DEF 14A of Envista Holdings Corp
Filed Apr 8, 2024 · FY20230001757073-24-000033
Brea, CA 92821
| Executive Compensation Tables | 43 | | Summary Compensation Table | 43 | | Grants of Plan-Based Awards for Fiscal 2023 | 45 | | Outstanding Equity Awards at 2023 Fiscal Year-End | 46 | | Option Exercises and Stock Vested During Fiscal 2023 | 48 | | 2023 Nonqualified Deferred Compensation | 49 | | Potential Payments Upon Termination or Change-of-Control as of 2023 Fiscal Year-End | 49 | | Agreements with our NEOs | 51 | | Employee Benefit Plans | 52 | | CEO Pay Ratio | 55 | | Pay Versus Performance | 56 | | Equity Compensation Plan Information | 60 | | Director Compensation | 61 | | Director Compensation Philosophy | 61 | | Process for Setting Director Compensation | 61 | | Director Compensation Structure | 61 | | Director Stock Ownership Requirements and Hedging / Pledging Policy | 62 | | Director Summary Compensation Table | 62 | | Proposal 2 – Ratification of Independent Registered Public Accounting Firm | 63 | | Fees Paid to Independent Registered Public Accounting Firm | 63 | | Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors | 63 | | Audit Committee Report | 64 |
Directors and Executive Officers
Directors and Executive Officers The following table sets forth as of March 25, 2024 (unless otherwise indicated) the number of shares and percentage of Common Stock beneficially owned by each of our directors, nominees for director and each of the executive officers named in the Summary Compensation Table (the “Named Executive Officers”), and all current executive officers and directors as a group. Except as otherwise indicated and subject to community property laws where applicable, each person or entity included in the table below has sole voting and investment power with respect to the shares beneficially owned by that person or entity. Under applicable SEC rules, the definition of beneficial ownership for purposes of this table includes shares over which a person or entity has sole or shared voting or investment power, whether or not the person or entity has any economic interest in the shares, and also includes shares as to which the person has the right to acquire beneficial ownership within 60 days of March 25, 2024. Except as indicated, the address of each director and executive officer shown in the table below is c/o Envista Holdings Corporation, 200 S. Kraemer Boulevard, Building E, Brea, CA 92821.
Directors and Executive Officers
| | Shares of Common Stock beneficially owned | | | Name of Beneficial Owner | Number of Shares(1) | Percent of Shares(1) | | Amir Aghdaei | 1,578,100(2) | * | | Wendy Carruthers | 30,075(3) | * | | Eric Conley | 95,848(4) | * | | Patrik Eriksson | 413,478(5) | * | | Kieran T. Gallahue | 24,145(3) | * | | Scott Huennekens | 40,980(3) | * | | Barbara Hulit | 12,290(3) | * | | Vivek Jain | 23,080(3) | * | | Stephen Keller | 38,620(6) | * | | Jean-Claude Kyrillos | —(7) | * | | Mark Nance | 114,870(8) | * | | Daniel A. Raskas | 24,145(3) | * | | Christine Tsingos | 30,065(3) | * | | Howard H. Yu | 5,871(9) | * | | All current directors and executive officers as a group (13 persons) | 2,194,689(10) | 1.3% |
Directors and Executive Officers
_________________ * Denotes less than 1% of the outstanding Common Stock on March 25, 2024 (1)Balances credited to each executive officer’s account under the Envista Executive Deferred Incentive Plan (the “EDIP”), the Envista Excess Contribution Program (the “ECP”) and/or the Envista Deferred Contribution Plan (the “DCP”) which are vested or are scheduled to vest within 60 days of March 25, 2024, are included in the table. See “Employee Benefit Plans—Supplemental Retirement Program” for a description of our EDIP, ECP and DCP. The incremental number of notional phantom shares of Common Stock credited to a person’s EDIP, ECP, or DCP account is based on the incremental amount of contribution to the person’s EDIP, ECP, or DCP balance divided by the closing price of Common Stock as reported on the NYSE on the date of the contribution. The table also includes shares that may be acquired upon exercise of options that are exercisable within 60 days of March 25, 2024 or upon vesting of Restricted Stock Units (“RSUs”) that vest within 60 days of March 25, 2024. (2)Includes 184,649 shares of Common Stock held by Mr. Aghdaei, options to acquire 1,307,151 shares, and 86,300 shares attributable to Mr. Aghdaei’s EDIP account. (3)Consists of RSUs that are vested but not released and RSUs granted to non-employee directors which vest within 60 days of March 25, 2024. For grants before 2022, the underlying shares of vested RSUs will be delivered at the earlier of the director’s death or the first day of the seventh month following the director’s resignation from the Board. RSUs granted in 2022 and after will vest on the first anniversary of the date of grant, unless a compliant Section 409A deferral election is made by the participant. Ms. Tsingos’ total also includes 4,435 shares of Common Stock, Ms. Carruthers’ total also includes 10 shares of Common Stock and Ms. Hulit’s total also includes 5 shares of Common Stock. (4)Includes 19,989 shares of Common Stock held by Mr. Conley, options to acquire 59,312 shares, 2,636 RSUs and 10,424 stock options that vest within 60 days of March 25, 2024 and 3,487 shares attributable to Mr. Conley’s DCP and ECP account. (5)Includes 62,017 shares of Common Stock held by Mr. Eriksson, options to acquire 305,318 shares, 4,044 shares under Mr. Eriksson’s 401(k) account, and 42,099 shares attributable to Mr. Eriksson’s EDIP account. Mr. Eriksson ceased serving as SVP and President, Nobel Biocare, effective December 31, 2023. (6)Includes 6,806 shares of Common Stock held by Mr. Keller, options to acquire 30,603 shares, and 1,211 shares attributable to Mr. Keller’s’ DCP and ECP account. (7)Mr. Kyrillos ceased serving as SVP and President, Diagnostics and Digital Solutions, effective June 30, 2023 and holds no shares of Common Stock. (8)Includes 26,662 shares of Common Stock held by Mr. Nance, options to acquire 85,090 shares, and 3,118 shares attributable to Mr. Nance’s DCP and ECP account. (9)Includes 2,000 shares of Common Stock held by Mr. Yu and 3,871 shares attributable to Mr. Yu’s DCP and ECP account. Mr. Yu ceased serving as Chief Financial Officer effective September 22, 2023. (10)Includes 261,190 shares of Common Stock, options to acquire 1,629,693 shares, 140,155 RSUs that have vested but are not released until a later date, 42,811 RSUs that will vest within 60 days of March 25, 2024, 10,424 options that will vest within 60 days of March 25, 2024, 102,600 shares attributable to EDIP accounts, and 7,816 shares attributable to DCP and ECP accounts.
Principal Stockholders
Principal Stockholders The following table sets forth the number of shares and percentage of Common Stock beneficially owned by each person who owns of record or is known to us to beneficially own more than five percent of our Common Stock.
Principal Stockholders
| NAME AND ADDRESS | NUMBER OF SHARES BENEFICIALLY OWNED | PERCENT OF CLASS | | BlackRock, Inc. 50 Hudson Yards, New York, NY 10001 | 18,278,869(1) | 10.7% | | The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355 | 17,167,767(2) | 10.0% | | Morgan Stanley 1585 Broadway, New York, NY 10036 | 15,898,867(3) | 9.3% | | Harris Associates L.P. 111 South Wacker Drive, Suite 4600, Chicago, IL 60606 | 11,078,748(4) | 6.5% |
Principal Stockholders
(1)The amount shown and the following information is derived from a Schedule 13G/A filed January 24, 2024 by BlackRock, Inc., which sets forth its beneficial ownership as of December 31, 2023. According to the Schedule 13G/A, BlackRock Inc. has sole voting power over 17,656,053 shares and sole dispositive power over 18,278,869 shares. (2)The amount shown and the following information is derived from a Schedule 13G/A filed January 10, 2024 by The Vanguard Group, which sets forth its beneficial ownership as of December 31, 2023. According to the Schedule 13G/A, The Vanguard Group has shared voting power over 59,950 shares, sole dispositive power over 16,929,398 shares and shared dispositive power over 238,369 shares. (3)The amount shown and the following information is derived from a Schedule 13G/A filed February 8, 2024 jointly by Morgan Stanley, Atlanta Capital Management Company, LLC (“Atlanta Capital”), and Eaton Vance Atlanta Capital SMID-Cap Fund (“Eaton Vance”), which sets forth their respective beneficial ownership as of December 31, 2023. According to the Schedule 13G/A, Morgan Stanley has shared voting power over 15,379,869 shares and shared dispositive power over 15,839,532 shares, Atlanta Capital has shared voting power over 12,111,948 shares and shared dispositive power over 12,432,136 shares, and Eaton Vance has shared voting and dispositive power over 9,678,610 shares. (4)The amount shown and the following information is derived from a Schedule 13G filed February 14, 2024 by Harris Associates L.P. and Harris Associates Inc., which sets forth their respective beneficial ownership as of December 31, 2023. According to the Schedule 13G, Harris Associates L.P. and Harris Associates Inc. have sole voting power over 5,611,676 shares and sole dispositive power over 11,078,748 shares.
Proposal 1. Election of Directors
Proposal 1. Election of Directors
Election of Directors
Election of Directors As of the Annual Meeting, our Board is fully declassified and all directors are elected annually. At the Annual Meeting, stockholders will be asked to elect Amir Aghdaei, Wendy Carruthers, Kieran Gallahue, Scott Huennekens, Barbara Hulit, Vivek Jain, Daniel Raskas, and Christine Tsingos (who have been recommended by the Nominating and Governance Committee, nominated by the Board and currently serve as directors of Envista) to serve until the 2025 Annual Meeting of Stockholders and until his or her successor is duly elected and qualified. We have set forth below information as of March 25, 2024 relating to each nominee for election as director, including: his or her principal occupation and any board memberships at other public companies during the past five years; the other experience, qualifications, attributes or skills that led the Board to conclude that he or she should continue to serve as a director of Envista; the year in which he or she became a director; and age. Please see “Corporate Governance – Director Nomination Process” for a further discussion of the Board’s process for nominating Board candidates. Each of the nominees has consented to serve if elected. In the event a nominee declines or is unable to serve, the proxies may be voted in the discretion of the proxy holders for a substitute nominee designated by the Board, or the Board may reduce the number of directors to be elected.
Director Nominees
Director Nominees
Director Nominees
| Amir Aghdaei | Director since: 2019 | Other Current Public Company Directorships: None | | Age: 66 | | Board Committees: None |
Director Nominees
Amir Aghdaei has served as our President and Chief Executive Officer and as a director on our Board since May 2019. Prior to that, Mr. Aghdaei served in multiple leadership roles since joining Danaher Corporation in 2008, including as Vice President - Group Executive since 2011 and with responsibility for Danaher’s Dental business since July 2015. Before joining Danaher, Mr. Aghdaei served in a variety of international leadership roles with Hewlett-Packard Company, Agilent Technologies Inc. and Credence Systems Corporation. Qualifications: Mr. Aghdaei’s qualifications to sit on the Board include, among other factors, his extensive experience in senior leadership positions, his in-depth knowledge of our Company as our CEO since our IPO and from his prior experience at Danaher, and his international experience. .
Director Nominees
| Wendy Carruthers | Director since: 2019 | Other Current Public Company Directorships: None | | Age: 55 | Independent | Board Committees: Compensation (Chair) & Nominating and Governance |
Director Nominees
Wendy Carruthers has served as Executive Vice President of Human Resources at Boston Scientific Corporation, a medical device manufacturer, since February 2022 and as Senior Vice President of Human Resources from December 2012 until February 2022 after serving in a series of progressively more responsible human resources roles since joining Boston Scientific in 2004, including as Vice President of Human Resources for Europe, Middle East and Africa from January 2006 to December 2010. Qualifications: Ms. Carruthers’ qualifications to sit on the Board include, among other factors, an international business background and broad experience in the areas of executive compensation and talent management.
Director Nominees
| Kieran T. Gallahue | Director since: 2019 | Other Current Public Company Directorships: Edwards Lifesciences | | Age: 60 | Independent | Board Committees: Nominating and Governance (Chair) |
Director Nominees
Kieran T. Gallahue is the former Chairman and Chief Executive Officer of CareFusion Corporation, a global medical technology company, from 2011 until its acquisition by Becton, Dickinson and Company in March 2015. From January 2008 through January 2011, Mr. Gallahue served as President, Chief Executive Officer and a Director of ResMed, Inc., a medical device firm serving the sleep-disordered breathing and respiratory markets. Mr. Gallahue is also currently a member of the Board of Directors of Edwards Lifesciences Corp. and previously served as a director of Intersect ENT, Inc. and Arena Pharmaceuticals, Inc. Qualifications: Mr. Gallahue’s qualifications to sit on the Board include, among other factors, prior Chairman and CEO experience, extensive public company board experience and a deep knowledge of the medical device industry and related fields.
Director Nominees
| Scott Huennekens | Director since: 2019 | Other Current Public Company Directorships: Hyperfine, Inc. | | Age: 59 | Independent | Board Committees: Audit & Nominating and Governance |
Director Nominees
Scott Huennekens served as President, Chief Executive Officer and Chairman of the Board of Directors of Verb Surgical, Inc., a medical equipment manufacturer, from August 2015 to January 2019. Prior to this role, Mr. Huennekens served as President and Chief Executive Officer of Volcano Corporation, a medical device company, from 2002 to February 2015, and as President and Chief Executive Officer of Digirad Corporation, a diagnostic imaging centers company, from 1999 to 2002. Mr. Huennekens is currently a member of the Board of Directors of Hyperfine, Inc., and previously served as a director of NuVasive, Inc., Acutus Medical, Inc., ViewRay, Inc., Reva Medical Inc., EndoChoice Holdings, Volcano Corporation and Bellerophon Therapeutics Inc. Qualifications: Mr. Huennekens’ qualifications to sit on the Board include, among other factors, prior public company Chairman and CEO experience and an extensive background in the medical device field.
Director Nominees
| Barbara Hulit | Director since: 2021 | Other Current Public Company Directorships: Novanta Inc. and PACCAR Inc. | | Age: 57 | | Board Committees: None |
Director Nominees
Barbara Hulit served as President and Chief Executive Officer of the Advanced Healthcare Solutions segment of Fortive Corporation, a global technology company and former affiliate of the Company, from July 2021 until her retirement in April 2022 and Senior Vice President from June 2016 to July 2021. She was also a co-executive sponsor of the Allies Across Fortive employee and friends resource group. As a founding SVP at Fortive in 2016, Ms. Hulit had company-wide responsibility for the Fortive Business System (FBS), as well as procurement, IT, high-growth markets, and innovation, building on her experience running the Danaher Business System Office for 3 years. She previously spent nearly 8 years as president and group executive of Fluke, served as a partner at The Boston Consulting Group, and held sales and marketing roles at Noxell, PepsiCo, and Marketing Corporation of America. Ms. Hulit was named one of the top women in STEM for her role in establishing Washington STEM, and she serves on the Dean’s Advisory Council for the Kellogg Graduate School of Management. Ms. Hulit is also currently a member of the Board of Directors of Novanta Inc. and PACCAR Inc. Qualifications: Ms. Hulit’s qualifications to sit on the Board include, among other factors, her executive leadership and extensive operational experience, as well as in-depth knowledge of the Danaher Business System, which gives her invaluable insight into EBS and our core value of continuous improvement.
Director Nominees
| Vivek Jain | Director since: 2020 | Other Current Public Company Directorships: ICU Medical, Inc. | | Age: 52 | Independent | Board Committees: Audit & Finance |
Director Nominees
Vivek Jain has served as CEO and Chairman of the Board of ICU Medical, Inc., a global medical technology company specializing in infusion therapy, since February 2014. Prior to this role, Mr. Jain served at CareFusion Corporation, a global medical technology company, as President of Procedural Solutions from 2011 to February 2014 and as President, Medical Technologies and Services from September 2009 until 2011. Before joining CareFusion Corporation, Mr. Jain served as the Executive Vice President-Strategy and Corporate Development of Cardinal Health, Inc., a health care services company, from June 2007 until August 2009. Mr. Jain served as Senior Vice President, Business Development and M&A for the Philips Medical Systems business of Koninklijke Philips Electronics N.V., an electronics company, from 2006 to August 2007. Mr. Jain served as an investment banker at J.P. Morgan Securities, Inc., an investment banking firm, from 1994 to 2006. Mr. Jain’s last position with J.P. Morgan was as Co-Head of Global Healthcare Investment Banking from 2002 to 2006. Qualifications: Mr. Jain’s qualifications to sit on the Board include, among other factors, prior public company Chairman and CEO experience and an extensive background in medical technology and healthcare.
Director Nominees
| Daniel A. Raskas | Director since: 2019 | Other Current Public Company Directorships: None | | Age: 57 | Independent | Board Committees: Compensation & Finance |
Director Nominees
Daniel A. Raskas has served as Senior Vice President - Corporate Development of Danaher Corporation (“Danaher”) since 2010 after serving as Vice President - Corporate Development from 2004, when he joined Danaher. Prior to joining Danaher, Mr. Raskas was a Managing Director for Thayer Capital Partners, a private equity investment firm. Qualifications: Mr. Raskas’ qualifications to sit on the Board include, among other factors, his corporate development and private equity experience which give him particular insight into acquisition strategy, which represents a key strategic opportunity for us.
Director Nominees
| Christine Tsingos | Director since: 2019 | Other Current Public Company Directorships: Onto Innovation Inc., Varex Imaging Corporation and Telesis Bio Inc. | | Age: 65 | Independent | Board Committees: Audit (Chair), Compensation & Finance |
Director Nominees
Christine Tsingos served as Executive Vice President and Chief Financial Officer at Bio-Rad Laboratories, Inc., a manufacturer of life science research and clinical diagnostics products, from 2002 to May 2019. Ms. Tsingos is also currently a member of the Board of Directors of each of Onto Innovation Inc. (formerly Nanometrics Incorporated), Varex Imaging Corporation and Telesis Bio Inc. (formerly Codex DNA, Inc). Qualifications: Ms. Tsingos’ qualifications to sit on the Board include, among other factors, deep finance and accounting leadership as well as substantial audit committee experience.
Director Nominees
| The Board of Directors recommends that stockholders vote “FOR” the election to the Board of each of the foregoing Director Nominees. |
Objectives and Framework
Objectives and Framework With the goal of building long-term value for stockholders, our executive compensation program is designed to: •attract and retain executives with the leadership skills, attributes and experience necessary to succeed in an enterprise with our complexity and global footprint; •motivate executives to perform consistently at or above the levels that we expect, over the long-term and through a range of economic cycles; and •link compensation to the achievement of corporate goals that we believe best correlate with the creation of long-term stockholder value. To achieve these objectives, our compensation program combines annual and long-term components, cash and equity, and fixed and variable elements, with a bias toward long-term equity awards which are subject to multi-year vesting periods. Our executive compensation program rewards executive officers when they build long-term stockholder value, achieve annual business goals and maintain long-term careers with us. The Compensation Committee exercises judgment in setting compensation levels, taking into account the following: Pay competitiveness in the context of the marketplace for executive talent. Our Compensation Committee considers market trends and practices in determining pay levels and compensation design to ensure that compensation is appropriately positioned to attract and retain talented executives and that our costs are sustainable relative to peers. Internal equity, including compensation that reflects the responsibilities and relative complexity of the executive’s position within Envista. To ensure that the most senior executives are held most accountable for long-term operating results and changes in stockholder value, the Compensation Committee believes that both the amount and “at-risk” nature of compensation should increase with the relative complexity and significance of an executive’s position. Our performance, along with the executive’s performance and contributions. Our cash incentive compensation varies annually to reflect near-term changes in operating and financial results. Our long-term compensation is closely aligned with long-term stockholder value creation, both by tying the ultimate value of the awards to the stock price and because of the length of time executives are required to hold the awards before realizing their value. The executive’s performance and individual contributions toward our business objectives are also incorporated in the Compensation Committee’s decision-making process.
Analysis of 2023 Executive Compensation
Analysis of 2023 Executive Compensation The vast majority of our senior executives’ total target compensation is performance based and variable in nature (approximately 86% for our CEO and an average of approximately 68% for our other NEOs). In 2023, long-term incentives were awarded 60% in performance stock units (“PSUs”), 20% in stock options and 20% in time-based RSUs for Mr. Aghdaei and 50% in PSUs, 25% in stock options and 25% in time-based RSUs for our other NEOs, other than Mr. Keller, who received a long-term incentive award comprised of a mix of 50% stock options and 50% time-based RSUs, when he was serving as our VP, Investor Relations. The PSUs will vest based on achievement of identified performance measures over a three-year performance period, and the stock options and time-based RSUs vest ratably over a three-year period - see “Long-Term Incentive Compensation” for details. The following chart reflects components of compensation at target, as described in “Executive Compensation Tables —Agreements with our NEOs.” The components of our executive compensation program are intended to support our human capital strategy and to further stockholder interests as follows:
Analysis of 2023 Executive Compensation
| ELEMENT | FORM OF COMPENSATION | PRIMARY OBJECTIVES | | Base Salary | Cash | •Help attract and retain executive talent. •Balance pay-at-risk components by providing a stable source of income. •Recognize day-to-day role and scope of responsibility. | | Annual Incentive Compensation | Cash | •Align executives with key short-term strategic and operational initiatives. •Reward performance on key annual financial measures, including core sales growth, profitability and cash flow generation. •Motivate and reward teamwork and individual performance. | | Long-Term Incentive Compensation | PSUs Stock Options RSUs | •Drive sustainable performance that delivers value to stockholders over the long-term. •Provide direct alignment to stock price appreciation. •Promote the long-term retention of our executive officers. •Align the interest of the executive with those of the stockholders. •PSUs reward performance on key financial measures, including core sales growth and adjusted EBITDA margin, measured over a three-year period, as modified by relative total stockholder return over a three-year period. | | Other Compensation | Employee Benefits Perquisites Severance | •Provide a competitive compensation package. •Reinforce alignment with stockholder interests through deferrals in Company stock and, also, retention through vesting restrictions (e.g., ECP & EDIP). •Support corporate objectives (e.g., relocation and tax equalization benefits). |
Annual Incentive Compensation
Annual Incentive Compensation
Overview
Overview We provide annual incentives to our NEOs under our Executive Incentive Compensation Plan (the “ICP”). The ICP provides cash bonuses to participants based on the achievement of annual performance metrics relating to our business and the participant’s personal performance. In 2023, the target bonus for each NEO was equal to the executive’s base salary as of December 31, 2023 multiplied by the relevant target award percentage. The 2023 actual bonus earned was equal to the target bonus multiplied by an overall weighted factor, which incorporated a Company Financial Factor (“CFF”) as well as a Personal Performance Factor (“PPF”), described in more detail below. The diagram below illustrates the 2023 annual incentive award opportunities: *As discussed in more detail under “Company Financial Factor” below, financial achievement for our operating company leaders is based on operating company financial performance and overall Envista financial performance, equally weighted. Our approach to 2023 incentive design emphasizes company-wide financial results and teamwork while also rewarding business financial results and progress against personal objectives and strategic priorities. In establishing annual incentive award opportunities for 2023, our Compensation Committee established two of the same metrics and weights used in 2022 for annual incentive compensation (core sales growth weighted at 50% and free cash flow ratio weighted at 10%) and replaced adjusted EPS with adjusted EBITDA margin, weighted at 40%. The Compensation Committee decided to include adjusted EBITDA margin rather than adjusted EPS in 2023 due to the concern that adjusted EPS would have greater volatility and uncertainty based on external factors, such as inflation and rising interest rates, and greater ability of ICP participants to influence adjusted EBITDA margin performance through day-to-day decision making, thus more directly tying pay for performance within the participants’ control, which plays an important role in employee recruitment and retention. Highlights of our approach to rewarding company-wide performance in the form of the Company Financial Factor, which constitutes 75% of the annual incentive opportunity, are as follows: Core sales growth, adjusted EBITDA margin and free cash flow ratio are not prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures and insight into how these non-GAAP measures are considered by management, please see Appendix A. Individual performance in the form of Strategic Priorities/Personal Performance Factor constitutes 25% of the annual incentive opportunity and reflects the executive’s execution against operational and personal goals for the year, overall leadership effectiveness, overall financial performance, and, for executives managing a business, operating performance for that business. Our Compensation Committee maintains discretion in determining incentive payouts for each executive officer. We believe that such discretion is set at a reasonable level, strengthens the effectiveness of our compensation programs by allowing performance differentiation among our leadership team and enables the Compensation Committee to incorporate risk mitigation and unanticipated developments in determining payouts.
Company Financial Factor (“CFF”)
| Metric | Threshold (50% Payout) | Target (100% Payout) | Maximum (200% Payout) | Actual 2023 | Achievement | Weight | Payout/ Weighted Achievement | | Core Sales Growth (YoY %) | 0.5% | 2.5% | 4.5% | (0.4)% | 0% | 50.0% | 0% | | Adjusted EBITDA (%) | 19.0% | 20.5% | 21% | 18.1% | 0% | 40.0% | 0% | | Adjusted Free Cash Flow to Adjusted Net Income Ratio | 85.0% | 105.0% | 135.0% | 83.0% | 0% | 10.0% | 0% | | Envista CFF | | | | | | | 0% |
Company Financial Factor (“CFF”)
| Metric | Achievement | Weight | Payout/Weighted Achievement | | Core Sales Growth | 105% | 50% | 53% | | Operating Profit | 76% | 40% | 30% | | Working Capital Turnover | 99% | 10% | 10% | | Orthodontics CFF | | | 93% |
Company Financial Factor (“CFF”)
| Metric | Achievement | Weight | Payout/Weighted Achievement | | Core Sales Growth | 0% | 50% | 0% | | Operating Profit | 82% | 40% | 33% | | Working Capital Turnover | 0% | 10% | 0% | | Nobel Biocare CFF | | | 33% |
Personal Performance Factor (“PPF”) & Individual Payouts
Personal Performance Factor (“PPF”) & Individual Payouts Following the end of 2023, the Compensation Committee used its judgment and the recommendations of Mr. Aghdaei to determine for each executive a PPF between 0% and 150%. The Compensation Committee did not assign a PPF for Mr. Aghdaei. With respect to the other NEOs, the average PPF assigned by the Compensation Committee was 92.5%. Our Compensation Committee has discretion in determining the PPF of each executive officer, which is an important risk-mitigating element to our compensation program. The target percentages for our NEOs as a percentage of base salary were as follows: Mr. Aghdaei, 125%; Mr. Keller, 45%; Mr. Conley, 70%; Mr. Eriksson, 70%; and Mr. Nance, 60%. While the Incentive Compensation Plan permitted a payout to Messrs. Keller and Nance based on the combined weighted CFF and PPF, the Compensation Committee exercised discretion to approve a $0 payout for those individuals to align with Envista’s 0% CFF. Because our OpCos’ performance resulted in positive CFFs, the Compensation Committee approved Incentive Compensation Plan payouts for Messrs. Conley and Eriksson. Accordingly, the bonus target amounts, relevant CFF and PPF for each eligible NEO and non-equity Incentive Compensation Plan payouts for 2023 are as follows:
Personal Performance Factor (“PPF”) & Individual Payouts
| NAMED EXECUTIVE OFFICER(1) | 2023 TARGET ($) | WEIGHTED CFF(2) | PPF | 2023 PAYOUT (% OF TARGET) | 2023 PAYOUT ($)(3) | | Amir Aghdaei | $1,375,000 | 0% | — | 0% | $0 | | Stephen Keller | $184,500 | 0% | 1.00 | 0% | $0 | | Eric Conley | $350,000 | 46.0% | 1.00 | 60.0% | $208,250 | | Patrik Eriksson(4) | $385,000 | 16.0% | 0.60 | 27.0% | $103,950 | | Mark Nance | $315,000 | 0% | 1.10 | 0% | $0 |
Personal Performance Factor (“PPF”) & Individual Payouts
(1)Mr. Yu was not eligible for an Incentive Compensation Plan payout for 2023 due to his voluntary departure from the Company in September 2023. Mr. Kyrillos received a pro rata portion of his 2023 ICP (assuming 100% for the CFF and 100% for the PPF) after his departure from the Company effective June 30, 2023, pursuant to the terms of the Severance and Change in Control Plan and his separation agreement with the Company. See “Executive Compensation Tables—Agreements with our NEOs” below for additional information. (2)For Messrs. Aghdaei, Keller and Nance, the weighted CFF is solely based on the CFF for all of Envista (0%). For Mr. Conley, the weighted CFF is based 50% on the CFF for Orthodontics (93%) and 50% on the CFF for all of Envista (0%). For Mr. Eriksson, the weighted CFF is based 50% on the CFF for Nobel Biocare (33%) and 50% on the CFF for all of Envista (0%). (3)Reflects Compensation Committee discretion to pay out at $0 for Messrs. Aghdaei, Keller and Nance to align with Envista’s 0% CFF. (4)Pursuant to the terms of the Severance and Change in Control Plan and Mr. Eriksson’s separation agreement with the Company, Mr. Eriksson was entitled to a pro rata portion of his 2023 ICP, based on actual performance. Since his employment terminated effective December 31, 2023, Mr. Eriksson’s pro rata bonus was the same as his full year bonus. See “Executive Compensation Tables—Agreements with our NEOs” and “Executive Compensation Tables—Employee Benefit Plans” below for additional information.
Long-Term Incentive Compensation
Long-Term Incentive Compensation
Annual Equity Awards
Annual Equity Awards The annual equity awards granted to our NEOs are intended to align the NEOs’ compensation with market levels of compensation within our peer group and, also, provide enhanced performance and retention incentives. The target values and associated vesting periods reflect the increases in the value of the long-term incentive awards for certain of our NEOs based on Envista’s review of peer and market data, along with 2022 personal performance and the fact that performance-based equity awards in the form of PSUs comprise at least half of the NEOs’ total long-term incentive value, as shown below:
Annual Equity Awards
| FORM OF AWARD | KEY TERMS | | PSUs | • Contingent on core sales growth rate and adjusted EBITDA margin (which are independent goals for the 2023 grants), subject to further adjustment by the Company’s relative TSR versus S&P 400 Health Care Sector Index over a three-year performance period, as described below. | | Stock Options | • Ratable vesting on each anniversary of the grant date over three years. • Exercise price based on the closing price on date of grant. | | RSUs | • Ratable vesting on each anniversary of the grant date over three years. |
Annual Equity Awards
On February 25, 2023, our Compensation Committee granted equity awards to the NEOs as follows:
Annual Equity Awards
| NAMED EXECUTIVE OFFICER | VALUE OF AWARD(1) | TARGET PSUs | STOCK OPTIONS(2) | TIME-BASED RSUs | | Amir Aghdaei | $5,200,000 | 74,095 | 65,250 | 27,190 | | Stephen Keller | $250,000 | — | 7,850 | 3,270 | | Eric Conley | $700,000 | 8,315 | 10,980 | 4,580 | | Patrik Eriksson(3) | $850,000 | 10,095 | 13,340 | 5,560 | | Mark Nance | $950,000 | 11,280 | 14,910 | 6,210 | | Howard Yu(4) | $1,575,000 | 18,705 | 24,710 | 10,295 | | Jean-Claude Kyrillos(4) | $850,000 | 10,095 | 13,340 | 5,560 |
Annual Equity Awards
(1) These are the values assigned to the award for compensation purposes. The values placed on the option portion of the award in the “Summary Compensation Table” and the “Grants of Plan-Based Awards for Fiscal 2023” table differ from the values shown above in line with the requirements of Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 718. (2) The exercise price for the options was $38.25, the closing price of our Common Stock on the date of grant. (3) Mr. Eriksson’s departure from the Company qualified as an “early retirement” under the 2019 Plan, which provides for continued vesting of a pro rata portion of unvested PSUs (subject to actual performance), stock options, and RSUs. (4) Messrs. Yu and Kyrillos forfeited all unvested outstanding equity awards upon their departures from the Company. The PSUs can be earned and vest contingent on the achievement of three-year performance goals, which relate to core sales growth rate and adjusted EBITDA margin (which are independent goals for the 2023 grants), and subject to further adjustment by the Company’s TSR performance over a three-year period compared to the Standard & Poor’s 400 Health Care Sector Index. The NEOs can earn between 0% to 200% of the target number of PSUs, depending on the level of performance achieved. Core sales growth rate is determined on a currency neutral basis excluding the first-year impact of any acquisitions and the impact of any divestitures. Adjusted EBITDA margin is the Company’s adjusted EBITDA, calculated consistent with how the Company reports adjusted EBITDA to the public, divided by the Company’s total net sales. Core sales growth and adjusted EBITDA margin were considered appropriate metrics given their importance to our growth strategy. TSR percentile rank acts as a modifier to core sales growth and adjusted EBITDA margin as a means to validate that the outcome is directionally aligned with our returns to stockholders during the same performance period. Our Compensation Committee establishes separate performance goals for each annual equity award.
Special One-Time Equity Award to Eric Conley
Special One-Time Equity Award to Eric Conley On February 25, 2023, the Compensation Committee approved a special one-time equity award for Mr. Conley in connection with his promotion and appointment as an executive officer and to encourage retention and leadership consistency for the Company’s Orthodontics business. The details of Mr. Conley’s special one-time promotion award are as follows:
Special One-Time Equity Award to Eric Conley
| NAMED EXECUTIVE OFFICER | DATE OF GRANT | VALUE OF AWARD | TIME-BASED RSUs | VESTING SCHEDULE | | Eric Conley | 02/25/2023 | $650,000 | 16,995 | 50% on February 25, 2025 and 50% on February 25, 2026, subject to continued service through each such date. |
Other Benefits
Other Benefits Our US-based executive officers, including the NEOs, participate in broad-based employee benefit plans, which are generally available to all U.S. salaried employees and do not discriminate in favor of our NEOs. These include subsidized health and dental insurance, AD&D and life insurance coverage, participation in the Envista Savings Plan as well as participation in employee-paid benefits such as vision insurance and flexible spending accounts. Additionally, US-based executive officers are eligible to defer a portion of their salary and bonus in our Deferred Compensation Plan which also covers other senior employees. Mr. Aghdaei participates, and prior to his departure, Mr. Eriksson participated, in our Executive Deferred Incentive Program (“EDIP”), a plan which is closed to new entrants, and each received a contribution in Envista notional shares in 2023 with respect to their participation in this plan. Messrs. Keller, Conley and Nance are eligible to participate in our Excess Contribution Program (“ECP”), which provides for excess matching and non-elective contributions in Envista notional shares. Messrs. Yu and Kyrillos also participated in the ECP prior to their departures. US-based executives also participate in the Envista Holdings Corporation Severance and Change in Control Plan. See “Executive Compensation Tables—Employee Benefit Plans” below for additional information on these benefits.
2024 Executive Compensation Developments
| NAMED EXECUTIVE OFFICER | DATE OF GRANT | VALUE OF AWARD | TIME-BASED RSUs | VESTING SCHEDULE | | Stephen Keller | 2/25/2024 | $100,000 | 4,420 | RSUs vest ratably on each anniversary of the grant date over three years, subject to continued service through each such date | | Mark Nance | 2/25/2024 | $200,000 | 8,835 | |
2024 Executive Compensation Developments
• On February 25, 2024, our Compensation Committee granted annual equity awards to the NEOs consisting of 60% PSUs, 20% stock options and 20% time-based RSUs for Mr. Aghdaei; 50% stock options and 50% time-based RSUs for Mr. Keller given that his role as Principal Financial Officer is temporary; and 50% PSUs, 25% stock options and 25% time-based RSUs for our other NEOs. The PSUs will vest based on achievement of identified performance measures over a three-year performance period, and the stock options and time-based RSUs vest ratably over a three-year period. •On March 5, 2024, we entered into a letter agreement with Mr. Keller providing for the following compensation terms for his continuing role as our Principal Financial Officer on an interim basis: ◦Mr. Keller will stay in his role as Principal Financial Officer on an interim basis until a Chief Financial Officer is appointed, at which time, Mr. Keller will be appointed to another leadership position within Envista. ◦Base salary increase from $410,000 to $460,000. ◦Target annual bonus increase from 45% to 50% of base salary. ◦Subject to approval by the Compensation Committee, a one-time retention equity award valued at $500,000 comprised of time-based RSUs, vesting ratably on each anniversary of the date of grant over three years, to be granted at the Compensation Committee’s next meeting, if approved. ◦A cash retention bonus in the amount of $400,000, to be split into two payments of $200,000 each, one in April 2024 and the other in January 2025, subject to continued employment on each such dates, and subject to repayment if Mr. Keller voluntarily terminates his employment or is terminated by the Company for cause prior to October 1, 2025, in the case of the first installment, and January 1, 2026, in the case of the second installment.
Compensation Peer Group Analysis
Compensation Peer Group Analysis Each year, the Compensation Committee works with its independent compensation consultant, FW Cook, to determine appropriate peer companies for benchmarking our executive compensation program. FW Cook uses the following guidelines in recommending a peer group to the Compensation Committee: •The extent to which such companies compete with us in one or more lines of business and for executive talent; and •Comparability of size, scope and complexity (including revenues, market capitalization, net income, total assets and number of employees). •Of note, peer selection is challenging given that there is a limited number of companies operating solely within the dental equipment space, requiring consideration of size-comparable companies operating within similar industries. In May 2023, FW Cook reviewed the Company’s peer group for purposes of evaluating our compensation decisions for our executive officers and non-employee directors and recommended no changes to the peer group. Based on the recommendations of FW Cook, our Compensation Committee adopted a compensation peer group consisting of the following companies:
Compensation Peer Group Analysis
| Align Technology, Inc. | Henry Schein, Inc. | NuVasive, Inc. | | CONMED Corporation | Hologic, Inc. | Patterson Companies, Inc. | | The Cooper Companies, Inc. | ICU Medical, Inc. | Revvity, Inc. | | DENTSPLY SIRONA Inc. | Integer Holdings Corporation | STERIS plc | | Enovis Corporation | Integra LifeSciences Holdings Corp. | Teleflex Incorporated |
Compensation Peer Group Analysis
While our Compensation Committee considers the data from the peer group helpful in assessing our competitive position, our Compensation Committee refers to other resources, including published compensation data from other surveys and from public compensation data for competitors to one or more of our operating companies in an effort to ensure our compensation program is competitive. In addition to compensation data, the Compensation Committee considers pay for performance and long-term value creation objectives in determining the compensation for our executive officers that best aligns management’s interests with those of our stockholders.
Risk Considerations and Review of Executive Compensation Practices
| ATTRIBUTE | RISK-MITIGATING EFFECT | | Incentive compensation programs feature multiple, complementary performance measures aligned with business strategy | Mitigates incentive to over-perform with respect to any particular metric at the expense of other metrics and/or to play accounting games. The presence of strategic metrics in the annual incentive plan ensures that the Compensation Committee retains discretion and the focus is not exclusively financial. | | Long-term incentives balance options and full-value awards, and incorporate competitive vesting periods | Upside from options is balanced by the presence of downside risk inherent in full value awards such as RSUs. The introduction of PSUs in 2022 (and related down weighting of options and time-based RSUs) provide upside leverage and downside protection. Multi-year vesting periods ensure that executives will not benefit excessively from short-run spikes in the stock price. | | Rigorous, no-fault clawback policy that is triggered even in the absence of wrongdoing | Ensures executives remain exposed to risks faced by the Company’s owners under all circumstances. Helps support a culture of “no excuses.” | | Stock ownership requirements for all executive officers | Ensures executives build up their exposure to risks faced by the Company’s owners over time. The Compensation Committee reviews requirements and compliance on an annual basis and may incorporate these in setting compensation opportunity and granting stock awards. | | No hedging of Envista securities permitted | Prevents executives from reducing risks by entering into financial contracts which offset their risk and/or exposure to the Company. | | Independent compensation consultant that performs no other services for the Company | Ensures the Compensation Committee and the Board receive broad market information about market practices and trends. Helps ensure advice will not be influenced by conflicts of interest. | | Executive Officer payouts are approved by the Compensation Committee | Incentive calculations are reviewed and approved by the Compensation Committee. The Compensation Committee also reviews and approves objectives and performance and ensures that they are set at challenging yet achievable levels. |
Summary Compensation Table
Summary Compensation Table The Summary Compensation Table and notes show all compensation paid to or earned by each of our NEOs for 2023, 2022 and 2021.
Summary Compensation Table
| NAME AND PRINCIPAL POSITION (1) | YEAR | SALARY ($)(2) | BONUS ($) | STOCK AWARDS ($)(3) | OPTION AWARDS ($)(3) | NON-EQUITY INCENTIVE PLAN COMPENSATION ($)(4) | ALL OTHER COMPENSATION ($)(5) | TOTAL ($) | | Amir Aghdaei, President & CEO | 2023 | $1,100,000 | $— | $4,160,158 | $1,040,020 | $— | $759,147(6) | $7,059,325 | | | 2022 | $1,100,000 | $— | $4,080,220 | $1,020,101 | $725,313 | $1,598,098 | $8,523,732 | | | 2021 | $1,100,000 | $— | $2,350,004 | $2,350,018 | $2,268,750 | $1,130,976 | $9,199,748 | | Stephen Keller Principal Financial Officer, effective September 22, 2023 | 2023 | $410,000 | $— | $125,078 | $125,121 | $— | $43,728(7) | $703,927 | | Eric Conley President, Orthodontics | 2023 | $500,000 | $— | $1,175,389 | $175,010 | $208,250 | $58,612(7) | $2,117,261 | | Patrik Eriksson, SVP and President of Nobel Biocare, until December 31, 2023 | 2023 | $550,000 | $— | $637,770 | $212,626 | $103,950 | $97,260(7) | $1,601,606 | | | 2022 | $550,000 | $— | $637,582 | $212,579 | $203,088 | $81,519 | $1,684,768 | | | 2021 | $550,000 | $— | $425,118 | $425,032 | $532,263 | $86,598 | $2,019,011 | | Mark Nance, SVP and General Counsel | 2023 | $525,000 | $— | $712,534 | $237,650 | $— | $67,956(7) | $1,543,140 | | | 2022 | $525,000 | $— | $675,295 | $225,104 | $174,038 | $54,598 | $1,654,035 | | | 2021 | $525,000 | $— | $350,186 | $350,080 | $519,750 | $50,486 | $1,795,502 | | Howard Yu, Senior Vice President and CFO, until September 22, 2023 | 2023 | $550,000 | $— | $1,181,452 | $393,853 | $— | $113,522(8) | $2,238,827 | | | 2022 | $525,000 | $— | $1,125,063 | $375,058 | $217,547 | $99,595 | $2,342,263 | | | 2021 | $525,000 | $— | $500,049 | $500,086 | $639,844 | $62,751 | $2,227,730 | | Jean-Claude Kyrillos, SVP and President, Diagnostics and Digital Solutions, until June 30, 2023 | 2023 | $525,000 | $— | $637,770 | $212,626 | $— | $473,796(9) | $1,849,192 | | | 2022 | $525,000 | $— | $637,582 | $212,579 | $229,688 | $59,315 | $1,664,164 | | | 2021 | $475,000 | $— | $425,118 | $2,425,059 | $497,503 | $32,628 | $3,855,308 |
Summary Compensation Table
(1)All amounts presented in the Summary Compensation Table, and in the supporting tables that follow, are expressed in U.S. dollars. (2)Includes the following amounts deferred into the Executive Deferred Incentive Program and Deferred Compensation Plan. See “Employee Benefit Plans—Supplemental Retirement Program” for a description of our deferred compensation arrangements and the transfer from the Danaher plans to their Envista equivalents:
Summary Compensation Table
| | | AMOUNT OF SALARY DEFERRED INTO PLAN | | | AMOUNT OF NON-EQUITY INCENTIVE COMPENSATION DEFERRED INTO PLAN | | | | NAME | PLAN | 2023 | 2022 | 2021 | 2023 | 2022 | 2021 | | Amir Aghdaei | DCP | $55,000 | $55,000 | $55,000 | $72,531 | $226,875 | $137,500 | | Stephen Keller | DCP | $34,530 | $37,349 | $— | $8,340 | $32,193 | $— | | Eric Conley | DCP | $39,846 | $45,000 | $— | $151,875 | $116,640 | $— | | Patrik Eriksson | DCP | $— | $— | $— | $101,544 | $266,132 | $60,157 | | Mark Nance | DCP | $52,500 | $52,500 | $52,500 | $43,510 | $129,938 | $31,500 | | Howard Yu | DCP | $63,317 | $52,500 | $52,500 | $54,387 | $127,969 | $27,563 | | Jean-Claude Kyrillos | DCP | $13,125 | $— | $— | $— | $— | $16,919 |
Summary Compensation Table
(3)These amounts represent the aggregate grant date fair value of all equity awards made in the applicable year computed in accordance with ASC Topic 718. As such, they do not correspond to the actual economic value that may be received by our NEOs from these awards. The “Stock Awards” column equals the aggregate grant date fair value of all RSUs and PSUs granted during the relevant year, as applicable. The grant date fair value for RSUs is calculated as the number of RSUs multiplied by the closing price of the Common Stock on the date of grant. For PSUs, we are required to report the PSU awards at the beginning of the three-year performance cycle (in the year in which the PSU awards were granted), even though they will not be paid (if at all) until the end of the performance period. The amounts shown assume performance at target. The PSUs are paid only if performance conditions are met, and the final payment amount will range from 0% to 200% of the stated target. See the “Grants of Plan-Based Awards for Fiscal 2023” table below for the threshold, target, and maximum amounts that can be earned. With respect to stock option grants shown in the “Options Awards” column, the grant date fair value has been calculated using the Black-Scholes option pricing model. Pursuant to Securities and Exchange Commission rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Additional information about the assumptions that we used when valuing equity awards is set forth in our Annual Report on Form 10-K in Note 17 to the Consolidated Financial Statements for the 2023 fiscal year. (4)Additional information regarding these payments appear under the heading “Annual Incentive Compensation” in the CD&A. (5)The following table sets out the 401(k), EDIP, and ECP contributions made to our NEOs’ accounts for 2023, which are included in “All Other Compensation.” EDIP and ECP contributions are in Company stock and are converted to notional phantom shares by dividing the relevant closing price of the Company’s stock.
Summary Compensation Table
| NAME | COMPANY 401(K) CONTRIBUTIONS ($) | COMPANY EDIP CONTRIBUTIONS ($) | COMPANY ECP CONTRIBUTIONS ($) | | Amir Aghdaei | $22,460 | $198,000 | $— | | Stephen Keller | $22,460 | $— | $21,268 | | Eric Conley | $22,460 | $— | $36,152 | | Patrik Eriksson | $22,460 | $74,800 | $— | | Mark Nance | $16,966 | $— | $50,990 | | Howard Yu | $22,460 | $— | $58,944 | | Jean-Claude Kyrillos | $22,460 | $— | $20,100 |
Summary Compensation Table
(6)$538,687 consists of tax equalization related to Mr. Aghdaei’s prior Danaher assignment in Germany, reflecting $139,280 in foreign and local tax payments made on Mr. Aghdaei’s behalf, $115,250 in tax preparation fees paid in 2023 for tax years 2020-2023 and $284,157 in related gross-ups. See “Other Compensation—Perquisites” on page 36 for additional information about the legacy Danaher tax equalization benefits paid to certain of our NEOs. Also includes 401(k) and EDIP contributions as detailed in Footnote 5. (7)Includes 401(k) and EDIP contributions as detailed in Footnote 5. (8)$32,118 relates to tax equalization (including a gross up in the amount of $10,021), reflecting $19,097 in Swiss income tax payments made on Mr. Yu’s behalf and $3,000 in tax preparation fees. Also includes 401(k) and ECP contributions as detailed in Footnote 5. (9)Includes $431,236 in severance pay pursuant to the terms of the Envista Holdings Corporation Severance and Change in Control Plan and Mr. Kyrillos’ separation agreement with the Company. Also includes 401(k) and ECP contributions as detailed in Footnote 5.
Grants of Plan-Based Awards for Fiscal 2023
Grants of Plan-Based Awards for Fiscal 2023 The following table sets forth certain information regarding grants of plan-based awards to our NEOs in 2023 under our compensation programs and plans.
Grants of Plan-Based Awards for Fiscal 2023
| NAME | TYPE OF AWARD | GRANT DATE | ESTIMATED FUTURE PAYOUTS UNDER NON-EQUITY INCENTIVE PLAN AWARDS (1) | | | ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS (2) | | | ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS (#) (2) | ALL OTHER OPTION AWARDS: NUMBER OF SECURITIES UNDERLYING OPTIONS (#) (2) | EXERCISE OR BASE PRICE OF OPTION AWARDS ($/SHARE) | GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS ($) (4) | | | | | THRESHOLD ($) (3) | TARGET ($) | MAXIMUM ($) | THRESHOLD (#) | TARGET (#) | MAXIMUM (#) | | | | | | Amir Aghdaei | Annual cash incentive compensation | | $515,625 | $1,375,000 | $2,750,000 | — | — | — | | — | — | — | | | Stock options | 2/25/2023 | — | — | — | — | — | — | | 65,250 | $38.25 | $1,040,020 | | | Restricted stock units | 2/25/2023 | — | — | — | — | — | — | 27,190 | — | — | $1,040,018 | | | Performance stock units | 2/25/2023 | — | — | — | 27,786 | 74,095 | 148,190 | | — | — | $3,120,140 | | Stephen Keller | Annual cash incentive compensation | | $69,188 | $184,500 | $369,000 | — | — | — | | — | — | — | | | Stock options | 2/25/2023 | — | — | — | — | — | — | | 7,850 | $38.25 | $125,121 | | | Restricted stock units | 2/25/2023 | — | — | — | — | — | — | 3,270 | — | — | $125,078 | | | Performance stock units | 2/25/2023 | — | — | — | — | — | — | | — | — | — | | Eric Conley | Annual cash incentive compensation | | $131,250 | $350,000 | $700,000 | — | — | — | | — | — | — | | | Stock options | 2/25/2023 | — | — | — | — | — | — | | 10,980 | $38.25 | $175,010 | | | Restricted stock units | 2/25/2023 | — | — | — | — | — | — | 4,580 | — | — | $175,185 | | | Restricted stock units | 2/25/2023 | — | — | — | — | — | — | 16,995 | — | — | $650,059 | | | Performance stock units | 2/25/2023 | — | — | — | 3,118 | 8,315 | 16,630 | | — | — | $350,145 | | Patrik Eriksson | Annual cash incentive compensation | | $144,375 | $385,000 | $770,000 | — | — | — | | — | — | — | | | Stock options | 2/25/2023 | — | — | — | — | — | — | | 13,340 | $38.25 | $212,626 | | | Restricted stock units | 2/25/2023 | — | — | — | — | — | — | 5,560 | — | — | $212,670 | | | Performance stock units | 2/25/2023 | — | — | — | 3,786 | 10,095 | 20,190 | | — | — | $425,100 | | Mark Nance | Annual cash incentive compensation | | $118,125 | $315,000 | $630,000 | — | — | — | | — | — | — | | | Stock options | 2/25/2023 | — | — | — | — | — | — | | 14,910 | $38.25 | $237,650 | | | Restricted stock units | 2/25/2023 | — | — | — | — | — | — | 6,210 | — | — | $237,533 | | | Performance stock units | 2/25/2023 | — | — | — | 4,230 | 11,280 | 22,560 | | — | — | $475,001 | | Howard Yu | Annual cash incentive compensation | | $154,688 | $412,500 | $825,000 | — | — | — | | — | — | — | | | Stock options | 2/25/2023 | — | — | — | — | — | — | | 24,710 | $38.25 | $393,853 | | | Restricted stock units | 2/25/2023 | — | — | — | — | — | — | 10,295 | — | — | $393,784 | | | Performance stock units | 2/25/2023 | — | — | — | 7,014 | 18,705 | 37,410 | | — | — | $787,668 | | Jean-Claude Kyrillos | Annual cash incentive compensation | | $137,813 | $367,500 | $735,000 | — | — | — | | — | — | — | | | Stock options | 2/25/2023 | — | — | — | — | — | — | | 13,340 | $38.25 | $212,626 | | | Restricted stock units | 2/25/2023 | — | — | — | — | — | — | 5,560 | — | — | $212,670 | | | Performance stock units | 2/25/2023 | — | — | — | 3,786 | 10,095 | 20,190 | | — | — | $425,100 |
Grants of Plan-Based Awards for Fiscal 2023
(1)These columns relate to 2023 cash award opportunities under the Company’s annual Incentive Compensation Plan. The actual amounts earned are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table above. (2)These columns relate to awards granted under the 2019 Plan. (3)No amount will be paid out with respect to any annual incentive plan opportunity if performance is below threshold. (4)See footnote 3 to the Summary Compensation Table above for a discussion of the calculation of grant date fair value for RSUs, PSUs and options.
Outstanding Equity Awards at 2023 Fiscal Year-End
Outstanding Equity Awards at 2023 Fiscal Year-End The following table summarizes the number of securities underlying outstanding equity awards for each of our NEOs as of December 31, 2023.
Outstanding Equity Awards at 2023 Fiscal Year-End
| | | Option Awards | | | | Stock Awards | | | | | NAME | GRANT DATE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) (1) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#) (2) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) (1) | | AMIR AGHDAEI | 2/25/2023 | — | 65,250 | $38.25 | 2/25/2033 | — | — | — | —(3) | | | 2/25/2023 | — | — | — | — | 27,190 | $654,191 | — | —(4) | | | 2/25/2023 | — | — | — | — | — | — | 37,048 | $891,375(5) | | | 2/25/2022 | 19,546 | 39,094 | $48.52 | 2/25/2032 | — | — | — | —(3) | | | 2/25/2022 | — | — | — | — | 14,017 | $337,249 | — | —(4) | | | 2/25/2022 | — | — | — | — | — | — | 28,653 | $689,391(6) | | | 2/25/2021 | 154,886 | 77,444 | $37.94 | 2/25/2031 | — | — | — | —(3) | | | 2/25/2021 | — | — | — | — | 20,647 | $496,767 | — | —(4) | | | 2/25/2020 | 188,052 | 125,368 | $26.50 | 2/25/2030 | — | — | — | —(7) | | | 2/25/2020 | — | — | — | — | 33,964 | $817,174 | — | —(8) | | | 9/17/2019 | 140,910 | 140,910 | $22.00 | 9/17/2029 | — | — | — | —(9) | | | 9/17/2019 | — | — | — | — | 35,228 | 847,586 | — | —(10) | | | 2/24/2019 | 71,502 | 35,758 | $21.76 | 2/24/2029 | — | — | — | —(11) | | | 2/24/2019 | — | — | — | — | 11,085 | $266,705 | — | —(12) | | | 7/15/2018 | 238,936 | — | $19.02 | 7/15/2028 | — | — | — | —(11) | | | 2/24/2018 | 112,790 | — | $19.04 | 2/24/2028 | — | — | — | —(11) | | | 2/24/2018 | 161,151 | — | $19.04 | 2/24/2028 | — | — | — | —(11) | | | 2/24/2017 | 2,195 | — | $16.51 | 2/24/2027 | — | — | — | —(11) | | STEPHEN KELLER | 2/25/2023 | — | 7,850 | $38.25 | 2/25/2033 | — | — | — | —(3) | | | 2/25/2023 | — | — | — | — | 3,270 | $78,676 | — | —(4) | | | 2/25/2022 | 2,156 | 4,314 | $48.52 | 2/25/2032 | — | — | — | —(3) | | | 2/25/2022 | — | — | — | — | 1,547 | $37,221 | — | —(4) | | | 2/25/2022 | — | — | — | — | 207 | $4,980 | — | —(4) | | | 8/25/2021 | — | — | — | — | 794 | $19,104 | — | —(4) | | | 2/25/2021 | 7,420 | 3,710 | $37.94 | 2/25/2031 | — | — | — | —(3) | | | 2/25/2021 | — | — | — | — | 990 | $23,819 | — | —(4) | | | 2/25/2020 | 9,408 | 6,272 | $26.50 | 2/25/2030 | — | — | — | —(7) | | | 2/25/2020 | — | — | — | — | 1,700 | $40,902 | — | —(8) | | ERIC CONLEY | 2/25/2023 | — | 10,980 | $38.25 | 2/25/2033 | — | — | — | —(3) | | | 2/25/2023 | — | — | — | — | 16,995 | $408,900 | — | —(13) | | | 2/25/2023 | — | — | — | — | 4,580 | $110,195 | — | —(4) | | | 2/25/2023 | — | — | — | — | — | — | 4,158 | $100,041(5) | | | 2/25/2022 | 2,300 | 4,600 | $48.52 | 2/25/2032 | — | — | — | —(3) | | | 2/25/2022 | — | — | — | — | 1,650 | $39,699 | — | —(4) | | | 2/25/2022 | — | — | — | — | — | — | 1,500 | $36,090(6) | | | 2/25/2021 | 13,186 | 6,594 | $37.94 | 2/25/2031 | — | — | — | —(3) | | | 2/25/2021 | — | — | — | — | 1,759 | $42,322 | — | —(4) | | | 5/25/2020 | 31,272 | 20,848 | $18.97 | 5/25/2030 | — | — | — | —(7) | | | 5/25/2020 | — | — | — | — | 5,272 | $126,844 | — | —(8) |
Outstanding Equity Awards at 2023 Fiscal Year-End
| | | Option Awards | | | | Stock Awards | | | | | NAME | GRANT DATE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) (1) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#) (2) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) (1) | | PATRIK J. ERIKSSON | 2/25/2023 | — | 7,474 | $38.25 | 12/31/2028 | — | — | — | —(3) | | | 2/25/2023 | — | — | — | — | 3,116 | $74,971 | — | —(4) | | | 2/25/2023 | — | — | — | — | — | — | 1,683 | $40,493(5) | | | 2/25/2022 | 4,073 | 6,507 | $48.52 | 12/31/2028 | — | — | — | —(3) | | | 2/25/2022 | — | — | — | — | 2,333 | $56,132 | — | —(4) | | | 2/25/2022 | — | — | — | — | — | — | 2,654 | $63,855(6) | | | 2/25/2021 | 28,013 | 13,618 | $37.94 | 12/31/2028 | — | — | — | —(3) | | | 2/25/2021 | — | — | — | — | 3,632 | $87,386 | — | —(4) | | | 2/25/2020 | 35,526 | 20,873 | $26.50 | 12/31/2028 | — | — | — | —(7) | | | 2/25/2020 | — | — | — | — | 5,655 | $136,059 | — | —(8) | | | 9/17/2019 | 15,910 | 13,789 | $22.00 | 12/31/2028 | — | — | — | —(9) | | | 9/17/2019 | — | — | — | — | 3,448 | $82,959 | — | —(10) | | | 2/24/2019 | 30,672 | 7,545 | $21.76 | 12/31/2028 | — | — | — | —(7) | | | 2/24/2019 | 30,672 | 7,545 | $21.76 | 12/31/2028 | — | — | — | —(7) | | | 2/24/2019 | — | — | — | — | 2,340 | $56,300 | — | —(8) | | | 2/24/2019 | — | — | — | — | 2,340 | $56,300 | — | —(8) | | | 2/24/2018 | 32,240 | — | $19.04 | 2/24/2028 | — | — | — | —(7) | | | 2/24/2018 | 40,327 | — | $19.04 | 2/24/2028 | — | — | — | —(7) | | | 2/24/2017 | 20,033 | — | $16.51 | 2/24/2027 | — | — | — | —(7) | | | 2/24/2016 | 14,654 | — | $12.65 | 2/24/2026 | — | — | — | —(7) | | | 2/24/2015 | 4,914 | — | $12.62 | 2/24/2025 | — | — | — | —(7) | | MARK NANCE | 2/25/2023 | — | 14,910 | $38.25 | 2/25/2033 | — | — | — | —(3) | | | 2/25/2023 | — | — | — | — | 6,210 | $149,413 | — | —(4) | | | 2/25/2023 | — | — | — | — | — | — | 5,640 | $135,698(5) | | | 2/25/2022 | 4,313 | 8,627 | $48.52 | 2/25/2032 | — | — | — | —(3) | | | 2/25/2022 | — | — | — | — | 3,094 | $74,442 | — | —(4) | | | 2/25/2022 | — | — | — | — | — | — | 4,215 | $101,413(6) | | | 2/25/2021 | 23,073 | 11,537 | $37.94 | 2/25/2031 | — | — | — | —(3) | | | 2/25/2021 | — | — | — | — | 3,077 | $74,033 | — | —(4) | | | 2/25/2020 | 16,716 | 16,716 | $26.50 | 2/25/2030 | — | — | — | —(7) | | | 2/25/2020 | — | — | — | — | 4,530 | $108,992 | — | —(8) | | | 7/15/2019 | 11,810 | 5,907 | $27.05 | 7/15/2029 | — | — | — | —(7) | | | 7/15/2019 | — | — | — | — | 1,828 | $43,982 | — | —(8) | | HOWARD YU | 2/25/2023 | — | — | $38.25 | 12/21/2023 | — | — | — | —(3) | | | 2/25/2023 | — | — | — | — | — | — | — | —(4) | | | 2/25/2023 | — | — | — | — | — | — | — | —(5) | | | 2/25/2022 | — | — | $48.52 | 12/21/2023 | — | — | — | —(3) | | | 2/25/2022 | — | — | — | — | — | — | — | —(4) | | | 2/25/2022 | — | — | — | — | — | — | — | —(6) | | | 2/25/2021 | — | — | $37.94 | 12/21/2023 | — | — | — | —(3) | | | 2/25/2021 | — | — | — | — | — | — | — | —(4) | | | 2/25/2020 | — | — | $26.50 | 12/21/2023 | — | — | — | —(7) | | | 2/25/2020 | — | — | — | — | — | — | — | —(8) | | | 9/17/2019 | — | — | $22.00 | 12/21/2023 | — | — | — | —(9) | | | 9/17/2019 | — | — | — | — | — | — | — | —(10) | | JEAN-CLAUDE KYRILLOS | 2/25/2023 | — | — | $38.25 | 9/28/2023 | — | — | — | —(3) | | | 2/25/2023 | — | — | — | — | — | — | — | —(4) | | | 2/25/2023 | — | — | — | — | — | — | — | —(5) | | | 2/25/2022 | — | — | $48.52 | 9/28/2023 | — | — | — | —(3) | | | 2/25/2022 | — | — | — | — | — | — | — | —(4) | | | 2/25/2022 | — | — | — | — | — | — | — | —(6) |
Outstanding Equity Awards at 2023 Fiscal Year-End
| | | Option Awards | | | | Stock Awards | | | | | NAME | GRANT DATE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) EXERCISABLE | NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS (#) UNEXERCISABLE | OPTION EXERCISE PRICE ($) | OPTION EXPIRATION DATE | NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED (#) | MARKET VALUE OF SHARES OR UNITS OF STOCK THAT HAVE NOT VESTED ($) (1) | EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#) (2) | EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED ($) (1) | | | 10/25/2021 | — | — | $38.46 | 9/28/2023 | — | — | — | —(14) | | | 2/25/2021 | — | — | $37.94 | 9/28/2023 | — | — | — | —(3) | | | 2/25/2021 | — | — | — | — | — | — | — | —(4) | | | 2/25/2020 | — | — | $26.50 | 9/28/2023 | — | — | — | —(7) | | | 2/25/2020 | — | — | — | — | — | — | — | —(8) |
Outstanding Equity Awards at 2023 Fiscal Year-End
(1)Market value is calculated based on the closing price of our Common Stock on December 29, 2023, the last trading day of the year, as reported on the NYSE ($24.06 per share), times the number of unvested shares. (2)The amounts shown represent the threshold amount of the PSUs for the 2022-2024 performance cycle and for the 2023-2025 performance cycle because our performance did not exceed the threshold performance level as of December 31, 2023. (3)One-third of the options granted become exercisable on each of the first, second and third anniversaries of the grant date. (4)One-third of the RSUs granted vests on each of the first, second and third anniversaries of the grant date. (5)The PSUs vest, if at all, upon the certification by the Compensation Committee of the performance conditions after the end of the 2023-2025 performance period, based on actual performance. (6)The PSUs vest, if at all, upon the certification by the Compensation Committee of the performance conditions after the end of the 2022-2024 performance period, based on actual performance. (7)20% of the options granted become exercisable on each of the first five anniversaries of the grant date. (8)20% of the RSUs granted vests on each of the first five anniversaries of the grant date. (9)50% of the options granted become exercisable on each of the fourth and fifth anniversaries of the grant date. (10)50% of the RSUs granted vests on each of the fourth and fifth anniversaries of the grant date. (11)One-third of the options granted become exercisable on each of the third, fourth and fifth anniversaries of the grant date. (12)One-third of the RSUs granted vests on each of the third, fourth and fifth anniversaries of the grant date. (13)50% of the RSUs granted vests on each of the second and third anniversaries of the grant date. (14)25% of the RSUs granted vests on each of the first four anniversaries of the grant date.
Option Exercises and Stock Vested During Fiscal 2023
Option Exercises and Stock Vested During Fiscal 2023 The following table summarizes stock option exercises and the vesting of RSU awards with respect to our NEOs in 2023.
Option Exercises and Stock Vested During Fiscal 2023
| | OPTION AWARDS | | STOCK AWARDS | | | NAME | NUMBER OF SHARES ACQUIRED ON EXERCISE (#) | VALUE REALIZED ON EXERCISE ($)(1) | NUMBER OF SHARES ACQUIRED ON VESTING (#) | VALUE REALIZED ON VESTING ($)(2) | | Amir Aghdaei | — | $— | 178,426 | $6,410,773 | | Stephen Keller | — | $— | 3,509 | $129,652 | | Eric Conley | — | $— | 5,219 | $185,656 | | Patrik Eriksson | — | $— | 21,926 | $801,365 | | Mark Nance | — | $— | 8,720 | $327,714 | | Howard Yu | 60,531 | $345,670 | 21,218 | $758,291 | | Jean-Claude Kyrillos | 28,212 | $95,656 | 7,743 | $296,170 |
Option Exercises and Stock Vested During Fiscal 2023
(1)Calculated by multiplying the number of corresponding shares acquired by the difference between the exercise price and the market price of the underlying Common Stock at the time of exercise. (2)Calculated by multiplying the number of corresponding shares acquired by the closing price of the Common Stock as reported on the NYSE on the vesting date (or on the last trading day prior to the vesting date if the vesting date was not a trading day).
2023 Nonqualified Deferred Compensation
2023 Nonqualified Deferred Compensation The table below sets forth for each NEO information regarding participation in the EDIP, DCP, and ECP. There were no withdrawals by or distributions to any of the NEOs from these plans in 2023.
2023 Nonqualified Deferred Compensation
| NAME | PLAN NAME | EXECUTIVE CONTRIBUTIONS IN LAST FY ($)(1) | REGISTRANT CONTRIBUTIONS IN LAST FY ($)(2) | AGGREGATE EARNINGS IN LAST FY ($)(3) | AGGREGATE BALANCE AT LAST FYE ($)(4) | | Amir Aghdaei | EDIP | $— | $198,000 | $280,620 | $7,113,106 | | | DCP/ECP | $127,531 | $— | $339,312 | $1,867,976 | | Stephen Keller | EDIP | $— | $— | $— | $— | | | DCP/ECP | $42,870 | $21,268 | $8,536 | $272,889 | | Eric Conley | EDIP | $— | $— | $— | $— | | | DCP/ECP | $191,721 | $36,152 | $30,917 | $459,676 | | Patrik Eriksson | EDIP | $— | $74,800 | $(161,806) | $2,285,953 | | | DCP/ECP | $101,544 | $— | $148,289 | $756,890 | | Mark Nance | EDIP | $— | $— | $— | $— | | | DCP/ECP | $96,010 | $50,990 | $9,985 | $565,399 | | Howard Yu | EDIP | $— | $— | $— | $— | | | DCP/ECP | $117,704 | $58,944 | $(9,739) | $540,244 | | Jean-Claude Kyrillos | EDIP | $— | $— | $— | $— | | | DCP/ECP | $13,125 | $20,100 | $(16,460) | $98,427 |
2023 Nonqualified Deferred Compensation
(1)Contributions to the DCP relate to deferrals from the 2022 annual incentive compensation in February 2023 and from the executive’s 2023 salary. (2)The amounts set forth in this column are included as 2023 compensation under the “All Other Compensation” column in the Summary Compensation Table. (3)Earnings represent returns on investments on fund alternatives which parallel those available to all employees under the 401(k) plan. Accordingly, these amounts are not considered above-market or preferential earnings for purposes of, and are not included in, the Summary Compensation Table. (4)These balances constitute the accumulation of employee deferrals, Company contributions and investment returns during the participation of these executives in these plans, and include service with both Danaher and Envista. Company contributions are included in the “All Other Compensation” column in the Summary Compensation Table in the year in which they were made.
Potential Payments Upon Termination or Change-of-Control as of 2023 Fiscal Year-End
Potential Payments Upon Termination or Change-of-Control as of 2023 Fiscal Year-End The following table describes the payments and benefits that each NEO would have been entitled to receive upon termination of employment under certain circumstances as of December 31, 2023. The amounts set forth below assume that the triggering event occurred on December 31, 2023. See “Employee Benefit Plans” for a description of the Envista Holdings Corporation Severance and Change in Control Plan providing for certain severance payments upon specified terminations without cause, resignations with good reason and upon and in connection with a change in control, each as defined under such plan. Where benefits are based on the market value of our Common Stock, we have used the closing price of our Common Stock as reported on the NYSE on December 29, 2023, the last trading day of the year ($24.06 per share). In addition to the amounts set forth below, upon any termination of employment, each executive would also be entitled to (1) receive all payments generally provided to salaried employees on a non-discriminatory basis on termination, such as life insurance proceeds (for any termination caused by death), unused vacation and 401(k) plan distributions, (2) receive accrued, vested balances under the EDIP or ECP (except that under the EDIP and ECP, if an employee’s employment terminates as a result of gross misconduct, the EDIP or ECP administrator may determine that the employee’s vesting percentage with respect to all employer contributions is zero), and (3) exercise vested stock options (except that under the terms of the 2019 Plan, all outstanding equity awards are terminated upon, and no employee can exercise any outstanding equity award after, termination for gross misconduct). The values reflected in the table below relating to the acceleration of stock options, RSUs and PSUs reflect the intrinsic value (that is, the value based on the price of our Common Stock, and in the case of stock options minus the exercise price) of the options, RSUs and PSUs that would have vested had the specified event occurred on December 31, 2023.
Potential Payments Upon Termination or Change-of-Control as of 2023 Fiscal Year-End
| | | TERMINATION EVENT | | | | | NAMED EXECUTIVE OFFICER | BENEFIT | TERMINATION WITHOUT CAUSE OR WITH GOOD REASON (NO CHANGE IN CONTROL) (1) | TERMINATION WITHOUT CAUSE OR WITH GOOD REASON (FOLLOWING A CHANGE IN CONTROL) | RETIREMENT (1) | DEATH (2) | | Amir Aghdaei | Acceleration of unvested stock options | $372,518 | $372,518 | $372,518 | $372,518 | | | Acceleration of unvested RSUs | $3,419,672 | $3,419,672 | $3,419,672 | $3,027,374 | | | Acceleration of unvested PSUs | $1,350,969 | $3,161,484 | $1,350,969 | $1,513,446 | | | Acceleration of unvested EDIP balance | $— | $— | $— | $— | | | Benefits continuation(3) | $29,790 | $29,790 | $— | $— | | | Cash severance(3) | $4,950,000 | $6,187,500 | $— | $— | | | Total: | $10,122,949 | $13,170,964 | $5,143,159 | $4,913,338 | | Stephen Keller | Acceleration of unvested stock options | $— | $— | $— | $— | | | Acceleration of unvested RSUs | $— | $204,702 | $— | $163,031 | | | Acceleration of unvested PSUs | $— | $— | $— | $— | | | Acceleration of unvested DCP Balance | $— | $— | $— | $13,137 | | | Benefits continuation(3) | $19,860 | $29,790 | $— | $— | | | Cash severance(3) | $594,500 | $891,750 | $— | $— | | | Total: | $614,360 | $1,126,242 | $— | $176,168 | | Eric Conley | Acceleration of unvested stock options | $— | $106,116 | $— | $106,116 | | | Acceleration of unvested RSUs | $— | $727,959 | $— | $427,330 | | | Acceleration of unvested PSUs | $— | $272,239 | $— | $114,838 | | | Acceleration of unvested DCP Balance | $— | $— | $— | $22,328 | | | Benefits continuation(3) | $19,860 | $29,790 | $— | $— | | | Cash severance(3) | $850,000 | $1,275,000 | $— | $— | | | Total: | $869,860 | $2,411,104 | $— | $670,612 | | Patrik Eriksson(4) | Acceleration of unvested stock options | $63,112 | $— | $— | $— | | | Acceleration of unvested RSUs | $550,108 | $— | $— | $— | | | Acceleration of unvested PSUs | $104,348 | $— | $— | $— | | | Acceleration of unvested EDIP balance | $— | $— | $— | $— | | | Benefits continuation | $22,000 | $— | $— | $— | | | Cash severance | $1,038,950 | $— | $— | $— | | | Total: | $1,778,518 | $— | $— | $— | | Mark Nance | Acceleration of unvested stock options | $— | $— | $— | $— | | | Acceleration of unvested RSUs | $— | $450,860 | $— | $369,465 | | | Acceleration of unvested PSUs | $— | $474,223 | $— | $225,707 | | | Acceleration of unvested DCP Balance | $— | $— | $— | $31,470 | | | Benefits continuation(3) | $6,389 | $9,583 | $— | $— | | | Cash severance(3) | $840,000 | $1,260,000 | $— | $— | | | Total: | $846,389 | $2,194,666 | $— | $626,642 | | Howard Yu (5) | Acceleration of unvested stock options | $— | $— | $— | $— | | | Acceleration of unvested RSUs | $— | $— | $— | $— | | | Acceleration of unvested PSUs | $— | $— | $— | $— | | | Acceleration of unvested DCP Balance | $— | $— | $— | $— | | | Benefits continuation | $— | $— | $— | $— | | | Cash severance | $— | $— | $— | $— | | | Total: | $— | $— | $— | $— |
Potential Payments Upon Termination or Change-of-Control as of 2023 Fiscal Year-End
| | | TERMINATION EVENT | | | | | NAMED EXECUTIVE OFFICER | BENEFIT | TERMINATION WITHOUT CAUSE OR WITH GOOD REASON (NO CHANGE IN CONTROL) (1) | TERMINATION WITHOUT CAUSE OR WITH GOOD REASON (FOLLOWING A CHANGE IN CONTROL) | RETIREMENT (1) | DEATH (2) | | Jean-Claude Kyrillos (6) | Acceleration of unvested stock options | $— | $— | $— | $— | | | Acceleration of unvested RSUs | $— | $— | $— | $— | | | Acceleration of unvested PSUs | $— | $— | $— | $— | | | Acceleration of unvested DCP Balance | $— | $— | $— | $— | | | Benefits continuation | $19,313 | $— | $— | $— | | | Cash severance | $1,076,250 | $— | $— | $— | | | Total: | $1,095,563 | $— | $— | $— |
Potential Payments Upon Termination or Change-of-Control as of 2023 Fiscal Year-End
(1) If Mr. Aghdaei had terminated without cause or with Good Reason or retired as of December 31, 2023, he would have qualified for “normal retirement” treatment under the terms of the 2019 Plan, which provides for continued vesting of all unvested stock options, RSUs and PSUs upon retirement. The PSU amount in this column assumes a payout amount of 50%. The actual amount will be determined by the actual performance payout (if any) at the end of the three year performance period. (2) The terms of the 2019 Plan provide for accelerated vesting of all unvested stock options, a pro rata portion of unvested RSUs and a pro rata portion of unvested target amount of PSUs upon death. Under the terms of the EDIP and the DCP, upon a participant’s death, the unvested portion of the Company contributions that have been credited to the participant’s EDIP or DCP account would immediately vest. (3) Please see “Agreements with our NEOs” and “Employee Benefit Plans” for a description of the cash payments each officer would be entitled to if we terminate the officer’s employment without cause, the officer resigns with good reason, qualifying terminations within 24 months of a Change in Control, as well as a description of the post-employment restrictive covenant obligations of each officer. The amounts set forth in the table assume that the officer would have executed our standard release in connection with any termination without cause. (4) Mr. Eriksson’s departure from the Company effective December 31, 2023 qualified as a termination without cause under the Severance and Change in Control Plan and as an “early retirement” under the 2019 Plan, which provides for continued vesting of a pro rata portion of unvested stock options, RSUs and PSUs as of the date of termination. The PSU amount assumes a payout of 50%. The actual amount will be determined by the actual performance payout (if any) at the end of the three year performance period. (5) Mr. Yu ceased serving as Chief Financial Officer effective September 22, 2023. The amounts in this table for Mr. Yu represent amounts actually paid to him as a result of his voluntary termination of employment ($0). (6) Mr. Kyrillos ceased serving as SVP and President; Diagnostics and Digital Solutions, effective June 30. 2023. The amounts in this table for Mr. Kyrillos represent amounts actually paid to him as a result of his termination of employment.
CEO Pay Ratio
CEO Pay Ratio We are providing this pay ratio disclosure in accordance with Item 402(u) of Regulation S-K promulgated under the Exchange Act. The pay ratio disclosed below is a reasonable estimate derived from our internal records using the methodology described below. This information may not be comparable to the ratio that any other company reports because other companies may have different employment and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their pay ratios. We identified a median employee as of November 1, 2023 (the “Median Employee”). In connection with determining the Median Employee, we considered only those employees that we employed as of November 1, 2023 (the “Determination Date”). In addition, in reliance on the “de minimis” exemption provided by Item 402(u) of Regulation S-K, we identified the median employee from an employee population that excluded the non-U.S. employees from each of the jurisdictions listed below. In compliance with the “de minimis” exemption, the 622 non-U.S. employees in the excluded countries constituted less than 5% of our 12,967 aggregate employees (comprised of 3,002 U.S. and 9,965 non-U.S. employees) as of the Determination Date.
CEO Pay Ratio
| Country | Employees in the Applicable Country as of November 1, 2023 | Country | Employees in the Applicable Country as of November 1, 2023 | | Australia | 85 | Lithuania | 11 | | India | 80 | Colombia | 10 | | United Kingdom | 79 | Norway | 9 | | Thailand | 44 | Indonesia | 8 | | Taiwan | 36 | Türkiye | 8 | | Poland | 35 | New Zealand | 5 | | Portugal | 30 | Ireland | 5 | | Hong Kong | 28 | Republic of Korea | 5 | | Chile | 26 | Estonia | 3 | | United Arab Emirates | 17 | Slovakia | 3 | | Singapore | 17 | Vietnam | 3 | | Denmark | 16 | Ukraine | 2 | | South Africa | 15 | Croatia | 2 | | Hungary | 13 | Malaysia | 2 | | Austria | 12 | Argentina | 1 | | Romania | 11 | Slovenia | 1 |
CEO Pay Ratio
We identified the Median Employee by examining the total cash compensation, including base salary, overtime, bonus and commission (excluding benefits), for each of the employees in such employee population (excluding the employees we describe above) who was employed as of the Determination Date. For non-U.S. employees that we paid in currency other than U.S. dollars, we applied the applicable currency exchange rate as of November 1, 2023. Mr. Aghdaei’s annual total compensation for 2023 was $7,059,325 as reflected in the Summary Compensation Table on page 43. The 2023 annual total compensation for the Median Employee, calculated in the same manner, was estimated to be $42,579. Therefore, our CEO to median employee pay ratio for 2023 is approximately 166 to 1.
Pay Versus Performance
Pay Versus Performance In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its compensation decisions for any of the years shown.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1)(2) | Average Summary Compensation Table Total for Non-PEO NEOs(1) | Average Compensation Actually Paid to Non-PEO NEOs(1)(2) | Total Shareholder Return | Peer Group Total Shareholder Return(3) | Net (Loss) Income (millions) | Adjusted EBITDA %(4) | | 2023 | $7,059,325 | $(1,816,558) | $1,675,659 | $(222,491) | $81.17 | $143.18 | $(100.2) | 18.1% | | 2022 | $8,523,732 | $(4,535,253) | $1,836,308 | $(42,128) | $113.60 | $140.29 | $243.1 | 20.1% | | 2021 | $9,199,748 | $28,844,127 | $2,474,388 | $4,661,522 | $152.02 | $143.09 | $340.5 | 19.7% | | 2020 | $7,370,894 | $14,441,335 | $1,640,642 | $2,321,660 | $113.80 | $113.45 | $33.3 | 13.0% |
Pay Versus Performance
(1)The PEO for 2023, 2022, 2021 and 2020 was Amir Aghdaei. The non-PEO NEOs for 2022, 2021 and 2020 were Howard Yu (Senior Vice President and Chief Financial Officer), Jean-Claude Kyrillos (Senior Vice President of Diagnostics and Digital Solutions), Patrik Eriksson (Senior Vice President, President of Nobel Biocare), and Mark Nance (Senior Vice President, General Counsel and Secretary). The non-PEO NEOs for 2023 were Mr. Yu, Mr. Kyrillos, Mr. Eriksson, Mr. Nance, Stephen Keller (Principal Financial Officer) and Eric Conley (Senior Vice President and President, Orthodontics). (2)The amounts shown in the Compensation Actually Paid columns have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table (“SCT”) Total with certain adjustments as described below.
Pay Versus Performance
| | | | Equity award adjustments | | | | | | Year | Executive(s) | SCT Total | Deduct grant date fair value of equity awards reported in SCT | Add year-end value of unvested equity awards granted in year | Change in value of unvested equity awards granted in prior years | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Change in value of equity awards granted in prior years which vested in year | | 2023 | PEO | $7,059,325 | $(5,200,178) | $1,613,810 | $(5,825,994) | | $536,479 | | | Non-PEO NEOs | $1,675,659 | $(971,147) | $212,290 | $(332,625) | $(891,449) | $84,781 | | 2022 | PEO | $8,523,732 | $(5,100,321) | $2,608,474 | $(11,166,139) | | $599,000 | | | Non-PEO NEOs | $1,836,308 | $(1,025,211) | $537,397 | $(1,446,374) | | $55,752 | | 2021 | PEO | $9,199,748 | $(4,700,022) | $6,694,551 | $14,514,792 | | $3,135,059 | | | Non-PEO NEOs | $2,474,388 | $(1,350,182) | $2,029,238 | $1,321,927 | | $186,151 | | 2020 | PEO | $7,370,894 | $(4,500,157) | $6,904,798 | $5,224,388 | | $(558,588) | | | Non-PEO NEOs | $1,640,642 | $(781,373) | $1,198,887 | $331,885 | | $(68,381) |
Pay Versus Performance
(3)Total shareholder return (“TSR”) is determined based on the value of an initial fixed investment of $100 on December 31, 2019. The Peer Group TSR set forth in this table utilizes the S&P 500 Health Care Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report on Form 10-K for the year ended December 31, 2023. Historical stock performance is not necessarily indicative of future stock performance. (4)We determined adjusted EBITDA margin, calculated consistent with how the Company reports adjusted EBITDA to the public, divided by the Company’s total net sales, to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2023. This performance measure may not have been the most important financial performance measure for years 2021 and 2020, and we may determine a different financial performance measure to be the most important financial performance measure in future years.
Description of Relationship Between PEO and Other NEO Compensation Actually Paid, Company TSR, and Peer Group TSR
Description of Relationship Between PEO and Other NEO Compensation Actually Paid, Company TSR, and Peer Group TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, the Company’s cumulative TSR over the four most recently completed fiscal years, and the TSR of the S&P 500 Health Care Index over the same period.
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Net Income
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and our Net Income during the four most recently completed fiscal years.
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Adjusted EBITDA Margin
Description of Relationship Between PEO and Other NEO Compensation Actually Paid and Adjusted EBITDA Margin The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and our adjusted EBITDA margin during the four most recently completed fiscal years.
Director Compensation
Director Compensation
Director Compensation Features
Director Compensation Features
Director Compensation Features
| • Retainers for Board and committee chairs recognize additional responsibility associated with leadership roles | | • Differentiating committee chair retainers based on time commitment and expertise associated with each role is majority practice | | • Annual equity grants with one-year vesting allow directors to accumulate meaningful ownership and prevent the possibility of entrenchment | | • Dollar-denominated equity awards provide for the delivery of consistent compensation levels on an annual basis regardless of price volatility | | • Compensation provided solely in the form of equity and cash with equity representing at least 50% of total value | | • Robust stock ownership guideline of 5x Board cash retainer aligns director and stockholder interests | | • No meeting fees, except for payments in excess of a threshold number of meetings to account for higher workloads | | • Absence of retirement or benefit programs avoids conflicts of interest |
Director Compensation Philosophy
Director Compensation Philosophy We use a combination of cash and equity-based compensation to attract and retain qualified candidates to serve on the Board. In setting director compensation, the Board and the Compensation Committee are guided by the following principles: •compensation should fairly pay directors for work required in a company of our size and scope, and differentiate among directors where appropriate to reflect different levels of responsibilities; •a significant portion of the total compensation should be paid in stock-based awards to align directors’ interests with the long-term interests of our stockholders; and •the structure of the compensation program should be simple and transparent.
Process for Setting Director Compensation
Process for Setting Director Compensation Non-employee director compensation levels are reviewed by the Compensation Committee each year, and resulting recommendations are presented to the full Board for approval. To help inform its decisions, the Compensation Committee uses an independent compensation consultant to provide information on current developments and practices in director compensation. Under the terms of the 2019 Plan, an annual limit of $700,000 per calendar year applies to the sum of all cash and equity-based awards (calculated based on the grant date fair value of such awards for financial reporting purposes) granted to each non-management director for services as a member of the Board. This annual limit does not apply to compensation (including equity awards and cash compensation) paid to any non-management director who also provides services to Envista outside of such director’s ordinary duties as a director (e.g., as a consultant to the Company) for such other services.
Director Compensation Structure
Director Compensation Structure Non-employee directors receive an annual cash retainer and an annual equity award of restricted stock units (“RSUs”) for service on the Board, as well as additional cash retainers for the Chair of the Board or chair of a committee, as applicable. Cash retainers are paid in four, equal installments following each quarter of service. The annual equity awards are granted each year immediately following the annual meeting of stockholders. The following table sets forth the cash and equity compensation for non-employee directors in effect during fiscal 2023:
Director Compensation Structure
| Annual Cash Retainer | $100,000 | | Annual Equity Award | $185,000 | | Board Chair Cash Retainer | $75,000 | | Board Chair Equity Award | $75,000 | | Audit Committee Chair Cash Retainer | $25,000 | | Compensation Committee Chair Cash Retainer | $20,000 | | Nominating and Governance Committee Chair Cash Retainer | $15,000 | | Meeting Fees | $2,000 for each Board and committee meeting attended in excess of 20 meetings (in aggregate) in a calendar year, including meetings of the Finance Committee. |
Director Compensation Structure
The annual equity award of RSUs vests on the first anniversary of the date of grant, prorated for the first year of service on the Board, with the underlying shares being issued on the vesting date or such later date as selected by the non-employee director in a valid deferral election (or in each case the next business day thereafter if such date is not a business day). Directors are also reimbursed for out-of-pocket expenses, including travel expenses, related to the director’s service on the Board.
Director Summary Compensation Table
| NAME | FEES EARNED OR PAID IN CASH ($) | STOCK AWARDS ($) (1) | TOTAL ($) | | Scott Huennekens | $175,000 | $260,089 | $435,089 | | Wendy Carruthers | $120,000 | $185,047 | $305,047 | | Kieran T. Gallahue | $115,000 | $185,047 | $300,047 | | Barbara B. Hulit | $100,000 | $185,047 | $285,047 | | Vivek Jain | $100,000 | $185,047 | $285,047 | | Daniel A. Raskas | $100,000 | $185,047 | $285,047 | | Christine Tsingos | $125,000 | $185,047 | $310,047 |