COR Cencora Inc

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934

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Dear Cencora shareholders:

2024 Proxy Statement

Notice of 2024 Annual Meeting of Shareholders

​	Meeting information	​
​	Time and date Tuesday, March 12, 2024 4:00 p.m., Eastern Time	​
​	Virtual meeting Held virtually-only via live webcast at www.virtualshareholder meeting.com/COR2024	​
​	Who may vote Shareholders of record on January 16, 2024 may vote	​
​	Date of availability This notice and proxy statement, together with our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, are being made available to shareholders on or about January 29, 2024	​

Agenda				​	​	Board recommendation				​
1	​	​	Elect the eleven directors named in this proxy statement	​	​		​	​	For each nominee	​
2	​	​	Conduct an advisory vote to approve the compensation of our named executive officers	​	​		​	​	For	​
3	​	​	Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal 2024	​	​		​	​	For	​
4	​	​	Approve an amendment of our certificate of incorporation to provide for the exculpation of officers as permitted by Delaware law	​	​		​	​	For	​
5	​	​	Approve miscellaneous amendments to our certificate of incorporation	​	​		​	​	For	​
6	​	​	Vote on the shareholder proposal set forth in this proxy statement, if properly presented at the 2024 Annual Meeting	​	​		​	​	Against	​
7	​	​	Transact any other business properly brought before the meeting	​	​					​

​		​	​	Internet Visit www.proxyvote.com and follow the instructions	​
​		​	​	Phone​ Call toll-free 1.800.690.6903 inside the United States or Puerto Rico and follow the instructions	​
​		​	​	Mail​ If you received a proxy/voting instruction card by mail, you can mark, date, sign and return it in the postage-paid envelope	​
​		​	​	Mobile device​ Scan the QR code provided on your proxy/voting instruction card	​
​		​	​	At the meeting​ Attend the virtual meeting and vote online	​

2024 Proxy Statement

Table of contents

​	Company highlights	​	​	1	​
​	Proxy statement summary	​	​	6	​
​	Board and governance matters	​	​	10	​
​	Item 1: Election of directors ​	​	​	10	​
​	Our Board of Directors	​	​	11	​
​	Corporate governance	​	​	21	​
​	Director compensation	​	​	36	​
​	Overview	​	​	36	​
​	Fiscal 2023 director compensation	​	​	38	​
​	Executive compensation	​	​	39	​
​	Item 2: Advisory vote to approve the compensation of our named executive officers ​	​	​	39	​
​	Compensation discussion and analysis	​	​	40	​
​	Report of the Compensation Committee	​	​	61	​
​	Executive compensation tables	​	​	62	​
​	CEO pay ratio	​	​	75	​
​	Pay versus performance	​	​	75	​
​	Audit matters	​	​	81	​
​	Item 3: Ratification of the appointment of Ernst & Young LLP as Cencora’s Independent Registered Public Accounting Firm for Fiscal 2024 ​	​	​	81	​
​	Selection and engagement of audit firm	​	​	82	​
​	Audit and non-audit fees	​	​	82	​
​	Pre-approval policies	​	​	82	​
​	Report of the Audit Committee	​	​	83	​
​	Item 4: Approval of an amendment of the certificate of incorporation to provide for the exculpation of officers as permitted by Delaware law ​	​	​	84	​

​	Item 5: Approval of miscellaneous amendments to the certificate of incorporation ​	​	​	86	​
​	Item 6: Shareholder proposal ​	​	​	88	​
​	Stock ownership information	​	​	91	​
​	Security ownership of certain beneficial owners, officers and directors	​	​	91	​
​	Equity compensation plan information	​	​	93	​
​	Delinquent Section 16(a) reports	​	​	93	​
​	Frequently asked questions about the 2024 Annual Meeting of Shareholders and voting at the meeting	​	​	94	​
​	Other Information	​	​	99	​
​	Availability of the Annual Report on Form 10-K	​	​	99	​
​	Requirements for submission of proxy proposals, nomination of directors and other business of shareholders	​	​	99	​
​	Appendix A	​	​	A-1	​
​	Supplemental information: GAAP to non-GAAP reconciliation	​	​	A-1	​
​	Exhibits	​	​	A-1	​
​	Exhibit A:	​	​	​	​
​	Proposed amended and restated certificate of incorporation	​	​	A-1	​
​	Exhibit B:	​	​	​	​
​	Proposed changes to current amended and restated certificate of incorporation (marked to show changes)	​	​	B-1	​

Cautionary note regarding forward-looking statements

Certain of the statements contained in this proxy statement and elsewhere in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “aim,” “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “on track,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “strive,” “sustain,” “synergy,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances and speak only as of the date hereof. These statements are not guarantees of future performance and are based on assumptions and estimates that could prove incorrect or could cause actual results to vary materially from those indicated.

Websites

Website addresses referenced in this proxy statement are intended to be inactive textual references, provided for convenience only, and the content on the referenced websites does not constitute a part of this proxy statement.

2024 Proxy Statement

Company highlights

Cencora is a leading global pharmaceutical solutions organization centered on improving the lives of people and animals around the world. We partner with pharmaceutical innovators across the value chain to facilitate and optimize market access to therapies. Care providers depend on us for the secure, reliable delivery of pharmaceuticals, healthcare products, and solutions. Our 46,000+ worldwide team members contribute to positive health outcomes through the power of our purpose: We are united in our responsibility to create healthier futures.

Fiscal 2023 performance

Business highlights

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Strategy for long-term sustainable growth

Cencora’s five strategic imperatives deliver long-term sustainable growth by maintaining a leading share of pharmaceutical distribution and best-in-class efficiency while growing our complementary higher-margin and high-growth businesses.

Our strategic imperatives are supported by investments in our people and culture and commitment to ESG.

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Our environmental, social and governance (ESG) priorities and selected activities and accomplishments

At Cencora, we believe that healthier futures start with the health of our people and planet. We engage our team members and work closely with partners who share our passion for supporting communities so that together we can help make a bigger difference in the world. We strive to help people around the globe have timely access to the medicines and therapies they need, and we prioritize protecting the environment in the process. Our Global ESG Impact Council serves as an internal steering committee focused on our long-term ESG strategy and disclosure approach. In fiscal year 2023, our notable ESG highlights included:

2024 Proxy Statement

Shareholder engagement

Shareholder engagement program

Maintaining regular dialogue with our shareholders is critically important to Cencora’s Board of Directors (the “Board”) and management team and ultimately to our success. The goal of our engagement and outreach efforts is to solicit feedback and understand and identify issues of importance to our shareholders. Additionally, we proactively communicate with the investment community and shareholders about our financial performance, operations and strategic developments through a year-round engagement program that includes the following:

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Quarterly earnings releases, investor presentations and conference calls;

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Conference calls, presentations and webcasts related to specific developments;

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Participation in numerous healthcare investor conferences with webcasted presentations;

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In-person and telephonic meetings with investors and stakeholders;

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Proactive outreach to institutional investors, pension funds and governance professionals from our largest shareholders; and

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Our annual shareholders meeting that includes a Q&A session.

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As part of our ongoing engagement program, we meet with shareholders throughout the year to discuss a broad range of topics, including strategic priorities, risk management, corporate governance and executive compensation, and ESG initiatives. Members of our Board and management team participate in these engagements and incorporate feedback from shareholders into their decision-making processes, where appropriate.

Year-round shareholder engagement informs the Board’s decision-making process

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Extensive shareholder outreach and engagement(1)

During fiscal 2023, we reached out to shareholders representing a majority of our outstanding common stock (“Common Stock”) as of September 30, 2023, as well as proxy advisory firms, industry groups, and our shareholder proposal proponent. One of our independent directors participated in select engagements. We appreciate the opportunity to hear direct feedback from our shareholders.

Shareholder feedback themes

We discussed a range of important topics with shareholders during fiscal 2023, including Board composition and succession planning, the evolution of our global brand to Cencora, governance matters, executive compensation (including the addition of an ESG metric for fiscal 2023), ESG initiatives and reporting, and Board oversight of risk.

Throughout these conversations, we heard positive feedback from shareholders regarding our governance, compensation, and environmental and social practices. In response to feedback from shareholders, we have enhanced disclosure in this proxy statement regarding the Compensation & Succession Planning Committee’s (the “Compensation Committee”) decision-making process.

2024 Proxy Statement

Proxy statement summary

This summary provides highlights of selected information about Cencora, Inc. (the “Company,” “Cencora,” “we,” “our” or “us”) from this proxy statement. Please review the entire document before voting. All of our 2024 Annual Meeting of Shareholders (the “2024 Annual Meeting”) materials are available at investor.cencora.com.

Voting roadmap

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Director nominee snapshot(1)

(1)

Sets forth information regarding the self-identification selections that our directors consented to be disclosed in the proxy statement.

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Our Board’s skills and experience

Our director nominees are a diverse group of skilled leaders who bring relevant experience and qualifications that enable the Board to effectively provide oversight to our management team and our long-term strategy and execution.

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2024 Board nominee highlights

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Fiscal 2023 executive compensation design overview(1)

(1)

Long-Term Incentives representation reflects grant date value of FY23 awards.

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(2)

Adjusted Free Cash Flow, Adjusted EPS, and Adjusted Operating Income are non-GAAP financial measures. See Appendix A for additional information regarding non-GAAP financial measures, including definitions and GAAP to non-GAAP reconciliations. For a comprehensive discussion of our GAAP financial results beyond those discussed in Appendix A, please refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

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Board and governance matters

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Election of directors

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We recommend that you vote FOR the election of each of the eleven nominees named in this proxy statement to the Board of Directors.

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2024 Proxy Statement

Our Board of Directors

Board size and director nominees

Our Board currently has 12 members, 11 of whom are standing for re-election at the 2024 Annual Meeting. As of the 2024 Annual Meeting, the size of the Board will be reduced from 12 members to 11. As previously announced, Henry W. McGee is not standing for re-election at the 2024 Annual Meeting. We thank Mr. McGee for his service.

The director nominees are listed below. Biographical information about our director nominees can be found on pages 14-19.

Director independence

The Board has adopted guidelines in our corporate governance principles to assist it in making independence determinations, which meet or exceed the independence requirements set forth in the New York Stock Exchange (“NYSE”) listing standards. For a director to be considered independent, the Board must determine that the director does not have any direct or indirect material relationship with Cencora.

With the assistance of legal counsel, our Board reviewed the applicable legal standards for director and Board committee member independence. In undertaking its review, the Board considered that some of our directors serve on the board of directors or as executive officers of companies for which we perform (or may seek to perform) drug distribution and other services in the ordinary course of business. As a result of this review, the Board determined that each of the following current directors and director nominees is independent: Werner Baumann; D. Mark Durcan; Richard W. Gochnauer; Lon R. Greenberg; Kathleen W. Hyle; Lorence H. Kim, M.D.; Henry W. McGee; Redonda G. Miller, M.D.; Dennis M. Nally; and Lauren M. Tyler.

Our Board also determined that each of the members of our Audit Committee, Compensation Committee and Governance, Sustainability & Corporate Responsibility Committee (the “Governance Committee”) are independent, in accordance with the independence requirements set forth in their charters, the applicable NYSE listing standards and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). None of the members of these committees receives any consulting or advisory fee from us other than compensation as non-employee directors.

Additionally, there are no family relationships among Cencora’s directors and executive officers.

2024 Proxy Statement

Identification and evaluation of director nominees and overboarding policy

Our Governance Committee seeks director nominees who possess qualifications, experience, attributes and skills that will enable them to contribute meaningfully to the leadership of our Board and to effectively guide and supervise management in driving Cencora’s growth and financial and operational performance. Each director nominee should:

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possess the highest personal and professional ethics, integrity and values;

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be committed to representing the long-term interests of our shareholders; and

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have an inquisitive and objective perspective, practical wisdom and mature judgment.

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Each director nominee should also have sufficient time to effectively carry out his or her duties as a director. Pursuant to our corporate governance principles, our Chief Executive Officer (“CEO”) may serve on no more than one other public company board and our other director nominees may serve on no more than three other public company boards. In addition, our Governance Committee has identified the following expertise, experience, attributes and skills that are particularly relevant to Cencora:

Board succession

To further our commitment to ensuring meaningful Board refreshment, in 2022, the Board adopted a mandatory term limit, pursuant to which any director initially elected or appointed to the Board after August 18, 2022 will offer to resign at the annual meeting of shareholders following his or her 15th anniversary as a director.

2024 Proxy Statement

Diversity

We seek individuals with diverse backgrounds, skills and expertise to serve on our Board. We believe that diversity is essential to encourage fresh perspectives, enrich the Board’s deliberations and avoid the dominance of a particular individual or group over the Board’s decisions. In accordance with our corporate governance principles and the Governance Committee charter, the Governance Committee has formalized its diversity focus to include, and have any search firm that it engages include, women and ethnically and racially diverse candidates in the pool from which the committee selects new director candidates. The Governance Committee evaluates all potential director nominees using the same criteria, regardless of the source of the nominee. Accordingly, all potential director nominees, including shareholder nominees, are assessed using the criteria outlined above. The Governance Committee may consider and evaluate director nominees identified by our shareholders as described below in the section titled “Shareholder recommendations for director nominees.”

Audit committee financial experts

The Board has determined that each of Mr. Nally and Mr. Gochnauer is an “audit committee financial expert” as defined in Item 407(d)(5) of Regulation S-K. Mr. Nally serves as chair of the Audit Committee. A description of the financial expertise of Mr. Nally and Mr. Gochnauer accompanies their biographies on pages 19 and 16, respectively.

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Biographies of our director nominees

Walgreens Boots Alliance’s designated director nominee

Pursuant to the Amended and Restated Shareholders Agreement (the “Shareholders Agreement”) between Cencora and Walgreens Boots Alliance, Inc. (“WBA”), WBA has the right to designate a director to our Board once WBA and certain of its subsidiaries collectively own five percent or more of our Common Stock. On May 1, 2014, WBA notified us that it had acquired at least five percent of our Common Stock. Ms. Barra, Chief Operating Officer, International of WBA, has been designated by WBA to serve on our Board since, and was appointed to the Board on, January 16, 2015 and is a current nominee for election as director. In addition, under the Shareholders Agreement, if WBA and its subsidiaries acquires 19,859,795 shares of our Common Stock in the open market, WBA will be entitled to designate a second director to the Board. Per the terms of the Shareholders Agreement, for so long as WBA has a right to designate a director to the Board, subject to certain exceptions, including matters related to acquisition proposals, WBA and its subsidiaries will be obligated to vote their shares in accordance with our Board’s recommendations on all matters submitted to a vote of our shareholders.

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Director elections

Our bylaws and corporate governance principles provide for a majority vote standard for the election of directors. Under the majority vote standard, each director must be elected by a majority of the votes cast by the shares present in person or represented by proxy and entitled to vote. A “majority of the votes cast” means that the number of votes cast “for” a candidate for director must exceed the number of votes cast “against” that director. A plurality voting standard will apply instead of a majority voting standard if there is a contested election. A “Contested Election” means any meeting of shareholders at which the number of nominees for election of directors exceeds the number of directors to be elected as of the tenth day preceding the date that we first mail our notice of meeting for such meeting to our shareholders.

Under Delaware law, if an incumbent nominee for director in an uncontested election does not receive the required votes for re-election, the director remains in office until a successor is elected and qualified. Our bylaws and corporate governance principles require each director nominee to tender an irrevocable resignation prior to the applicable meeting of shareholders and include post-election procedures in the event an incumbent director does not receive the required votes for re-election, as follows:

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The Governance Committee shall make a recommendation to the Board as to whether to accept the previously tendered resignation of the director;

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The Board will act on the Governance Committee’s recommendation; and

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The Board expects the director whose resignation is under consideration to abstain from participating in any decision regarding that resignation.

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Shareholder recommendations for director nominees

The advance notice provision for nomination of directors in our bylaws allows a shareholder to propose nominees for consideration by the Governance Committee by submitting specified information regarding the shareholder and the proposed nominee, including the name, appropriate biographical information and qualifications of the proposed nominee. In order to be considered for the 2025 Annual Meeting of Shareholders, this and other information required under the advance notice provision must be provided to us in writing to: Corporate Secretary, Cencora, Inc., 1 West First Avenue, Conshohocken, PA 19428, no earlier than November 12, 2024 and no later than December 12, 2024.

The proxy access provisions in our bylaws allow an eligible shareholder or group of no more than 20 eligible shareholders that has maintained continuous ownership of 3% or more of our Common Stock for at least three years to include in our proxy materials for an annual meeting of shareholders a number of director nominees up to the greater of two or 20% of the directors then in office. Loaned stock that can be recalled within three days may count towards an eligible shareholder’s 3% beneficial ownership requirement, which must be maintained at least until the annual meeting at which the proponent’s nominee will be considered. Proxy access nominees who do not receive at least a 25% vote in favor of election will be ineligible as a nominee for the following two years. Provisions in the Shareholders Agreement with WBA would not permit WBA to use proxy access. If any shareholder proposes a director nominee under our advance notice provision, we are not required to include any proxy access nominee in our proxy statement for the annual meeting. Information required under the proxy access provision must be provided to us in writing to: Corporate Secretary, Cencora, Inc., 1 West First Avenue, Conshohocken, PA 19428, no earlier than September 1, 2024 and no later than October 1, 2024 to be considered for the 2025 Annual Meeting of Shareholders. In considering any nominee proposed by a shareholder in accordance with the requirements set forth in our bylaws, the Governance Committee will reach a conclusion based on the nominee evaluation criteria described under “Identification and evaluation of director nominees and overboarding policy” beginning on page 12 of this proxy statement. After full consideration, the shareholder proponent will be notified of the decision of the committee.

2024 Proxy Statement

Corporate governance

Board and governance practices

Together with the charters of the Board committees, our Board-adopted corporate governance principles provide the framework for the governance of Cencora. Our corporate governance principles clearly delineate the authority and roles of the Chairman of the Board and the Lead Independent Director in the leadership of the Board, mandate the independence of the committee chairs and all the members of our Audit, Compensation and Governance Committees, and affirm non-employee directors’ access to managers and team members outside the presence of our executives. The corporate governance principles address a variety of governance issues in addition to leadership structure, including those discussed under the headings “Board committees,” “Code of ethics” and “Shareholder recommendations for director nominees.” The Board reviews and updates the corporate governance principles and the committee charters from time to time to reflect leading corporate governance practices.

Our corporate governance principles and the charters of the Audit Committee, the Compensation Committee, the Compliance & Risk Committee, the Finance Committee and the Governance Committee have been posted on our website at investor.cencora.com/governance/committees.

Board structure and operations

Our Board provides guidance and critical review of our governance, strategic initiatives, talent management, and risk management processes.

Our Board also ensures that we have an effective management team in place to run our business and serves to protect and advance the long-term interests of our shareholders. The role of our senior executives is to develop and implement a strategic business plan for Cencora and to grow our business.

Our employees conduct our business under the direction of our Chairman, President and CEO and with the independent oversight of our Board, including our Lead Independent Director. To enhance its oversight function, our Board is composed of directors who are not employed by us, with the exception of Mr. Collis.

Our Board has meaningful measures in place to facilitate strong independent oversight: the Lead Independent Director has clearly articulated and extensive authority and responsibilities in the Board’s governance and functions.

2024 Proxy Statement

Lead independent director

Mr. Durcan began his service as our Lead Independent Director immediately following the 2023 Annual Meeting of Shareholders. The Board continues to believe that Mr. Durcan provides sound independent leadership in the boardroom. He brings important skills and qualifications to the role, including substantial experience in strategic planning, global markets and technological innovation gained through his experience as a Chief Operating Officer and CEO of a publicly traded company and his service on other public company boards. Mr. Durcan also has strong working relationships with his fellow directors.

The Lead Independent Director’s robust and comprehensive authority is as follows:

The Board maintains processes that provide it with opportunities to examine and reassess the effectiveness of our leadership structure, including the performance of our Chairman and our Lead Independent Director. These topics are reviewed through annual evaluations, under the oversight of our Governance Committee. The Compensation Committee, in accordance with its charter and under the oversight of the Lead Independent Director, will also annually review the performance of, and succession plan for, the CEO.

Chairman

Our Board has always retained the flexibility to determine the optimal leadership structure for the Company and our shareholders because our shareholders benefit most when our Board has the freedom to make decisions that are in the best interests of the Company, rather than pursuant to a predetermined policy. As provided for in our corporate governance principles, if the Chairman is not an independent member of the Board, then a Lead Independent Director must be elected annually from among the independent directors by a majority vote of the independent directors. We believe that this leadership structure fosters innovative, responsive, and strong leadership for the Company as a whole.

The Chairman’s primary responsibility is to set the agenda for the Board in coordination with the Lead Independent Director and to facilitate communications among our directors and between the Board and senior management. Mr. Collis has served as President and CEO since July 2011 and as Chairman since March 2016. As Chairman, President and CEO, Mr. Collis ensures that the Board’s agenda and discussions address strategic planning as well as key business issues and risks that he encounters in daily operations. Through its annual review process, the Board has determined that it remains in the best interests of the Company and its shareholders for him to serve in both roles at this time, with a Lead Independent Director serving as a counterbalance. Mr. Collis is uniquely suited to serve in this combined role due to his knowledge of the Company and his experience in the industry, and it enables him to effectively and efficiently execute our strategic initiatives. In November 2018, the Board determined that it was in the best interests of the Company to split the role of Chairman of the Board and CEO in the future, commencing with the Company’s next CEO. At that time, the Chairman role will be assumed by an independent director.

2024 Proxy Statement

Board committees

There are five standing committees of the Board which, together with the Executive Committee, are the primary committees with delegated oversight of the Company’s operations: Audit Committee; Compensation Committee; Compliance & Risk Committee; Finance Committee; and Governance Committee.

Our Audit, Compensation, and Governance Committees are each chaired by and composed solely of independent directors; a majority of the directors serving on our Compliance & Risk Committee and Finance Committee are independent directors; and our non-employee directors are encouraged to, and often do, have direct contact with our senior managers outside the presence of our executive officers. Our Executive Committee is composed of our Chairman, Lead Independent Director and the chairs of the five standing committees and has authority to act in between regularly scheduled meetings of the Board. The Chairman serves as the chair of the Executive Committee.

The Board believes that changing committee assignments from time to time strengthens our corporate governance practices and enhances each committee’s objective review of management.

Our governance structure establishes a dynamic leadership role for the Lead Independent Director which, together with independent committee leadership, provides a meaningful counterbalance to the executive Chairman and maintains independent and effective oversight of management.

Key responsibilities

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Key responsibilities

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Key responsibilities

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The Board’s role and responsibilities

Oversight of risk management

Our Board considers specific risk topics throughout the year, including risks associated with government regulation as well as with our strategic objectives, business plan, operations, distribution of controlled substances, ESG, compensation, information technology (including cybersecurity), and capital structure, among many others. Each quarter, our Chief Financial Officer reports to the Board on Cencora’s financial performance and explains how actual performance compares to our business plan. Our corporate officers and the leaders of our principal business units report regularly to the Board about the risks and exposures related to their areas of responsibility. The Board is informed about and regularly discusses our risk profile, including legal, regulatory and operational risks to our business.

We have a Chief Compliance Officer who oversees our corporate compliance program, including our:

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Office of Compliance;

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compliance audits;

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compliance training;

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compliance with our Code of Ethics and Business Conduct; and

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reporting, investigation and corrective action program.

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We also have an internal Compliance Committee composed of executive officers that supports the Chief Compliance Officer in fulfilling his or her responsibilities and driving corporate adherence to our compliance program, Code of Ethics and Business Conduct and related policies and procedures. Our Chief Legal Officer, Chief Compliance Officer and Chief Diversion Control Officer report to the Compliance & Risk Committee and to the full Board throughout the year on corporate compliance matters, the status of our compliance programs (including our diversion control program described below), calls to our hotline and any other material developments.

Each Board committee reports to the Board at every regular Board meeting on the topics discussed and actions taken at the most recent committee meeting. The Board discusses the risks and exposures, if any, involved in the matters or recommendations of the committees, as necessary.

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Role of the Board, committees and management

The Board executes its oversight responsibility for risk management directly and through its five standing committees, as follows:

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Oversight of controlled substances

The Board oversees our compliance policies and practices, including our sophisticated diversion control program through which the Company provides daily reports directly to the Drug Enforcement Administration (“DEA”) about the quantity, type, and receiving pharmacy of every order of controlled substances we distribute. Additionally, the Board periodically visits Company facilities, which provides the directors with an opportunity to observe the Company’s operations and to interact with employees outside of the boardroom.

Cencora has a longstanding commitment to ensuring a safe and efficient pharmaceutical supply chain. Our wholesale pharmaceutical distribution business plays a key, but specific, role of providing safe access to thousands of important medications to enable healthcare providers to serve patients with a wide array of clinical needs across the healthcare spectrum. We have taken substantial steps to help prevent the diversion of controlled substances and are committed to joining other healthcare stakeholders, government entities, civic organizations, law enforcement agencies and individuals to help address the opioid epidemic.

Our Board oversees risk management and considers specific risk topics on an ongoing basis, including risks associated with the Company’s distribution of opioid medications. Our Compliance & Risk Committee provides further oversight on these matters and expertise at the Board level. The Board (and/or the Compliance & Risk Committee) receive at least quarterly updates on our anti-diversion program, the status of pending litigation related to the distribution of opioids, legislative and regulatory developments related to controlled substances, and shareholder feedback. For additional information on the Board’s oversight of risks, see “Board and governance matters — The Board’s role and responsibilities — Oversight of risk management” beginning on page 27 of this proxy statement.

Our role in the supply chain

Our wholesale distribution business manages the secure transportation of Food and Drug Administration (“FDA”) approved medications, a small part of which includes opioids and other controlled substances, from manufacturers to neighborhood pharmacies and pharmacy chains as well as hospitals, nursing homes, hospices and other clinical settings. Distributors do not manufacture or create supply or demand for opioids. The distribution of opioid medicines represents less than two percent of our annual revenue, and we do not offer our sales team members incentives based on opioid sales.

In fulfilling our Company’s purpose to create healthier futures, Cencora is dedicated to providing efficient and safe access to all FDA-approved medications through our wholesale distribution business. Wholesale distribution serves as a physical link between manufacturers and the healthcare providers that ultimately serve patients.

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Internal controls and anti-diversion practices

Ensuring the safety and security of wholesale distribution has always been paramount. To achieve this, we continuously evaluate, enhance, strengthen and expand the proven measures we have implemented to maintain the integrity of every order we ship. These processes include:

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Oversight of ESG

Creating healthier futures is at the foundation of everything we do, and our purpose directly inspires our global environmental, social, and governance (“ESG”) strategy. When we deliver on our purpose, we enhance access to healthcare and accelerate better patient outcomes in communities everywhere.

We are committed to continually evolving our ESG strategy and governance approach year after year. The ongoing growth of our business and brand on a global scale provides meaningful opportunities to ensure that our approach to ESG impact aligns with the current state and future vision for our business. Our efforts to continually enhance our ESG strategy routinely involves engaging a diverse set of internal and external stakeholders to understand the primary ESG issues where Cencora has the greatest impact.

The governance and ongoing execution of our global ESG strategy is the responsibility of leaders and key internal partners across the Cencora enterprise. Our global ESG strategy, program, and goals have direct oversight and approval by the Board, key Board committees, executive management, and the Global ESG Impact Council.

Oversight of Cybersecurity and Other Information Technology

The Audit Committee is responsible for discussing with management our cybersecurity and other major information technology risk exposures. The Audit Committee receives quarterly updates from the Chief Information Officer and Chief Information Security Officer on these risk exposures and the Board receives an annual cybersecurity update. These updates focus on, among other things, the threat environment and the risks our businesses face, the state, priorities of, and investments in our information protection program, the availability of cyber insurance, and relevant cybersecurity operational metrics.

Oversight of employee compensation

We have conducted an internal risk assessment of our compensation policies and practices, including those relating to our named executive officers (“NEOs”). We have concluded that our compensation policies and practices do not promote behaviors that could put the organization at legal, financial, or reputational risk. We have reviewed our risk analysis with the Compensation Committee. The risk assessment process included, among other things, a review of all key incentive compensation plans to ensure that they are aligned with our pay-for-performance philosophy and include performance metrics that support corporate goals. The objective of this process was to identify any compensation plans and practices that may encourage unnecessary or excessive risk-taking that could have a material adverse effect on the Company. No such plans or practices were identified. Accordingly, no material adjustments were made to the Company’s compensation policies and practices as a result of its risk profile. Various factors mitigate the risk profile of our compensation programs, including, among others:

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Performance targets under our cash incentive programs are tied to a number of different financial metrics to avoid placing undue emphasis on any particular metric at the expense of other aspects of our business;

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Maximum caps on payouts have been established for our annual cash incentive programs, including under our cash bonus plan;

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Equity awards under our performance plan have maximum caps and are forfeited entirely if the threshold performance metrics are not achieved;

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The performance plan ties 60% of the annual equity award to performance shares that are dependent on financial metrics achieved over a three-year period to ensure executive accountability for our long-term measures of success;

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The remaining 40% of the annual equity award is in restricted stock units and also vests over a multi-year period to encourage retention and to focus on long-term growth and creating value for shareholders;

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Stock ownership requirements align the interests of our NEOs with those of our shareholders;

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We have effective management processes for developing annual business plans and a strong system of internal financial controls; and

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A broad-based group of functions, including human resources, finance, and legal, oversees aspects of our cash and equity incentive programs.

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We will continue to monitor our compensation policies and practices to determine whether our risk management objectives are being met.

Director engagement

Director attendance

The Board met eleven times during fiscal 2023, two of which were special meetings. Each director attended at least 75% of the aggregate of  (i) the total number of meetings of the Board held during fiscal 2023 and (ii) the total number of meetings held by each committee of the Board on which such director served during fiscal 2023. Directors are expected to attend our annual meetings pursuant to our corporate governance principles and we expect all our director nominees to virtually attend the 2024 Annual Meeting. All of our directors virtually attended the 2023 Annual Meeting of Shareholders.

Meetings of the independent directors

The independent directors meet prior to the commencement of each of the regularly scheduled committee meetings. Additionally, the independent directors, together with our one additional non-management director, meet after each regularly scheduled meeting of the full Board. The Lead Independent Director presides at each such meeting and, if the Lead Independent Director is not present, the committee chairs preside on a rotating basis.

Board education and onboarding

We provide our directors with comprehensive orientation, which is overseen by the Governance Committee. Director orientation familiarizes the directors with our business and strategic plans, significant financial, accounting and risk management issues, compliance programs, policies and other controls, and our principal officers. The orientation also addresses Board procedures, our corporate governance principles and our Board committee charters. Our new directors also attend at least one meeting of each committee as part of their onboarding process. We also offer continuing education programs and reimbursement for outside educational programs and provide opportunities to attend commercial director education seminars to assist our directors in maintaining their expertise in areas related to the work of the Board and the directors’ committee assignments. Ongoing education includes two hours of annual compliance training for each director. We also provide our directors with full membership to the National Association of Corporate Directors to provide a forum for them to maintain their insight into leading governance practices and exchange ideas with peers. Ms. Hyle in 2015 was named to the “NACD Directorship 100,” an annual honor sponsored by the National Association of Corporate Directors to recognize influential directors and others who impact corporate governance.

Board evaluation process

We have a comprehensive annual review process in place for the Board and each of its committees, which is led by the chair of our Governance Committee and our Lead Independent Director. As required by our corporate governance principles, the review occurs annually. The process involves discussion and planning for both Board succession and committee rotation, including with regard to the skills needed to continue to represent the long-term interests of shareholders. Either

2024 Proxy Statement

the chair of our Governance Committee, the Lead Independent Director, or an independent, third-party governance expert interviews each director to obtain his or her assessment of the effectiveness of the Board and the committees on which he or she serves, as well as director performance and Board dynamics. For fiscal 2023, the evaluation process was led by the Lead Independent Director. In advance of the interview, each member of a committee receives a questionnaire soliciting feedback regarding the committee’s performance. During the interview, each director is asked to provide an assessment of the Board’s and the relevant committee’s performance. We also solicit suggestions for improving the Board’s and the committee’s performance, dynamics, time-management, and functioning, as well as proposed topics of focus for the Board and the committees in the upcoming year. The results of the individual interviews and assessments are compiled in a report, which the Lead Independent Director presents to the full Board for review, discussion and determination of action items. The annual review by the Board of the corporate governance principles and by each committee of its charter is a further step in the evaluation process through which the directors consider corporate governance best practices and trends for the Board as a whole and identify new areas of focus for the different committees. The full Board reviews and discusses recommended revisions to the corporate governance principles and committee charters prior to voting on their approval.

Director communications

Interested parties who wish to communicate with the full Board, the non-management directors, an individual director or a Board committee may submit communications at any time in writing to: Corporate Secretary, Cencora, Inc., 1 West First Avenue, Conshohocken, PA 19428. Cencora’s Corporate Secretary will determine, in his or her good faith judgment, which communications will be relayed to the Lead Independent Director and other non-management directors. All such correspondence should identify the author as a shareholder or other interested party and clearly state the intended recipient. Communications received may be reviewed by the Corporate Secretary for the sole purpose of determining whether it is appropriate. In general, the following types of communication are not related to the duties and responsibilities of the Board and are therefore not appropriate: spam and similar junk mail and mass mailings, unsolicited advertisements or invitations to conferences or promotional material, product complaints, resumes or other job inquiries, and surveys.

Other governance policies and practices

Code of ethics

The Board adopted our Code of Ethics and Business Conduct in May 2004. We review and revise the Code of Ethics and Business Conduct from time to time, most recently in August 2023. It applies to directors and employees, including officers, and is intended to comply with the requirements of Section 303A.10 of the NYSE Listed Company Manual. Any waivers of the application of the Code of Ethics and Business Conduct to directors or executive officers must be approved by either the Board or the Compliance & Risk Committee.

We have also adopted our Code of Ethics for Designated Senior Officers in accordance with Item 406 of the SEC’s Regulation S-K. It applies to our President and CEO, our Executive Vice President and Chief Financial Officer and our Senior Vice President and Chief Accounting Officer.

Our Code of Ethics and Business Conduct and our Code of Ethics for Designated Senior Officers are posted on our website at investor.cencora.com/governance/policies. Additionally, any waiver or amendment to either code will be disclosed promptly on our website at investor.cencora.com/governance/policies.

Derivatives trading and hedging prohibition

Cencora considers it improper and inappropriate for its directors, officers and employees to engage in short-term or speculative transactions in our securities, including hedging or monetization transactions. Many forms of speculative transactions are inconsistent with the goal to improve our long-term performance. Accordingly, Cencora has a policy that prohibits directors, officers and employees from engaging in the following transactions involving Cencora securities: short sales, hedging or monetization transactions, and transactions in publicly-traded options on our securities, such as puts, calls and other derivatives.

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Related persons transactions

Related persons transactions policy

We have a written Related Persons Transactions Policy, which is posted on our website at investor.cencora.com/​governance/policies. The Audit Committee must approve or ratify any transaction, arrangement or relationship exceeding $120,000 in which the Company and any related person has a direct or indirect material interest. This policy includes any series of transactions that exceeds $120,000 in the aggregate in any calendar year. Related persons include:

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directors and director nominees;

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executive officers;

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persons controlling more than 5% of our Common Stock;

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the immediate family members of each of these individuals; and

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a firm, corporation or other entity in which any of these individuals is employed or is a partner or principal or in which any of these individuals has more than 5% ownership interest.

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Related persons must notify our Executive Vice President and Chief Legal Officer in advance of any proposed transaction with us. They must explain the principal features of the proposed transaction, including its potential value and benefit to us. Our Executive Vice President and Chief Legal Officer will refer all proposed related person transactions exceeding $120,000 to the Audit Committee for review.

The Audit Committee will consider the proposed transaction at its next regularly scheduled meeting. In reviewing the proposed transaction, the Audit Committee will take into account those factors it considers appropriate, including the business reasons for the transaction and whether the terms of the transaction are fair to the Company and no less favorable than would be provided by an unaffiliated third party. The Audit Committee will also consider, if applicable, whether the proposed transaction would impair the independence of a director or present an improper conflict of interest for directors, director nominees or executive officers. Directors with an interest in any proposed transaction will not vote on the proposed transaction. The Audit Committee will review annually any ongoing or continuous related person transactions.

Related persons transactions

WBA, through Walgreens Boots Alliance Holdings LLC (formerly known as WAB Holdings LLC), controls more than 5% of our Common Stock, and transactions between us and WBA are subject to our Related Persons Transactions Policy. In fiscal 2023, transactions between the Company and WBA accounted for approximately 26% of our revenues and 38% of our receivables. For fiscal 2023, revenue from various agreements and arrangements with WBA was $68.7 billion, and the Company’s receivable, net of incentives, was $8.1 billion.

As previously disclosed, in March 2013, we established a strategic relationship with WBA. As part of that strategic relationship, we entered into various agreements and arrangements with WBA and certain of its affiliates, including a ten-year pharmaceutical distribution agreement, pursuant to which we distribute branded and generic pharmaceutical products to WBA (the “US PVA”), and a generics purchasing services arrangement that provides us with the ability to access generics and related pharmaceutical products through a global sourcing arrangement with Walgreens Boots Alliance Development GmbH (the “WBAD Arrangement”).

In addition, the Shareholders Agreement contains, among other things, certain restrictions on WBA’s ability to transfer its shares of our Common Stock. The Shareholders Agreement also contains certain standstill provisions that, among other things and subject to certain exceptions, prohibit WBA from acquiring additional shares of our Common Stock. The standstill provisions prohibit WBA from entering into voting agreements or granting a proxy to any other person; participating or engaging in a proxy solicitation with respect to Cencora; seeking to control or influence the management or policies of Cencora; or entering into or proposing a merger, business combination or other similar extraordinary transaction involving Cencora. The foregoing restrictions do not prohibit WBA from, subject to certain requirements, making private proposals to Cencora subject to the approval of our Board, or competing with third-party acquisition proposals. The Shareholders Agreement also contains various provisions relating to Board representation, voting arrangements, registration rights and other matters. The subsidiaries of WBA that hold our Common Stock (including Walgreens Boots Alliance Holdings) are also subject to the above-mentioned restrictions and provisions.

Under the Shareholders Agreement, WBA became entitled to designate a director to our Board when it, together with its subsidiaries, achieved ownership of 5% or more of our Common Stock. Ornella Barra is currently serving on our Board as WBA’s designee and is a nominee for re-election as a director. Ms. Barra has served as a director of the Company since January 2015 and is a member of our Compliance & Risk Committee and Finance Committee.

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WBA is entitled to designate a second director to our Board if, together with its subsidiaries, it acquires in one or more open market transactions, a total of 19,859,795 shares of our Common Stock (subject to certain adjustments). If WBA divests its equity securities such that it owns less than 5% of the Common Stock, WBA will no longer be entitled to designate any directors to the Board, and the Shareholders Agreement will, subject to certain exceptions, terminate.

For so long as WBA has the right to designate a director to our Board, subject to certain exceptions, including matters related to acquisition proposals, WBA will be obligated to vote all of its shares of our Common Stock in accordance with the recommendation of the Board on all matters submitted to a vote of our shareholders (including the election of directors).

As previously disclosed, in June 2021, we acquired a majority of WBA’s Alliance Healthcare businesses for $6.275 billion in cash, subject to certain purchase price adjustments, and 2 million shares of our Common Stock. We also extended the US PVA and the WBAD Arrangement by three years through 2029 and entered into a distribution agreement pursuant to which we will supply branded and generic pharmaceutical products to WBA’s Boots pharmacies in the United Kingdom through 2031. We also entered into an Amended and Restated Shareholders Agreement, which amended and restated in its entirety the Shareholders Agreement and, among other things, increased by 1% the percentage of outstanding shares of our Common Stock which WBA and its affiliates are permitted to hold.

Prohibition of loans to directors and officers

Our corporate governance principles prohibit us from making any loans or extensions of credit to directors or executive officers. We do not have any programs under which we extend loans to either directors or officers.

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Director compensation

Overview

Elements of director compensation

Our director compensation program is designed to attract and retain qualified non-employee directors. Our program aligns director compensation with the compensation of our peers (our peer companies are identified on page 48). Our Governance Committee reviews non-employee director compensation regularly to confirm that it appropriately addresses time, effort, expertise, and accountability required of active Board membership.

The following table summarizes the total compensation earned by directors who were not employees of Cencora during fiscal 2023. Ms. Barra waived her right to receive compensation as a non-employee director. Directors who are employees of Cencora receive no compensation for their service as directors or as members of Board committees.

Director fees

Our director compensation program provides for an annual cash retainer plus an annual equity award of restricted stock units. Consistent with our overall compensation philosophy, the compensation program for non-employee directors targets total direct compensation (cash retainer and equity award) aligned with the median of our peer group. (See page 48 for a description of our peer group.)

​	Fiscal 2023 annual compensation for non-employee directors				​
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​	Lead Independent Director Compensation ($)				​
​	• Annual retainer ​	​	​	125,000	​
​	• Annual equity award ​	​	​	250,000	​

​	Additional fiscal 2023 annual retainers ($)(1)				​
​	Committee Chair Fee				​
​	• Audit Committee ​	​	​	25,000	​
​	• Compensation & Succession Planning Committee ​	​	​	20,000	​
​	• Compliance & Risk Committee ​	​	​	25,000	​
​	• Finance Committee ​	​	​	20,000	​
​	• Governance, Sustainability & Corporate Responsibility Committee ​	​	​	20,000	​

(1)

Mr. Nally also received an annual retainer of  $50,000 as the sole member of the Special Litigation Committee, which was created in September 2020 to review and evaluate a derivative complaint related to Medical Initiatives, Inc., a subsidiary that ceased operations in 2014.

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Annual retainers

A director may elect to have the annual retainer paid in cash, Common Stock or restricted stock units, or credited to a deferred compensation account. Payment of annual retainers in cash are made in equal quarterly installments.

Annual equity awards

On March 9, 2023, each of the non-employee directors (other than Ms. Barra, who waived compensation) received an annual grant of restricted stock units. The vesting period for these awards is one year from the date of grant, subject to continued service on the Board or following retirement by a director who, after reaching age 55, has an age plus years of continuous service with the Company that equals at least 65. These grants were made under the Company’s 2022 Omnibus Incentive Plan (the “2022 Omnibus Incentive Plan”). A director may defer settlement of shares payable with respect to restricted stock units as described below.

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Deferral and other arrangements

Directors have the option to defer all or any part of the annual retainer and to credit the deferred amount to an account under the Company’s Deferred Compensation Plan (the “Deferred Compensation Plan”). Payment of deferred amounts will be made or begin on the first day of the month after the non-employee director ceases to serve as a director. A director may elect to receive the deferred benefit (i) over annual periods ranging from three to 15 years and payable in quarterly installments or (ii) in a single distribution. We pay all costs and expenses incurred in the administration of the Deferred Compensation Plan. Directors also have the option to forgo 50% or more of their annual cash retainers and receive either Common Stock or restricted stock units covering shares having a fair market value on the quarterly grant date equal to the amount of the foregone compensation. In addition, directors may defer settlement of any shares payable with respect to any restricted stock units (and any dividend equivalents) received either in lieu of the annual retainer or as the annual equity award to a later date.

Perquisites

We also provide our directors with a prescription drug benefit and reimburse them for the cost of education programs, transportation, food and lodging in connection with their service as directors.

Director compensation policies and practices

Stock ownership guidelines

We require our non-employee directors to own shares of our Common Stock to align their interests with those of the shareholders and to provide an incentive to foster our long-term success. From and after the fifth year following their Board election, non-employee directors must own stock equal in value to at least five times the annual cash retainer. We may take unusual market conditions into consideration when assessing compliance. We confirm compliance with guidelines annually at the end of each fiscal year and, as of September 30, 2023, all of our non-employee directors were in compliance with the stock ownership guidelines or had not yet completed their fifth year as a director.

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Fiscal 2023 director compensation

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(1)

These amounts include amounts earned for service as committee chairs and amounts deferred into our Deferred Compensation Plan. In fiscal 2023, Mr. Nally received 748 shares of Common Stock in lieu of a portion of his retainers.

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(2)

As of September 30, 2023, each of the non-employee directors held the following shares of outstanding restricted stock units:

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The amounts reported represent the grant date fair value for equity awards shown in accordance with Accounting Standards Codification 718, disregarding the estimate of forfeitures related to service-based vesting conditions. There were no forfeitures by the directors in fiscal 2023. See Note 10 to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 for assumptions used to estimate the fair values of restricted stock units granted during fiscal 2023. In the case of each of Dr. Kim and Dr. Miller, also reflects pro-rated grant for service through the 2023 annual shareholders meeting.

(3)

Ms. Barra waived her right to receive compensation as a non-employee director. Consequently, our Board has waived the stock ownership requirements for Ms. Barra.

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(4)

Mr. Baumann and Ms. Tyler joined the Board in fiscal 2024 and therefore did not receive any compensation during fiscal 2023.

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2024 Proxy Statement

Executive compensation

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Advisory vote to approve the compensation of our named executive officers

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The Board recommends that you vote FOR the advisory resolution approving the fiscal 2023 compensation of Cencora’s named executive officers as described in this proxy statement.

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2024 Proxy Statement

Compensation discussion and analysis

This Compensation Discussion and Analysis (“CD&A”) describes the material elements of our executive compensation program during fiscal 2023 and provides an overview of how and why the Compensation Committee arrived at the specific compensation decisions for our named executive officers for fiscal 2023.

Our named executive officers

Our fiscal 2023 named executive officers (“NEOs”) are:

Executive summary

Our company

Cencora is a leading global pharmaceutical solutions organization centered on improving the lives of people and animals around the world. We partner with pharmaceutical innovators across the value chain to facilitate and optimize market access to therapies. Care providers depend on us for the secure, reliable delivery of pharmaceuticals, healthcare products, and solutions. Our 46,000+ worldwide team members contribute to positive health outcomes through the power of our purpose: We are united in our responsibility to create healthier futures.

Fiscal 2023 performance

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Fiscal 2023 business and strategic highlights

Cencora delivered strong financial performance in fiscal 2023 as we capitalized on the opportunities presented by our pharmaceutical-centric strategy. Revenue and adjusted diluted earnings per share (“adjusted EPS”) grew in the high-single digits as we continued to benefit from solid underlying business fundamentals, broad-based utilization trends, execution by our team members, and our value creating approach to capital deployment.

During fiscal 2023 we:

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Generated $3.1 billion in adjusted free cash flow, providing flexibility to support further investment in our business and return capital to our shareholders;

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Completed the acquisition of PharmaLex, expanding our global commercialization offerings and adding to our ability to support our pharmaceutical partners; and

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Completed a minority investment in OneOncology, deepening our relationship with community oncologists and enhancing our oncology platform.

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We also returned capital to our shareholders during 2023 by opportunistically buying back $1.2 billion of shares and increasing our dividend 5%, representing the 19th consecutive year of increasing our dividend.

United under our new identity as Cencora, we believe that we are better positioned to grow globally and leverage our infrastructure efficiently to serve our customers and create value for our stakeholders.

Elements of compensation

The Compensation Committee seeks to design an executive compensation program that incentivizes our management team to meet and exceed objectives that drive long-term value for all our stakeholders, while promoting talent retention. Our NEOs’ total direct compensation consists of three main elements:

A substantial majority of this compensation is at-risk and/or variable and tied to Company performance and share price. Base salary is the only form of fixed compensation. The Compensation Committee considers a multitude of factors in determining executive compensation objectives and targets for our NEOs, which are described in detail in the following sections.

Our compensation policies are designed to attract and retain talented and experienced executive officers. We believe that these policies have benefited Cencora over time and position us for continued growth in the future.

Pay and performance alignment

We emphasize compensation opportunities that reward our NEOs when they deliver on targeted results and strategic objectives. When setting executive compensation, the Compensation Committee takes into account job performance, scope of role, duties and responsibilities, expected future contributions, peer group, and other market pay data.

As shown in the charts below, a significant portion of our NEOs’ compensation is incentive-based. In fiscal 2023, incentive compensation (annual cash bonus and equity incentive awards) accounted for approximately 91% of our CEO’s total target direct compensation and approximately 84% of the average total target direct compensation of the other NEOs.

We believe that the fiscal 2023 compensation of our NEOs was aligned with our reported financial results and compensation objectives.

2024 Proxy Statement

Fiscal 2023 compensation design: target pay mix(1)

(1)

Long-Term Incentives representation reflects grant date value of fiscal 2023 awards.

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(2)

Adjusted Free Cash Flow, Adjusted EPS, and Adjusted Operating Income are non-GAAP financial measures. See Appendix A for additional information regarding non-GAAP financial measures, including GAAP to non-GAAP reconciliations. For a comprehensive discussion of our GAAP financial results beyond those discussed in Appendix A, please refer to our Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

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Say-on-pay results and shareholder engagement

In addition to vote outcomes, regular shareholder outreach and engagement are critical inputs, which are shared with our full Board and management to help inform their decision-making process. We engage with shareholders throughout the year to seek their feedback on our governance and executive compensation practices, in addition to other topics important to our long-term growth and value creation.

As demonstrated in the chart below, we engaged with a number of our largest shareholders, as well as proxy advisory firms and investor organizations, and in certain meetings, included an independent director to represent the perspective of the Board. We appreciate the opportunity to hear direct feedback from our shareholders.

Extensive shareholder outreach and engagement(1)

We discussed a range of important topics with shareholders during fiscal 2023. With respect to executive compensation, we discussed the implementation of the ESG metric in our 2023 short-term cash incentive program and the Compensation Committee’s process for reviewing our reported financial results quarterly and making final executive compensation decisions after fiscal year end.

We continued to hear support for our efforts to incorporate ESG in a way that is both aligned with our business and objectively measurable. We have also received positive feedback on the disclosure regarding the Compensation Committee’s decision-making process and, based on additional input, we further enhanced that disclosure in this proxy statement.

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Compensation governance best practices

We believe that our executive pay is reasonable and provides appropriate incentives to our executive officers to achieve our financial and strategic goals without encouraging them to take excessive risks in their business decisions. The Board and its committees regularly evaluate major risks to our business, including how risks taken by management could affect the value of executive compensation.

Highlights of our executive compensation program – linking pay with performance and mitigating risk

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Compensation philosophy and objectives

The Compensation Committee supports a compensation philosophy for our NEOs that:

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Executive compensation decision-making process

Our Compensation Committee meets at least four times per year to review and approve, among other things, executive compensation strategy, individual pay packages, incentive plan designs and equity grant practices, performance and payouts for incentive plans, and CEO and other NEO performance, as well as to make recommendations on succession planning and talent development. The Compensation Committee reviews preliminary plan design and compensation proposals at least one meeting prior to considering formal approval so that its members can ask questions and provide feedback, which is then incorporated into the final proposal.

In fiscal 2023, the Compensation Committee met six times.

Year-round compensation planning

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Review adjustments reflected in the Company’s reported, non-GAAP metrics

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Discuss a report from the Company’s internal Benefits Committee

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The Compensation Committee’s independent compensation consultant attends all meetings and meets with Compensation Committee members independently as needed

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The Compensation Committee meets in executive session without management present as needed

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Roles and responsibilities

​	​	Role of external compensation consultant​	​	​
​	​	• The Compensation Committee’s independent compensation consultant advises the Compensation Committee on all aspects of executive compensation, including: comparative data; competitive positioning of executive pay; plan design; long-term incentive pay practices; and market trends. ​ • As directed by the Compensation Committee, the consultant prepares analyses and recommendations relating to the compensation of our NEOs, including pay recommendations for our CEO. ​ • The Compensation Committee’s independent compensation consultant attended committee meetings and met privately from time to time with the committee and individual committee members to plan for committee meetings and discuss executive compensation matters. ​	​	​

​	​	Role of management​ • Our CEO gives the Compensation Committee a performance assessment and pay recommendation for senior management, including each of the other NEOs, and does not participate in discussions regarding his own performance or pay determinations. ​ • Management, in consultation with the Compensation Committee’s compensation consultant, may also make recommendations on matters of compensation philosophy and plan design. ​ • Executives may attend the Compensation Committee meetings, but they are not present when the Compensation Committee meets in executive session and they do not make recommendations regarding their own pay. ​	​	​
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The Compensation Committee has sole authority to retain and terminate any consultant or other external advisor, and to approve the fees and other terms of engagement for such consultant or advisor. Each year, the Compensation Committee evaluates the qualifications, performance, independence, and potential for conflicts of interest of its compensation consultant and any other external advisors to the Compensation Committee. This evaluation takes place at the beginning of the fiscal year in the case of an ongoing engagement or prior to the selection of a new consultant or advisor.

Pearl Meyer & Partners (“Pearl Meyer”) served as the Compensation Committee’s compensation consultant during fiscal 2023. The Compensation Committee determined that Pearl Meyer and the individual Pearl Meyer consultants are independent and have not had any economic interests or other relationships with the Company or the Compensation Committee members that would conflict with their obligation to provide the Compensation Committee with impartial and objective advice. Pearl Meyer did not provide any services to our management in fiscal 2023 and, accordingly, no fees were paid for any additional services in fiscal 2023.

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Peer group

Each year, the Compensation Committee, in consultation with its independent compensation consultant, evaluates a peer group of companies that will serve as a reference for comparing the pay of our NEOs to the market. We assess companies that best reflect the complexity of our industry and competition for customers, shareholders, and talent to determine whether our level of executive pay is appropriate when compared to industry and market standards. We also conduct a detailed market review of executive pay to evaluate each element of pay and benefit competitiveness, review pay practices, and compare performance against our peer group.

Our peer group consists of companies with business models and operations comparable to our own, including our two largest direct competitors, and companies that we believe have a similar financial and operational profile. Metrics used to select our peer group include: revenue; market capitalization; number of employees; net income; operating income margin; and return on invested capital.

Following review with its independent compensation consultant in fiscal 2023, the Compensation Committee concluded that our fiscal 2022 peers remained appropriate and made no changes to the peer group. The fiscal 2023 peer group included:

The Compensation Committee reviews peer group proxy statement data in evaluating our CEO’s pay and published compensation survey data in evaluating our other NEOs’ pay. When assessing pay levels, the Compensation Committee also reviews our NEOs’ compensation in relation to each other. The Compensation Committee’s independent consultant concluded that our overall competitive posture for executive pay in fiscal 2023 remained aligned with our pay for performance compensation philosophy.

2024 Proxy Statement

2023 NEO compensation

Our executive compensation program consists of three core components: base pay, short-term incentives, and long-term incentives, with the majority of compensation being at-risk, variable, or performance-based. The Compensation Committee’s decisions regarding the fiscal 2023 pay program are described in detail below.

Base salary

Base salary is intended to provide a fixed and steady source of income and security. The Compensation Committee takes into account a variety of factors, including scope of role, duties, and responsibilities, expected future contributions, our pay philosophy, median pay of our designated peer group and other market data, and internal pay equity.

In fiscal 2023, following an assessment taking into account the factors described above, the Compensation Committee made adjustments to our NEOs’ base salaries, other than Mr. Collis, as shown below. In the cases of Mr. Mauch and Ms. Campbell, their adjustments took into consideration a progression towards the market median for their roles as Chief Operating Officer and Chief Legal Officer, respectively.

Compensation committee considerations of adjusted (non-GAAP) metrics in compensation decisions

Cencora uses non-GAAP financial measures to perform financial planning and to evaluate the Company’s operating performance. We also furnish the same non-GAAP measures to investors on a quarterly basis. Our annual cash bonus plan and long-term incentive plan each use certain of the same non-GAAP measures that management uses internally and that we publicly disclose, which we believe provides consistency and transparency between our financial reporting and compensation outcomes and effectively measures and rewards operational performance. Those measures reflect adjustments made based on predetermined and publicly disclosed criteria, as further described in Appendix A to this proxy statement.

Quarterly review of adjustments and final determination of executive compensation payouts

Cencora’s reported non-GAAP financial results are presented to the Compensation Committee by the CFO and the Chief Accounting Officer quarterly, along with reconciliations to GAAP, and are the starting point for the Compensation Committee’s annual incentive compensation decisions. As part of its year-end approval of executive compensation, the Compensation Committee determines whether to exercise discretion to modify the payouts that are calculated under our incentive plans from the Company’s reported non-GAAP financial results.

Short-term incentive compensation

Our short-term incentive plan is intended to both motivate NEOs to improve financial performance year-over-year and reward NEOs who deliver on targeted financial results and other objectives.

For fiscal 2023, the Compensation Committee set the target cash bonus incentive levels for our NEOs as follows: an increase from 150% to 175% of base salary for the CEO and from 100% to 125% of base salary for our Chief Operating Officer to better align their annual incentives with market practice following an assessment of peer practices and to support retention of our key executives. Based on that review, the Committee also maintained a cash bonus target of 100% of base salary for the other NEOs.

2024 Proxy Statement

Fiscal 2023 cash bonus measures and goals

Each year, the Compensation Committee selects enterprise-level performance measures that it believes are the key metrics used for setting business goals and evaluating our financial results. The Compensation Committee also sets goals for these performance measures that it views to be challenging, yet attainable, based on the Company’s fiscal year plan, which is approved by the Board and takes into account, among other things: the prior fiscal year’s results, internal operating plans for our business units, the Company’s strategic initiatives, external conditions specific to our industry, and the macroeconomic environment. For fiscal 2023, the Compensation Committee set target goals as follows:

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The adjusted operating income and adjusted EPS targets were set to achieve 2% and 4% growth, respectively, over fiscal 2022 results. These growth targets reflected lower expected COVID therapy income in fiscal 2023 versus fiscal 2022.

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The adjusted free cash flow target was set at $1.8 billion, which was lower than fiscal 2022 due to various factors, including consideration of the timing of customer cash receipts at fiscal year-end and the payment under the Distributor Settlement Agreement that became effective in 2022.

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For fiscal 2023, the Compensation Committee approved maintaining the previously selected financial measures of adjusted operating income, adjusted EPS, and adjusted free cash flow and, based on feedback from shareholders, added an ESG measure covering 10% of the payout opportunity. The Compensation Committee selected three components for the ESG metric that were objectively measurable and aligned with the Company’s ESG pillars of purpose-driven team members, resilient and sustainable operations, and healthy communities for all.

The fiscal 2023 cash bonus measures for our NEOs are as follows:

(1)

Adjusted Operating Income, Adjusted EPS, and Adjusted Free Cash Flow are non-GAAP financial measures. See Appendix A to this proxy statement for additional information regarding non-GAAP financial measures, including GAAP to non-GAAP reconciliations.

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2024 Proxy Statement

Fiscal 2023 cash bonus goals and outcomes

In November 2022, the Compensation Committee approved the following enterprise-level performance goals for these measures, which also performed as follows:

(1)

Actual results between threshold and target were calculated by straight-line interpolation. For the financial metrics, actual results above target were calculated based on the “stretch” bonus, equal to an additional 5% for every 1% that actual performance exceeds target, up to a maximum of 200%. For the ESG metric, only a target opportunity was available. As a result, the maximum overall payout opportunity for fiscal 2023 was 190%.

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(2)

Adjusted Operating Income, Adjusted EPS, and Adjusted Free Cash Flow are non-GAAP financial measures. See Appendix A to this proxy statement for additional information regarding non-GAAP financial measures, including GAAP to non-GAAP reconciliations.

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(3)

As this was our first incentive plan cycle incorporating an ESG metric, the Compensation Committee took a measured approach by setting only a target goal for this metric. Unlike the financial metrics, the fiscal 2023 ESG metric has only a target and no threshold or maximum opportunity. All three components of the ESG metric were measured over the fiscal 2023 performance period.

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(4)

A leadership role is defined as vice president or above.

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(5)

Inclusion index score is based on a sub-section of an externally-developed employee engagement survey designed to assess how inclusive and supportive is the Company’s work environment.

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2024 Proxy Statement

Fiscal 2023 cash bonus payouts

Cencora exceeded the target goals for the enterprise-level performance measures and delivered strong business execution and performance for fiscal 2023, resulting in each of the NEOs earning a stretch bonus in accordance with the terms of our Annual Incentive Plan (“AIP”). Adjusted free cash flow was particularly strong due to better-than-expected growth in the U.S. human health distribution business and good working capital management.

The Compensation Committee reviewed and discussed the Company’s achievement of financial and strategic objectives and its reported non-GAAP financial results. Following this review, the Compensation Committee determined that it would apply discretion to reduce the fiscal 2023 cash bonus awards for the NEOs from 134.2% to 131.9% of target to reflect the foreign currency exchange impact relative to rates utilized when the Company established its fiscal 2023 budget.

Target and actual fiscal 2023 cash bonuses (as reduced by the Compensation Committee’s discretion) for our NEOs were as follows:

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(1)

As described above, the Compensation Committee applied discretion to reduce the final payout for our NEOs to 131.9%.

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Long-term equity incentive compensation

In approving long-term equity incentive awards, the Compensation Committee considers several factors, including:

2024 Proxy Statement

Fiscal 2023 equity incentives

For fiscal 2023, the Compensation Committee awarded the following amounts in long-term incentives to our NEOs:

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(1)

Amounts in this column represent the grant date fair values of performance shares and restricted stock units, respectively, shown in accordance with Accounting Standards Codification (“ASC”) Topic 718, and do not correspond to the actual economic value that may be received by our NEOs upon vesting. For the performance shares, which are subject to performance conditions, we report the value at grant date based upon the probable outcome of such conditions consistent with our estimate of aggregate compensation cost to be recognized over the service period determined under ASC 718, excluding the effect of estimated forfeitures. For this purpose, the probable outcome of the performance shares is assumed to be at target level attainment. See Note 10 to the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, relating to assumptions made in the valuations.

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We believe that it was appropriate to award this amount of equity incentives to our NEOs because they are in the best position to drive our future results and implement our long-term business strategy.

Performance share awards

Our performance plan is designed to encourage our NEOs to focus on initiatives that promote the achievement of our long-term goals. Performance share awards are granted annually in November and cover a three-year performance period. Performance shares are subject to the attainment of predetermined goals approved by the Compensation Committee that it believes to be challenging, yet attainable. Specific targets for these goals are disclosed retroactively to avoid the potential for competitive harm. Vesting (or payout of shares) is based on performance at the end of the applicable three-year performance cycle. NEOs have the opportunity to earn a payout of between 0% and 200% of their target award.

As with our fiscal 2022 performance share awards, in consideration of feedback received from shareholders, the Compensation Committee included the following features in our fiscal 2023 performance share awards:

1.

A relative total shareholder return (“TSR”) modifier with above median performance required for a target payout, as described in more detail below; and

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2.

A post-vest holding requirement of two years for the CEO, and one year for the other NEOs on 50% of earned performance shares.

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2024 Proxy Statement

Fiscal 2023 performance shares metrics

Consistent with fiscal 2022, the Compensation Committee selected the following metrics for the reasons cited below for the performance shares granted in fiscal 2023, which covers the three-year performance period beginning October 1, 2022 and ending September 30, 2025:

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(1)

Compound Annual Adjusted EPS Growth is the mean annual growth rate of adjusted EPS from the baseline over the three-year performance period.

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(2)

Average Annual Adjusted ROIC is calculated by taking the average of the Company’s annual adjusted ROIC during the three-year performance period. Annual Adjusted ROIC is calculated by dividing after-tax adjusted operating income by invested capital, where invested capital is the 12-month average of accounts receivable, inventories, accounts payable, net property and equipment, goodwill, intangible assets, and right-of-use assets.

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(3)

TSR is calculated as share price appreciation (or reduction) over the performance period, including reinvestment of dividends when paid, divided by the share price at the beginning of the period. The value of performance shares awarded will be decreased or increased by up to 15% based on this relative TSR measure. In the event of a negative absolute Cencora TSR over the three-year period, payout is capped at 100% of target, regardless of whether actual performance is above target for compound annual adjusted EPS growth or average annual adjusted ROIC.

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(4)

As of September 30, 2023, the S&P 500 Healthcare Providers & Services Index included:

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The Compensation Committee sets the goals for these metrics in consideration of several factors, including the Company’s long-range plan, as approved by the Board, which considers, among other things: the Company’s multi-year operating plans and strategic initiatives; projected business conditions; macroeconomic conditions; and anticipated capital deployment.

The Compensation Committee believes the goals set for these performance shares are challenging and difficult to achieve, but attainable and consistent with our long-range plan. The specific goals for all of our outstanding performance share awards are confidential, competitively sensitive information and are disclosed after the performance period ends.

2024 Proxy Statement

Fiscal 2021 performance share payouts (2021-2023 performance period)

In November 2020, each of our NEOs received performance shares for the three-year performance period spanning fiscal 2021 through fiscal 2023. In November 2023, the Compensation Committee approved the vesting and payment of these performance shares based on the Company’s achievement of a Compound Annual Adjusted EPS growth rate of 14.92% and an Average Annual Adjusted ROIC of 18.73%, in each case for the performance period ended September 30, 2023, which aggregated to 167.6% of target, calculated as shown in the table below. Plan and goals were set prior to the acquisition of Alliance Healthcare (which increased EPS and reduced ROIC) and were positively impacted by broad-based performance across multiple business units, strong pharmaceutical utilization trends, and sales of COVID treatments.

(1)

Compound Annual Adjusted EPS Growth is the mean annual growth rate of Adjusted EPS from the baseline over the three-year performance period.

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(2)

Average Annual Adjusted ROIC is calculated by taking the average of the Company’s annual adjusted ROIC during the three-year performance period. Annual Adjusted ROIC is calculated by dividing after-tax adjusted operating income by invested capital, where invested capital is the 12-month average of accounts receivable, inventories, accounts payable, property and equipment, goodwill, intangible assets, and right of use assets.

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(3)

Please note that the relative TSR modifier was introduced with the fiscal 2022 grants and, therefore, will be incorporated into the total payout result beginning with the performance period ending September 30, 2024.

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Based on our performance, and the respective weighting of each performance metric, the number of shares earned by our NEOs for the fiscal 2021 through fiscal 2023 performance period was calculated as follows:

Fiscal 2021 — fiscal 2023 performance shares earned

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(1)

Please note that the total shares earned may vary from a straight calculation of the target number of performance shares times the payout result due to rounding.

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2024 Proxy Statement

Additional benefits and perquisites

Other compensation

Our NEOs receive a limited number of other benefits as part of a competitive compensation package, which constitutes in the aggregate only a small percentage of their total compensation. As discussed below, these benefits include:

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