Through our Global Healthcare Gateway® – a platform that allows partners to access our many established strengths to reach patients they may not have the resources to reach on their own – we aim to connect more people with more products and services.
Our People
Viatris colleagues are passionate about our mission, and together we are building a performance-driven, highly engaging and inclusive culture where diverse perspectives drive access, innovation and our ability to make an impact in the world, and truly involves everyone at Viatris in different ways.
Viatris 2023 accolades include inclusion on 3BL’s 100 Best Corporate Citizens list, Forbes’ list of World’s Best Employers 2023, Newsweek’s America’s Greenest Companies 2024, TIME’s World’s Best Companies 2023 list and USA Today’s inaugural list of America’s Climate Leaders 2023. The Company has also been included on Forbes’ list of World’s Best Employers 2022, Fortune’s Change the World list, Newsweek’s America’s Most Responsible Companies 2022 list, a Great Place to Work® certification in India, Capital Magazine’s Best Employers in France list, and HR Asia’s Best Companies to Work for in Asia (Taiwan), among others.
Our colleagues are leading our mission and we continue to build our culture with a focus on colleague experience and engagement; learning and development; career progression; DEI; talent attraction and our deep commitment to the health, safety and wellbeing of our colleagues, their families and the communities we serve.
As a newer company, we have remained committed to building upon our foundations, harmonizing our processes and programs and initiating many firsts for Viatris. These have included conducting our first global employee Voice Survey with an 89% participation rate in 2022, defining our expectations for how we work together – and growing our initial Employee Resource Groups. The insights from our Voice Survey are guiding our efforts as we continually strive to create a work environment where people can learn, grow, feel appreciated and make an impact in the world.
We have expanded our professional development opportunities via internal and external resources, including programs focused on female leadership, management coaching and executive leadership. We completed Viatris’ first full cycle of talent review and succession planning. We further performed a broad talent assessment, focusing on establishing a baseline across the entire enterprise.
DEI is essential to our mission. We seek to understand and embrace what makes individuals and their circumstances unique and believe that recognition is fundamental to our success. Following the launch of our initial DEI goals, we have focused on identifying initial actions, building our strategy and setting in place the essential building blocks to advance DEI at Viatris. This includes a Focusing on Inclusion course, which is part of every employee’s learning curriculum.
Our ability to make a positive impact for patients worldwide relies on having a healthy and thriving workforce. The wellbeing of our colleagues is a priority, and we support colleagues through wellbeing programs across the world, taking into consideration local markets and needs. We also launched our global wellbeing strategy.
Most importantly, protecting the health and safety of our colleagues is essential at Viatris. We have a global Environmental, Health and Safety Management System, technical requirements, processes and systems that establish the foundation of this program. These elements apply to all locations and guide us in cultivating a culture of health and safety throughout our global workforce.
Environmental Stewardship
We are committed to minimizing our impact on the environment while safeguarding a reliable supply of medicine. Our commitment entails systematic and continuous work to identify opportunities to support our goals. We have a global integrated approach to managing our use of water, impact on and from climate change, energy efficiency, waste reduction and air emissions.
We have several ongoing environmental initiatives, including efficiency, renewable energy and water and waste management. We have made progress on our goals to reduce greenhouse gas emissions, conduct water risk assessments in areas of high or extremely high-water stress and increase the number of sites with zero waste sent to landfill.
As part of having our Scope 1, 2 and 3 emission reduction targets validated and approved by SBTi, SBTi classified Viatris’ scope 1 and 2 target ambition and has determined that it is in line with the 1.5°C trajectory. Further, we have concluded a climate scenario analysis, a key recommendation of the Task Force on Climate-Related Financial Disclosures. The analysis is global in scope and helps us to continue to understand the risk and uncertainties in different hypothetical scenarios.
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2023 Proxy Statement | 10 |
Director Independence
Viatris’ Board has determined that Mr. Cornwell, Ms. Dillon, Ms. Finney, Mr. Groothuis, Ms. Higgins, Mr. Kilts, Mr. Korman, Mr. Mark, Mr. Parrish, and Ms. van der Meer Mohr are independent Directors under the applicable NASDAQ listing rules. In making these determinations, the Board considered, with respect to Mr. Cornwell’s independence, that Mr. Cornwell’s son was a partner of PJT Partners (“PJT”) until January 2023 when he became a member of its board of directors. PJT served as a financial advisor to Mylan in connection with the Combination and the Biocon Biologics Transaction. Mr. Cornwell’s son was not involved in PJT’s work related to either the Combination or the Biocon Biologics Transaction. With respect to Mr. Groothuis, the Board considered his prior service to Mylan and the Company at NautaDutilh, an international law firm, where he was a partner until May 2022. With respect to Mr. Korman’s independence, the Board considered (a) Mr. Korman’s past employment by Mylan Inc. from 1996 through July 2014 and his prior consulting services for Mylan Inc. from July 2014 to July 1, 2015 and (b) that Mr. Korman’s son had a paid internship with a Mylan subsidiary during the summer of 2019. With respect to Mr. Mark, the Board considered his prior service as a partner at Deloitte & Touche LLP, Viatris’ independent registered public accounting firm. The Board determined that any such past arrangements, transactions or relationships would not interfere with the exercise of independent judgment by Messrs. Cornwell, Groothuis, Korman or Mark in carrying out his respective responsibilities as a Director of Viatris.
Messrs. Coury, Malik, and Smith are not independent Directors under applicable NASDAQ listing rules.
Viatris’ Board had previously determined that Neil Dimick, who served on the Board until December 28, 2022, was independent under the applicable NASDAQ listing rules. Michael Goettler, who served on the Board until April 1, 2023, and Ian Read, who served on the Board until December 28, 2022, were not independent Directors under applicable NASDAQ listing rules.
How Our Board Governs and Is Governed
Viatris’ Board Structure
As set forth in our Amended and Restated Bylaws (the “Bylaws”), the Company has a majority vote standard for director elections in the event of an uncontested election and a plurality standard in the event of a contested election. The Bylaws also provide that if a nominee for Director who is an incumbent is not elected and no successor has been elected at such meeting, the Director shall promptly tender their irrevocable resignation to the Board, such resignation to be effective upon acceptance by the Board.
Commencing with the 2023 Annual Meeting and at all subsequent annual meetings of shareholders, the Board will be declassified and all Directors will be submitted for election at each annual meeting of shareholders. The parties to the Combination determined prior to closing that the Board would include, among others, certain persons designated by Pfizer (including W. Don Cornwell and James M. Kilts) and certain persons designated by Mylan (including JoEllen Lyons Dillon, Melina Higgins, Harry A. Korman, Rajiv Malik, Richard A. Mark and Mark W. Parrish.
The members of the Board collectively have expertise in developing and overseeing strategies in the context of a complex and rapidly changing environment, as well as a deep understanding of the management team and culture of the Company, our global platforms, the healthcare systems in which we operate, and the opportunities and challenges facing the Company around the world. Our Board members have key skills and experiences, including with respect to CEO and public company management experience; the optimization of shareholder value creation; corporate governance/CSR; finance, accounting and capital markets; global business experience; healthcare industry; human capital management, including but not limited to oversight of DEI; information security; legal and regulatory oversight; risk oversight/compliance; and strategy and M&A, among many other areas. We are confident that the collective experience and expertise of our Directors enables the Board to effectively guide and oversee the management team (“see Viatris’ Board of Directors — Board Overview”) and the strategy of the Company.
The Board has selected a leadership and management structure that it believes is best suited to meet the needs of the Company and our shareholders. The flexibility to make these decisions serves the interests of the Company and its shareholders, as the Board is best positioned to evaluate the optimal leadership structure for the Company based upon the
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2023 Proxy Statement | 24 |
As part of the Board’s ongoing focus on board refreshment, since 2021 a third-party search firm has assisted with identifying potential new director candidates, including gender and racially/ethnically diverse candidates. After initial screenings and outreach, as well as additional guidance from the Governance and Nominating Committee, committee members and selected other Directors interviewed potential Director candidates identified by the third-party search firm as well as additional potential Director candidates recommended by Viatris Directors. Based on this process, the Board, on the recommendation of the Governance and Nominating Committee, appointed Ms. Finney and Mr. Smith to the Board in December 2022 to fill the two vacancies resulting from the retirements of Mr. Dimick and Mr. Read and appointed Mr. Groothuis to the Board in May 2023 to fill the vacancy resulting from Mr. Goettler ceasing to serve on the Board. We will continue to work to establish a pool of qualified potential candidates to support our Board refreshment efforts.
In addition, in May 2023 we announced that Mr. Coury had agreed with the independent members of the Board to transition to a new role as Chairman Emeritus and Senior Strategic Advisor from the conclusion of the 2023 Annual Meeting through the end of 2025 (the same period that Mr. Coury previously committed to the Company under his Executive Employment Agreement when Viatris was created). As a result of Mr. Coury’s agreement to serve in this advisory role, the independent members of the Board and Mr. Coury agreed that Mr. Coury will not stand for re-election at the 2023 Annual Meeting and will cease to be a director and to serve as an officer and employee of the Company effective as of the conclusion of the 2023 Annual Meeting. The Board also announced that it would select a new independent Chair of the Board whose tenure will begin following the 2023 Annual Meeting.
Reflecting the critical importance of senior leadership to the success of the Company and its overall business strategy, our Corporate Governance Principles also provide that the Board will work with senior management to ensure that effective plans are in place for management succession. The Board’s goal is to have a long-term and continuous program as well as to have contingency plans in place for emergencies such as departure, death, or disability. The Board discusses succession planning regularly at scheduled meetings, including in executive session, as appropriate. These succession planning activities have been and may continue to be supported by independent third-party consultants.
The Board prioritizes reviewing and discussing the succession plans for the CEO and each of his direct reports. Management succession planning continues to be among the Board’s top priorities and is included in the annual goals for executive management. In connection with our management succession planning, in February 2023, we appointed Scott A. Smith as CEO to lead our Phase 2 strategy and execution.
In addition, Mr. Malik will retire from his executive role with the Company and Mr. Mauro will depart from the Company, in each case, effective as of April 1, 2024. Mr. Malik has agreed to remain a member of the Board.
Annual Board and Committee Self-Evaluations
The Governance and Nominating Committee is responsible for overseeing the annual self-evaluation of the Board and its committees and, as part of those self-evaluations, engages an outside facilitator to lead the process. To date, the annual self-evaluations have alternated between using one-on-one interviews by the outside facilitator with each Director (with the outside facilitator then reporting out to the full Board) and a full Board discussion led by the outside facilitator. The self-evaluation process is designed to facilitate ongoing, systematic examination of the Board’s and committees’ effectiveness and accountability, and to identify opportunities for improving operations and procedures. In addition, the self-evaluations are intended to collect the perspectives of each Director, and are guided by use of a questionnaire, prepared by the outside facilitator, reviewed and approved by the Governance and Nominating Committee and distributed to Directors in advance, which includes typical questions used to evaluate a board and its committees with appropriate tailoring for the Company. The questionnaire covers, among other topics: Board and committee composition and organization, including responsibilities and oversight assigned to each committee; diversity of the Board’s membership; Board and committee leadership and management; Board responsibilities and oversight with respect to topics including, among others, strategic matters, succession planning, risk oversight, CSR and human capital management and DEI; Board and committee culture, administration and materials/resources; and Board, committee and Director performance.
Following its discussion with the outside facilitator, the Board discusses potential action items and evolves its processes where appropriate.
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| 31 | 2023 Proxy Statement |
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Risk Oversight
Viatris operates in a complex and rapidly changing environment that involves many potential risks. In addition to general market, industry, R&D, supply chain, political, financial, and economic risks, the Company faces potential risks related to, among others, executing on and implementing our strategic objectives, including completed or potential acquisitions and divestitures; information technology and cybersecurity; data privacy; financial controls and reporting; manufacturing and quality; legal, regulatory and compliance requirements and developments; the global nature of our operations; human capital management; environmental and social responsibility; and product portfolio and commercialization, among others. As a company committed to operating ethically and with integrity, we proactively seek to manage and, where possible, mitigate risks to help ensure compliance with applicable rules and regulations, maintain integrity and continuity in our operations and business, including in support of achieving strategic priorities, long-term financial and operational performance, and protect our assets (financial, intellectual property, and information, among others). Risk management is an enterprise-wide objective subject to oversight by the Board and its committees.
It is the responsibility of Viatris’ management and employees to identify material risks to our business and to implement and administer robust risk management and mitigation processes and programs, while also maintaining reasonable flexibility in how we operate. Our internal audit function periodically completes a comprehensive enterprise risk assessment to identify key and emerging risks, and reviews and refreshes this analysis quarterly with management. For each key or emerging risk identified, we have a process in place to establish ownership of monitoring the risk and evaluate risk mitigation opportunities. Our internal risk management team consists of senior leaders across multiple disciplines, including internal audit, information technology, information security, compliance, corporate environmental and social responsibility matters, environmental health and safety, security, finance, legal, quality and product safety, and the team meets quarterly to review and discuss risks and trends, which vary across the short-, medium- and long-term. To further embed risk management and compliance into our culture, Viatris has a robust global corporate compliance program, implements comprehensive policies and procedures, trains employees on how to implement and comply with them, and maintains an extensive program of oversight and audit to help ensure compliance and appropriate enterprise risk management.
Our risk oversight framework also aligns with our disclosure controls and procedures. For example, the Company’s Disclosure Committee reviews the Company’s quarterly and annual financial statements and related disclosures. The Disclosure Committee consists of senior management including our President, Chief Financial Officer (the “CFO”), Global General Counsel, Corporate Controller, Head of Corporate Affairs, Head of Capital Markets, and Deputy Global General Counsel, all of whom participate in the risk assessment practices described above. The CEO and CFO then receive a report from the Disclosure Committee before the financial statements are reviewed with the Audit Committee, approved, and filed with the SEC.
The Board directly, or through its committees, oversees the implementation of risk management and mitigation processes. The Board and its committees rigorously review with management the risk management program and discuss risk assessment matters at least quarterly, as well as during the Board’s annual budget review and approval process. Each of our committees has full access to officers and employees of the Company, and our Board and committees also meet without members of management present. The Board and committee Chairs periodically discuss the allocation of specific risk oversight matters between the various Board committees and the Board believes that its current risk oversight structure, as outlined below, assigns particular risk oversight matters to the Board committees that have the appropriate expertise to manage them. The Board also has the authority to form special strategic committees if it believes that it would be advisable to oversee significant strategic or other corporate actions, including the risks related thereto. All committees also have access to outside advisors in their sole discretion and periodically receive external updates concerning oversight of risks related to the Company and management’s efforts to manage risk. The Compliance Committee is responsible for appointing and replacing the Company’s Chief Compliance Officer, who is responsible for, among other things, the day-to-day management and implementation of the Company’s Corporate Compliance Program and who reports to the Compliance Committee and the CEO. In addition to meeting with the Company’s internal risk committee of senior management, which meets at least quarterly, the Chief Compliance Officer meets at least quarterly with the Audit Committee, Compliance Committee and Risk Oversight Committee.
The Board also has approved a Code of Business Conduct and Ethics, Code of Ethics for Chief Executive Officer, Chief Financial Officer and Corporate Controller, and other related policies to help manage and mitigate risk globally.
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| 33 | 2023 Proxy Statement |
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The Board’s Role in Oversight of Corporate Environmental and Social Responsibility Matters
Viatris’ Board oversees management’s efforts with respect to corporate environmental and social responsibility matters through its Risk Oversight Committee. The CSR function operates as a center of excellence within the Viatris Corporate Affairs leadership team. The Head of CSR drives the strategic and operational development of CSR across the Company together with key partners. The Head of Corporate Affairs and the Head of CSR communicate quarterly with the Board on corporate environmental and social responsibility matters through the Risk Oversight Committee, and on an annual basis, the Risk Oversight Committee reviews progress with the Head of Corporate Affairs and Head of CSR on corporate environmental and social responsibility-related matters that have been discussed with the Board to confirm the Company is tracking its priorities in this area.
The Board’s and its Committees’ Role in Cybersecurity Oversight
The Company maintains an information security program, as overseen by a committee of senior leadership, to monitor and mitigate cybersecurity risks. This program is managed by the Company’s Chief Information Security Officer & Head of Global Security under the direction of the Company’s Chief Compliance Officer and is designed to identify, protect, detect and respond to cybersecurity risks, and includes policies, procedures, cybersecurity awareness communications, testing, and training for employees (including mandatory training programs for system users), system monitoring, risk reduction, vulnerability and patch management, and a robust incident response and reporting program. Based upon these activities, we have not identified any material security breaches over the last three years.
The Risk Oversight Committee receives reports from senior management on data security, cybersecurity and information security-related matters on at least a quarterly basis, including with respect to related risks, risk management, and relevant legislative, regulatory, and technical developments. On a biannual basis, the Risk Oversight Committee and chairs of each other Committee of the Board receive an information security update from the Company’s Chief Information Security Officer & Head of Global Security and the Chief Information Officer. The full Board receives a report on the respective quarterly discussions with senior management from the chair of the Risk Oversight Committee each quarter.
Board Education and Director Orientation
The Governance and Nominating Committee is responsible for overseeing and reviewing quarterly Director continuing education programs, including educational seminars, presentations, conferences and other programs or opportunities presented by external and internal resources, on matters that may relate to, among other topics: compensation, compliance, governance, board process, risk oversight, audit and accounting, regulatory and other current issues. Past trainings have included the Stanford Graduate School of Business Directors’ Consortium and Deloitte & Touche’s Board Symposium, among others. Directors also may elect to attend additional third-party educational events. The Company reimburses Directors for costs associated with any related seminars and conferences, including travel expenses.
The Governance and Nominating Committee is also responsible for overseeing and annually reviewing the Company’s Director orientation program. The program is designed to familiarize new Directors with, among other matters, the Company’s business, operations, financial reporting, risk management and executive officers. In addition, new Directors receive extensive onboarding materials which address topics including the Company’s strategy, policies, director roles and responsibilities, corporate governance policies and procedures, and leadership structure.
How Our Directors Are Selected and Evaluated
Consideration of Director Nominees
For purposes of identifying individuals qualified to become members of the Board, and consistent with the Company’s Corporate Governance Principles, the Governance and Nominating Committee considers the following general criteria, among others, in nominating director candidates. These criteria reflect the traits, abilities, and experience that the Board considers in determining candidates for election:
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highest ethical character and shares the values of the Company |
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personal and/or professional reputations that are consistent with the image and reputation of the Company |
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| 35 | 2023 Proxy Statement |
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relevant expertise and experience and ability to offer advice and guidance to the CEO and senior management based on that expertise and experience |
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sound business judgment |
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diverse perspectives and personal backgrounds reflecting a mix of nationalities, ethnicities, races, ages and/or genders |
In addition to the criteria set forth above, and any others the Governance and Nominating Committee or Viatris’ Board may consider, a majority of the members of the Board must be “independent”, as that term may be defined from time to time by the applicable NASDAQ listing standards, including that an independent Director must be free of any relationships which, in the opinion of the Board, would interfere with the exercise of such Director’s independent judgment in carrying out the responsibilities of a Director.
As needed, the Governance and Nominating Committee may identify new potential Director nominees by, among other means, requesting current Directors, executive officers, and external advisors to notify it if they become aware of persons meeting the criteria described above who would be suitable candidates for service on Viatris’ Board. The Committee also may, as needed, engage one or more firms that specialize in identifying director candidates. The Governance and Nominating Committee also may consider candidates recommended by shareholders in accordance with the procedures outlined in the question titled, “How do I recommend a candidate for nomination to Viatris’ Board?” on page A-7. The Committee’s evaluation process does not vary based on whether a candidate is recommended by a shareholder.
As appropriate, the Governance and Nominating Committee will review publicly available information regarding a potential candidate, request information from the candidate, review the candidate’s experience and qualifications, including in light of any other candidates the Governance and Nominating Committee might be considering, and conduct, together with other members of Viatris’ Board, one or more interviews with the candidate. Governance and Nominating Committee members or their designees also may contact one or more references provided by the candidate or may contact other members of the business community or persons who have first-hand knowledge of the candidate’s talents and experience. With respect to Board composition, the Board considers characteristics such as expertise, experience, knowledge, abilities and diversity (including nationality, ethnicity, race, age, gender, education and professional background), among others.
Certain Relationships and Related Transactions
Based on a review of any transactions between Viatris and its Directors, Director nominees and executive officers, their immediate family members, and their affiliated entities, Viatris has determined that since the beginning of 2022, it was or is to be a participant in the following transactions in which the amount involved exceeds $120,000 and in which any of Viatris’ Directors, Director nominees, executive officers, or greater than five percent shareholders, or any of their immediate family members, had or will have a direct or indirect material interest:
Since approximately 1995, The Coury Firm LLC (together with its predecessors, “TCF”) and, in the past, other affiliated entities of TCF, has been serving as the broker of record in connection with several of Mylan’s and, since the closing of the Combination, Viatris’ employee benefit programs. TCF is in the business of providing strategic corporate benefits advice and services, among others. TCF provides certain services to Viatris and its subsidiaries pursuant to a contract between Mylan Inc., a subsidiary of Viatris, and TCF. The principals of TCF are brothers and a son of Robert J. Coury, Executive Chairman, and TCF is beneficially owned by brothers and trusts on behalf of brothers and children of Mr. Coury. Commencing on September 1, 2020, the parties extended their agreement through December 31, 2023 on substantially the same terms as their prior arrangement, which included a fixed base fee of $37,500 per month to be paid by Mylan to TCF, corresponding to the term of agreements negotiated with certain benefit plan carriers and capping payments over that time period. However, where required by law, TCF will continue to receive commissions directly from certain other benefit plan carriers, and in 2022 and through September 21, 2023, received payments totaling approximately $185,000 in commissions for these services directly from the insurance carriers (including payments for 2021 business paid in 2022). Commencing on September 1, 2023, the parties further extended this agreement through December 31, 2026 on substantially the same terms.
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2023 Proxy Statement | 36 |
In addition, Viatris has a number of other policies in effect that govern our executive team’s behavior and that set out clear ethical expectations. Those policies, including our Code of Business Conduct and Ethics, empower Viatris to take a full range of disciplinary responses for any violations, and the Compensation Committee and the Board are not otherwise constrained from seeking to clawback from or deny compensation to any member of the executive team in response to any breach of duties or ethics. The Board considers additional updates to the clawback policy from time to time.
On October 26, 2022, the SEC adopted rules implementing the clawback provisions of the Dodd-Frank Act. The final rules direct the stock exchanges to establish listing standards requiring listed companies to develop and implement a policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers and to satisfy related disclosure obligations. We intend to timely amend our clawback policy to reflect these new requirements.
Anti-Hedging and Anti-Pledging Policy
Viatris has a securities trading policy that prohibits directors and Section 16 Officers and their respective designees from trading in hedging instruments or otherwise engaging in any transaction that limits or eliminates, or is designed to limit or eliminate, economic risks associated with the ownership of our securities. Hedging instruments are defined as any prepaid variable forward contracts, equity swaps, collars, exchange funds, insurance contracts, short sales, options, puts, calls or other instruments that hedge or offset, or are designed to hedge or offset, movements in the market value of our securities. For purposes of this policy, our securities include shares and options to purchase shares, and any other type of securities that we may issue, including but not limited to, preferred shares, notes, debentures, and warrants issued by Viatris or any parent, subsidiary, or subsidiary of any parent of Viatris, as well as any derivative financial instruments pertaining to such securities, whether or not issued by us, such as options and forward contracts.
The policy also prohibits Directors and Section 16 Officers and their respective designees from entering into any transaction that involves the holding of our securities in a margin account (other than the “cashless exercise” of stock options) or the pledging of our securities as collateral for loans. The Compensation Committee may approve exceptions to the prohibition on the use of margin accounts or pledging or securities if, among other factors, the Director or Section 16 Officer demonstrates, in advance, that he or she has the continuing financial capacity to repay any underlying loan or potential margin call without resorting to our securities held in such margin account or our pledged securities and is not in possession of any material information about the Company that has not been made widely available to the investing public.
Consideration of Risk in Company Compensation Policies
The Compensation Committee has considered risk management in determining compensation policies and believes that our programs are designed appropriately to encourage outstanding, consistent, sustainable business performance over extended periods of time. Management and the Compensation Committee have considered and discussed the risks inherent in our business and the design of our compensation plans, policies and programs that are intended to drive the achievement of our long-term business objectives while avoiding excessive short-term risk-taking. In addition, we utilize a mix of objective performance measures, so that undue emphasis is not placed on one particular measure, and we employ different types of compensation to provide value over the short-, medium- and long-term. These performance measures are reevaluated annually in light of the evolving risk environment facing our business. When making compensation decisions, we also consider qualitative factors to avoid the consequences that an overly formulaic approach may have on excessive risk-taking by management. At least annually, the Compensation Committee also receives and discusses a report from Meridian Compensation Partners, LLC (“Meridian”), its independent compensation consultant, on risk management in connection with the Company’s compensation program.
The Compensation Committee believes that our compensation policies and practices do not encourage excessive risk and are not reasonably likely to have a material adverse effect on the Company.
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| 55 | 2023 Proxy Statement |
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Role of the Compensation Committee
The Compensation Committee is comprised solely of independent Directors and oversees the design and implementation of our executive compensation programs. The Compensation Committee reviews and evaluates the performance of our NEOs and determines their compensation and objectives, or, in the case of our Executive Chairman and CEO, recommends compensation and objectives to the independent, non-executive members of the Board. The Compensation Committee monitors compensation trends and developments periodically and undertakes a comprehensive assessment of our compensation programs at least annually. In fulfilling these responsibilities, the Compensation Committee utilizes the support of independent compensation consulting firms, independent outside counsel, and an internal executive compensation team.
The Compensation Committee has retained Meridian to provide advice and information regarding the design and implementation of Viatris’ executive compensation programs. Meridian also provided information to the Compensation Committee regarding regulatory and other technical developments that may be relevant to our executive compensation programs. In addition, Meridian provided the Compensation Committee with competitive market information, analyses and trends on executive base salary, annual incentives, long-term incentives, benefits and perquisites.
The Compensation Committee also receives advice from outside counsel, including, but not limited to, Cravath, Swaine & Moore LLP.
The Compensation Committee performs an annual review of the independence of its outside advisors, consistent with NASDAQ requirements and the Compensation Committee charter.
Tax Deduction Cap on Executive Compensation
Section 162(m) of the Code restricts the deductibility for U.S. federal income tax purposes of the compensation paid to the CEO, CFO, each of the other NEOs who was an executive officer at the end of the applicable fiscal year, and certain other executives to the extent that such compensation for such executive exceeds $1 million. As a result, except to the extent provided in limited transition relief, compensation over $1 million paid to any NEO is not deductible under Section 162(m) of the Code. The Compensation Committee and the Board reserve the right to provide compensation to our executives that is not deductible, including, but not limited to, when necessary to comply with contractual commitments, or to maintain the flexibility needed to attract talent, promote retention, or recognize and reward desired performance.
Compensation Committee Report
We have reviewed and discussed the CD&A with management. Based on such review and discussions, we recommended to the Board that the CD&A be included in this Proxy Statement.
Respectfully submitted,
Melina Higgins, Chair
James M. Kilts
Harry A. Korman
Pauline van der Meer Mohr
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee during 2022 was an officer or employee of Viatris, was formerly an officer of Viatris, or had any relationship requiring disclosure by Viatris under Item 404 of Regulation S-K. During 2022, no executive officer of Viatris served on the compensation committee or board of another entity, one of whose executive officers served on the Compensation Committee or the Board of Viatris.
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2023 Proxy Statement | 56 |
Sanjeev Narula
Mr. Narula is entitled to severance payments and benefits upon certain terminations of employment pursuant to the Mylan N.V. Severance Plan and Global Guidelines (which was assumed by Viatris) (the “Severance Plan”) and his equity award agreements with Viatris.
Termination Without Cause Absent a Change in Control. If Mr. Narula’s employment was terminated on December 31, 2022 by Viatris without cause, he would have been entitled to twelve (12) months of base salary continuation and twelve (12) months of continued health and other benefits. The estimated value of such payments, assuming a December 31, 2022 termination, would have been $913,508.
Termination Due to Death or Disability Absent a Change in Control. If Mr. Narula’s employment was terminated on December 31, 2022 due to death or disability, he would have been entitled to full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such equity vesting, assuming a December 31, 2022 termination, would have been $6,128,595. Mr. Narula is not entitled to cash severance payments in connection with a termination of employment due to death or disability.
Termination in Connection with a Change in Control. If Mr. Narula incurred a CIC Termination on December 31, 2022, he would have been entitled to (1) a payment equal to two times the sum of his base salary and his target annual bonus in effect at the time of such termination, payable in equal installments, (2) twenty-four (24) months of continued health and other benefits, and (3) full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such payments and benefits, assuming a December 31, 2022 CIC Termination, would have been (i) $3,489,367, in respect of cash severance and other benefits and (ii) $6,128,595, in respect of the vesting of his equity awards.
Rajiv Malik
Mr. Malik is entitled to severance payments and benefits upon certain terminations of employment pursuant to the Severance Plan and his equity award agreements with Viatris.
Termination Without Cause Absent a Change in Control. If Mr. Malik’s employment was terminated on December 31, 2022 by Viatris without cause, he would have been entitled to twelve (12) months of base salary continuation and twelve (12) months of continued health and other benefits. The estimated value of such payments, assuming a December 31, 2022 termination, would have been $1,263,508. Mr. Malik is also entitled to participate in the Company’s Supplemental Health Insurance Plan for certain retired executives following a termination of employment.
Termination Due to Death or Disability Absent a Change in Control. If Mr. Malik’s employment was terminated on December 31, 2022 due to death or disability, he would have been entitled to full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such equity vesting, assuming a December 31, 2022 termination, would have been $16,145,271. Mr. Malik is not entitled to cash severance payments in connection with a termination of employment due to death or disability.
Termination in Connection with a Change in Control. If Mr. Malik incurred a CIC Termination on December 31, 2022, he would have been entitled to (1) a payment equal to two times the sum of his base salary and his target annual bonus in effect at the time of such termination, payable in equal installments, (2) twenty-four (24) months of continued health and other benefits, and (3) full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such payments and benefits, assuming a December 31, 2022 CIC Termination, would have been (i) $5,489,367, in respect of cash severance and other benefits and (ii) $16,145,271, in respect of the vesting of his equity awards.
Anthony Mauro
Mr. Mauro is entitled to severance payments and benefits upon certain terminations of employment pursuant to the Severance Plan and his equity award agreements with Viatris.
|
|
|
|
|
| 65 | 2023 Proxy Statement |
|
|
|
|
Pay vs Performance Disclosure - USD ($)
|
12 Months Ended |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
| Pay vs Performance Disclosure |
|
|
|
| Pay vs Performance Disclosure, Table |
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, 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. For further information concerning the Company’s variable philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Compensation Discussion and Analysis” beginning on page 44. Pay Versus Performance Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Compensation Table Total for Michael Goettler (PEO) (1) |
|
|
Compensation Actually Paid to Michael Goettler (PEO) (1)(2)(3) |
|
|
Average Summary Compensation Table Total for non-PEO NEOs (1) |
|
|
Average Compensation Actually Paid to non-PEO NEOs (1)(2)(3) |
|
|
Value of Initial Fixed $100 Investment Based on TSR (4) |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
14,771,270 |
|
|
|
14,343,391 |
|
|
|
14,937,678 |
|
|
|
13,714,272 |
|
|
|
74.84 |
|
|
|
152.44 |
|
|
|
2,079 |
|
|
|
2,547 |
|
|
|
|
|
|
|
|
|
|
2021 |
|
|
14,779,570 |
|
|
|
13,637,943 |
|
|
|
10,468,732 |
|
|
|
5,996,167 |
|
|
|
87.32 |
|
|
|
141.38 |
|
|
|
(1,269 |
) |
|
|
2,560 |
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
5,472,905 |
|
|
|
6,397,981 |
|
|
|
13,208,230 |
|
|
|
13,982,122 |
|
|
|
118.20 |
|
|
|
113.12 |
|
|
|
(670 |
) |
|
|
989 |
|
(1) |
The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Goettler (who served as our CEO until April 1, 2023) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to Summary Compensation Table on page 57. The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Goettler) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Goettler) included for purposes of calculating the average amounts in each applicable year are Sanjeev Narula, Rajiv Malik, Anthony Mauro and Robert J. Coury. |
(2) |
The amounts shown for compensation actually paid have been calculated in accordance with Item 402(v) of Regulation S-K (“Compensation Actually Paid”) and do not reflect compensation actually earned, realized, or received by the Company’s NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. |
(3) |
In accordance with the requirements of Item 402(v) of Regulation S-K, adjustments were made to total compensation for each year to determine the compensation actually paid as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Pension Benefit Adjustments Column are based on the service cost for services rendered during the listed year and any prior service cost related to plan amendments or initiations. | PEO SCT Total to CAP Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Summary
Compensation
Table Total for
Michael
Goettler (PEO) |
|
|
Reported
Change in
Pension Value
for
Michael
Goettler
(PEO) (a) |
|
|
Reported Value
of Equity Awards
for
Michael Goettler
(PEO) (b) |
|
|
Pension
Benefit
Adjustments
for Michael
Goettler
(PEO) (c) |
|
|
Equity Award
Adjustments
for Michael
Goettler
(PEO) (d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
14,771,270 |
|
|
|
— |
|
|
|
(9,100,001 |
) |
|
|
— |
|
|
|
8,672,122 |
|
|
|
14,343,391 |
|
|
|
|
|
|
|
|
2021 |
|
|
14,779,570 |
|
|
|
— |
|
|
|
(9,100,015 |
) |
|
|
— |
|
|
|
7,958,388 |
|
|
|
13,637,943 |
|
|
|
|
|
|
|
|
2020 |
|
|
5,472,905 |
|
|
|
— |
|
|
|
(2,400,000 |
) |
|
|
— |
|
|
|
3,325,076 |
|
|
|
6,397,981 |
| Average non-PEO NEOs SCT Total to CAP Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Summary Compensation Table Total for non-PEO NEOs |
|
|
Average Reported Change in Pension Value for non-PEO NEOs (a) |
|
|
Average Reported Value of Equity Awards for non-PEO NEOs (b) |
|
|
Average Pension Benefit Adjustments for non-PEO NEOs (c) |
|
|
Average Equity Award Adjustments for non-PEO NEOs (d) |
|
|
Average Compensation Actually Paid to non-PEO NEOs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
14,937,678 |
|
|
|
— |
|
|
|
(6,150,008 |
) |
|
|
— |
|
|
|
4,926,603 |
|
|
|
13,714,272 |
|
|
|
|
|
|
|
|
2021 |
|
|
10,468,732 |
|
|
|
— |
|
|
|
(6,000,014 |
) |
|
|
— |
|
|
|
1,527,448 |
|
|
|
5,996,167 |
|
|
|
|
|
|
|
|
2020 |
|
|
13,208,230 |
|
|
|
(84,073 |
) |
|
|
(5,744,245 |
) |
|
|
— |
|
|
|
6,602,209 |
|
|
|
13,982,122 |
|
(a) |
The amounts included in this column are the changes in pension value reported in “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column of the Summary Compensation Table on page 57 for each applicable year. |
(b) |
The amounts included in this column represent the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table on page 57 for each applicable year. |
(c) |
The total pension benefit adjustments for each applicable year include the aggregate of two components: (i) the actuarially determined service cost for services rendered by each NEO during the applicable year (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) during the applicable year that are attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case, calculated in accordance with U.S. GAAP. There were no such costs for any NEO (including Mr. Goettler) during the covered period. |
(d) |
The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in the fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in the fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: | PEO Equity Component of CAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Michael Goettler (PEO) |
|
|
Change in
Fair Value
from Last
Day of Prior
Year to Last
Day of Year
of Unvested
Equity
Awards for
Michael
Goettler
(PEO) |
|
|
Vesting-
Date Fair
Value of
Equity
Awards
Granted
During Year
that Vested
During Year
for Michael
Goettler
(PEO) |
|
|
Change in
Fair Value
from Last
Day of Prior
Year to
Vesting
Date of
Unvested
Equity
Awards
that Vested
During Year
for Michael
Goettler
(PEO) |
|
|
Fair Value
at Last Day
of Prior
Year of
Equity
Awards
Forfeited
During Year
for Michael
Goettler
(PEO) |
|
|
Value of
Dividends
or Other
Earnings
Paid on
Equity
Awards Not
Otherwise
Included for
Michael
Goettler
(PEO) |
|
|
Total Equity
Award
Adjustments
for Michael
Goettler (PEO) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
10,405,453 |
|
|
|
(1,284,199 |
) |
|
|
— |
|
|
|
(449,132 |
) |
|
|
— |
|
|
|
— |
|
|
|
8,672,122 |
|
|
|
|
|
|
|
|
|
2021 |
|
|
8,821,950 |
|
|
|
(849,951 |
) |
|
|
— |
|
|
|
(13,611 |
) |
|
|
— |
|
|
|
— |
|
|
|
7,958,388 |
|
|
|
|
|
|
|
|
|
2020 |
|
|
3,325,076 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,325,076 |
| Average non-PEO NEOs Equity Component of CAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for non-PEO NEOs |
|
|
Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for non-PEO NEOs |
|
|
Average Vesting- Date Fair Value of Equity Awards Granted During Year that Vested During Year for non-PEO NEOs |
|
|
Average
Change in
Fair Value
from Last
Day of Prior
Year to
Vesting
Date of
Unvested
Equity
Awards |
|
|
|
|
|
Awards Not
Otherwise
Included for |
|
|
Total - Average Equity Award Adjustments for non-PEO NEOs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
7,032,266 |
|
|
|
(1,679,859 |
) |
|
|
— |
|
|
|
(425,804 |
) |
|
|
— |
|
|
|
— |
|
|
|
4,926,603 |
|
|
|
|
|
|
|
|
|
2021 |
|
|
5,816,674 |
|
|
|
(3,675,929 |
) |
|
|
— |
|
|
|
(613,297 |
) |
|
|
— |
|
|
|
— |
|
|
|
1,527,448 |
|
|
|
|
|
|
|
|
|
2020 |
|
|
6,923,584 |
|
|
|
(213,242 |
) |
|
|
— |
|
|
|
(108,133 |
) |
|
|
— |
|
|
|
— |
|
|
|
6,602,209 |
|
(4) |
Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
(5) |
The Peer Group TSR set forth in this table utilizes the Dow Jones U.S. Pharmaceuticals Index, which is also the published industry or index we utilized in the stock performance graph required by Item 201(e) of Regulation S-K included in the Form 10-K. Viatris common stock has been listed on the NASDAQ under the symbol “VTRS” since November 17, 2020. Prior to that time, there was no public market for our common stock. Upon consummation of the Combination, Pfizer stockholders received approximately 0.124079 shares of Viatris common stock for every one share of Pfizer common stock held as of the close of business on the record date (which was November 13, 2020). Former Mylan N.V. (“Mylan”) ordinary shareholders received one share of Viatris common stock for every one share of Mylan ordinary share held. The comparison assumes $100 was invested in Company stock for the period starting November 16, 2020, and in the Dow Jones U.S. Pharmaceuticals Index starting October 31, 2020 (with the reinvestment of all dividends) through the end of the listed year. Historical stock performance is not necessarily indicative of future stock performance. |
(6) |
The dollar amounts reported represent the amount of net earnings (loss) reflected in the Company’s audited financial statements for the applicable year. |
(7) |
In accordance with Accounting Standards Codification 805, Business Combinations, Mylan is considered the accounting acquirer of the Upjohn business and all historical financial information of the Company prior to November 16, 2020 represents Mylan’s historical results and the Company’s thereafter. |
(8) |
We determined Free Cash Flow (as reported) 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 2022. Free Cash Flow (as reported) refers to U.S. GAAP net cash provided by operating activities less capital expenditures. We may determine a different financial performance measure to be the most important financial performance measure in future years. |
|
|
|
| Company Selected Measure Name |
Free Cash Flow
|
|
|
| Named Executive Officers, Footnote |
The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Goettler) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Goettler) included for purposes of calculating the average amounts in each applicable year are Sanjeev Narula, Rajiv Malik, Anthony Mauro and Robert J. Coury.
|
|
|
| Peer Group Issuers, Footnote |
(5) |
The Peer Group TSR set forth in this table utilizes the Dow Jones U.S. Pharmaceuticals Index, which is also the published industry or index we utilized in the stock performance graph required by Item 201(e) of Regulation S-K included in the Form 10-K. Viatris common stock has been listed on the NASDAQ under the symbol “VTRS” since November 17, 2020. Prior to that time, there was no public market for our common stock. Upon consummation of the Combination, Pfizer stockholders received approximately 0.124079 shares of Viatris common stock for every one share of Pfizer common stock held as of the close of business on the record date (which was November 13, 2020). Former Mylan N.V. (“Mylan”) ordinary shareholders received one share of Viatris common stock for every one share of Mylan ordinary share held. The comparison assumes $100 was invested in Company stock for the period starting November 16, 2020, and in the Dow Jones U.S. Pharmaceuticals Index starting October 31, 2020 (with the reinvestment of all dividends) through the end of the listed year. Historical stock performance is not necessarily indicative of future stock performance. |
|
|
|
| PEO Total Compensation Amount |
$ 14,771,270
|
$ 14,779,570
|
$ 5,472,905
|
| PEO Actually Paid Compensation Amount |
$ 14,343,391
|
13,637,943
|
6,397,981
|
| Adjustment To PEO Compensation, Footnote |
PEO SCT Total to CAP Reconciliation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Summary
Compensation
Table Total for
Michael
Goettler (PEO) |
|
|
Reported
Change in
Pension Value
for
Michael
Goettler
(PEO) (a) |
|
|
Reported Value
of Equity Awards
for
Michael Goettler
(PEO) (b) |
|
|
Pension
Benefit
Adjustments
for Michael
Goettler
(PEO) (c) |
|
|
Equity Award
Adjustments
for Michael
Goettler
(PEO) (d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
14,771,270 |
|
|
|
— |
|
|
|
(9,100,001 |
) |
|
|
— |
|
|
|
8,672,122 |
|
|
|
14,343,391 |
|
|
|
|
|
|
|
|
2021 |
|
|
14,779,570 |
|
|
|
— |
|
|
|
(9,100,015 |
) |
|
|
— |
|
|
|
7,958,388 |
|
|
|
13,637,943 |
|
|
|
|
|
|
|
|
2020 |
|
|
5,472,905 |
|
|
|
— |
|
|
|
(2,400,000 |
) |
|
|
— |
|
|
|
3,325,076 |
|
|
|
6,397,981 |
|
(a) |
The amounts included in this column are the changes in pension value reported in “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column of the Summary Compensation Table on page 57 for each applicable year. |
(b) |
The amounts included in this column represent the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table on page 57 for each applicable year. |
(c) |
The total pension benefit adjustments for each applicable year include the aggregate of two components: (i) the actuarially determined service cost for services rendered by each NEO during the applicable year (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) during the applicable year that are attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case, calculated in accordance with U.S. GAAP. There were no such costs for any NEO (including Mr. Goettler) during the covered period. |
(d) |
The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in the fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in the fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: | PEO Equity Component of CAP
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
| |
|
Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Michael Goettler (PEO) |
|
|
Change in
Fair Value
from Last
Day of Prior
Year to Last
Day of Year
of Unvested
Equity
Awards for
Michael
Goettler
(PEO) |
|
|
Vesting-
Date Fair
Value of
Equity
Awards
Granted
During Year
that Vested
During Year
for Michael
Goettler
(PEO) |
|
|
Change in
Fair Value
from Last
Day of Prior
Year to
Vesting
Date of
Unvested
Equity
Awards
that Vested
During Year
for Michael
Goettler
(PEO) |
|
|
Fair Value
at Last Day
of Prior
Year of
Equity
Awards
Forfeited
During Year
for Michael
Goettler
(PEO) |
|
|
Value of
Dividends
or Other
Earnings
Paid on
Equity
Awards Not
Otherwise
Included for
Michael
Goettler
(PEO) |
|
|
Total Equity
Award
Adjustments
for Michael
Goettler (PEO) |
|
|
|
|
|
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|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
10,405,453 |
|
|
|
(1,284,199 |
) |
|
|
— |
|
|
|
(449,132 |
) |
|
|
— |
|
|
|
— |
|
|
|
8,672,122 |
|
|
|
|
|
|
|
|
|
2021 |
|
|
8,821,950 |
|
|
|
(849,951 |
) |
|
|
— |
|
|
|
(13,611 |
) |
|
|
— |
|
|
|
— |
|
|
|
7,958,388 |
|
|
|
|
|
|
|
|
|
2020 |
|
|
3,325,076 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,325,076 |
|
|
|
|
| Non-PEO NEO Average Total Compensation Amount |
$ 14,937,678
|
10,468,732
|
13,208,230
|
| Non-PEO NEO Average Compensation Actually Paid Amount |
$ 13,714,272
|
5,996,167
|
13,982,122
|
| Adjustment to Non-PEO NEO Compensation Footnote |
Average non-PEO NEOs SCT Total to CAP Reconciliation
|
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|
|
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|
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|
|
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| |
|
Average Summary Compensation Table Total for non-PEO NEOs |
|
|
Average Reported Change in Pension Value for non-PEO NEOs (a) |
|
|
Average Reported Value of Equity Awards for non-PEO NEOs (b) |
|
|
Average Pension Benefit Adjustments for non-PEO NEOs (c) |
|
|
Average Equity Award Adjustments for non-PEO NEOs (d) |
|
|
Average Compensation Actually Paid to non-PEO NEOs |
|
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|
|
|
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
14,937,678 |
|
|
|
— |
|
|
|
(6,150,008 |
) |
|
|
— |
|
|
|
4,926,603 |
|
|
|
13,714,272 |
|
|
|
|
|
|
|
|
2021 |
|
|
10,468,732 |
|
|
|
— |
|
|
|
(6,000,014 |
) |
|
|
— |
|
|
|
1,527,448 |
|
|
|
5,996,167 |
|
|
|
|
|
|
|
|
2020 |
|
|
13,208,230 |
|
|
|
(84,073 |
) |
|
|
(5,744,245 |
) |
|
|
— |
|
|
|
6,602,209 |
|
|
|
13,982,122 |
|
(a) |
The amounts included in this column are the changes in pension value reported in “Change in Pension Value and Non-qualified Deferred Compensation Earnings” column of the Summary Compensation Table on page 57 for each applicable year. |
(b) |
The amounts included in this column represent the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table on page 57 for each applicable year. |
(c) |
The total pension benefit adjustments for each applicable year include the aggregate of two components: (i) the actuarially determined service cost for services rendered by each NEO during the applicable year (the “service cost”); and (ii) the entire cost of benefits granted in a plan amendment (or initiation) during the applicable year that are attributed by the benefit formula to services rendered in periods prior to the plan amendment or initiation (the “prior service cost”), in each case, calculated in accordance with U.S. GAAP. There were no such costs for any NEO (including Mr. Goettler) during the covered period. |
(d) |
The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in the fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in the fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: | Average non-PEO NEOs Equity Component of CAP
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
| |
|
Average Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for non-PEO NEOs |
|
|
Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for non-PEO NEOs |
|
|
Average Vesting- Date Fair Value of Equity Awards Granted During Year that Vested During Year for non-PEO NEOs |
|
|
Average
Change in
Fair Value
from Last
Day of Prior
Year to
Vesting
Date of
Unvested
Equity
Awards |
|
|
|
|
|
Awards Not
Otherwise
Included for |
|
|
Total - Average Equity Award Adjustments for non-PEO NEOs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
|
7,032,266 |
|
|
|
(1,679,859 |
) |
|
|
— |
|
|
|
(425,804 |
) |
|
|
— |
|
|
|
— |
|
|
|
4,926,603 |
|
|
|
|
|
|
|
|
|
2021 |
|
|
5,816,674 |
|
|
|
(3,675,929 |
) |
|
|
— |
|
|
|
(613,297 |
) |
|
|
— |
|
|
|
— |
|
|
|
1,527,448 |
|
|
|
|
|
|
|
|
|
2020 |
|
|
6,923,584 |
|
|
|
(213,242 |
) |
|
|
— |
|
|
|
(108,133 |
) |
|
|
— |
|
|
|
— |
|
|
|
6,602,209 |
|
|
|
|
| Compensation Actually Paid vs. Total Shareholder Return |
Description of Relationship Between PEO and non-PEO NEO Compensation Actually Paid and Company TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our non-PEO NEOs, and the Company’s cumulative TSR over the three most recently completed fiscal years.
* |
$100 invested on November 16, 2020 in Company stock including reinvestment of dividends. |
|
|
|
| Compensation Actually Paid vs. Net Income |
Description of Relationship Between PEO and non-PEO 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 non-PEO NEOs, and our Net Earnings (Loss) during the three most recently completed fiscal years.
|
|
|
| Compensation Actually Paid vs. Company Selected Measure |
Description of Relationship Between PEO and non-PEO NEO Compensation Actually Paid and Free Cash Flow (as reported) The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our non-PEO NEOs, and our Free Cash Flow (as reported) during the three most recently completed fiscal years.
|
|
|
| Total Shareholder Return Vs Peer Group |
Description of Relationship Between Company TSR and Peer Group TSR The following chart compares our cumulative TSR over the three most recently completed fiscal years to that of the Dow Jones US Pharmaceuticals Index over the same period.
|
|
|
| Tabular List, Table |
List of Most Important Financial Performance Measures The following presents the financial performance measures that the Company considers to have been the most important in linking Compensation Actually Paid to our PEO and other NEOs for 2022 to Company performance. The measures are not ranked.
|
|
Most Important Performance Measures |
|
Adjusted EBITDA (as reported)* |
|
Free Cash Flow (as reported)* |
|
Relative TSR |
|
See Appendix B of this Proxy Statement for reconciliations of 2022 Adjusted EBITDA (as reported) and Free Cash Flow (as reported) to our audited financial statements. |
|
|
|
| Total Shareholder Return Amount |
$ 74.84
|
87.32
|
118.2
|
| Peer Group Total Shareholder Return Amount |
152.44
|
141.38
|
113.12
|
| Net Income (Loss) |
$ 2,079,000,000
|
$ (1,269,000,000)
|
$ (670,000,000)
|
| Company Selected Measure Amount |
2,547,000,000
|
2,560,000,000
|
989,000,000
|
| PEO Name |
Mr. Goettler
|
|
|
| Measure:: 1 |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Name |
Adjusted EBITDA
|
|
|
| Measure:: 2 |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Name |
Free Cash Flow
|
|
|
| Measure:: 3 |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Name |
Relative TSR
|
|
|
| PEO | Reported Value of Equity Awards [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
$ (9,100,001)
|
$ (9,100,015)
|
$ (2,400,000)
|
| PEO | Equity Award Adjustments [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
8,672,122
|
7,958,388
|
3,325,076
|
| PEO | Year End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
10,405,453
|
8,821,950
|
3,325,076
|
| PEO | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
(1,284,199)
|
(849,951)
|
|
| PEO | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
(449,132)
|
(13,611)
|
|
| Non-PEO NEO | Reported Change in Pension Value [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
|
|
(84,073)
|
| Non-PEO NEO | Reported Value of Equity Awards [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
(6,150,008)
|
(6,000,014)
|
(5,744,245)
|
| Non-PEO NEO | Equity Award Adjustments [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
4,926,603
|
1,527,448
|
6,602,209
|
| Non-PEO NEO | Year End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
7,032,266
|
5,816,674
|
6,923,584
|
| Non-PEO NEO | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
(1,679,859)
|
(3,675,929)
|
(213,242)
|
| Non-PEO NEO | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year [Member] |
|
|
|
| Pay vs Performance Disclosure |
|
|
|
| Adjustment to Compensation, Amount |
$ (425,804)
|
$ (613,297)
|
$ (108,133)
|