OGN Organon and Co

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

(Amendment No.    )

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Organon & Co.

(Name of Registrant as Specified In Its Charter)

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Organon launched in 2021 with a unique long-term vision: a better and healthier every day for every woman. Over the past year, it has been my privilege to serve as the first Chairman of Organon, leading a Board that embodies and embraces this vision on behalf of our shareholders, with a deep commitment to our purpose to advance women’s health, as well as the company’s financial success.

Board Leadership and Composition

The Board was constructed from the beginning to reflect the value of independent Board oversight as a foundational governance principle. Director candidates were chosen through a deliberate and thoughtful process over many months, based on extensive consideration of the needs of the new company and aided by a professional search firm with spinoff experience.

The resulting Board is one with a wide and deep variety of skills, experiences, and areas of expertise. Our 12 independent directors bring significant leadership and industry accomplishments; financial acumen; medical degrees; substantial experience in healthcare delivery, pharmacy, public health policy, and scientific research; and operational, marketing, and digital backgrounds.

We also represent both gender and racial diversity, which positions Organon as a leader among boards: nearly 70 percent of the directors are women, and 46 percent are from underrepresented ethnic groups. In addition, about half have lived and worked outside the United States, bringing a true global perspective, appropriate for a company with significant revenue outside the United States.

Over the eight months before Organon separated from Merck & Co., Inc., the future directors were supported with an extensive orientation program to ensure their readiness to provide oversight and strategic direction to the new company upon spin.

Board Oversight of Strategy and Risk

The Board engages regularly with the CEO, as well as each member of the Executive Leadership Team, on Organon’s strategy, oversight of the business, and key risks facing the company. Board members have drawn on their leadership and other diverse experiences to provide input on strategic decisions relating to each of the

 

We established Organon to focus on bringing forward the innovation that is so urgently needed in women’s health. We saw the opportunity to create a company with an important vision – a better and healthier every day for every woman – that serves as a strong and highly sustainable foundation for our business.

Since spinning off as a new, independent company in June 2021, we’ve made significant progress toward our vision. We continue to believe that focused management attention and dedicated resources for our products will create value and growth for our shareholders as well as help meet the societal need of improving the health of women.

In our journey to become a leader in women’s health, we have been maximizing our foundational strengths within reproductive health, while expanding our therapeutic areas through business development. This includes the acquisition of Alydia Health and its Jada^® System, a medical device designed to control and treat postpartum hemorrhage; a global license agreement with ObsEva, to develop and commercialize ebopiprant (OBE022), an investigational agent being evaluated as a first-in-class treatment for preterm labor; and the acquisition of Forendo Pharma, a clinical-stage drug development company focused on endometriosis and polycystic ovary syndrome. In this way, we are moving with urgency to bring forward new hope for the many women who suffer from these health issues.

		Notice of 2022 Annual Meeting of Shareholders

To Organon Shareholders:

You are cordially invited to the Annual Meeting of Shareholders of Organon & Co. to be held on Tuesday, June 7, 2022, at 9:00 a.m. (Eastern Daylight Time), where we will vote on the matters below. To increase shareholder accessibility, be fiscally and environmentally responsible, and support the health and well-being of our employees and shareholders due to the public health impact of the COVID-19 pandemic, the Annual Meeting will be conducted exclusively online without an option for physical attendance. You will be able to attend the Annual Meeting, vote and submit questions via a live webcast by visiting www.virtualshareholdermeeting.com/OGN2022.

Items of Business:

Thank you for your continued support of and interest in Organon.

By Order of the Board of Directors,

Your Vote is Important—Vote Right Away

We encourage you to read the accompanying proxy statement with care and vote right away using any of the following methods, even if you intend to attend the Annual Meeting webcast.

 

To vote by Internet or telephone, have the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card, or voting instruction form in hand and follow the instructions. Internet and telephone voting facilities will close at 11:59 p.m. Eastern Daylight Time on June 6, 2022. If your shares are held in a stock brokerage account or by a bank or other nominee, your ability to vote by Internet or telephone depends on your broker’s voting process. Please follow the directions provided to you by your broker, bank, or nominee. If you hold shares in one of the Merck & Co., Inc. (known as MSD outside of the U.S. and Canada) plans that holds Organon stock, your voting instructions to the plan trustee must be completed and received prior to 11:59 p.m. Eastern Daylight Time on June 2, 2022. For more specific voting instructions, please refer to the Questions and Answers beginning on page 73.

To be admitted to the virtual meeting, have the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, proxy card or voting instruction form in hand and visit www.virtualshareholdermeeting.com/OGN2022.

Only shareholders listed on Organon’s records at the close of business on April 8, 2022, the record date, are entitled to vote. A list of shareholders of record as of the record date will be available during regular business hours starting 10 days prior to the Annual Meeting at the Office of Corporate Secretary at our corporate headquarters located at 30 Hudson Street, Floor 33, Jersey City, New Jersey 07302. The shareholder list will also be available during the meeting at www.virtualshareholdermeeting.com/OGN2022.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 7, 2022:

The Notice of Annual Meeting of Shareholders, proxy statement, and the 2021 Annual Report on Form 10-K are available free of charge at www.proxyvote.com.

The accompanying proxy is solicited on behalf of the Board of Directors (the “Board”) for use at the 2022 Annual Meeting of Shareholders of Organon & Co. (“Organon,” the “company,” “we,” “us,” or “our”). Please review the entire proxy statement and the Organon 2021 Annual Report on Form 10-K before voting. The voting items expected to be proposed at the meeting are listed below along with the Board’s voting recommendations.

2022 Annual Meeting of Shareholders

Who We Are

Organon is a global healthcare company formed to focus on improving the health of women throughout their lives. Organon’s focus is on women’s health as its primary therapy area, and is the only large global pharmaceutical company currently in existence to do so.

On June 2, 2021, Organon separated from Merck & Co., Inc. (“Merck”; known as MSD outside the U.S. and Canada) as a result of a pro rata distribution of Organon’s common stock to shareholders of Merck. We refer to this transaction as the “spinoff.” Organon is now a standalone public company trading on the New York Stock Exchange (the “NYSE”) under the ticker symbol “OGN.”

Organon has a portfolio of more than 60 healthcare products across a range of therapeutic areas. Organon is a global healthcare company that develops and delivers innovative health solutions through a portfolio of prescription therapies within women’s health, biosimilars and established brands. Organon sells its products through various channels including drug wholesalers and retailers, hospitals, government agencies, and managed healthcare providers such as health maintenance organizations, pharmacy benefit managers, and other institutions. Organon’s operations include the following product portfolios:

Executive Compensation Highlights (Page 46)

The Talent Committee reviews our executive compensation program to evaluate whether it supports our executive compensation philosophies and objectives and is aligned with shareholder interests. As a newly independent company, we expect our executive compensation program to evolve in support of our on-going business strategy. The Talent Committee will review and consider modifications to our executive compensation program to reflect our business strategy, performance, and evolving corporate governance practices.

 

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Our executive compensation practices include the following, each of which the Talent Committee believes reinforces our executive compensation objectives:

Our Executive Compensation Practices

		What We Do   ✓   Significant percentage of target annual compensation to be delivered in the form of variable compensation tied to performance   ✓   Long-term incentives aligned with the creation of shareholder value   ✓   Environmental, Social and Governance (“ESG”) progress metrics are embedded into the Company Scorecard (as defined below), which is tied to Organon’s annual incentive programs   ✓   Target total compensation at the competitive market median   ✓   Market comparison of executive compensation against a relevant peer group   ✓   Use of an independent compensation consultant reporting directly to the Talent Committee   ✓   Double-trigger vesting for equity awards in the event of a change in control under our long-term incentive plan   ✓   Clawback policy   ✓   Annual say-on-pay vote (recommended)
		What We Don’t Do   •   We do not have change in control tax gross-ups   •   We do not have excessive severance benefits   •   We do not pay dividends or dividend equivalents on unearned performance-based awards under our long-term incentive plan   •   We do not allow repricing of underwater stock options under our long-term incentive plan without shareholder approval   •   We do not allow hedging, pledging or short sales of our securities by directors or specified key employees, including Section 16 officers

For additional information on the components of our 2021 compensation, please refer to the Compensation Discussion and Analysis (“CD&A”), beginning on page 46.

The following provides summary information about each director nominee and continuing director. Detailed information about each individual’s background, skill sets, and areas of expertise can be found beginning on page 25.

C = Committee Chair

 

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The Board has the legal responsibility for overseeing the management of Organon and its business. The Board’s primary mission is to represent and protect the interests of our shareholders. To that end, the Board selects the CEO and oversees the senior management team, which is charged with conducting Organon’s daily business.

The Board has adopted corporate governance principles (the “Principles of Corporate Governance”) that, together with our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, and Board committee charters, form the governance framework for the Board and its committees. The Principles of Corporate Governance cover a wide range of subjects, including the role and composition of the Board; functioning of the Board and Board committees; director qualifications; diversity, overboarding, resignation, and retirement age policies; director compensation; share ownership guidelines; succession planning; evaluation of the CEO; director orientation and continuing education; Board, committee, and director performance evaluations; and shareholder engagement.

The Principles of Corporate Governance and Board committee charters are reviewed at least annually and revised, as appropriate, in response to changing regulatory requirements, evolving best practices and the perspectives of our shareholders and other constituents.

Governance Materials

The following items relating to corporate governance at Organon are available on our website at www.organon.com/about-organon/leadership/board-of-directors:

 

		Amended and Restated Certificate of Incorporation				Amended and Restated Bylaws
		Principles of Corporate Governance				Board Committee Charters

In addition, as part of our ethics and compliance program, our Board has approved a Code of Conduct, which is available on our website at www.organon.com/about-organon/mission-vision-and-values/code-of-conduct. The information contained on our website does not constitute a part of this proxy statement.

Board’s Role in Strategic Planning

The Board – acting both as a whole and through its three standing committees – is fully engaged and involved in Organon’s strategic planning process. Each director has an obligation to keep informed about Organon’s business and strategies, so they can provide guidance to management in formulating and developing plans and knowledgeably exercise their decision-making authority on matters of importance to Organon.

The Board’s oversight and guidance are inextricably linked to the development and review of Organon’s strategic plan. By exercising sound and independent business judgment on the strategic issues important to Organon’s business, the Board facilitates its long-term success.

Risk Oversight

The Board’s oversight of Organon’s risk is an important component of the Board’s engagement on strategic planning, and the Board has two primary methods of overseeing risk. The first method is through Organon’s Enterprise Risk Management (“ERM”) process, which allows for Board oversight of the most significant risks facing Organon. The second is through the functioning of the three standing committees of the Board – the Talent Committee, the Audit Committee, and the Environmental, Social and Governance Committee (“ESG Committee”).

Management has established the ERM process to ensure a complete company-wide approach to evaluating risk over six distinct but overlapping risk areas:

The goal of the ERM process is to provide an ongoing review, implemented across Organon and aligned to its values and ethics, to identify and assess risk and to monitor risk and agreed-upon mitigating action. If the ERM process identifies a material risk, it is elevated to the CEO, the Executive Leadership Team, and the Board for review. The Audit Committee periodically reviews the ERM process to ensure it is robust and functioning effectively.

Through the ERM process, each Board committee oversees specific areas of risk relevant to the committee through direct interactions with the CEO, the Executive Leadership Team, the heads of business franchises, and compliance and corporate functions. A committee may address risks directly with management or, where appropriate, may elevate a risk for consideration by the Board or another Board committee. The following are examples of Board committees’ responsibilities in risk oversight:

The separate ERM process and Board committee approach to risk management leverages the Board’s leadership structure to ensure the Board oversees risk on both a company-wide approach and through specific areas of competency.

 

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Board Oversight of Information Security, Including Cybersecurity and Data Privacy

Our information security and privacy programs provide that the Board receives an annual report from our Chief Information Security Officer to discuss our program for managing information security risks, including cyber and data security risks. The Audit Committee also receives regular briefings on both information security and data privacy from the Chief Information Security Officer and Chief Ethics and Compliance Officer, respectively. Both the Board and the Audit Committee receive annual reports on our cyber readiness, adversary assessment, and risk profile status. In addition, the Audit Committee receives regular updates about these topics, and our directors are apprised of incident simulations and response plans, including for cyber and data breaches.

Program Highlights

Independence of Directors

The Principles of Corporate Governance require a substantial majority of our directors be independent. In making independence determinations, the Board observes all relevant criteria established by the U.S. Securities and Exchange Commission (the “SEC”) and the NYSE. The Board considers all relevant facts and circumstances in making an independence determination.

To be considered independent, an outside director must meet the bright-line independence tests established by the NYSE, and the Board must affirmatively determine that the director has no direct or indirect material relationship with Organon.

The Board also rigorously considers all relevant heightened independence requirements for members of the Audit Committee and the Talent Committee. The ESG Committee reviews the Board’s approach to determining director independence periodically and recommends changes, as appropriate, for consideration and approval by the Board.

Independence Determinations

The Board has determined that each of Organon’s directors and director nominees, with the exception of our CEO, Kevin Ali, are independent under the NYSE Listing Standards. All members of the Board’s Audit Committee, Talent Committee, and ESG Committee are independent under these standards, and all members of the Audit Committee and Talent Committee are also compliant with the SEC enhanced independence requirements for audit committee members and compensation committee members, respectively.

In making these determinations, the Board considered relationships that exist between Organon and other organizations where each director serves, as well as the fact that in the ordinary course of business, transactions may occur between such organizations and Organon or one of our subsidiaries. The Board also evaluated whether there were any other facts or circumstances that might impair a director’s independence. In particular, with respect to Ms. Cox, the Board considered that she received a monthly fee of $9,500 in exchange for her performance of certain consulting services to Merck prior to the spinoff relating to her anticipated position as Chairman of the Board of Organon and reimbursement of reasonable out-of-pocket expenses. The Board determined this relationship was not material and the amount involved did not prevent a finding of Ms. Cox’s independence under the NYSE Listing Standards or our Principles of Corporate Governance both for her service on the Board and on the Talent Committee.

Related Person Transactions

Related Person Transaction Policies and Procedures

The Board has adopted written Related Person Transaction Policies and Procedures (the “Policy”). The Policy, which is administered by the Audit Committee, governs the review, approval, ratification, or disapproval by the Audit Committee of transactions between us or any of our subsidiaries and any “related person” in which the amount involved since the beginning of our last completed fiscal year will or may be expected to exceed $100,000 and in which one or more of such related persons has a direct or indirect material interest. The Policy defines a “related person” to include anyone who served as a director or officer since the beginning of Organon’s last fiscal year, any 5% shareholder, or any immediate family member of any of those persons.

Pursuant to the Policy, management will provide the Audit Committee all material information relevant to transactions that require the Audit Committee’s approval. In approving or rejecting any such transaction, the Audit Committee will consider all relevant factors, including as applicable (1) Organon’s business rationale for entering into the transaction, (2) the alternatives to entering into the transaction, (3) whether the transaction is on terms comparable to those generally available to an unaffiliated third party under the same or similar circumstances, (4) the extent of the related person’s interest in the transaction, and (5) the potential for the transaction to lead to an actual or apparent conflict of interest. Any member of the Audit Committee who is a related person with respect to a transaction under review will not be permitted to participate in the discussion or approval of the transaction.

As necessary, the Audit Committee will review and assess ongoing related person transactions throughout the duration of their term, but no less than annually, to ensure that the transactions are in compliance with any Audit Committee guidelines and the transactions remain fair and reasonable to Organon and not inconsistent with the interests of Organon and its shareholders.

Certain Related Person Transactions

Each director, director nominee and executive officer of Organon is required to annually complete a Director & Officer (“D&O”) Questionnaire. The D&O Questionnaire requests, among other things, information regarding whether any director, director nominee, executive officer, or their immediate family members had an interest in any transaction or proposed transaction with Organon or its subsidiaries or has a relationship with a company that has entered or proposes to enter into such a transaction.

After review of the D&O Questionnaires by the Office of Corporate Secretary, the responses are collected, summarized, and distributed to responsible areas within Organon to identify any potential transactions. All relevant relationships and any transactions, along with payables and receivables, are compiled for each person and affiliation. Management submits a report of the affiliations, relationships, transactions, and appropriate supplemental information to the Audit Committee for its review. Based on this information for 2021 from the date of the spinoff, the Audit Committee has determined that no transactions require disclosure under Item 404(a) of SEC Regulation S-K, except as set forth below.

 

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On June 2, 2021, Organon and Merck entered into a separation and distribution agreement pursuant to which Merck agreed to spin off a portfolio of prescription therapies within women’s health, biosimilars and established brands into Organon, a new, publicly traded company, which we refer to as the “spinoff.” We also entered into several other agreements with Merck to provide a framework for our relationship with Merck after the spinoff, including transition services agreements, interim operating agreements, manufacturing and supply agreements, a tax matters agreement, an employee matters agreement, intellectual property license agreements, and regulatory agreements. Merck ceased to be one of our shareholders upon completion of the spinoff.

Board Leadership Structure

Board Meetings and Committees

The Board was constituted immediately prior to the spinoff on June 2, 2021 and had no formal meetings prior to the spinoff. In 2021, following the spinoff, the Board met four times. Under the Principles of Corporate Governance, directors are expected to attend regular Board meetings, applicable Board committee meetings, and annual meetings of shareholders. Directors attended 100% of the meetings of the Board and of the Board committees on which they served in 2021 following the spinoff. Organon did not hold an annual shareholder meeting in 2021.

The independent directors of the Board met in three executive sessions in 2021. Ms. Cox, Chairman of the Board, presided over the executive sessions.

The Board’s three standing committees, each of which is made up solely of independent directors, are the Audit, Talent and ESG Committees. In addition, the Board from time to time may establish special purpose committees. All standing committees are governed by Board-approved charters, which are available on our website at www.organon.com/about-organon/leadership/board-of-directors. Each committee evaluates its performance and reviews its charter annually. Additional information about the committees is provided on the following pages. As a non-independent director, Mr. Ali is not a member of any Board committee.

            Audit Committee

 

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            Talent Committee

              Environmental,

                 Social and

               Governance

                Committee

 

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Our Environmental, Social, and Governance Approach

We believe supporting women is vital to a healthier world. We envision a better and healthier every day for every woman. Our mission is to deliver impactful medicines and solutions for a healthier every day. We focus on the material ESG issues that matter most to our stakeholders, our business, and most importantly, women around the world.

In addition to the governance matters discussed within this proxy statement and the foundational elements that we believe are essential to conducting our business in an ethical, compliant, and transparent manner, there are focus areas within our ESG strategy that demonstrate our commitment to being a purpose-driven company:

Our purpose is to help women and girls achieve their promise through better health. By addressing gender-related disparities in health, we build a more sustainable future for women, families, economies, and society. Our commitment to ESG aligns with the purpose of Organon, and it is embedded into our foundation. The Board has oversight of ESG issues. In addition, the ESG Committee of the Board oversees and makes recommendations to the Board regarding ESG, sustainability, and corporate responsibility matters and associated risks. The ESG Committee evaluates and discusses such matters as investor and stakeholder expectations, market and peer ESG disclosure practices, Organon’s internal assessment of ESG materiality, Organon’s performance on material ESG issues including the consideration of goal setting, and internal reporting of ESG-related metrics. As needed, the Committee receives information from third-party consultants and other experts on relevant ESG topics, to inform the Committee’s thought process and to ensure continuous knowledge building in support of its ESG oversight role.

The entire Executive Leadership Team is responsible for developing and reviewing Organon’s ESG strategy and is accountable for making progress against the goals and targets set out in the strategy. The Head of External Affairs and ESG reports directly to the CEO and is a member of the Executive Leadership Team. She has a dedicated ESG team that works across all the functions of Organon to ensure that progress is made against each of our ESG targets and that we report this progress in a timely, transparent fashion. ESG performance is also embedded into the Company Scorecard, which is tied to annual incentive programs.

In 2021, we embarked upon a robust research process to develop our ESG strategy. We analyzed leading ESG reporting frameworks (e.g., the Sustainability Accounting Standards Board (“SASB”), the Global Reporting Initiative (“GRI”), and the Task Force on Climate-Related Financial Disclosures (“TCFD”)), conducted an ESG materiality assessment, interviewed internal subject-matter experts, engaged our top shareholders, and sought input from a broad base of our employees. We engaged the ESG Committee of the Board multiple times to share insights from this exercise. The Executive Leadership Team reviewed and approved the short- and long-term goals in the strategy, and they were shared with the ESG Committee. In December 2021, the ESG Committee and the Board endorsed Organon’s ESG strategy, which will be expounded upon in Organon’s first ESG Report, scheduled to be published in June 2022. We plan to disclose human capital management data in our ESG Report in alignment with SASB and GRI standards. When published, you will find additional information about our management of topics such as diversity, equity and inclusion (including U.S. Equal Employment Opportunity Commission EEO-1 data for our U.S.-based workforce), employee engagement, and human rights. For more information about Organon’s ESG strategy and initiatives, please review our 2021 Annual Report on Form 10-K and visit the ESG section of our website at www.organon.com/about-organon/environmental-social-governance.

Our ESG strategy is embedded into our business strategy, as we believe that it will create long-term value for shareholders and other stakeholders. Organon is committed to transparency in our business activities and aims to apply and abide by the highest ethical, social, and environmental standards. We recognize that our business partners play an important role in our overall success. Accordingly, Organon strives to conduct business with individuals and organizations who share our commitment to high ethical standards and who operate in a socially and environmentally responsible manner. To reinforce the standards to which we are committed, Organon developed the Business Partner Code of Conduct founded upon the Pharmaceutical Supply Chain Initiative’s (PSCI) Pharmaceutical Industry Principles, the 10 Principles of the United Nations Global Compact, and our Code of Conduct. For more information, please review our position on human rights on our website at www.organon.com/about-organon/policies-disclosure.

 

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Criteria for Board Membership and Director Nomination Process

The ESG Committee is responsible for screening and nominating director candidates to be considered for election by the Board. As part of this process, the ESG Committee considers the composition of the Board at the time, including the depth of experience, balance of professional skills, expertise, and diversity of perspectives represented by its members at the time. The ESG Committee evaluates prospective nominees identified on its own initiative as well as candidates recommended by other Board members, management, shareholders, or search consultants. From time to time, the ESG Committee may also retain a search firm to identify possible candidates who meet the Board’s qualifications, to interview and screen such candidates (including conducting reference checks), and to assist in scheduling candidate interviews with Board members.

To be considered for membership on the Board, a candidate must meet the following minimum criteria:

Individual Experience, Qualifications, Attributes, and Skills

The ESG Committee evaluates the composition of the Board annually to assess whether the skills, experience, characteristics, and other criteria established by the Board are currently represented on the Board as a whole, and in individual directors, and to assess the criteria that may be needed in the future in light of Organon’s anticipated needs. The Board should have a balanced membership, with representation of relevant areas of experience, types of expertise, and backgrounds. These include pharmaceutical industry expertise, global management experience, marketing and public relations skills, public company governance expertise, women’s health experience, medical expertise, and financial expertise. The ESG Committee uses this input in its planning and director search process.

Each of our current directors joined the Board in connection with our spinoff from Merck. None of the nominees nor any current Class II or Class III directors have been elected by our public shareholders. As noted in the director biographies that follow this section, our directors have experience, qualifications, and skills across a wide range of public and private companies, possessing a broad spectrum of experience both individually and collectively. The following chart highlights the key background, experience, and skills the Board considers for future candidates. These attributes are amply represented by our directors and director nominees.

Board Diversity Policy

The Board endorses the principle that it should have a balance of skills, experience, and diversity of perspectives appropriate to Organon’s current and future global business and strategic initiatives, opportunities, and challenges. The Board recognizes that maintaining a truly diverse membership with varying backgrounds, skills, expertise, and other differentiating personal characteristics promotes inclusiveness, fosters a breadth of thinking, enhances the Board’s deliberations, and contributes to the Board’s overall effectiveness to better represent the long-term interests of Organon and its shareholders.

The ESG Committee, acting on behalf of the Board, is committed to actively identifying and recruiting highly qualified, diverse candidates in the search process. In evaluating the suitability of potential candidates to the Board, the ESG Committee (or any search firm acting under the direction of the ESG Committee) considers the benefits of diversity, including diversity of thought, viewpoints, educational and professional background, gender, race, age, sexual orientation, and ethnic or national background, among other characteristics.

The ESG Committee and the Board have adopted a Board diversity policy as part of the Principles of Corporate Governance that formalizes Organon’s approach to Board diversity. The ESG Committee and the Board believe that the Board’s current membership — 9 of the 13 members are women and 6 directors are racially or ethnically diverse — strongly reflects their commitment to diversity.

 

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		As a company with a vision of a better and healthier every day for every woman, our Board values gender diversity in its membership. Organon is a leader in Board gender diversity, with women constituting nearly 70% of the Board.				Organon is committed to racial and ethnic diversity. Our Board is 46% ethnically or racially diverse.
		The average age of our directors and director nominees is 62.5 years, with ages ranging from 47 to 74 years old.				Organon’s Principles of Corporate Governance require that a substantial majority of the Board be made up of independent directors. The Board has determined that each of Organon’s directors and director nominees, with the exception of our CEO, Kevin Ali, is independent under the NYSE Listing Standards.

Shareholder Recommendations of Director Candidates

The ESG Committee will consider recommendations for director candidates made by shareholders and will evaluate those individuals using the same criteria applied to other candidates. Shareholder recommendations must be sent to the Office of Corporate Secretary, 30 Hudson Street, Floor 33, Jersey City, New Jersey 07302, and must include detailed background information regarding the recommended candidate that demonstrates how that candidate meets the Board membership criteria. Shareholders may make recommendations at any time, but recommendations for consideration as nominees at Organon’s annual meeting of shareholders must be received not less than 120 days before the first anniversary of the date of the previous year’s annual meeting.

Candidates are evaluated initially based on materials submitted by them or on their behalf. If a proposed or recommended candidate continues to be of interest to the ESG Committee, we obtain additional information through inquiries to various sources and, if warranted, interviews.

Management Succession Planning

The Talent Committee is responsible for oversight of succession planning for certain senior management positions. At least annually, the Talent Committee reviews with the Board succession planning and management development, including recommendations and evaluations of potential successors to fill the CEO and other senior management positions. The succession planning process includes consideration of both ordinary course succession, in the event of planned promotions and retirements, and planning for situations where the CEO or another member of senior management unexpectedly becomes unable to perform the duties of his or her position.

Board Succession Planning

The Board also considers its own composition and succession plans. In director succession planning, the ESG Committee and the Board will consider, among other things, the needs of the Board and Organon in light of the overall composition of the Board, with a view toward achieving a balance of the skills, experience, and attributes that are essential to the Board’s oversight role. In particular, the Board is deliberate in ensuring the Board has the right mix of diverse perspectives, skills, and expertise to address Organon’s current and anticipated needs as

opportunities and challenges facing it evolve. In addition, the Principles of Corporate Governance provide that non-management directors may not stand for re-election to the Board after they reach the age of 75, unless the Board determines that it is in the best interests of Organon and its shareholders to extend the director’s service for an additional period of time. The Board believes this policy promotes regular refreshment of the Board.

Annual Board, Committee, and Individual Director Evaluations

The Board conducts an annual self-evaluation to assess its performance and the performance of individual directors. The Audit, Talent, and ESG Committees also conduct annual self-evaluations to assess their performance. In the event it is believed an individual director is not making meaningful contributions to the overall effectiveness of the Board, the Chairman of the Board or another Board member should raise the matter with the ESG Committee, which will then seek the views of the other Board members and, if appropriate, make a recommendation to the Board regarding the future role of the director in question.

The ESG Committee is responsible for developing, administering and overseeing processes for conducting evaluations. The first evaluations after our spinoff were conducted in January 2022, as follows:

Shareholder Engagement and Feedback

Organon regularly communicates with shareholders to better understand their perspectives and has established a shareholder engagement program that is proactive and cross-functional. Throughout the year, our CEO, CFO, members of our Investor Relations department and the EVP for External Affairs and ESG, as well as other subject-matter experts within Organon, engage with our shareholders to remain well-informed regarding their perspectives on current issues and to address any questions or concerns. These teams serve as liaisons between shareholders, members of senior management, and the Board.

Since the spinoff, we have met with about two-thirds of our 50 largest shareholders, representing approximately 45% of our shares outstanding as of December 31, 2021. ESG was a focal point in many of the shareholder engagements we had post-spinoff. We also engaged with our shareholders on various topics relating to our Board governance and executive compensation. Organon intends to remain engaged with its largest shareholders through frequent meetings during the year. Our shareholder engagement program includes outreach focused on governance and executive compensation at least once a year, as well our business strategy, risk management, human capital management and ESG matters. We believe it is most productive to discuss governance and compensation issues well in advance of the Annual Meeting so management and the Board can gather information about investor perspectives and make educated and deliberate decisions that are balanced and appropriate for Organon’s diverse shareholder base and in the best interest of Organon. We also regularly seek to take advantage of other engagement opportunities and events.

 

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Shareholder Communications with the Board

The Board welcomes input from shareholders and other interested parties and has established a process to receive these communications. Shareholders and interested parties may communicate directly with the Board, the Chairman of the Board, the non-management or independent directors as a group, or other members of the Board by writing to the following address:

Board of Directors

c/o Office of Corporate Secretary

Organon & Co.

30 Hudson Street, Floor 33

Jersey City, New Jersey 07032

In order to manage efficiently the volume of correspondence received, communications will be reviewed by the Office of Corporate Secretary for the purpose of determining whether the contents are appropriate for transmission. The Office of Corporate Secretary will not transmit:

Comments or questions regarding the nomination of directors and other corporate governance matters will be referred to the Chair of the ESG Committee. Comments or questions regarding executive compensation will be referred to the Chair of the Talent Committee.

In addition, the Audit Committee has established procedures for the receipt, retention and treatment, on a confidential basis, of complaints regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters.

Share Ownership of Directors and Officers

The table below reflects the number of shares of Organon common stock beneficially owned by (i) each of our executive officers named in the Summary Compensation Table; (ii) each of our directors and director nominees; and (iii) all directors and executive officers as a group. As of April 8, 2022, 253,637,179 shares of Organon common stock were issued and outstanding. Unless otherwise noted, the information is stated as of April 8, 2022, and the beneficial owners exercise sole voting and/or investment power over their shares.

 

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Share Ownership of Certain Beneficial Owners

The table below reflects the number of shares beneficially owned by persons or entities known to us to own more than 5% of the outstanding shares of Organon common stock as of December 31, 2021.

Organon’s Amended and Restated Certificate of Incorporation provides that, until the annual meeting of shareholders in 2025, our Board will be divided into three classes, with each class consisting, as nearly as may be possible, of one-third of the total number of directors. The directors designated as Class I directors have terms expiring at the 2022 Annual Meeting. The directors designated as Class II directors have terms expiring at the 2023 annual meeting of shareholders, and the directors designated as Class III directors have terms expiring at the 2024 annual meeting of shareholders. Directors elected to succeed Class I, II, and III directors whose terms then expire will be elected for a term of office that expires at the 2025 annual meeting of shareholders. Beginning at the 2025 annual meeting of Organon’s shareholders, each of our directors will stand for election each year for a one-year term, and our Board will therefore no longer be divided into three classes.

Each member of our Board became a director of Organon in connection with the spinoff, and was each chosen through a deliberate and thoughtful process over many months, based on extensive consideration of the needs of the new company and aided by a professional search firm with spinoff experience.

Nominees for Director

The Board has selected Robert Essner, Shelly Lazarus, Cynthia M. Patton, and Grace Puma for election as Class I director nominees. Each of the director nominees named in this proxy statement meet the Board’s criteria for membership and were recommended by the ESG Committee for election by shareholders at the Annual Meeting. All of the nominees hold, or have held, senior leadership positions in large, complex organizations, including multinational corporations. In these positions, our nominees have demonstrated their leadership, intellect, and analytical skills and gained deep experience in core disciplines significant to their oversight responsibilities at Organon. Their varied roles and experiences reflect a diversity of perspectives, skills, and expertise to address Organon’s current and anticipated needs as its opportunities and challenges evolve. If elected, each nominee will serve for a three-year term or until a successor has been duly elected and qualified.

Any director nominee who does not receive a majority of the votes cast with respect to his or her election will tender his or her resignation to the ESG Committee promptly following certification of the shareholder vote for consideration by the ESG Committee and the Board. If the ESG Committee recommends the Board accept the tendered resignation offer, the ESG Committee will also recommend to the Board whether to fill the vacancy resulting from the resignation or to reduce the size of the Board. The Board will act on the recommendation of the ESG Committee no later than 90 days following certification of the shareholder vote for the Annual Meeting.

If any nominee becomes unavailable for election (which we do not expect), votes will be cast for such substitute nominee or nominees as may be designated by the Board, unless the Board reduces the size of the Board.

There are no family relationships among Organon’s executive officers and directors.

We provide below biographical information for each director nominee, including key experience, qualifications, and skills such director nominee contributes to the Board in light of our current needs and business priorities.

		THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE ELECTION OF EACH OF THE DIRECTOR NOMINEES.

 

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2022 Nominees for Class I Directors

Continuing Class II Directors Whose Terms Will Expire in 2023

Continuing Class III Directors Whose Terms Will Expire in 2024