Financial Goals
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Goal and Expected Result(1)
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Result(2)
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Outcome
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Performance Against
Annual Goals
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A.
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Non-GAAP Net Revenues of $25.7BN
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A.
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$25.4BN
(3)
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Achieved
|
|
99%
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B.
|
|
Non-GAAP Income Before Taxes of $9.7BN
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|
B.
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$10.0BN
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|
Achieved Above Target
|
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100%
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C.
|
|
Adjusted Return on Assets of 17.0%
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|
C.
|
|
17.2%
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Achieved Above Target
|
|
100%
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D.
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Non-GAAP Operating Margin of $10.9BN
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|
D.
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$11.0BN
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Achieved Above Target
|
|
100%
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E.
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|
Humira Sales of $15.7BN
|
|
E.
|
|
$16.0BN
(3)
|
|
Achieved Above Target
|
|
100%
|
-
(1)
-
Expected
results reflect the acquisition of assets from Boehringer Ingelheim and the acquisition of Stemcentrx.
-
(2)
-
Results
achieved reflect certain specified items, which are reconciled in Appendix B.
-
(3)
-
Net
revenues and Humira sales are evaluated on a constant currency basis.
In
addition to the financial goals set forth above, each of our NEOs also has individual performance goals that the committee reviews and ensures are appropriately rigorous and in line
with the long-term success of the company. Each NEO achieved or exceeded his or her 2016 goals, which are listed below:
-
-
Richard A. Gonzalez:
Drive
top-tier business performance; execute key strategic initiatives to drive sustainable long-term business performance; deliver value to our stockholders, building investor confidence and credibility;
successfully advance mid- and late-stage pipeline assets; continue to drive employee engagement and motivation around AbbVie's mission and future prospects; and advance our transformation to a
biopharmaceutical culture.
-
-
William J. Chase:
Achieve
proprietary pharmaceutical pipeline enhancement objectives; and provide support on corporate strategic initiatives and build shareholder value through investor activities.
-
-
Laura J.
Schumacher:
Successfully continue to develop and implement strategies to effectively resolve key litigation matters; achieve proprietary
pharmaceutical pipeline enhancement objectives; execute biologics strategic development initiatives; and support research and development initiatives per company strategy.
-
-
Henry O. Gosebruch:
Achieve
proprietary pharmaceutical pipeline enhancement objectives; and support research and development initiatives per company strategy.
-
-
Michael E. Severino:
Achieve key
research and development milestones per company strategy; and achieve proprietary pipeline enhancement objectives.
Stockholder Engagement
2016 Say on Pay Results
At our 2016 Annual Meeting, the say on pay proposal received support from 94% of our stockholders. The board and compensation committee are
encouraged by the continued, consistent stockholder support for our executive compensation program.
AbbVie
is committed to regular, ongoing engagement with stockholders to ensure that we continue to understand stockholder feedback about our compensation program and incorporate that
feedback into the compensation decision-making process. To that end, in 2016 AbbVie approached and engaged stockholders holding approximately 38% of the company's outstanding shares. In these
discussions, the aggregate feedback was generally supportive of the compensation program, consistent with the level of stockholder support for our say on pay proposals in the last two
2017 Proxy Statement
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29
Table of Contents
years,
and was not prescriptive about our compensation plan design. The feedback informs the compensation committee's continuous assessment of the program design and ongoing discussions with
stockholders, which contribute to the evolution of the program.
After
considering stockholder feedback and suggestions, AbbVie's compensation committee, in consultation with management and the committee's independent compensation consultant, has
proactively reviewed our policies and compensation program design. For annual awards beginning in 2016, our LTI program has been redesigned, as discussed in greater detail in the following section.
Executive Compensation Program Updates in 2016
The compensation committee of the board has engaged in a continuous process of evaluation and enhancement of the AbbVie executive compensation
program. Since the company's launch, AbbVie has made significant enhancements to its legacy compensation programs, the most recent of which are described in the following paragraphs and on
page 36.
The
committee has considered the feedback from stockholders as to the design of its compensation program and competitive benchmarking and, in 2016, completed a comprehensive revision of
the program. The new long-term incentive program was effective for equity grants made in 2016. The program consists of equity awards that include 40% performance shares, 40% performance-vested
restricted stock awards and 20% stock options. Vesting may occur over a 3-year period based on relative return on equity (ROE) for the performance-vested restricted stock awards and earnings per share
(EPS) (with a relative 3-year total stockholder return (TSR) modifier) for the performance shares. The 2016 program eliminates vesting in any 3 of 5 years and provides that awards may vest only
over 3 years based on the achievement of the defined performance metrics. Additionally, dividends will not be paid unless the performance criteria are met, and then will be paid only on shares
that are earned. AbbVie believes the new design further strengthens and aligns the performance orientation of senior executive compensation. Highlights of the changes made for 2016 include:
|
|
|
Element of Pay
|
|
Changes Made for 2016
|
|
|
|
Long-Term Incentive Program
|
|
ü
Completed redesign of our long-term incentive program:
|
|
|
Added multiple
performance metrics, including relative ROE, EPS and relative TSR as criteria for vesting.
|
|
|
Removed provision that
allowed performance awards to vest if thresholds were met in any 3 of 5 years, creating more risk of forfeiture.
|
|
|
Added multi-year
performance periods.
|
|
|
Changed dividend payment
schedule so dividends are paid only at vesting and only on earned shares.
|
|
|
Increased use of
performance-vested awards from 75% to 80% which, in combination with stock options, ties 100% of our LTI program to performance metrics and stock price appreciation.
|
|
|
Refined process for
referencing the market median for long-term incentive award decisions.
|
Short-Term Incentive Plan
|
|
ü
Added disclosure of our maximum annual incentive cap of 200% of target.
|
|
|
ü
Reduced the CEO's target annual incentive to 150% of base salary.
|
|
|
ü
Established a formal payout matrix based on net revenues and operating margin to define and cap NEO annual incentive awards at or below the plan maximum.
|
Peer Comparisons
|
|
ü
Simplified the peer group used for compensation benchmarking, the AbbVie Health Care Peer Group.
|
|
|
|
The
new design is discussed in more detail in Section III.
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Compensation Program Governance Summary
In addition to strong alignment of pay with the performance of the company and our NEOs, we maintain and are committed to good governance
practices, including the following:
|
|
|
|
|
|
New
|
|
|
|
ü
Long-term incentive design emphasizing multiple, relative performance metrics and multi-year performance periods (see page 36 for a detailed description of the 2016
redesign)
|
Shifts program
away from a single, absolute performance metric to a multi-factor model
|
Incorporates
relative total stockholder return
|
Eliminates extra
vesting opportunity that was a part of the prior LTI design
|
Dividends on
outstanding equity awards are paid at vesting and only on earned shares
|
ü
CEO target annual incentive reset at 150% of base salary
|
ü
Robust stock ownership guideline of 5x annual fees for non-employee directors
|
|
|
|
Ongoing
|
|
|
|
ü
Majority of NEO compensation tied to long-term performance
|
ü
Short- and long-term incentive programs closely align pay with performance
|
ü
Annual incentive payout matrix used to define and cap the range for the committee's determinations (at or below the plan maximum of 200% of target)
|
ü
Robust stock ownership guidelines of 6x salary for CEO and 3x salary for NEOs
|
ü
NEOs must hold and not sell equity until the minimum stock ownership requirement is satisfied
|
ü
Double-trigger requirements for equity acceleration and other benefits in the event of a change in control
|
ü
No tax gross-ups in executive compensation program
|
ü
No duplication of performance metrics in short-and long-term incentives
|
ü
No repricing of stock options without express stockholder approval
|
ü
No employment contracts
|
ü
No guaranteed short-term incentives or equity awards
|
ü
Anti-hedging and anti-pledging policies
|
ü
Independent compensation consultant that performs no other work for the company
|
ü
Committee has broad discretion to claw back incentive awards in the unlikely event of a restatement of earnings
|
ü
Proactive stockholder engagement process
|
|
|
|
II. Executive Compensation Process
Commitment to Performance-Based Awards
More than three-fourths of AbbVie's NEO pay is performance-based. Specific goals and targets are the foundation of our pay-for-performance
process, and this section describes how they apply to each pay component. Though quantitative metrics such as financial and operational results are a central part of our performance assessment, some
goals such as leadership and progress against strategic and long-term objectives are difficult to measure using numeric or formulaic criteria. As such, the compensation committee also conducts a
qualitative assessment of individual performance to ensure the overall assessment of performance and pay decisions are aligned with the company's true performance over a period of time. A discussion
of the decision-making criteria for each pay component follows.
Committee Process for Setting Total Compensation
Each February, the committee, with the assistance of its independent compensation consultant and AbbVie's management team, determines target
pay levels for NEOs. The process starts with a consideration of compensation levels and the mix of compensation for comparable executives at companies in AbbVie's Health Care Peer Group, which are
listed below in the section captioned "Compensation Benchmarking." After this benchmark review, the committee establishes NEO compensationbase salary adjustments, annual incentive awards,
and long-term
incentive awardsrelative to the peer median in each instance. Awards can be differentiated from the peer group median based on each NEO's individual performance, leadership, and
contributions to long-term strategic performance.
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Compensation Benchmarking
To provide the appropriate context for executive pay decisions, the committee, in consultation with its independent compensation consultant,
assesses the compensation practices and pay levels of AbbVie's Health Care Peer Group. The committee chooses to focus on the Health Care Peer Group because its constituents share important
characteristics with AbbVie, particularly the global emphasis on research-based pharmaceuticals and biopharmaceutical therapies and the regulatory environment within which they operate. Members of the
Health Care Peer Group are AbbVie's primary competitors for executive talent and are companies the committee believes chiefly represent our competitive market:
|
|
|
|
|
|
Health Care Peer Group
|
|
|
|
Amgen, Inc.
|
Bristol-Myers Squibb Company
|
Eli Lilly and Company
|
Gilead Sciences, Inc.
|
GlaxoSmithKline plc
|
Johnson & Johnson
|
Merck & Company, Inc.
|
Novartis AG
|
Pfizer Inc.
|
|
|
|
Role of the Compensation Consultant
The compensation committee has engaged Compensation Advisory Partners as its independent compensation consultant. The committee's independent
consultant reports directly to the chair of the committee. The consultant meets regularly, and as needed, with the committee in executive sessions, has direct access to the chair during and between
meetings, and performs no other services for AbbVie or its senior executives. The committee determines what variables it will instruct its consultant to consider, which include: peer groups against
which performance and pay should be examined, metrics to be used to assess AbbVie's performance, competitive incentive practices in the marketplace, and compensation levels relative to market
benchmarks.
Compensation Risk Oversight
The company has established, and the compensation committee endorses, several controls to address and mitigate compensation-related risk, such
as employing a diverse set of performance metrics, maintaining robust stock ownership guidelines for its executives and non-employee directors, and retaining broad discretion to recover incentive
awards in the unlikely event that incentive plan award decisions are based on earnings that are subsequently restated. The committee identified no material risks in AbbVie's compensation programs in
2016.
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III. Compensation Plan Elements
Three primary components make up AbbVie's executive pay program: (1) base salary, (2) short-term incentives and
(3) long-term incentives. The structure of each component is tailored to serve a specific function and purpose.
|
|
|
CEO Pay Mix
|
|
All Other NEO Average Pay Mix
|
|
|
|
Base Salary
The compensation committee sets appropriate levels of base salary to ensure that AbbVie can attract and retain a leadership team that will
continue to meet our commitments to customers and patients and sustain long-term profitable growth for our stockholders. Generally, the committee considers the median of the Health Care Peer Group as
an initial benchmark, but also references additional information as needed. Specific pay rates are then established for each NEO relative to his or her market benchmark based on the NEO's performance,
experience, unique skills, internal equity with others at AbbVie, and the company's operating budget.
Short-Term Incentives
Performance Incentive Plan
Annual cash incentives are paid to NEOs through AbbVie's Performance Incentive Plan (PIP), which rewards executives for achieving key financial
and non-financial goals that are measured at the company and individual levels. The PIP is intended to comply with the requirements of Internal Revenue Code Section 162(m) for performance-based
compensation. The compensation committee may define and cap PIP awards below the maximum amounts allowed by IRC Section 162(m), and is guided by the use of a formal annual incentive payout
matrix that establishes a potential range of final incentive outcomes based on net revenues and operating margin performance. All NEOs carry a target incentive amount set as a percentage of their base
salary. Mr. Gonzalez's target is 150% of base salary and the other NEOs' targets are 110% of base salary. Determining award amounts is a multi-step process. First, financial and individual
goals are evaluated and scored, resulting in a preliminary award amount of up to 100% of target only. For 2016, all financial and strategic goals were materially achieved, resulting in performance
scores between 99% and 100% of target. Final awards above 100% of target are determined at the February meeting based on company performance (the extent to which performance exceeds targets), the
recommendation of the CEO (for NEOs other than himself), and the support
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33
Table of Contents
of
the compensation committee. To determine final awards, the CEO and the compensation committee use the payout matrix to define and cap the range in making its final determinations. This process is
more fully described below:
Illustration of 2016 Incentive Calculation
While
the compensation committee relies heavily on objective, quantitative metrics to determine PIP awards, the performance review also includes a qualitative element to ensure the
review is comprehensive and inclusive of all individual, strategic, and leadership goals for which assessment is not solely dictated by numeric or formulaic applications. Moreover, while each
participant has predetermined goals, the committee also considers relative achievements and/or developments in the company, the marketplace, and the global economy that could not have been foreseen
when individual goals were established.
For
2016, net revenue performance was 99% compared to plan, while operating margin performance was 101% compared to plan. As a result of this performance, the annual incentive payout
matrix capped the annual incentives at 150% of target, below the plan maximum of 200% of target and the Code Section 162(m) cap. This resulted in final awards between 134% and 150% of target,
consistent with the high level of performance achieved in 2016 and within the outcome range suggested by the payout matrix.
Annual Metrics and Goal Assessment
AbbVie's PIP structure is intended to align NEOs' interests directly with AbbVie's annual operating strategies, financial goals, and leadership
behaviors. In doing so, it provides a direct link between the NEOs' short-term incentives and the company's and the NEOs' annual performance results through measurable financial and operational
performance and qualitative assessments of clearly defined strategic progress and leadership behaviors. The compensation committee approves pre-established goals at the beginning of each year. The
qualitative assessment
reflects NEOs' overall leadership, progress on strategic initiatives, advancement of the pipeline, and enhancement of AbbVie's biopharmaceutical culture.
The
financial and strategic/leadership goals and their respective weightings are summarized in the chart below. The specific goals and weightings for each NEO, other than the CEO, are
established at the start of each performance year based on the NEO's role and anticipated contributions to the company's annual objectives. The CEO's goals are similarly established at the start of
each performance year; however, to reflect the CEO's overall accountability for
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company
financial performance and strategic outcomes, the committee considers all financial and non-financial goals holistically, without specific weightings, when evaluating CEO performance.
|
|
|
|
|
|
Annual Incentive Payout Matrix
|
|
Range
|
|
|
|
Net Revenues
|
|
0% to 200% of target
|
Operating Margin
|
|
0% to 200% of target
|
|
|
|
|
|
|
|
|
|
Financial Goals
|
|
% Weighting
|
|
|
|
Income Before Taxes
|
|
20%
|
Net Revenues, Operating Margin, Humira Sales, and Return on Assets
|
|
20% to 60%
|
|
|
|
Total Tied to Financial Goals
|
|
40% to 80%
|
|
|
|
|
|
|
|
|
|
Strategic/Leadership Goals
|
|
% Weighting
|
|
|
|
R&D/Biosimilars
|
|
0% to 50%
|
Business Development
|
|
0% to 50%
|
Other (including strategic initiatives, etc.)
|
|
0% to 30%
|
|
|
|
Total Tied to Strategic/Leadership Goals
|
|
20% to 60%
|
|
|
|
Assessments
of performance against financial results consider the effect of specified adjustments and/or unusual or unpredictable events, and the appropriateness of these adjustments is
reviewed annually by the committee. In 2016 specified adjustments consisted of intangible asset amortization, milestones and other research and development expenses, acquired in process research and
development, acquisition related costs, change in fair value of contingent consideration, Venezuela devaluation loss, revaluation due to tax law change, and other items, as described in
Exhibit 99.1 to AbbVie's Form 8-K filed on January 27, 2017.
2016 PIP Awards
|
|
|
|
|
|
|
|
|
|
Target
Award
|
|
Actual Award
Paid
|
|
Actual Award
as a % of
Target
|
|
|
|
|
|
|
|
|
Richard A. Gonzalez
|
|
$
|
2,400,000
|
|
$3,600,000
|
|
150%
|
William J. Chase
|
|
|
1,084,358
|
|
1,626,000
|
|
150%
|
Laura J. Schumacher
|
|
|
1,084,358
|
|
1,626,000
|
|
150%
|
Henry O. Gosebruch
|
|
|
990,418
|
|
1,327,136
|
|
134%
|
Michael E. Severino
|
|
|
1,063,986
|
|
1,596,000
|
|
150%
|
|
|
|
|
|
|
|
|
2017 Proxy Statement
|
35
Table of Contents
Long-Term Incentives
AbbVie redesigned its LTI program effective with the 2016 annual grant, based in part on feedback from stockholders. The new design increases
the alignment of AbbVie's long-term incentive compensation with key operational and financial initiatives, including sustained EPS growth and generation of superior investment returns relative to
peers. In 2016, NEOs received LTI awards with the following characteristics as compared to the 2015 LTI awards:
Evolution of Long-Term Incentive Program
-
-
Performance Shares (40% of total LTI award)
These awards have the potential to vest
at 0% to 250% of target after a three-year performance period and are earned based on company performance in earnings per share (EPS) and relative total stockholder return (TSR). TSR performance is
measured relative to a group made up of companies that are constituents in either the S&P Pharmaceutical, Biotech, and Life Science Index or the NYSE Arca Pharmaceutical Index. Dividends on
performance shares accrue during the performance period and are paid at vesting only to the extent that shares are earned.
-
-
Performance-Vested Restricted Stock (40% of total LTI award)
These awards have the
potential to vest at 0% to 150% of target, in one-third increments during a three-year performance term based on AbbVie's return on equity articulated as pre-set goals and measured relative to a group
made up of companies that are constituents in either the S&P Pharmaceutical, Biotech, and Life Science Index or the NYSE Arca Pharmaceutical Index. Dividends accrue during the performance period and
are paid at vesting only to the extent that shares are earned.
-
-
Non-Qualified Stock Options (20% of total LTI award)
These awards have the
potential to vest in one-third increments on each of the first three annual anniversaries of the grant date, subject to continued employment with the company. The option exercise price is set at or
above fair market value on the grant date. To the extent that the options vest, the award expires ten years after the grant date.
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Performance Share and Performance-Vested Restricted Stock Performance Targets and Results
Performance targets and results associated with the 2016 awards of performance shares and performance-vested restricted stock are shown below.
Total shareholder return results are in progress; these results and their impact on final payout will be disclosed following the completion of the three-year performance period.
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Objective
|
|
Target
|
|
Result
|
|
Impact on Payout
|
|
|
|
|
|
|
|
Adjusted Diluted EPS
|
|
$4.72
|
|
|
$
|
4.82
|
|
|
166.7%
|
Total Shareholder Return
|
|
TSR is measured over a 3-year performance period and used as a modifier
|
ROE compared to industry peers
|
|
75
th
- 90
th
|
|
|
> 90
th
|
|
|
150%
|
|
|
|
|
|
|
|
AbbVie's
policy with respect to its annual equity award for all eligible employees, including the NEOs, is to grant the award and set the grant price at the compensation committee's
regularly scheduled February meeting each year. These meeting dates generally are the third Thursday of February and are scheduled two years in advance. The grant price is the average of the highest
and lowest trading prices of a common share on the date of the grant (rounded up to the next even penny). The grant price for the 2016 annual grant was $54.86. The high, low and closing prices of an
AbbVie common share on the grant date (February 18, 2016) were $55.53, $54.17, and $54.55, respectively. All LTI awards are subject to a minimum vesting period of 12 months.
Benefits
Benefits are an important part of retention and capital preservation for all employees, helping to protect against the impact of unexpected
catastrophic loss of health and/or earnings potential, as well as providing a means to save and accumulate for retirement or other post-employment needs.
Each
of the benefits described below supports the company's objective of providing a market competitive total rewards program. Individual benefits do not directly affect decisions
regarding other benefits or pay components, except to the extent that all benefits and pay components must, in aggregate, be competitive, as previously discussed.
Retirement Benefits
All eligible U.S. employees, including NEOs, participate in the AbbVie Pension Plan, the company's principal qualified defined benefit plan.
NEOs and certain other employees also participate in the AbbVie Supplemental Pension Plan. These plans are described in greater detail in the section of this proxy statement captioned "Pension
Benefits."
The
Supplemental Pension Plan is a non-qualified defined benefit plan that cannot be secured in a manner similar to a qualified plan, for which assets are held in trust, so eligible
NEOs receive an annual cash payment equal to the increase in the present value of their Supplemental Pension Plan benefit. Eligible NEOs have the option of depositing the annual payment into an
individually established grantor trust, net of tax withholdings. Deposited amounts may be credited with the difference between the NEO's actual annual trust earnings and the rate used to calculate
trust funding (currently 8 percent). Amounts deposited in the individual trusts are not tax-deferred and the NEOs personally pay the taxes on those amounts without gross-ups.
The
manner in which the grantor trust assets are to be distributed to an NEO upon retirement from the company generally follows the distribution method elected by the NEO under the
AbbVie Pension Plan. If an NEO (or the NEO's surviving spouse, depending on the pension distribution method elected by the NEO under the AbbVie Pension Plan) lives beyond the actuarial life expectancy
age used to determine the Supplemental Pension Plan benefit, and therefore exhausts the trust balance, the Supplemental Pension Plan benefit will be paid to the NEO (or his or her surviving spouse) by
AbbVie.
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Savings Plans
All U.S. employees, including NEOs, are eligible to defer a portion of their annual base salary under the AbbVie Savings Plan, the company's
principal qualified defined contribution plan, up to the IRS contribution limits. Eligible NEOs also may defer up to 18 percent of their base salary, less contributions to the AbbVie Savings
Plan, to the AbbVie Supplemental Savings Plan, which is a non-qualified defined contribution plan. Eligible NEOs may defer these amounts to unfunded book accounts or choose to have the amounts paid in
cash on a current basis and deposited into individually established grantor trusts, net of tax withholdings. These amounts are credited annually with earnings. Amounts deposited in the individual
trusts are not tax-deferred and the NEOs personally pay the taxes on those amounts without gross-ups.
NEOs
elect the manner in which the assets held in their grantor trusts will be distributed to them upon retirement or other separation from the company. These arrangements are described
in greater detail in this proxy statement beginning with the section captioned "Summary Compensation Table."
Financial Planning
NEOs are paid an annual stipend of $10,000 for estate planning advice, tax preparation and general financial planning fees. The stipend is
income to the NEO, who is responsible for payment of all resulting taxes without gross-ups.
Company-Provided Transportation
NEOs are eligible for transportation perquisites that are designed to improve the effectiveness and efficiency of their work, including the use
of a company-leased vehicle and access to company-provided air travel, as appropriate. In some circumstances, these benefits may be used for personal travel, which would then be considered
part of the NEO's total compensation and treated as taxable income to them under applicable tax laws. The NEOs pay the taxes on such income without gross-ups.
Disability Benefits
In addition to AbbVie's standard disability benefits, NEOs are eligible for a monthly long-term disability benefit, which is described on
page 53 of this proxy statement.
Employment Agreements
AbbVie does not have employment agreements with any of its NEOs.
Excise Tax Gross-ups
AbbVie does not provide excise tax gross-ups on NEO compensation.
Change in Control Agreements
AbbVie has entered into change in control agreements with its NEOs to aid in retention and recruitment, encourage continued attention and
dedication to assigned duties during periods involving a possible change in control of the company, and to protect the earned benefits of the NEOs against potential adverse changes resulting from a
change in control.
The
change in control agreements contain a double-trigger feature, meaning that if the NEO's employment is terminated other than for cause or permanent disability, or if the NEO elects
to terminate employment for good reason, within two
years following a change in control, he or she is entitled to receive certain pay and benefits as described in the section of this proxy statement captioned "Potential Payments upon Termination or
Change in Control."
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IV. Other Matters
Stock Ownership Guidelines
AbbVie's stock ownership guidelines are designed to further promote sustained stockholder return and to ensure the company's senior executives
remain focused on both short- and long-term objectives. Each senior executive has five years from the date of election or appointment to his or her position to achieve the ownership level associated
with his or her position. NEOs are not allowed to sell stock, except for tax withholding at vesting or exercise, if they do not satisfy the minimum stock ownership requirement. The minimum stock
ownership guidelines for the CEO and other NEOs are as follows:
|
|
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|
|
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|
|
|
|
Executive
|
|
Stock Ownership Requirement
|
|
Requirement Met?
|
|
|
|
|
|
Richard A. Gonzalez
|
|
6x Base Salary
|
|
Yes
|
William J. Chase
|
|
3x Base Salary
|
|
Yes
|
Laura J. Schumacher
|
|
3x Base Salary
|
|
Yes
|
Henry O. Gosebruch
|
|
3x Base Salary
|
|
Yes
|
Michael E. Severino
|
|
3x Base Salary
|
|
Yes
|
|
|
|
|
|
In
addition, AbbVie's non-employee directors are required to own AbbVie stock valued at five times (5x) the annual fee for service as a director under the AbbVie Non-Employee Directors'
Fee Plan within five years of joining the Board or as soon as practicable thereafter.
Clawback Policy
While the committee does not anticipate there would ever be circumstances where a restatement of earnings upon which any incentive plan award
decisions were based would occur, the committee, in evaluating such circumstances, has broad discretion to take all actions necessary to protect the interests of stockholders up to and including
actions to recover such incentive awards.
Anti-Hedging and Anti-Pledging Policies
AbbVie has a formal policy that prohibits directors and officers subject to Section 16 of the Exchange Act, including all of the NEOs,
from entering into or engaging in the purchase or sale of financial instruments that are designed to hedge or offset any decrease in the market value of AbbVie equity securities they hold. AbbVie also
has a
formal policy that prohibits directors and officers subject to Section 16 of the Exchange Act, including all of the NEOs, from pledging AbbVie common stock as collateral for a loan.
In
addition, the AbbVie Incentive Stock Program provides that no long-term incentive award may be assigned, alienated, sold or transferred other than by will or by the laws of descent
and distribution or as permitted by the compensation committee for estate planning purposes, and no award and no right under any award may be pledged, alienated, attached or otherwise encumbered. All
members of senior management, including the company's NEOs and certain other employees, are required to clear any transaction involving company stock with the General Counsel prior to entering into
such transaction.