buthman | 115,000 | 220,000 | 43,227 | 378,227 | | William F. Feehery | 108,750 | 220,000 | 34,082 | 362,832 | | Robert F. Friel | 108,333 | 220,000 | 2,329 | 330,662 | | Thomas W. Hofmann | 125,000 | 220,000 | 45,349 | 390,349 | | Molly E. Joseph | 100,000 | 220,000 | 1,433 | 321,433 | | Deborah L. V. Keller | 106,250 | 220,000 | 7,201 | 333,451 | | Myla P. Lai-Goldman | 115,000 | 220,000 | 24,348 | 359,348 | | Stephen H. Lockhart | 100,000 | 220,000 | 11,460 | 331,460 | | Douglas A. Michels | 111,667 | 220,000 | 45,338 | 377,005 | | Paolo Pucci | 140,000 | 220,000 | 7,437 | 367,437 |
Executive Compensation Philosophy
| ● | Aligning the interests of West’s leaders with those of our investors by varying compensation based on both short-term and long-term business results and delivering a large portion of the total pay opportunity in West stock. All NEOs have a minimum of 66% of at-risk compensation tied to business performance |
Best Practices that Support Our Executive Compensation Philosophy
| What We Do | What We Don’t Do | | ✔ Target Total Direct Compensation at the 50th percentile of our comparator group companies ✔ Provide most of the compensation through performance-based incentives ✔ Conduct realizable pay-for-performance analyses of our CEO compensation and use tally sheets to provide additional information on the appropriateness and function of our executive pay ✔ Incorporate in our CIC agreements a “double-trigger” feature requiring termination of employment to receive benefits ✔ Require executive officers to meet West stock ownership guidelines within 5-year period; if not met, ongoing compliance requirements are imposed until ownership guidelines are met ✔ Cancellation or recovery of incentive compensation based on achievement of specified financial results that are the subject of a subsequent restatement or amounts determined to have been inappropriately received due to fraud, misconduct or gross negligence as described in revised robust policies ✔ Engage with an independent consultant to review compensation programs and decisions | ✘ No hedging, pledging or engaging in any derivatives trading with respect to our common stock ✘ No repricing or exchange of awards without shareholder approval ✘ No individual severance agreements for executive officers other than CEO ✘ No tax gross ups ✘ No guaranteed incentive payouts ✘ No accelerated vesting of equity awards for executive officers ✘ No above market returns on deferred compensation plans |
Best Practices that Support Our Executive Compensation Philosophy
| Element | Objective | Type | Key Features | | Base Salary | Fair and competitive compensation to attract, retain and reward executive officers by providing a fixed level of cash compensation tied to experience, skills and capability relative to the market | Cash | ● Annual cash compensation that is not at risk ● Reviewed annually against our compensation comparator groups with adjustments considered based on level of pay relative to the market, individual and Company performance | | Short-term Annual Incentive | Focuses executives on annual results by rewarding them for achieving key budgeted financial targets Links executives’ incentives with those of shareholders by promoting profitable growth Helps retain executives by providing market competitive compensation | Cash | ● Annual cash incentive based on achievement of key business metrics: Net Sales, EPS, OCF, and Gross Profit ● Annual incentive award payouts may vary from 0% to 200% of the targeted award based on achievement ● Threshold performance required to achieve payment is 85% of target performance goal | | Long-term Incentive Compensation (100% Equity) | Aligns executives’ interests with those of shareholders by linking compensation with long-term Company and stock price performance that benefits our team members and shareholders Serves as both an incentive and retention vehicle for executives through multi-year Performance Stock Units (“PSU”) and stock options Promotes a balance of longer term risk and reward, without encouraging unnecessary or unreasonable risk-taking Typically granted as 50% PSUs and 50% stock options | Annual PSU Grant (50% of long-term incentive compensation award fair market value (“FMV”)) | ● PSUs are settled three years from the grant date based on business results over a three-year performance period ● PSUs (inclusive of DEUs) are paid in shares of Company common stock upon vesting ● The number of shares (inclusive of accrued DEUs) that may be earned over the performance period is based on achievement against target of two equally weighted measures—sales CAGR and ROIC—and can range from 0% to 200% of the target award ● Threshold performance required to achieve payment is 70% for each target performance metric | | | | Annual Nonqualified Stock Option Grant (50% of long-term incentive compensation award FMV) | ● Annual awards vest in four equal annual installments and expire 10 years from the grant date ● Option exercise prices must be equal to (or exceed) the closing price on the grant date ● DEUs are not provided on options |
Best Practices that Support Our Executive Compensation Philosophy
| Element | Objective | Type | Key Features | | | | Time Vesting Restricted Stock Units and Retention Options | ● Used for Director-level positions where equity compensation is a typical component of total direct compensation ● Used to attract talented executives who are foregoing compensation from prior employer ● Provides a retention tool for new executives, with an immediate ownership stake in the Company and alignment with shareholders through an incentive to increase the stock value | | Retirement | Attracts and retains executives by providing a level of retirement income and retirement savings in a tax efficient manner | 401(k) Plan | ● Qualified 401(k) plan that provides participants the opportunity to defer taxation on a portion of their income, up to Code limits, and receive a match of 100% on the first 3% and 50% on the next 2%. In addition, each team member is provided with an annual non-elective Company contribution equal to 3% of eligible earnings, Executives included. | | | | Employee Deferred Compensation Plan | ● Extends, on a nonqualified basis, the 401(k) plan deferrals in excess of Code limits on the same terms and permits deferral of AIP ● Executives may elect to defer up to 75% of their annual cash compensation | | Other Compensation | Perquisites and Other Benefits | | ● None |
Independent Compensation Consultant
Independent Compensation Consultant Pay Governance, serving as the Committee’s independent consultant, provides advice solely on executive compensation matters (including CIC matters) and director compensation to our NCGC. In 2023, the Committee reaffirmed Pay Governance’s independence under applicable NYSE and SEC regulations. During 2023, Pay Governance performed the following tasks for the Committee:
Independent Compensation Consultant
| ✔ | Provided competitive market data for the compensation of the executive officer group and provided input to the Committee regarding officer pay recommendations (including the CEO) |
Independent Compensation Consultant
| ✔ | Assessed incentive plan performance difficulty of achievement and provided related context regarding performance metric selection |
Independent Compensation Consultant
| ✔ | Updated the Committee on executive compensation trends and regulatory developments |
Independent Compensation Consultant
| ✔ | Prepared a realizable pay analysis for the CEO |
Independent Compensation Consultant
| ✔ | Conducted an in-depth review of the Company’s comparator groups |
Independent Compensation Consultant
| ✔ | Provided input on compensation program design and philosophy |
Independent Compensation Consultant
| ✔ | Monitored trends and analysis in executive and equity compensation |
External Benchmarking
External Benchmarking In support of our compensation philosophy, we reference the median compensation values of two compensation comparator groups, which we refer to as the “Business Segment Group” and the “Broad Talent Market Group.” Data from both the Business Segment Group (which generally is applicable to the CEO and CFO) and Broad Talent Market Group (applicable to all Executive Officers) are used holistically to determine competitive pay practices for our CEO and executive officers. The Business Segment Group is composed of public companies with operational and customer characteristics similar to our own business operations. These companies are initially identified by Pay Governance and subsequently approved by the Committee with input from Management based on the following criteria: (1) size (approximately one-half to two times our annual sales); (2) industry (healthcare equipment/supplies, industrial manufacturing and life sciences tools/services); and (3) operating structure such as:
External Benchmarking
| ● | Global footprint with multi-plant manufacturing capabilities |
External Benchmarking
| ● | Similar raw materials and products (elastomers, plastics, metals), and similar intellectual property profile |
External Benchmarking
| ● | Similar customer characteristics (complex sales cycle, quality requirements, regulatory requirements) |
External Benchmarking
The Broad Talent Market Group is a larger and broader sampling of size-appropriate companies that participate in the WTW (formerly Willis Towers Watson) annual executive compensation database. Unlike the Business Segment Group, the Committee does not select individual members of the Broad Talent Market Group. Companies within the Broad Talent Market Group operate in industries that are similar, but not identical to our own industry. Industries included are: Chemicals and Gases; Electrical and Scientific Equipment and Components; Medical Supplies and Equipment; and Pharmaceutical and Biotechnology. Given our size and business portfolio, it is challenging to identify a robust sample of appropriate market compensation peers that fit conventional criteria. Therefore, we believe that using a balance of business and talent market references that reflect companies with which we compete for business and capital, and more broadly, those with which we compete for talent, provides the Committee with decision-quality data and context, and reasonably represents our labor market for executive talent. The Committee believes it is good governance to periodically review our two compensation comparator group approach and comparators to ensure they are appropriate and to adjust based on: (1) our changing enterprise strategy; (2) the markets in which we compete for business, including emerging or more technical markets; (3) the areas in which we compete for talent, business and capital; and (4) our changing size and complexity. The last significant update to our comparator groups occurred in 2022. The chart below lists each company included in the 2023 Business Segment Group and some key data the Committee considered in making the selection for inclusion. The sales data below are generally from recently filed public annual reports with respect to each company. All amounts are in millions of U.S. Dollars. The Committee determined that the business of CONMED and West had evolved over time such that CONMED’s attributes no longer aligned with previously-defined criteria and determined they should be removed starting in 2024.
Target Awards
Target Awards The target annual incentive awards for our NEOs are set as a percentage of base salary. Target awards are reviewed annually to ensure alignment with our compensation philosophy of targeting each compensation element and the Target Direct Compensation at the market median. Variances from this goal are based on an evaluation of competitive market data, internal equity considerations and individual performance. Our payout curve is structured to reflect our philosophy that Management should be rewarded for meeting or exceeding goals and payouts should diminish or be withheld when targets are missed. The formula to determine each NEO’s AIP total potential payment is as follows: The payout factor is a pre-established multiplier that corresponds, on a sliding scale, to the achievement percentage of the AIP target objective so that if actual performance is less than target, the multiplier decreases on a sliding scale based on the achievement percentage and is based on the following chart:
Target Awards
| Achievement % | Payout factor | | <85% | 0.00% | | 85% | 50.00% | | 95% | 83.35% | | 100% | 100.00% | | 105% | 133.33% | | 110% | 166.67% | | ≥115% | 200.00% |
Target Awards
| | | | | | % Target | | Earned | | Plan | Metric | Weight | Target | Performance | Achieved | Payout | Incentive | | Corporate | Consolidated Revenue | 20% | $2,912.00 | $2,777.90 | 95.4% | 84.6% | 121.5% | | | EPS | 60% | $7.50 | $7.66 | 102.1% | 114.0% | | | | Operating Cash Flow | 20% | $693.00 | $777.30 | 112.1% | 180.7% | |
Target Awards
| (2) This item was not included in the budgeted EPS target and is deducted for purposes of comparing actual results to our performance targets for the AIP. |
Target Awards
Impact of Business Results on Our 2023 Incentive Plans We have designed our compensation programs to align the pay of our senior executives with both short-term and long-term financial results and the performance of our stock. As such, the majority of pay for our CEO and other NEOs is performance-based and is impacted by our financial results and stock price performance. During 2023, 15% of Mr. Green’s Total Direct Compensation (“TDC”) was variable based on short-term business performance and 72% was based on long-term goals. For our other executives, approximately 18% of their TDC was variable based on short-term business performance and 54% was based on long-term goals. Target achievement of financial metrics for 2023 resulted in a payout above 100% for our short-term incentive and long-term incentive plans. Our AIP paid out at 121.5% of target for the Corporate plan. Our 2021-2023 performance period LTI plan is equally based on achieving sales CAGR and ROIC targets. The payout for the performance period was 107.64%. The sales CAGR for this period achieved 12.07% versus the 11.30% target, resulting in a 113.63% payout factor (contributing 56.81% to the payout), and our ROIC for this period achieved 21.78% versus the target of 21.60%, resulting in a 101.67% payout factor (contributing 50.83% to the payout factor). Our Long-Term Equity Incentive Compensation
Target Setting
Target Setting Typically, the targets for West’s PSUs are set at the beginning of each three-year performance period, considering West’s financial guidance and the annual budget as approved by the Board. At the end of the three-year period, the score is calculated based on results against the predetermined, equally-weighted targets. We use CAGR and ROIC as our performance measures for determining PSU payouts. Each metric is weighted equally because we believe sales CAGR and ROIC are equally important in creating shareholder value over the long-term. The metrics, goals and weightings for the performance period are: 2023—25 PSU Performance Period Targets
Target Awards
Target Awards LTI compensation opportunities for our executives, including the NEOs, are exclusively equity-based. Each NEO’s annual target award is divided into two equal amounts, determining the allocation of stock options and PSUs awarded. The valuation of stock options follows the Black-Scholes valuation method, while the value of each PSU is contingent on our stock price at the grant date. Actual or realized values of these awards in subsequent years will fluctuate based on share price, ROIC and sales CAGR performance over time. The use of stock options is intended to align our executives’ longer-term interests with those of our shareholders as options only yield when the share price exceeds the option’s exercise price. This establishes a robust performance-based connection between shareholder value and executive compensation. PSUs grant the recipient the right to receive common shares contingent upon achieving three-year sales CAGR and ROIC targets. Successful attainment of these targets results in strong returns for our shareholders. The value of each NEO’s long-term grant is determined by the Committee based on its review of peer-group market data, the executive’s role and responsibilities, impact on results, advancement potential, retention considerations and with a principle focus on targeting the market median. In 2023, the number of target PSUs awarded to all executives, including the NEOs, was calculated by dividing the PSU portion of the annual target award value by $306.68, the closing price of our stock on the day the target awards were approved by the Committee, February 20, 2023. Please refer to Note 14 of our Annual Report on Form 10-K for a complete discussion of our stock-based compensation.
Performance Share Units
Performance Share Units The number of shares earned under the PSUs is contingent on achieving sales CAGR and ROIC targets. Each PSU award agreement contains a target payout for the recipient. The number of shares an executive earns at the end of a performance period is calculated by multiplying the target number of PSUs awarded at the beginning of the period by the applicable “payout factor” for each performance metric weighted according to the performance metric.
Performance Share Units
| Performance Achievement (% of Target) | Payout factor | | <70% | 0 | | 70% | 50% | | 85% | 75% | | 100% | 100% | | 110% | 120% | | 125% | 150% | | ≥150% | 200% |
Performance Share Units
The Committee approves the determination of actual achievement relative to pre-established targets and the number of PSUs is adjusted up or down from 0% to 200% based on the approved actual achievement. The Committee reserves the right to adjust payouts negatively or positively under exceptional circumstances.
Equity Award Grant Practices
Equity Award Grant Practices Under the Committee’s equity-based awards policy and procedures, equity awards to NEOs are normally made once per year. The Company’s policy on equity grants contains rules on determining (1) the grant date of equity awards (at least two business days following the release of our annual results for the preceding fiscal year) and (2) the exercise price of stock options granted by the Committee (which must be at least equal to the closing price of our stock on the grant date). In addition, all equity compensation is subject to a rigorous incentive compensation recovery (clawback) policy that includes all the requirements of applicable law, plus discretionary recovery in the event of adverse or materially harmful events against the Company. In 2023, the Committee reviewed this policy and expanded it to cover all forms of incentive compensation granted to officers and further expanded upon the events triggering recovery and the applicable procedures because the Committee determined that these measures were important mechanisms to preserve shareholder value and hold recipients of incentive compensation accountable for their actions. 2023 Compensation Decisions In the first quarter of each year, the Committee meets to determine CEO and Executive Officers’ pay decisions for base salary, AIP and LTI award grants reflecting both prior year performance and appropriate positioning versus the representative peer group(s). Our compensation strategy supports West’s business imperatives. It is designed to ensure:
Equity Award Grant Practices
| ● | That executives balance short-term objectives against long-term priorities |
Equity Award Grant Practices
| ● | Alignment with shareholder interests |
Equity Award Grant Practices
| ● | The Company can attract and retain the leadership needed to deliver strong results |
Equity Award Grant Practices
The Chair of the Committee works directly with the Committee’s Compensation Consultant to provide a decision-making framework for use by the Committee in determining incentive plan payouts and setting target compensation opportunities for the CEO. This framework considers, among other things:
Equity Award Grant Practices
| ● | Assessment of the CEO’s performance against objectives in the prior year, both qualitative and quantitative |
Equity Award Grant Practices
| ● | Progress against strategic objectives |
Equity Award Grant Practices
| ● | West’s total performance over a multi-year period |
Equity Award Grant Practices
| ● | Competitive benchmark analysis, and other relevant information |
2023 Performance Highlights
| 2023 CEO Compensation Decisions | | | | | | | Pay Element | 2022 | 2023 | % Change from Prior Year | Payout % | Pay at Risk % | | Base Salary | $1,110,000 | $1,143,000 | 3.0% | | | | AIP Target % | 120% | 120% | — | | | | AIP Target Value | $1,332,000 | $1,371,600 | 3.0% | | | | LTI (50/50 PSUs and Stock Options) | $6,000,000 | $6,500,000 | 8.3% | | | | Total Direct Compensation (TDC) | $8,442,000 | $9,014,600 | 6.8% | | | | Pay at Risk Value | $7,332,000 | $7,871,600 | | | 87.3% | | 2023 AIP Payout | | $1,666,494 | | 121.5% | |
2023 Performance Highlights
| 2023 Compensation Decisions | | | | | | | | | | | | | | Salary | | | AIP | | | | | | | | | | 2022 ($) | % Change from Prior Year | 2023 ($) | Target % | % Change from Prior Year | 2023 Target Amount ($) | Payout % | 2023 Payout Amount ($) | LTI Grant Value* ($) | TDC ($) | Pay at Risk % | | Bernard Birkett | 665,000 | 5.3% | 700,000 | 75% | — | 525,000 | 121.5% | 637,875 | 2,250,000 | 3,475,000 | 80% | | Silji Abraham | 500,000 | 5.0% | 525,000 | 65% | — | 341,250 | 121.5% | 414,619 | 700,000 | 1,566,250 | 66% | | Kimberly MacKay | 455,000 | 4.0% | 473,000 | 60% | — | 283,800 | 121.5% | 344,817 | 650,000 | 1,406,800 | 66% | | Cindy Reiss-Clark | 450,000 | 5.6% | 475,000 | 65% | 5% | 308,750 | 121.5% | 375,131 | 650,000 | 1,433,750 | 67% |
2023 Performance Highlights
* Granted in the form of 50% PSUs and 50% stock options. Other Compensation Practices
Severance Plan Arrangements
Severance Plan Arrangements West also provides our NEOs with benefits upon termination in various circumstances, as described in the “Estimated Payments Following Termination” and “Payments on Termination in Connection with a Change-in-Control” sections below. In 2020 and effective January 1, 2021, the Committee approved including officers in the U.S.-based severance plan, aligning with market practices. Mr. Green is excluded from this provision as he has a separate arrangement negotiated upon hire. The terms are consistent with those for all U.S. salaried team members and the length of severance benefit is dependent upon years of service and job level. The plan provides for severance payments to senior executives separated from the Company without cause. For officers, the severance payment is equal to one year’s salary and benefits continuation at active participant rates, provided the officer has a minimum of one year of service. In addition, all team members are eligible for job transition assistance. To receive benefits under the plan, team members must agree to certain restrictive covenants and a waiver of all claims against West. The Executive Change in Control Severance Pay Plan provides compensation in connection with an acceleration event. The Executive Change in Control Pay Plan applies to all NEOs with the exception of Mr. Green. The severance terms for Mr. Green are covered under his employment agreement. The provisions of this plan are specifically designed to address the inability of senior executives to influence the Company’s future performance after certain change of control events. We believe that our existing arrangements help executives remain focused on our business in the event of a threat or occurrence of a change in control and encourage them to act in the best interests of the shareholders in assessing and implementing a transaction. The Company’s CIC agreements do not include excise tax gross ups and single triggers where benefits would be paid without a termination of employment. Additionally, our CIC agreements include a cutback in payments and benefits if the NEO would be in a more favorable after-tax position and excludes benefits upon a voluntary resignation that is not due to “good reason.” Regarding Mr. Green’s severance arrangement, we believe severance pay is necessary to attract and retain a quality CEO candidate and that the benefits of securing a release of claims, cooperation and non-disparagement provision from Mr. Green upon an involuntary termination are significant. Mr. Green has a separate employment agreement that contains many provisions similar to those contained in the form of CIC Agreement for other officers, but also includes other terms and conditions that resulted from negotiations relating to compensation and termination. The terms and conditions of all these agreements are described in more detail in the Compensation Tables section of this Proxy Statement.
2023 Summary Compensation
| | | | | | | | Change in Pension | | | | | | | | | | | Value & Nonqualified | | | | | | | | | | Non-Equity | Deferred | | | | | | | | | | Incentive Plan | Compensation | All Other | | | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | Compensation ($) | Earnings ($) | Compensation | Total | | Eric M. Green | 2023 | 1,136,654 | 0 | 3,250,195 | 3,250,074 | 1,666,494 | — | 92,479 | 9,395,896 | | President & Chief Executive | 2022 | 1,098,462 | 0 | 3,000,289 | 2,999,992 | 675,324 | — | 130,994 | 7,905,061 | | Officer | 2021 | 1,040,385 | 0 | 3,307,377 | 2,750,076 | 2,230,253 | — | 144,666 | 9,472,757 | | Bernard J. Birkett | 2023 | 693,269 | 0 | 1,125,209 | 1,124,992 | 637,875 | | 55,696 | 3,637,041 | | SVP, Chief Financial & | 2022 | 652,692 | 0 | 1,075,420 | 1,074,884 | 249,908 | — | 70,217 | 3,123,121 | | Operations Officer | 2021 | 620,192 | 0 | 842,184 | 700,056 | 808,063 | — | 72,723 | 3,043,218 | | Silji Abraham | 2023 | 520,192 | 0 | 350,229 | 349,901 | 414,619 | — | 37,281 | 1,672,222 | | SVP & Chief Technology | 2022 | 495,192 | 0 | 300,103 | 299,922 | 164,775 | — | 47,126 | 1,307,118 | | Officer | 2021 | 469,231 | 0 | 330,870 | 274,932 | 570,261 | — | 68,917 | 1,714,211 | | Kimberly B. MacKay | 2023 | 462,262 | 0 | 325,081 | 325,094 | 344,817 | — | 34,442 | 1,491,696 | | SVP, General Counsel | 2022 | 450,192 | 0 | 300,103 | 299,922 | 138,411 | — | 256,627 | 1,445,255 | | & Corporate Secretary | 2021 | 430,000 | 0 | 330,870 | 274,932 | 476,526 | — | 39,908 | 1,552,236 | | Cindy Reiss-Clark(1) | 2023 | 470,192 | 0 | 325,081 | 325,094 | 375,131 | — | 34,155 | 1,529,653 | | SVP & Chief Commercial Officer | 2022 | 438,461 | 0 | 300,103 | 299,922 | 136,890 | — | 38,746 | 1,214,122 |
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards The following table provides information on plan-based equity and non-equity incentive awards granted to our NEOs in 2023.
2023 Grants of Plan-Based Awards
| | | | | | | | | | All Other | | Grant | | | | | | | | | | All other | Options | | Date | | | | | | | | | | Stock | Awards: | Exercise | Fair | | | | Estimated Future Payout | | | Estimated Future Payout | | | Awards: | Number of | or Base | Value of | | | | Under Non-Equity Incentive Plan | | | Under Equity Incentive | | | Number of | Securities | Price of | Stock And | | | | Awards (AIP)(1) | | | Plan Awards(2) | | | Stock or | Underlying | Option | Option | | | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | Units | Options | Awards | Awards | | Name | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/sh) | ($)(3) | | Eric M. Green | 2/21/2023 | 685,800 | 1,371,600 | 2,743,200 | | | | | | | | | | 2/21/2023 | | | | 5,299 | 10,598 | 21,196 | | | | 3,250,195 | | | 2/21/2023 | | | | | | | | 29,872 | 108.80 | 3,250,074 | | Bernard J. Birkett | 2/21/2023 | 262,500 | 525,000 | 1,050,000 | | | | | | | | | | 2/21/2023 | | | | 1,835 | 3,669 | 7,338 | | | | 1,125,209 | | | 2/21/2023 | | | | | | | | 10,340 | 108.80 | 1,124,992 | | Silji Abraham | 2/21/2023 | 170,625 | 341,250 | 682,500 | | | | | | | | | | 2/21/2023 | | | | 571 | 1,142 | 2,284 | | | | 350,229 | | | 2/21/2023 | | | | | | | | 3,216 | 108.80 | 349,901 | | Kimberly B. MacKay | 2/21/2023 | 141,900 | 283,800 | 567,600 | | | | | | | | | | 2/21/2023 | | | | 530 | 1,060 | 2,120 | | | | 325,081 | | | 2/21/2023 | | | | | | | | 2,988 | 108.80 | 325,094 | | Cindy Reiss-Clark | 2/21/2023 | 154,375 | 308,750 | 617,500 | | | | | | | | | | 2/21/2023 | | | | 530 | 1,060 | 2,120 | | | | 325,081 | | | 2/21/2023 | | | | | | | | 2,988 | 108.80 | 325,094 |
2023 Grants of Plan-Based Awards
| (1) These amounts represent the minimum, target and maximum awards under the AIP. The amounts are not reduced to reflect any elections to defer receipt of an executive’s cash bonus or bonus shares under any deferred compensation plan. |
2023 Grants of Plan-Based Awards
| (2) These amounts represent PSUs that may vest depending on attainment of performance targets over a three-year performance period. The amounts in this column are not reduced to reflect any elections to defer receipt of an executive’s PSUs under any deferred compensation plan. |
2023 Grants of Plan-Based Awards
| (3) This column consists of the fair value of options and stock awards granted during 2023. The per-option grant date fair value (under FASB ASC Topic 718) was $108.80 for all options granted on February 21, 2023. The grant date fair value for the PSUs granted on February 21, 2023 was $306.68. For the assumptions made in determining grant date fair values, refer to Note 14 to the consolidated financial statements included in our 2023 Annual Report. |
Outstanding Equity Awards at Year-End 2023
Outstanding Equity Awards at Year-End 2023 The following table contains information on the current holdings of stock options, unearned PSUs, RSUs, and restricted stock held by our NEOs on December 31, 2023.
Outstanding Equity Awards at Year-End 2023
| | Option Awards(1) | | | | | Stock Awards | | | | | | | | | | | Restricted Stock / | | PSUs(3)—Equity Incentive Plan | | | | | | | | | RSUs(2) | | Awards | | | | | | | | | | | | Market | | | | | | | | | | | Value or | | | | | | | | | | | Payout | | | | | | | | Number of | Market | Number of | Value of | | | | Number of | Number of | | | Shares or | Value of | Shares or | Unearned | | | | Securities | Securities | | | Units of | Shares or | Units of | Shares or | | | | Underlying | Underlying | | | Stock | Units of | Stock | Units or | | | | Unexercised | Unexercised | | | That | Stock That | That | Other Rights | | | | Options | Options | Option | Option | Have Not | Have Not | Have Not | That Have | | | | Exercisable | UnExercisable | Exercise | Expiration | Vested | Vested | Vested | Not Vested | | Name | Grant Date | (#) | (#) | Price ($) | Date | (#) | ($) | (#) | ($) | | Eric M. Green(4) | | | | | | | | 57,726 | 20,326,408 | | Hire Grant 1 | 4/24/2015 | 18,316 | | 57.38 | 4/24/2025 | | | | | | Hire Grant 2 | 4/24/2015 | 79,816 | | 57.38 | 4/24/2025 | | | | | | | 2/23/2016 | 86,732 | | 59.64 | 2/23/2026 | | | | | | | 2/21/2017 | 83,616 | | 83.47 | 2/21/2027 | | | | | | | 2/20/2018 | 87,720 | | 89.64 | 2/20/2028 | | | | | | | 2/19/2019 | 85,680 | | 102.51 | 2/19/2029 | | | | | | | 2/18/2020 | 43,038 | 14,346 | 173.22 | 2/18/2030 | | | | | | | 2/23/2021 | 21,826 | 21,826 | 274.29 | 2/23/2031 | | | | | | | 2/22/2022 | 7,772 | 23,316 | 369.13 | 2/22/2032 | | | | | | | 2/21/2023 | — | 29,872 | 306.68 | 2/21/2033 | | | | | | Bernard J. Birkett | | | | | | | | 18,485 | 6,508,874 | | | 2/19/2019 | 6,850 | — | 102.51 | 2/19/2029 | | | | | | | 2/18/2020 | 9,564 | 3,188 | 173.22 | 2/18/2030 | | | | | | | 2/23/2021 | 5,556 | 5,556 | 274.29 | 2/23/2021 | | | | | | | 2/22/2022 | 2,461 | 7,383 | 369.13 | 2/22/2032 | | | | | | | 5/23/2022 | 336 | 1,008 | 303.34 | 5/23/2032 | | | | | | | 2/21/2023 | — | 10,340 | 306.68 | 2/21/2033 | | | | | | Silji Abraham (5) | | | | | | 457 | 161,005 | 5,938 | 2,091,047 | | | 2/18/2020 | 5,259 | 1,753 | 173.22 | 2/18/2030 | | | | | | | 10/29/2020 | 1,467 | 489 | 275.23 | 10/29/2030 | | | | | | | 2/23/2021 | 2,182 | 2,182 | 274.29 | 2/23/2031 | | | | | | | 2/22/2022 | 777 | 2,331 | 369.13 | 2/22/2032 | | | | | | | 2/21/2023 | — | 3,216 | 306.68 | 2/21/2033 | | | | | | Kimberly B. MacKay(6) | | | | | | | | 5,774 | 2,033,206 | | Hire Grant | 12/2/2020 | 1,770 | 590 | 275.39 | 12/2/2030 | | | | | | | 2/23/2021 | 2,182 | 2,182 | 274.29 | 2/23/2031 | | | | | | | 2/22/2022 | 777 | 2,331 | 369.13 | 2/22/2032 | | | | | | | 2/21/2023 | — | 2,988 | 306.68 | 2/21/2033 | | | | | | Cindy Reiss-Clark | | | | | | | | 5,225 | 1,839,803 | | | 10/30/2018 | 4,909 | — | 104.69 | 10/30/2028 | | | | | | | 2/19/2019 | 3,060 | — | 102.51 | 2/19/2029 | | | | | | | 2/18/2020 | 800 | 956 | 173.22 | 2/18/2030 | | | | | | | 2/23/2021 | — | 1,588 | 274.29 | 2/23/2031 | | | | | | | 2/22/2022 | — | 2,331 | 369.13 | 2/22/2032 | | | | | | | 2/21/2023 | — | 2,988 | 306.68 | 2/21/2033 | | | | |
Outstanding Equity Awards at Year-End 2023
| (1) All options are exercisable in 25% annual increments beginning one year from the grant date, except as noted in footnote 4 for Mr. Green. |
Outstanding Equity Awards at Year-End 2023
| (2) RSUs were granted to Mr. Abraham as a recognition award on October 29, 2020. Vesting of awards for Mr. Abraham are discussed in footnote 5. All RSUs granted also earn DEUs, which are subject to the same vesting schedule as the underlying RSU. Dividends are paid on all unvested restricted shares and reinvested as additional stock subject to the same vesting requirements as the underlying shares. The market value of all restricted shares and RSUs is based on the closing price of our common stock on December 31, 2023 of $352.12. |
Outstanding Equity Awards at Year-End 2023
| (3) These PSUs were awarded on February 23, 2021, February 22, 2022 and February 21, 2023, and each covers a three-year performance period. This table includes as outstanding the 2021-23 PSUs awards that were distributed in February 2024, because the performance is not actually determined and certified by the Committee until the first quarter of 2024. The 2022 and 2023 awards will be earned (if at all) on December 31, 2024 and December 31, 2025, respectively, subject to the satisfaction of the applicable performance criteria and generally subject to the recipient’s continued employment through those dates. As required by the SEC’s disclosure rules, because the performance for the most recently completed fiscal year was more than 100%, the number of PSUs shown assumes that a maximum payout of 200% will be achieved for all three awards. Fair market value of the unearned PSUs is based on the closing price of our common stock on December 31, 2023 of $352.12. The amounts are not reduced to reflect any elections to defer receipt under the Employee Deferred Compensation Plan. |
Outstanding Equity Awards at Year-End 2023
| (4) The options denoted as Hire Grant 1 for Mr. Green were 25% vested upon the grant date and the remaining options vested in 25% increments on February 24th of each following year. The options denoted as Hire Grant 2 for Mr. Green vested in 25% increments on February 23rd of each year following grant. All other option grants are subject to the vesting schedules set forth in footnote 1 above. |
Outstanding Equity Awards at Year-End 2023
| (5) Mr. Abraham received 454 retention RSUs on October 29, 2020 which will vest 100% on the fourth anniversary of the grant date. The RSUs will vest provided that he remains employed by the Company, or dies or becomes disabled. The options awarded on October 29, 2020 as part of a retention award will vest in 25% increments on the anniversary of the grant. |
Outstanding Equity Awards at Year-End 2023
| (6) Upon Ms. MacKay’s hire on December 2, 2020, she was awarded 2,360 stock options. Ms. MacKay received 1,003 PSUs as part of her annual award on February 23, 2021 related to the performance period 2021-2023. |
2023 Option Exercises and Stock Vested
2023 Option Exercises and Stock Vested The following table provides information about the value realized by our NEOs on the vesting of stock awards and units during 2023.
2023 Option Exercises and Stock Vested
2023 Option Exercises and Stock Vested
2023 Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | | Number of Shares | Value Realized | Number of Shares | Value Realized | | | Acquired on | on Exercise | Acquired on | on Vesting | | Name | Exercise (#) | ($)(1) | Vesting (#)(2) | ($)(3) | | Eric M. Green | 150,000 | 45,404,218 | 26,160 | 8,022,807 | | Bernard J. Birkett | 22,334 | 6,004,832 | 5,892 | 1,807,838 | | Silji Abraham | 16,180 | 4,644,962 | 3,584 | 1,103,737 | | Kimberly B. MacKay | — | — | 547 | 167,657 | | Cindy Reiss-Clark | 3,477 | 452,636 | 1,744 | 534,854 |
2023 Option Exercises and Stock Vested
| (1) The value realized is equal to the difference between the option exercise price and the fair market value of our common stock on the date of exercise, multiplied by the number of options exercised. |
2023 Option Exercises and Stock Vested
| (2) This column includes PSUs that were awarded in 2020, earned in 2022 and paid in 2023 to all NEOs, whether or not either award was deferred under the Employee Deferred Compensation Plan. This column also includes vesting of Mr. Birkett’s and Mr. Abraham’s Bonus Incentive RSUs from 2019. For RSUs and PSUs, the total includes additional shares awarded pursuant to DEUs, which are credited on unvested PSUs over the three-year vesting period at a rate that assumes the participant will earn the target award. For PSUs, at the time of the payout, the credited DEUs are then increased or decreased based on the payout factor earned for the applicable three-year performance period. Because the payout factor earned for the 2020-22 performance period was 200%, the number of DEUs accrued over that period was multiplied by 200%. The following table shows the PSU payouts that vested, and the number of additional shares distributed due to DEUs. |
2023 Option Exercises and Stock Vested
| (3) The value of the PSUs was determined by multiplying the number of vested units by $306.68, the fair market value of our common stock on the payout date, February 21, 2023. The value of the RSUs for Mr. Birkett and Mr. Abraham was determined by multiplying the number of vested units by the fair market value of our common stock on March 1, 2023. |
2023 Pension Benefits
2023 Pension Benefits
2023 Pension Benefits
2023 Pension Benefits The following table shows the present value of accumulated pension benefits that Mr. Green is eligible to receive under the SERP. As noted above, the Retirement Plan was terminated. All other NEOs are not eligible for and did not accrue benefits under either plan. Actual benefit present values will vary from these estimates depending on many factors, including an executive’s actual retirement age, future-credited years of service, form of payment election, applicable interest rates and regulatory changes.
2023 Pension Benefits
| | | Number of Years | Present Value of | Payments | | | | Credited | Accumulated | During Last | | Name | Plan Name | Service (#)(1) | Benefit ($)(2) | Fiscal Year ($) | | Eric M. Green | SERP | 9 | 268,467 | — | | | | | 268,467 | — |
2023 Pension Benefits
| (1) Equals the number of full years of credited service as of December 31, 2023. Credited service generally begins with a participant’s hire date and ends with the date of employment termination. |
2023 Pension Benefits
| (2) The present value assumes that Mr. Green retires at age 65 for purposes of the SERP. The assumed cash balance crediting rate is 4.0% in the SERP. |
2023 Nonqualified Deferred Compensation
2023 Nonqualified Deferred Compensation The Employee Deferred Compensation Plan allows highly compensated team members to defer up to 100% of salary and cash bonus. Deferred cash contributions may be invested in a selection of investment options that mirror the funds available under our 401(k) plan. With respect to team member contributions made before 2019, we matched them at the rate of 100% of the first 3% of salary deferrals, plus 50% of the next 2%, and employer matching contributions are 100% vested. Matching contributions ceased effective January 1, 2019. A non-elective contribution is also made on behalf of participants who exceed the applicable Code limits. Before 2019, participants were eligible to defer payout of annual bonus shares. We contributed one restricted incentive share for each four bonus shares deferred. PSUs remain eligible for deferral. Incentive shares will vest on the fourth anniversary of the date of contribution or will vest pro rata on retirement, death or disability, if earlier. During the time these awards are deferred, they are deemed invested in our common stock and receive additional credits for DEUs. All deferred stock awards are distributed in shares of common stock. Amounts deferred in any year, except for matching contributions on cash contributions, will be distributed automatically in a lump sum five years after the year of deferral. A participant may choose to defer these amounts to another date or until termination. Matching contributions are only distributed on termination. Participants may elect to receive distributions on termination in a cash or stock lump sum or up to ten annual installments. Information regarding NEO’s account balances in the Employee Deferred Compensation Plan is below.
2023 Nonqualified Deferred Compensation
2023 Nonqualified Deferred Compensation
2023 Nonqualified Deferred Compensation
| | | Registrant | | | | | | Contributions | Aggregate | Aggregate | | | Executive Contributions | in | Earnings in Last | Balance at Last | | Name | in Last FY ($)(1) | Last FY ($)(2) | FY ($)(3) | FYE ($)(4) | | Eric M. Green | 0 | 44,459 | 8,794 | 513,473 | | Bernard J. Birkett | 0 | 18,395 | 6,104 | 197,818 | | Silji Abraham | 0 | 10,649 | 6,467 | 201,860 | | Kimberly B. MacKay | 0 | 8,338 | 872 | 33,782 | | Cindy Reiss-Clark | 0 | 8,312 | 3,981 | 124,023 |
2023 Nonqualified Deferred Compensation
| (1) The amounts reported in this column are reflected in this year’s Salary column of the Summary Compensation Table (“SCT”). |
2023 Nonqualified Deferred Compensation
| (2) These amounts reflect non-elective contributions made on behalf of participants who exceeded the applicable Code limits in the Employee Deferred Compensation Plan. |
2023 Nonqualified Deferred Compensation
| (3) These amounts reflect the net gains attributable to the investment funds in which the executives have chosen to invest and for deferred shares of stock contributed to the Employee Deferred Compensation Plan, net of any distributions or transfers. |
2023 Nonqualified Deferred Compensation
| (4) The total balance includes amounts contributed for prior years which have all been previously reported in the SCT for the year those amounts were deferred. |
Mr. Green
Mr. Green Mr. Green has an employment agreement that entitles him to continuation of his salary and welfare benefits at active team member rates for a period of 12 months if he is terminated involuntarily other than for “Cause” or the Company gives notice to Mr. Green that it will not renew the term of his employment under the agreement. Mr. Green’s employment agreement does not entitle him to severance payments or continued benefits if his employment is terminated for Cause or because of his death or disability (except as described above). “Cause” means any willful failure by Mr. Green to perform his duties or responsibilities or comply with any valid and legal directives of the Board; act of fraud; embezzlement; theft or misappropriation of the funds of the Company by Mr. Green; or Mr. Green’s admission to or conviction of a felony or any crime involving moral turpitude, fraud, embezzlement, theft, or misrepresentation; Mr. Green’s engagement in dishonesty, illegal conduct or misconduct that is materially injurious to the Company; Mr. Green’s breach of any material obligation of any written agreement with the Company; or a material violation of a rule, policy, regulation, or guideline imposed by the Company or a regulatory body. The obligation to pay severance is contingent on Mr. Green’s execution of a release and other customary provisions, including compliance with non-competition, non-solicitation and confidentiality obligations contained in the agreement.
Payments on Termination in Connection with a Change-in-Control
Payments on Termination in Connection with a Change-in-Control We have entered into agreements with each of our U.S.-based NEOs, as well as certain other of our officers, which provide the benefits described below on qualifying terminations of employment in connection with or within two years following a CIC. All currently employed NEOs, except Mr. Green, have CIC Agreements that are substantially similar and include the following:
Payments on Termination in Connection with a Change-in-Control
| ● | Cash severance pay equal to two times the sum of the executive’s highest annual base salary in effect during the year of termination and their target bonus immediately preceding the CIC |
Payments on Termination in Connection with a Change-in-Control
| ● | Immediate vesting of any unvested benefits and matching contributions under our 401(k) plan and the Employee Deferred Compensation Plan as of the termination of the executive’s employment |
Payments on Termination in Connection with a Change-in-Control
| ● | Payment of short-term incentive compensation with respect to the period during which the termination occurs at target levels, prorated for number of days worked in the year |
Payments on Termination in Connection with a Change-in-Control
| ● | Immediate vesting of all unvested stock options, stock appreciation rights (“SARs”), shares of stock, stock units, and other equity-based awards at target levels |
Payments on Termination in Connection with a Change-in-Control
| ● | Continued medical, dental, life, and other benefits for 24 months after termination of the executive’s employment, or until his or her retirement or eligibility for similar benefits with a new employer |
Payments on Termination in Connection with a Change-in-Control
| ● | Payments will be reduced below the applicable threshold in the Code if the NEO would be in a better after-tax position than if the excise tax under Section 4999 of the Code applied |
Payments on Termination in Connection with a Change-in-Control
| ● | Outplacement assistance up to $50,000 |
Payments on Termination in Connection with a Change-in-Control
The severance payments are payable in monthly installments and, if the executive is a key employee at the time of his/her termination, payments will be delayed six months to the extent required by applicable tax law. Employment terminations that entitle these executives to receive the severance benefits under a CIC consist of: (1) resignation following a constructive termination of his or her employment; or (2) employment termination other than due to death, disability, continuous willful misconduct, or normal retirement. These terminations must occur within two years after a CIC. To receive the severance benefits under the agreement, an executive must agree not to be employed by any of the Company’s competitors or compete with the Company in any part of the United States for up to two years following employment termination for any reason and execute a release of claims in favor of the Company. Mr. Green has a separate employment agreement, with CIC provisions that are substantially similar to the provisions contained in the other NEO agreements, except for the following:
Payments on Termination in Connection with a Change-in-Control
| ● | His payment is two times the sum of his annual base salary plus average of his bonus over the prior three years |
Payments on Termination in Connection with a Change-in-Control
| ● | 36-months of benefit continuation instead of 24 months |
Payments on Termination in Connection with a Change-in-Control
| ● | Mr. Green’s benefits may be reduced in the event he retires |
Payments on Termination in Connection with a Change-in-Control
| ● | His agreement does not contain specific language regarding the satisfaction of performance goals for incentive compensation, or a payout of the short-term incentive compensation for the year of termination |
Payments on Termination in Connection with a Change-in-Control
| ● | The definition of a CIC set forth below requires a change in two-thirds of our Board members rather than three-fourths |
Payments on Termination in Connection with a Change-in-Control
| ● | The definitions of “Cause” and “Constructive Termination,” which is called “Good Reason,” are slightly different and set forth in his employment agreement, which is described under Post-Employment Compensation Arrangements on page 69 |
CEO Pay Ratio
CEO Pay Ratio Applicable SEC rules require the disclosure of our median team member’s pay and the ratio of that pay to our CEO’s pay. Our CEO pay ratio and the underlying compensation and team member count data are reasonable estimates calculated consistent with applicable SEC guidance governing the use of estimates, adjustments and statistical sampling permitted by the SEC. The median team member’s identity was determined as of December 2023, and we used “base pay” as our compensation definition, which we then calculated as annual base pay based on a reasonable estimate of hours worked during 2023 for hourly workers, and upon salary levels for the remaining team members. We did not utilize cost-of-living adjustments. We annualized pay for those who commenced work during 2023. We used a valid statistical sampling methodology to identify the base pay for the median worker. In addition, in selecting the median worker, as permitted by applicable SEC regulations, we used our global employment roster as of November 30, 2023, but excluded all team members in the following countries (with the number of team members excluded in parentheses): Argentina (6), Australia (5), Italy (7), Serbia (461) and Spain (2). These exclusions represent less than 5% of the total population, as permitted under applicable SEC rules. As of November 30, 2023, total number of team members was 10,308, with U.S. team members totaling 4,768 and foreign team members totaling 5,540. Mr. Green’s 2023 pay, as indicated in our 2023 Summary Compensation Table was $9,395,896 and our median team member’s pay calculated in the same manner was $65,395. The ratio of Mr. Green’s pay to our median worker’s pay as determined under applicable SEC rules, therefore, is 144:1.
Pay Versus Performance
Pay Versus Performance As required by Item 402(v) of SEC Regulation S-K (“Item 401(v)”), the following table, footnotes and discussion provide “Pay versus Performance” information for the last four fiscal years for our Principal Executive Officer (“PEO”) and other proscribed NEOs. The information provided below was not considered by the Compensation Committee in structuring or determining compensation for our NEOs. Please refer to the Compensation Discussion and Analysis section of this Proxy Statement (page 44) for more information regarding our executive compensation program.
Pay Versus Performance
| | | | Average | | | | | | | | | | Summary | | | | | | | | Summary | | Compensation | Average | Value of Initial Fixed $100 | | | | | | Compensation | | Table | Compensation | Investment Based on: | | | | | | Table | Compensation | Total for | Actually Paid to | West Total | Peer Group Total | | | | | Total for | Actually Paid to | Non-PEO | Non-PEO | Shareholder | Shareholder | Net Income | Revenue | | Year | PEO ($)(1) | PEO ($)(1,2,3) | NEOs ($)(1) | NEOs ($)(1,2,3) | Return ($) | Return ($)(4) | (GAAP)($MM) | ($MM) (5) | | 2023 | 9,395,896 | 16,987,422 | 2,082,653 | 3,165,717 | 125 | 126 | 593 | 2,950 | | 2022 | 7,905,061 | (12,073,257) | 1,772,404 | (632,515) | 83 | 124 | 586 | 2,887 | | 2021 | 9,472,757 | 35,095,275 | 1,998,585 | 5,071,519 | 166 | 126 | 662 | 2,832 | | 2020 | 7,642,296 | 30,515,658 | 1,873,373 | 5,653,613 | 100 | 100 | 346 | 2,147 |
Pay Versus Performance
| (1) For each year represented, our PEO and NEOs were as follows: |
Pay Versus Performance
| Officer | 2023 | 2022 | 2021 | 2020 | | PEO | Eric Green | Eric Green | Eric Green | Eric Green | | NEO | Bernard J. Birkett | Bernard J. Birkett | Bernard J. Birkett | Bernard J. Birkett | | NEO | Silji Abraham | Silji Abraham | Silji Abraham | Silji Abraham | | NEO | Kimberly B. MacKay | Kimberly B. MacKay | David Montecalvo | David Montecalvo | | NEO | Cindy Reiss-Clark | Cindy Reiss-Clark | Kimberly B. MacKay | George Miller |
Pay Versus Performance
| (2) Amounts shown for Compensation “Actually Paid” are computed in accordance with Item 402(v) and do not reflect the actual amount of compensation earned by or paid to the NEOs during the applicable year. These amounts reflect total compensation as reported in the Summary Compensation Table with certain adjustments as described in footnote (3) below. |
Pay Versus Performance
| (3) Compensation “Actually Paid” reflects the exclusions and inclusions of equity awards for the PEO and the other NEOs as set forth below and calculated in accordance with FASB ASC Topic 718. The valuation methodologies and assumptions used to calculate Compensation “Actually Paid” are based on our grant date fair value of these awards as disclosed in the company’s audited financial statements for the years reflected in the table below. |
Summary Compensation Table Total to Compensation “Actually Paid”
Summary Compensation Table Total to Compensation “Actually Paid”
Reconciliation for the PEO and Non-PEO NEOs
| (1) For the PEO and other NEOs, for each covered year, service cost and prior service cost of pension benefits equals $0, fair value of awards that are granted and vest in the same covered fiscal year equals $0, and fair value of awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the covered fiscal year equals $0. |