☑ | Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
☐ | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Delaware | 83-4364296 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of Each Class: | Trading Symbol(s) | Name of Each Exchange on Which Registered: | ||
| Common Stock, par value $0.01 per share | VTRS | The NASDAQ Stock Market |
Large accelerated filer | ☑ | ☐ | ||||||
Non-accelerated filer | Smaller reporting company | ☐ | ||||||
Emerging growth company | ☐ | |||||||
| Auditor Name: Deloitte & Touche LLP | Auditor Location: Pittsburgh, Pennsylvania | Auditor Firm ID: 34 |
VIATRIS INC.
INDEX TO FORM 10-K/A
For the Year Ended December 31, 2020
| Page | |||||||||||
PART III | |||||||||||
ITEM 10. | 1 | ||||||||||
ITEM 11. | |||||||||||
ITEM 12. | |||||||||||
ITEM 13. | |||||||||||
ITEM 14. | |||||||||||
| 55 | |||||||||||
| PART IV | |||||||||||
ITEM 15. | Exhibits | 56 | |||||||||
| 57 | |||||||||||
Appendix A — | A-1 | ||||||||||
PART III
ITEM | Directors, Executive Officers and Corporate Governance |
Executive Officers
The following table sets forth the names, ages, and positions of Viatris’ executive officers as of April 30, 2021:
Scott A. Smith | 61 | |||
Chief Executive Officer (principal executive officer) | ||||
Rajiv Malik | 62 | President | ||
Sanjeev Narula | 62 | Chief Financial Officer (principal financial officer) | ||
Paul Campbell | 56 | Chief Accounting Officer and Corporate Controller (principal accounting officer) | ||
Brian Roman | 53 | Global General Counsel | ||
Andrew Cuneo | 47 | President, Japan, Australia and New Zealand (“JANZ”) | ||
Anthony Mauro | 50 | President, Developed Markets | ||
Xiangyang (Sean) Ni | 54 | President, Greater China | ||
Robert J. Coury | 62 | Executive Chairman |
Scott A. Smith. Mr. Coury has served as Viatris’ Executive Chairman since the closing of the Combination on November 16, 2020. Mr. Coury leads the Viatris Board of Directors (the “Board” or “Viatris Board”), oversees the strategic direction of the Company with the Board and in collaboration with executive management, and advises the management team as they execute on the Company’s strategy to drive value creation, while also ensuring robust board engagement with shareholders and other key stakeholders, among other responsibilities. Additional details regarding Mr. Coury’s background and experience can be found under the heading “Board of Directors” on page 4.
Rajiv Malik. Mr. Malik has served as Viatris’ President since the closing of the Combination on November 16, 2020. His responsibilities include the day-to-day operations of the Company, overseeing the Company’s commercial business units, the Medical, Information Technology and Quality functions, and Research and& Development (“R&D”) and Operations. Additional details regarding Mr. Malik’s background and experience can be found under the heading “Board“Viatris’ Board of Directors” on page 8.
Sanjeev Narula. Mr. Narula has served as Viatris’ Chief Financial Officer since the closing of the Combination on November 16, 2020. His responsibilities include oversight of the global Finance Department, which includes corporate controllership, financial planning and analysis, internal audit, and tax functions, among others. Prior to the Combination, Mr. Narula served as Chief Financial Officer of Pfizer’s Upjohn division beginning in January 2019, with responsibility for oversight of finance, procurement and business technology for all functions of the business. From January 2014 to January 2019, Mr. Narula served as Vice
Paul Campbell. Mr. Campbell has served as Viatris’ Chief Accounting Officer and Corporate Controller since the closing of the Combination on November 16, 2020. He is responsible for oversight of the day-to-day operations of the accounting and finance functions of the Company, including planning, implementing, and managing the Company’s finance and accounting activities. Prior to the closing of the Combination, Mr. Campbell was Mylan’s Chief Accounting Officer, Senior Vice President and Controller. Before his appointment as Chief Accounting Officer in November 2015, Mr. Campbell served as Mylan’s Senior Vice
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President and Controller beginning in May 2015, with responsibility for overseeing the company’s accounting and financial operations and reporting, and he previously held roles of increasing responsibility at Mylan since 2002.
Brian Roman. Mr. Roman has served as Viatris’ Global General Counsel since the closing of the Combination on November 16, 2020. His responsibilities include oversight of the Company’s global legal organization, including securities, global contracts, labor and employment, global regulatory, business development, litigation, and intellectual property, among other areas. From July 2017 until the closing of the Combination, Mr. Roman was Mylan’s Global General Counsel, with similar responsibilities. Prior to 2017, Mr. Roman served as Mylan’s Chief Administrative Officer from January 2016 until June 2017, with responsibility for oversight of the Human Relations, Compliance, Facilities, Security, Information Security, and Privacy functions. He served as Mylan’s Senior Vice President and Chief Compliance Officer from April 2010 until December 2015 and Vice President and General Counsel, North America from October 2005 until April 2010.
Andrew Cuneo. Mr. Cuneo has served as President, JANZ since the closing of the Combination on November 16, 2020.2020, and as President, JANZ and Emerging Markets since November 2022. His responsibilities include oversight of the day-to-day operations in the region.those regions. From April 2017 until the closing of the Combination, Mr. Cuneo was Mylan’s President—President — Rest of World, with responsibility for executing on commercial objectives in more than 120 countries, including developed and emerging markets. Mr. Cuneo joined Mylan in February 2009 and served as Head of Global Business Development until April 2017. Previously, Mr. Cuneo served as Director of Merrill Lynch’s Global Healthcare Investment Banking Group.
Anthony Mauro. Mr. Mauro has served as President, Developed Markets since the closing of the Combination on November 16, 2020. His responsibilities include oversight of the commercial functions in the more than 35 countries in North America and Europe, including sales and marketing strategies in those regions. From January 2016 until the closing of the Combination, Mr. Mauro served as Chief Commercial Officer of Mylan, with responsibility for overseeing Mylan’s commercial businesses around the world. Prior to 2016, Mr. Mauro served as Mylan’s President, North America beginning January 1, 2012. He served as President of Mylan Pharmaceuticals Inc. from 2009 through February 2013. Mr. Mauro previously served as Chief Operating Officer of Mylan Pharmaceuticals ULC in Canada, Vice President of North America Strategic Development, and Vice President of North America Sales.
Xiangyang (Sean) Ni. Mr. Ni has served as President, Greater China since the closing of the Combination on November 16, 2020. His responsibilities include oversight of the day-to-day operations in the region and overseeing the development and execution of the Company’s strategy in Greater China. From March 2019 until the closing of the Combination, Mr. Ni served as Senior Vice President of Global Strategy,
Robert J. Coury. Mr. TaddeseCoury has served as President, Emerging MarketsViatris’ Executive Chairman since the closing of the Combination on November 16, 2020. His responsibilities include oversightMr. Coury leads the Board, leads the strategic direction of day-to-day operationsthe Company with the Board and in collaboration with executive management, advises the segment,management team on important ongoing business matters, including leading the segment’s commercial team and establishing and executingas they execute on the Company’s strategy. From October 2018 untilstrategy to drive value creation, and
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leads Company strategy on highly complex matters and other strategic initiatives, while also ensuring robust board engagement with shareholders and other key stakeholders, among other responsibilities. Additional details regarding Mr. Coury’s background and experience can be found under the closingheading “Viatris’ Board of Directors” below.
Messrs. Coury, Smith, and Malik are also members of the Combination, Mr. Taddese served as Regional President, Emerging Markets at Pfizer’s Upjohn division, with commercial responsibility for the Upjohn Business across the segment. From December 2017 until October 2018, Mr. Taddese served as Regional President for Pfizer’s Essential Health business in Africa and the Middle East, with responsibility for Pfizer’s established portfolio business throughout the region. Prior to that role, he served as Regional Lead and General Manager from January 2016 until November 2017, with responsibility for Pfizer’s Innovative Health Business in Africa and the Middle East. Previously, Mr. Taddese held a number of senior roles at Pfizer, including Vice President, Chief Financial Officer, GIP North America from January 2014 until December 2015, and Vice President and Chief Financial Officer, US Primary Care from April 2011 to December 2013.
Pursuant to Viatris Inc.’s Amended and Restated Bylaws (“Bylaws”), officers hold office until their successors are chosen and qualify in their stead or until their earlier death, resignation or removal.
Viatris’ Board of Directors
Viatris’ Board currently consists of 1312 directors.
Name | Age (1) | Other Positions with Viatris and Principal Occupation | ||
W. Don Cornwell | 75 | Retired Chairman & Chief Executive Officer, Granite Broadcasting Corporation | ||
Robert J. Coury | 62 | Executive Chairman, Viatris | ||
JoEllen Lyons Dillon | 59 | Retired Executive Vice President, Chief Legal Officer and Corporate Secretary, The ExOne Company | ||
Elisha W. Finney | 61 | Retired Executive Vice President and Chief Financial Officer, | ||
Melina Higgins | ||||
55 | Retired Partner and Managing Director, Goldman Sachs | |||
James M. Kilts | 75 | Founding Partner, Centerview Capital | ||
Harry A. Korman | 65 | Retired Chief Operating Officer, Mylan Inc. | ||
Rajiv Malik | 62 | President, Viatris | ||
Richard A. Mark, C.P.A. | 69 | Retired Partner, Deloitte & Touche LLP | ||
Mark W. Parrish | 67 | Lead Independent Director and Vice Chairman, Viatris; Former Executive Chairman, TridentUSA Health Services | ||
Scott A. Smith | 61 | |||
Pauline van der Meer Mohr | 63 | Former President of the Executive Board at Erasmus University, Rotterdam | ||
(1) | Ages as of April |
Each of the Directors has served on the Board since November 16, 2020, the closing date of the Combination.Combination, other than Ms. Finney and Mr. Smith, each of whom joined the Board on December 29, 2022. Additional background information for each Director is set forth immediately below.
Robert J. Coury
Mr. Coury most recently served as Executive Chairman of Mylan. During his tenure with Mylan, Mr. Coury’s strategic vision led to the creation of a strong foundation for Viatris. Under Mr. Coury’s leadership, Mylan
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grew from the third-largest generics pharmaceutical company in the United States to one of the largest pharmaceutical companies in the world, earning spots in both the S&P 500 and, prior to Mylan’s reincorporation outside of the United States in 2015, the Fortune 500.
Mr. Coury was first was elected to Mylan’s Board of Directors (the “Mylan Board”) in February 2002, having served since 1995 as a strategic advisor to the company. He became the Vice Chairman shortly after his election and served as Chief Executive Officer from September 2002 until January 2012. He then served as Executive Chairman from 2012 until he became non-executive Chairman in June 2016. As Executive Chairman between 2012 and 2016, Mr. Coury’s primary responsibilities were similar to those noted above. As non-executive Chairman, Mr. Coury continued to provide the overall strategic leadership for Mylan and was directly involved in shareholder engagement and material transactions involving Mylan, as well as in other matters considered significant by Mylan’s Board. The Mylan Board reappointed Mr. Coury as Executive Chairman in April 2020. In that role, Mr. Coury’s responsibilities were similar to his current responsibilities, and he provided leadership and strategic direction in navigating the unique challenges posed to Mylan and the pharmaceutical industry by the
Mr. Coury is the founder and president of the Robert J. Coury Family Foundation, which is a private foundation formed to help support his philanthropic efforts and his mission of giving back. He has served as a member of the University of Southern California President’s Leadership Council since 2014.
Mr. Coury’s qualifications to serve on the Viatris Board include, among others, his unique strategic vision, leadership, extensive knowledge of the industry and the Company and its management and businesses around the world, demonstrated outstanding business acumen, proven ability to proactively anticipate and respond to opportunities and challenges, and strong business judgment.
W. Don Cornwell
Mr. Cornwell’s qualifications to serve on the Viatris Board include, among others, his experience and expertise as a Chief Executive Officer and regarding public company management, corporate governance, finance, information security, public company management and strategy,the healthcare industry, human capital management including oversight of diversity, equity and executive compensation, the healthcare industry,inclusion, global business, information security, legal and international business transactions.
JoEllen Lyons Dillon
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as an executive officer of The ExOne Company, (“ExOne”) (NASDAQ: XONE), an emerging growth company anda global provider of three-dimensional printing machines and services. She was promoted to Executive Vice President in December 2014, adding to her original duties as Chief Legal Officer and Corporate Secretary. She held responsibilities for, among other things, capital markets development, corporate strategic planning, human resources, global compliance, investor relations, and international business development within Europe and Asia. Previously, Ms. Dillon had an almost 25-year legal career in corporate mergers and acquisitions and securities, where she represented both public and private companies in a variety of complex matters. She was a Partner with Reed Smith LLP, a law firm, from 2002 until 2011. She previously had been at the law firm Buchanan Ingersoll & Rooney PC from 1988 until 2002, where she became a Partner in 1997. From September 2022 to January 2023, Ms. Dillon serveswas a member of the board of directors of World Wrestling Entertainment, Inc. (NYSE: WWE), an integrated media and entertainment company. Ms. Dillon previously served as a member of the board of trustees of the Allegheny District chapter of the National Multiple Sclerosis Society and served as Chair and Audit Committee chair.
Ms. Dillon’s qualifications to serve on the Viatris Board include, among others, her experience and expertise regarding public company management, corporate governance, finance, global business, human capital management including oversight of diversity, equity and inclusion, legal and regulatory matters, financial matters,oversight, risk oversight and compliance, corporate governance, executive and director compensation, public company managementstrategy and international business and strategy.
Elisha W. Finney.
Ms. Finney’s qualifications to serve on the Board include, among others, her experience and expertise regarding public company management, corporate governance, finance, global business, the healthcare industry, risk oversight and compliance, and strategy and M&A.
Melina Higgins. Ms. Higgins has served on the Board since the closing of the Combination on November 16, 2020. Mr. Dimick has served on the board of directors of Resources Connection, Inc. (NASDAQ: RECN) since November 2003, and chairs its Audit Committee and serves on its Compensation Committee. Mr. Dimick previously served as a Director of Mylan from 2005 until the closing of the Combination, most recently chairing the Audit Committee and serving as a member of the Executive, Finance, and Risk Oversight Committees. Mr. Dimick served as Executive Vice President and Chief Financial Officer of AmerisourceBergen Corporation (NYSE: ABC), a wholesale distributor of pharmaceuticals, from 2001 to 2002. From 1992 to 2001, he was Senior Executive Vice President and Chief Financial Officer of Bergen Brunswig Corporation, a wholesale drug distributor. Prior to that, Mr. Dimick was a Partner with Deloitte & Touche LLP (“Deloitte”) for eight years. Mr. Dimick also served on the boards of directors of WebMD Health Corp. from 2005 to September 2017; Alliance HealthCare Services, Inc. from 2002 to August 2017; and Thoratec Corporation from 2003 to October 2015.
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Financial Inc. (NYSE: GNW) (“Genworth”), an insurance company,company. She has been a member of Genworth’s board since September 2013 and serves on its Audit and Management Development & Compensation and Nominating & Corporate Governance Committees. InFrom March to December 2021, Ms. Higgins joinedserved on the board of NextGen Acquisition Corp. II, (NASDAQ: NGCAU), a special purpose acquisition company, chairing its Nominating and Corporate Governance Committee and serving on its Audit and Compensation Committees. In January 2016, Ms. Higgins became non-executive Chair of the board of directors of Antares Midco Inc., a private company that provides financing solutions for middle market, private equity-backed transactions. Ms. Higgins served as a Director of Mylan from 2013 to the closing of the Combination, most recently chairing the Finance Committee and serving on the Audit, Compensation, and Executive Committees. She previously held senior roles of increasing responsibility at The Goldman Sachs Group, Inc. (NYSE: GS), a global investment banking, securities and investment management firm, including Partner and Managing Director, from 1989 to 1992 and 1994 to 2010. Ms. Higgins served as a member of Goldman’s Investment Committee of the Principal Investment Area, which oversaw and approved global private equity and private debt investments. She also served as Head of the Americas for Private Debt and as co-Chairperson of the Investment Advisory Committee for GS Mezzanine Partners funds, which managed over $30 billion of assets.funds. Ms. Higgins is a member of the women’s leadership boardWomen’s Leadership Board of Harvard University’s John F. Kennedy School of Government.
Ms. Higgins’ qualifications to serve on the Viatris Board include, among others, her experience and expertise regarding finance, capital markets, international business and strategy, director and executive compensation, international business transactions, corporate governance, andfinance, global business, risk oversight, and compliance.
James M. Kilts
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Mr. Kilts’ qualifications to serve on the Viatris Board include, among others, his experience and expertise as a Chief Executive Officer and regarding public company management, corporate governance, finance, public company oversight, human resources,global business, the healthcare industry, human capital management directorincluding oversight of diversity, equity and executive compensation, international business,inclusion, and risk managementstrategy and oversight.
Harry A. Korman
Mr. Korman’s qualifications to serve on the Viatris Board include, among others, his extensive industry experience, his knowledge of healthcare systems and the U.S. and global commercial markets, and his experience and expertise inregarding public company management, global business, the areas of global strategy,healthcare industry, information security, risk oversight sales and marketing, commercial operations, supply chain,compliance, and business development.
Rajiv Malik
Previously, Mr. Malik served as President of Mylan from January 2012 until the closing of the Combination. His responsibilities with Mylan included leading the company’s global commercial, scientific, operational, information technology and business development activities in more than 165 countries and territories. In addition, he oversaw the operations that managed a portfolio of more than 7,500 products, a pipeline of approximately 1,200 products and more than 40 manufacturing facilities around the world. He also served on the Mylan Board from 2012 until the closing of the Combination. Mr. Malik also held various senior roles at Mylan, including Executive Vice President and Chief Operating Officer from July 2009 to December 2012, and head of Global Technical Operations from January 2007 to July 2009. Prior to joining Mylan in January 2007, Mr. Malik served as Chief Executive Officer of Matrix Laboratories Limited (now Mylan Laboratories Limited) from July 2005 to June 2008. Prior to joining Matrix, he served as Head of Global Development and Registrations for Sandoz GmbH from September 2003 to July 2005, and as Head of Global Regulatory Affairs and Head of Pharma Research for Ranbaxy from October 1999 to September 2003.
Mr. Malik’s qualifications to serve on Viatris’the Board include, among others, his knowledge and experience regarding Viatris’ businesses, markets and strategies, as well as itspublic company management, global research, supply chain, manufacturing, and commercial platforms; his knowledge and experience regarding issues, risks and opportunities inbusiness, the global healthcare industry; and his experience and expertise regarding R&D, manufacturing, and quality,industry, human capital management globalincluding oversight of diversity, equity and inclusion, legal and regulatory matters, public company managementoversight, and leadership,strategy and international business transactions and integration.M&A.
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Richard A. Mark, C.P.A.
Mr. Mark’s qualifications to serve on the Viatris Board include, among others, his experience and expertise regarding accounting andpublic company management, corporate governance, finance, global business, the healthcare industry, information security, global business, corporate governance, public company management, risk oversight and compliance, and strategy and international M&A.
Mark W. Parrish
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Pharmaceutical Wholesalers, an association of pharmaceutical wholesalers and pharmaceutical supply chain service companies, and as senior adviser to Frazier Healthcare Ventures, a healthcare-oriented growth equity firm.
Mr. Parrish’s qualifications to serve on the Viatris Board include, among others, his experience and expertise as a Chief Executive Officer and regarding issues, risks and opportunities inpublic company management, corporate governance, the global healthcare industry, compliance, corporate governance,human capital management including oversight of diversity, equity and inclusion, global business, information security, risk management oversight supply chain, the healthcare industry and technology, human capital management, public company managementcompliance, and strategy and international business transactions.
Scott A. Smith.
Mr. Smith’s qualifications to serve on the Board include, among others, his experience and expertise regarding public company management, corporate governance, finance, global business, the healthcare industry, human capital management including oversight of diversity, equity and inclusion, and strategy and M&A.
Pauline van der Meer Mohr. Ms. van der Meer Mohr has served on the Board since the closing of the Combination on November 16, 2020. Mr. Read also has served as Operating Executive of The Carlyle Group’s (NASDAQ: CG) Global Healthcare Group since January 2020, where he advises on growth strategies, leadership, talent development, effective operations, and risk management. Mr. Read has served as Lead Independent Director of Kimberly-Clark Corporation’s board of directors since March 2008 and currently serves on that company’s Management Development & Compensation and Nominating and Corporate Governance Committees. Mr. Read has also served as Chairman of DXC Technology (NYSE: DXC) since February 2020 and is the co-founder of Population Health Investment Co. Inc. (NASDAQ: PHIC), serving as that company’s Executive Chairman since November 2020. In September 2020, Mr. Read joined the supervisory board of avateramedical N.V., a private financial holding company that focuses on investments in and start-ups of medical technology companies. He also serves as an advisory board member of Tennor Holding B.V., avateramedical’s largest shareholder. Mr. Read previously held several positions at Pfizer between 1978 and 2019, including Executive Chairman from January 2019 until December 2019 and Chief Executive Officer from December 2010 until December 2018. He served as Chairman of Pfizer’s board of directors from December 2011 to December 2018.
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Corporate Governance Committee. SheCommittee, until her retirement from this board in April 2022. From 2011 to May 2021, she was also is a member of the supervisory boardsboard of Royal DSM N.V. (AMS: DSM), currentlymost recently serving as Deputy Chair, chairing its Remuneration Committee and serving on its Nomination Committee, andCommittee. She is also a member of the supervisory board of EY Netherlands LLP, currently serving as Chair. Ms. van der Meer Mohr also serves as the Chair of the Dutch Corporate Governance Code Monitoring Committee and as Chair of the Appointment Advisory Committee for the President of the Supreme Court of the Netherlands, and she is a member of the Capital Markets Committee of the Dutch Authority for Financial Markets. Previously, Ms. van der Meer Mohr served on the board of directors of Mylan from 2018 until the closing of the Combination, where she most recently served on the Compensation and Risk Oversight Committees. She also served on the supervisory board of ASML Holding N.V. (NASDAQ and AMS: ASML) from 2009 until April 2018, and as President of the executive board of Erasmus University in Rotterdam from 2010 to 2016. Ms. van der Meer Mohr began her career in the legal profession and previously held several legal and management positions at Royal Dutch Shell Group from 1989 to 2004. In 2004, she was appointed Group Human Resources Director at TNT N.V., now known as PostNL (AMS: PNL), before becoming Senior Executive Vice President and Head of Group Human Resources at ABN AMRO NV in 2006. She served as a member of the Dutch Banking Code Monitoring Commission in the Netherlands from 2010 to 2013, and began her own human capital consulting firm in 2008.
Ms. Vanvan der Meer Mohr’s qualifications to serve on the Viatris Board include, among others, her experience and expertise regarding public company management, corporate governance, finance, global business, human capital management including oversight of diversity, equity and inclusion, information security, public company oversight, legal and regulatory matters, human resources, human capital management, director and executive compensation,oversight, risk management and oversight and corporate social responsibility (“CSR”).
Viatris’ Board Structure
As set forth in theour Bylaws, the Company has a majority vote standard for director elections in the event of an uncontested election and a plurality standard in the event of a contested election. The Bylaws also provide that if a nominee for directorDirector who is an incumbent is not elected and no successor has been elected at such meeting, the directorDirector shall promptly tender his or her irrevocable resignation to the Board, such resignation to be effective upon acceptance by the Board.
In connection with the Combination, Mylan and Pfizer agreed that the Viatris Board would be classified for three years with respect to the time for which directorsDirectors hold office (designated as Class I, Class II and Class III). The first term of office of the Class I directors expiresDirectors expired as of the date of the 2021 annual meeting of stockholders;shareholders (the “2021 Annual Meeting”). At the 2021 Annual Meeting, each Class I Director was re-elected to serve as a Director until the Company’s 2023 annual meeting of shareholders (the “2023 Annual Meeting”). The first term of office of the Class II directors expiresDirectors expired as of the date of the 2022 annual meeting of stockholders; andshareholders (the “2022 Annual Meeting”). At the first term of office of the2022 Annual Meeting, each Class III directors expiresII Director was re-elected to serve as of the date ofa Director until the 2023 annual meeting of stockholders. At the 2021 annual meeting of stockholders, the Class I directors shall be submitted for election for a term of office to expire at the 2023 annual meeting of stockholders; and at the 2022 annual meeting of stockholders, the Class II directors shall be submitted for election for a term of office to expire at the 2023 annual meeting of stockholders.Annual Meeting. Commencing with the 2023 annual meeting of stockholdersAnnual Meeting and at all subsequent annual meetings of stockholders,shareholders, the Board will be declassified and all directorsDirectors will be submitted for election at each annual meeting of stockholders. Neil Dimick, Michael Goettler, Ian Read,shareholders. Elisha W. Finney, Scott A. Smith, and Pauline van der Meer Mohr are in Class I; W. Don Cornwell, Harry A. Korman, Rajiv Malik, and Richard A. Mark are in
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The members of the Board collectively have expertise in developing and overseeing strategies in the context of thisa complex and rapidly changing environment, as well as a deep understanding of the management team and culture of the Company, our global platforms, the healthcare systems in which we operate, and the opportunities and challenges facing the Company around the world. Our Board members have key skills and experience including with brandedrespect to CEO experience and generic pharmaceuticals businesses;public company management; the optimization of shareholder value creation; corporate governance, compliance,corporate environmental and enterprise risk management; corporate social responsibility; complex international M&A; financing;responsibility matters; finance, accounting and capital markets; global business experience; healthcare industry; human capital management; commercialmanagement, including but not limited to diversity, equity and operational management; directorinclusion; information security; legal and executive compensation; commercialregulatory oversight; risk oversight and operational management; R&D; pharmaceutical manufacturingcompliance; and quality; the regulatory environments in which we operate around the world;strategy and business integration,M&A, among many other areas. We are confident that the collective experience and expertise of our Directors enables the Board to effectively guide and oversee the management team.
The Board believes it should have the flexibility to select the structure of Board leadership best suited to meet the needs of the Company and our shareholders, including based on the particular opportunities, circumstances, or challenges confronting the Board and the Company at any given time. Accordingly, our governance documents provide the Board with the flexibility to select the most appropriate Board leadership structure. This flexibility benefits the Company and its shareholders because the Board is best positioned to evaluate the optimal leadership structure for the Company based upon the Company’s leadership team, strategy, challenges, and opportunities over time.
Considering the current opportunities and circumstances facing the Company, including but not limited to, the current economic environment and the Company’s focus on executing its previously disclosed two-phased strategic vision, the Board has determined that its current leadership structure — which separates the Executive Chairman, Lead Independent Director and Vice Chairman, CEO, and President roles, along with a strong, independent majority of Directors — has served the Company. Mr. Coury’s primary responsibilities include overallCompany well and enables it to best oversee and empower the management team and is optimal for Viatris and its shareholders and other stakeholders.
In particular, the Board believes that its current leadership structure — which separates the CEO and Chairman positions — enables our Executive Chairman to lead the Board and oversee the strategic direction of the Company in collaboration with executive management, and our CEO to run the Company on a day-to-day basis, leading the overall management of the Company and executing on the Company’s strategy.
Among other responsibilities, the Executive Chairman advises on important ongoing business matters and leads Company strategy on highly complex matters and other strategic initiatives, including significant M&A activity, management and development of senior executives, and engagement with shareholders and other key stakeholders.
Our CEO is tasked with leading the daily management and performance of the business, which include, among other responsibilities, building and enhancing the Company’s commercial excellence and executing on its strategy to increase access to medicines and services through the Global Healthcare Gateway®. In February 2023, we announced that Scott A. Smith would serve as CEO of Viatris and take responsibility for the day-to-day management of the Company, effective April 1, 2023. The Board believes that Mr. Smith is best suited to lead the Company’s previously announced Phase 2 (2024 and beyond) strategy and execution and brings experience that positions him to manage the global nature and complexity of a business that we expect to return to growth.
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The Board also believes that the current separation of the Chairman and CEO roles provides a clear delineation of responsibilities for each position and fosters greater accountability of management, which is particularly critical given our focus on execution and results, our reshaping initiatives and our two-phased strategic vision. The Board further believes it is valuable for Mr. Coury to serve as Executive Chairman because his familiarity with and knowledge of our Company and business is unmatched and because of his important relationships in the industry and his unique understanding of the global healthcare markets. With over 20 years of experience at Mylan and now Viatris, Mr. Coury is uniquely positioned to lead the Board and oversee the Company’s strategic direction in collaboration with the Board and executive management. In particular, the Board strongly believes that the separation of the Chairman and CEO roles has played, and continues to play, a vital role in the significant progress we have made in Phase 1 of our two-phased strategic vision.
Our current Board leadership structure is designed to meet the unique business needs of the Company and coordinationto build on the strengths of activitiesour Board. Since the Chairman of the Board among others. Seecurrently is not an independent Director, the Corporate Governance Principles require the independent Directors to elect a Lead Independent Director who also page 4.
The responsibilities of the Lead Independent Director include callingare robust and include:
presiding over executive sessions of the independent Directors,
calling meetings of the independent Directors,
consulting with the Executive Chairman regarding Board meeting schedules, agendas, and information sent to the Board and separately approving those items, and
serving as a liaison between the Executive Chairman and independent Directors.
The Lead Independent Director, as Vice Chairman, also presides at all meetings of the Board at which the Executive Chairman is not present and serves on the Executive Committee. The Executive Chairman and the Lead Independent Director serve as point persons for shareholders wishing to communicate to the Board.
The Board and independent Directors have elected, upon the opportunitiesrecommendation of the Governance and challenges facingNominating Committee, the Company, the Board has determined that its current leadership structure — Mr. Coury as Executive Chairman Mr. Parrish asand Lead Independent Director, respectively.
The Board has also adopted the corporate governance policies and Vice Chairman, Mr. Goettler as CEO, Mr. Malik as President, andpractices set forth below that promote a strong and effective Board that provides independent majority of Directors with collective experience overseeing each of Mylan and Upjohn — enables it to best oversee and empower the management team and is optimal for Viatris and its shareholders and other stakeholders.
Among the factors that supportdemonstrate the Board’s confidence that its current structure andcommitment to good governance practices and enable it to provide highly effective oversight and direction are:
8 out of 1312 Directors are independent;
The Board operates pursuant to robust Corporate Governance Principles, which are reviewed byresponsibilities of the Governance and Nominating Committee at least annually;
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The Audit, Compliance, Compensation, Finance, Governance and Nominating, and Risk Oversight Committees are composed entirely of independent Directors (as defined in the applicable NASDAQ listing rules and applicable SEC rules);
The Board operates pursuant to Corporate Governance Principles, which are reviewed by the Governance and Nominating Committee at least annually;
The Executive Chairman possesses deep knowledge of our management, business, and the healthcare industry, and he fosters a culture of robust Board engagement, interaction, and oversight;
All Board committees operate pursuant to robust written charters and will conduct annual self-assessments;
The Risk Oversight Committee assists the Board in its oversight of management’s efforts with respect to CSR-related matters and the Company’s enterprise risk framework, infrastructure and controls, and corporate environmental and social responsibility matters. The Committee receives updatesreports, including with respect to related risks, risk management, and relevant legislative, regulatory, and technical developments, from senior management on data security, cybersecurity, and information security-related matters, corporate environmental and social responsibility matters, certain litigation-related topics and other topics on at least a quarterly basis;basis. The Board and its other committees also have important roles in the oversight of risk as described in more detail in “Risk Oversight” beginning on page 18;
The independent Directors on the Viatris Board and its committees receive extensive information and input from multiple layers of management and external advisors, engage in detailed discussion and analysis regarding matters brought before them (including in executive session), and actively engage in the development and approval of significant corporate strategies;
The Viatris Board and its committees have full access to officers and employees of the Company; and
The Viatris Board and its committees have the authority to select, retain, and supervise advisors as necessary to fulfill their mandates; andmandates.
Meetings of Viatris’ Board
Viatris’ Board met nine times in 2022. In addition to meetings of the Combination in November 2020 through April 30, 2021, Viatris’ Board, has held 7 meetings, which included 5 executive sessions of independent Directors, and its committees have collectively held 21 meetings, including 4 executive sessions.
Viatris’ Corporate Governance Principles require the independent Directors of the Board to meet in separate executive sessions periodically, and at least twice annually, during regularly scheduled meetings of the Board.Board, without any non-independent Directors or members of management present. The independent Directors of the Board met twoeight times in executive session in 2020 following the closing of the Combination,2022, with Mr. Parrish presiding at those executive sessions.
Pursuant to Viatris’ Corporate Governance Principles, Directors are expected to attend the annual meeting of shareholders of the Company, where practicable. Ten Directors at the time of the 2022 Annual Meeting attended such meeting in person.
Meetings of ViatrisViatris’ Board Committees
The committees of the Viatris Board areinclude the Audit Committee, the Compensation Committee, the Compliance Committee, the Executive Committee, the Finance Committee, the Governance and Nominating
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which, along with our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, and Corporate Governance Principles, is available on Viatris’ website at https://www.viatris.com/en/About-Us/Corporate-Governance.
All members of the Audit, Compliance, Compensation, Finance, Governance and Nominating, and Risk Oversight Committees, and a majority of the members of the Compliance Committee, are independent Directors, as defined in the applicable NASDAQ listing rules and applicable SEC rules, and all members of each of these committees are non-employee directors.rules. Board approval of any Director appointment to the Audit, Compensation, Compliance, Governance and Nominating, and Risk Oversight Committees must include at least a majority of the independent Directors. The Viatris Board has determined that Mr. Dimick,Mark, the Chair of the Audit Committee, is an “audit committee financial expert”, as that term is defined in the rules of the SEC.
Information regarding each of the committees is provided on the following pages, and pages 1720 to 1821 provide additional discussion of committee responsibilities with respect to risk oversight.
The table below provides the current membership (as of the date of this report) and 20202022 meeting information for each Viatris Board committee held following the closing of the Combination on November 16, 2020. As noted above, through April 30, 2021, the committees collectively have had 21 meetings.
Director | Audit | Compensation | Compliance | Executive | Finance | Governance and Nominating | Risk Oversight | Science and Technology | ||||||||||||||||||||||||||||||||
W. Don Cornwell | ✓ | ✓ | ||||||||||||||||||||||||||||||||||||||
Robert J. Coury | Chair | |||||||||||||||||||||||||||||||||||||||
JoEllen Lyons Dillon | ✓ | ✓ | ✓ | Chair | ||||||||||||||||||||||||||||||||||||
Neil Dimick | Chair | ✓ | ✓ | ✓ | ||||||||||||||||||||||||||||||||||||
Michael Goettler | ✓ | |||||||||||||||||||||||||||||||||||||||
Melina Higgins | Chair | ✓ | Chair | ✓ | ||||||||||||||||||||||||||||||||||||
Harry A. Korman | ✓ | ✓ | Chair | ✓ | ||||||||||||||||||||||||||||||||||||
James Kilts | ✓ | ✓ | ||||||||||||||||||||||||||||||||||||||
Rajiv Malik | ✓ | |||||||||||||||||||||||||||||||||||||||
Richard A. Mark | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||||||||||
Mark W. Parrish | ✓ | Chair | ✓ | ✓ | ||||||||||||||||||||||||||||||||||||
Ian Read | ✓ | Chair | ||||||||||||||||||||||||||||||||||||||
Pauline van der Meer Mohr | ✓ | ✓ | ✓ | |||||||||||||||||||||||||||||||||||||
Meetings during 2020 | 2 | 1 | 1 | 0 | 0 | 1 | 0 | 0 | ||||||||||||||||||||||||||||||||
Director | Audit | Compensation | Compliance | Executive | Finance | Governance and Nominating | Risk Oversight | |||||||
W. Don Cornwell | ✓ | ✓ | ||||||||||||
Robert J. Coury | Chair | |||||||||||||
JoEllen Lyons Dillon | ✓ | ✓ | ✓ | Chair | ||||||||||
Elisha W. Finney(1) | ✓ | ✓ | ||||||||||||
Melina Higgins | Chair | ✓ | Chair | ✓ | ||||||||||
James M. Kilts | ✓ | ✓ | ||||||||||||
Harry A. Korman(1) | ✓ | ✓ | ✓ | Chair | ||||||||||
Rajiv Malik | ||||||||||||||
Richard A. Mark(1) | Chair | ✓ | ✓ | ✓ | ||||||||||
Mark W. Parrish | ✓ | Chair | ✓ | ✓ | ||||||||||
Scott A. Smith | ||||||||||||||
Pauline van der Meer Mohr | ✓ | ✓ | ✓ | |||||||||||
Meetings during 2022 | 9 | 5 | 4 | 1 | 4 | 5 | 4 | |||||||
| (1) | In February 2023, Richard Mark became Chair of the Audit Committee and joined the Executive Committee, Elisha Finney joined the Audit and Finance Committees and Harry A. Korman joined the Compensation Committee. |
Audit Committee Responsibilities
The Audit Committee’s key oversight responsibilities include, but are not limited to:
Integrity of the Company’s financial statements and its accounting and financial reporting processes
Effectiveness of the Company’s internal control over financial reporting
Qualifications, independence, and performance of the independent registered public accounting firm
Services to be performed by, and fees payable to, the independent registered public accounting firm
Internal Audit group
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Company processes and procedures related to risk assessment and risk management of financial and disclosure control-related, as well as SEC reporting-related matters
Related party transactions
Company compliance with applicable legal and regulatory requirements (including U.S. federal securities laws) regarding the preceding matters
Review of any critical audit matters identified by the independent registered public accounting firm in connection with its audit of the Company’s annual financial statements
Compensation Committee Responsibilities
The Compensation Committee’s key oversight responsibilities include, but are not limited to:
Executive Chairman, CEO, and senior management compensation, including the corporate goals and objectives relevant to such compensation
Board and committee compensation
Equity compensation plans in which Directors and/or executives participate
Compensation and benefits-related disclosures in annual reports and proxy statements
Reviewing the relationship between compensation policies and practices and the Company’s risk management with respect to compensation-related matters
From time to time reviewing reports from management regarding pay equity, human capital management and succession planning
Compliance Committee Responsibilities
The Compliance Committee’s key oversight responsibilities include, but are not limited to:
Chief Compliance Officer’s implementation of the Company’s corporate compliance program
Making recommendations to the Board and/or management with respect to Viatris’ corporate compliance program, the Code of Business Conduct and Ethics, and significant related global policies, such as anti-corruption and fair competition policies
Reviewing significant global compliance-related policies implementing the Company’s Code of Business Conduct and Ethics, or related to the operations of the Company’s business and its mode or methods of doing business, including, for example, policies relating to pricing and/or commercialization of Company products and services
Reviewing metrics used by management or requested by the Committee to provide insight into the status and efficacy of the corporate compliance program, including the Company’s global compliance systems and organization
Reviewing reports of significant actual and alleged violations of the Code of Business Conduct and Ethics, corporate policies and procedures, and applicable laws and regulations
Reviewing checks and balances implemented by the Company designed to support and promote compliance with approved corporate policies, legal rules, and regulations
Overseeing the Company’s policies and procedures for corporate political and lobbying expenditures
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Executive Committee Responsibilities
The Executive Committee’s key oversight responsibilities include, but are not limited to:
Assisting the Board in fulfilling its fiduciary responsibilities by exercising those powers of the Board not otherwise limited by a resolution of the Board or by law
Strategic planning and additional oversight of strategy implementation
Finance Committee Responsibilities
The Finance Committee’s key oversight responsibilities include, but are not limited to:
Material mergers, acquisitions, and combinations with other companies
Swaps and other derivatives transactions
Establishment of credit facilities
Potential financings with commercial lenders
Issuance and repurchase of the Company’s debt, equity, hybrid or other securities
Capital structure, including dividend payments
Governance and Nominating Committee Responsibilities
The Governance and Nominating Committee’s key oversight responsibilities include, but are not limited to:
Corporate governance matters
| • | The nomination or re-nomination of Director candidates |
The Board’s review and consideration of shareholder recommendations for, and nominations of, Director candidates
The annual self-evaluation of the Board and its committees
Director orientation and continuing education programs
Evaluating Board composition with respect to director independence, skills, experience, expertise, diversity, and other factors
Reviewing succession planning matters
Risk Oversight Committee Responsibilities
The Risk Oversight Committee’s key oversight responsibilities include, but are not limited to:
Reviewing the enterprise risk framework, infrastructure, and controls implemented by management to help identify, assess, manage and monitor material risks
Reviewing management’s exercise of its responsibility to identify, assess and manage material risks not allocated to the Board or another committee, including, for example, data security programs and cybersecurity and information technology
Management’s efforts with respect to CSRcorporate environmental and social responsibility matters
Meeting with the Chairs of the other committees at least two times a year to discuss enterprise risk and related matters
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Board Refreshment and Succession Planning
Viatris’ Board, with the support of the Governance and Nominating Committee, seeks to identify a diverse talent pool of qualified candidates for consideration as part of the Board’s refreshment and succession planning. The Board also seeks to combine the skills and experience of its long-standing Board members with fresh perspectives, insights, skills, and experiences of new members in support of its belief that it is important for Directors to represent diverse viewpoints and, further, that the personal backgrounds and qualifications of the Directors, considered as a group, should provide a composite mix of experience, knowledge and abilities. The Board is committed to fostering a culture of integrity, inclusion, dignity and mutual respect.
Viatris’ Board and Governance and Nominating Committee evaluate Board composition with respect to, among other matters, director independence, skills, experience, expertise, diversity, and other factors to ensure that the Board remains well-qualified to provide effective oversight of the Company and management. The Board and the Governance and Nominating Committee consider Viatris’ strategy, performance, operations, relevant industry and market conditions, and current and anticipated needs in terms of particular areas of experience and expertise (e.g., risk oversight, industry, science), among many other factors, to inform these refreshment practices and decisions. As we continue to evaluate Board composition, we also work to establish a pool of qualified potential candidates to support our continued refreshment efforts.
In 2022, Viatris’ Board adopted a Diversity and Inclusion Policy, which formalizes the Board’s ongoing commitment to fostering a culture of inclusion and seeking, supporting, valuing and leveraging diversity in the Board’s composition, including a mix of nationalities, ethnicities, races, ages, and/or genders and seeking a diverse talent pool of Director candidates when considering the Board’s refreshment and succession planning. The Board, in seeking candidates, reviews the principles of the policy and also asks its supporting search firms to provide candidates consistent with those principles. The Board and Governance and Nominating Committee consider this policy and diversity matters generally during their self-evaluations and when nominating directors for election to the Board, and the Board considers the policy effective in making sure these matters are appropriately considered.
As part of the Board’s ongoing focus on board refreshment, since 2021 a third-party search firm has assisted with identifying potential new director candidates, including gender and racially/ethnically diverse candidates. After initial screenings and outreach, as well as additional guidance from the Governance and Nominating Committee, committee members and selected other Directors interviewed potential Director candidates identified by the third-party search firm as well as additional potential Director candidates recommended by Viatris Directors. Based on this process, the Board, on the recommendation of the Governance and Nominating Committee, appointed Ms. Finney and Mr. Smith to the Board in December 2022 to fill the two vacancies resulting from the retirements of Neil Dimick and Ian Read. We will continue to work to establish a pool of qualified potential candidates to support our Board refreshment efforts.
Reflecting the critical importance of senior leadership to the success of the Company and its overall business strategy, our Corporate Governance Principles also provide that the Board will work with senior management to ensure that effective plans are in place for management succession. The Board’s goal is to have a long-term and continuous program for effective senior leadership and succession as well as to have contingency plans in place for emergencies such as departure, death, or disability. The Board discusses succession planning regularly at scheduled meetings, including in executive session, as appropriate. These
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succession planning activities have been and Technology Committee Responsibilities
The ScienceBoard prioritizes reviewing and Technology Committee’s key oversight responsibilities include, but are not limited to:
Setting and Overseeing Strategy
The Board actively discusses, determines and determinesoversees the Company’s strategies intended to unlock value for the Company and its shareholders and ensure the growth, durability, sustainability, and sustainabilitystability of the business, unlock value,business. We believe the Board has demonstrated over time the consistency and create long-term value for shareholders.
Under the leadership of the Board along with management, we laid out a clear and deliberate strategy to build a highly diversified company with multiple capabilities spanning numerous geographies and therapeutic areas. We established a two-phased roadmap that detailed and emphasized our strategic priorities to deliver value to our shareholders. In Phase 1 of our strategy (2020-2023), we continue to focus on integration, execution and optimizing synergies to build a foundation for Phase 2 (2024 and beyond).
The Board expectsBoard’s strategic review culminated in the announcement in November 2022 of our key strategic priorities by laying out a roadmap for our future and our capital allocation strategy, including with respect to returning cash to shareholders in the form of dividends and share repurchases and re-investing further into our business organically and inorganically with value-creating, financially accretive bolt-on and other transactions.
We also announced additional steps the Company was undertaking that were consistent with these priorities. First, we announced two ophthalmology transactions that we expect will add to both our top and bottom line in the future. Furthermore, we identified the following businesses for divestiture that the Company no longer considered core to its strategy will drive a global platform with a sustainable, diversefuture strategy: over the counter; active pharmaceutical ingredients (“API”) (while retaining some selective development API capabilities); women’s healthcare, primarily related to our oral and differentiated portfolioinjectable contraceptives (this does not include all of prescription medicines, complex generics,our women’s healthcare related products; as an example, our Xulane® product in the U.S. is excluded); and biosimilars supported by commercialselect geographic markets that were part of the Combination that are smaller in nature and regulatory expertise,in which we had no established infrastructure best-in-class R&D capabilities, and high-quality manufacturing and supply chain excellence.
As we move forward, the Board is committed to overseeing continuing efforts to further unlock the value of the Company’sour unique global platform the Board began implementing a strategy to delever and return capital to shareholders through a strong focus on execution, restructuring, and rapid delevering, and we expect to begin to return capital to shareholders by initiating a dividend in the second quarter of 2021.
Risk Oversight
Viatris operates in a complex and rapidly changing environment that involves many potential risks. In addition to general market, industry, R&D, supply chain, political, financial, and economic risks, the Company faces potential risks related to, the integration of Mylanamong others, executing on and Upjohn;implementing our ongoing global restructuring initiatives;strategic objectives,
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including completed or potential acquisitions and divestitures; information technology and cybersecurity; data privacy; financial controls and reporting; manufacturing and quality; legal, regulatory and compliance requirements and developments; finance; the global nature of our operations; human capital management and retention;management; environmental and social responsibility; and product portfolio and commercialization, among others. As a company committed to operating ethically and with integrity, we proactively seek to manage and, where possible, mitigate risks to help ensure compliance with applicable rules and regulations, maintain integrity and continuity in our operations and business, including in support of achieving strategic priorities, long-term financial and operational performance, and protect our assets (financial, intellectual property, and information, among others), and enhance shareholder and other stakeholder value.. Risk management is an enterprise-wide objective subject to oversight by the Board and its committees.
It is the responsibility of Viatris’ management and employees to identify material risks to our business and to implement and administer robust risk management and mitigation processes and programs, while also
Our risk oversight framework also aligns with our disclosure controls and procedures. For example, the Company’s Disclosure Committee reviews the Company’s quarterly and annual financial statements and related disclosures. The ViatrisDisclosure Committee consists of senior management including our President, Chief Financial Officer, Global General Counsel, Corporate Controller, Head of Corporate Affairs, Head of Capital Markets, and Deputy Global General Counsel, all of whom participate in the risk assessment practices described above. The CEO and CFO then receive a report from the Disclosure Committee before the financial statements are reviewed with the Audit Committee, approved, and filed.
The Board in turn, directly, or through its committees, oversees the implementation of risk management and mitigation processes. The Board and its committees rigorously review with management the risk management program and discuss risk assessment matters at least quarterly, as well as during the Board’s annual budget review and approval process. Each of our committees has full access to officers and employees of the Company, and our Board and committees also meet without members of management present. The Board and committee Chairs periodically discuss the allocation of specific risk oversight matters between the various Board committees and the Board believes that its current risk oversight structure, as outlined below, assigns particular risk oversight matters to the Board committees that have the appropriate expertise to manage them. The Board also has the authority to form special strategic committees if it believes that it would be advisable to oversee significant strategic or other corporate actions, including the risks related thereto. All committees also have access to outside advisors in their sole discretion and periodically receive external updates concerning oversight of risks related to the Company and management’s efforts to manage risk. The Compliance Committee is responsible for appointing and replacing the Company’s Chief Compliance Officer, who is responsible for, among other things, the
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day-to-day management and implementation of the Company’s Corporate Compliance Program and reports to the Compliance Committee and the CEO. In addition to meeting with the Company’s internal risk committee of senior management, which meets at least quarterly, the Chief Compliance Officer meets at least quarterly with the Audit Committee, Compliance Committee and Risk Oversight Committee.
The Board also has approved a Code of Business Conduct and Ethics, Code of Ethics for Chief Executive Officer, Chief Financial Officer and Corporate Controller, and other related policies to help manage and mitigate risk globally.
Our Lead Independent Director is chair of the Compliance Committee and also meets every other quarter with the Risk Oversight Committee and other committee chairs to discuss risk-related matters. While the full Board has retained responsibility for overseeing strategic risks to the business overall, it has delegated oversight of specific risks to its committees as outlined below.
Board Committees’ RolesRole in Risk Oversight
| • | The Audit Committee focuses on risks relating to financial and disclosure controls, SEC reporting matters, and oversight of Viatris’ internal audit function and independent registered public accounting firm. The Committee oversees, among other matters, the Company’s processes and procedures relating to risk assessment and risk management relating to financial, disclosure, and SEC reporting-related matters, and reviews with management the quality and adequacy of the Company’s internal control over financial reporting and the Company’s disclosure controls and procedures, including their effectiveness. Viatris’ internal audit function reports to and meets with the Committee at least quarterly to discuss potential risk or control issues, and the Committee regularly discusses the performance of the internal audit function, and the adequacy of resources available to this function. The Committee also meets quarterly with Viatris’ independent registered public accounting firm in executive session. |
| • | The Compensation Committee focuses on the design and administration of compensation-related plans and programs, and considers whether and how such plans and programs balance risk-taking and rewards, and align with shareholder interests. The Committee receives reports, on at least a quarterly basis, from management and outside advisors regarding compensation-related matters, and considers risk management in determining compensation structure. The Committee also reviews reports from management regarding pay equity, and human capital management. |
| • | The Compliance Committee is responsible for overseeing the Chief Compliance Officer’s implementation of Viatris’ Corporate Compliance Program. The Chief Compliance Officer reports to the Committee and the CEO, and the Committee is responsible for appointing and, as applicable, replacing, this individual, and discusses the Chief Compliance Officer’s performance, responsibilities, plans and resources with the CEO. The Committee also makes recommendations to the Board with respect to the Corporate Compliance Program, the Code of Business Conduct and Ethics, and significant related global policies, and is responsible for reviewing reports of significant actual or alleged violations of the Code of Business Conduct and Ethics, corporate policies and procedures, and applicable laws and regulations. The Committee also discusses reports regarding non-financial compliance risk and risks associated with privacy, antitrust and competition, anti-corruption, and third-party risks, and reviews significant global compliance-related policies, including policies related to pricing and/or commercialization of Company products and services. |
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• | The Finance Committee is responsible for reviewing and, as appropriate, providing recommendations to the Board with respect to significant strategies and policies of the Company relating to its capital structure and deployment and/or allocation of capital, material financial matters and transactions, and the risks related to such activities. |
| • | The Governance and Nominating Committee is responsible for identifying, assisting in recruiting, and nominating qualified individuals to become members of the Board, recommending committee assignments, overseeing the Board’s annual evaluation of the independence of Directors, and evaluating and assisting the Board in considering potential risks related to corporate governance. The Committee is also responsible for overseeing the annual self-evaluation of the Board and its committees and Director orientation and continuing education programs. |
| • | The Risk Oversight Committee assists the Board in its oversight of Viatris’ enterprise risk management framework. The Committee reviews the enterprise risk framework, infrastructure, and controls implemented by management to help identify, assess, manage, and monitor the Company’s material risks; reviews management’s exercise of its responsibility to identify, assess, and manage material risks not allocated to the Board or another committee, including, for example, data security programs and cybersecurity and information technology; oversees management’s activities with respect to CSR; and reviews the Company’s efforts to foster a culture of risk-adjusted decision-making without constraining reasonable risk-taking and innovation. Management reviews the Company’s enterprise risk management program with the Committee each quarter and discusses the short-, medium- and long-term matters of focus from a risk management perspective and actions being taken to mitigate risk. The Committee also meets with the Chairs of the other committees at least two times a year to discuss enterprise risk and related matters. |
The Board’s Role in Oversight of Corporate Environmental and Social Responsibility Matters
Viatris’ Board oversees management’s efforts with respect to corporate environmental and social responsibility matters through its Risk Oversight Committee. The CSR function operates as a center of excellence within the Viatris Corporate Affairs leadership team. The Head of Corporate Social Responsibility drives the strategic and operational development of CSR across the Company together with key partners. The Head of Corporate Affairs and the Head of Corporate Social Responsibility communicate quarterly with the Board on corporate environmental and social responsibility matters through the Risk Oversight Committee, and on an annual basis, the Risk Oversight Committee reviews progress with the Head of Corporate Affairs on corporate environmental and social responsibility-related matters that have been discussed with the Board to confirm the Company is tracking its priorities in this area.
The Board’s and its Committees’ Role in Cybersecurity Oversight
The Company maintains an information security program to monitor and mitigate cybersecurity risks. This program is managed by the Company’s Chief Information Security Officer & Head of Global Security under the direction of the Company’s Chief Compliance Officer and is designed to identify, protect, detect and respond to cybersecurity risks, and includes policies, procedures, cybersecurity awareness communications, testing, and training for employees (including mandatory training programs for system users), system monitoring, risk reduction, vulnerability and patch management, and a robust incident response and reporting program.
The Risk Oversight Committee receives reports from senior management on data security, cybersecurity and information security-related matters on at least a quarterly basis, including with respect to related risks, risk management, and relevant legislative, regulatory, and technical developments. On a biannual basis, the Risk
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Oversight Committee and chairs of each other Committee of the Board receive an information security update from the Company’s Chief Information Security Officer & Head of Global Security and its committeesthe Chief Information Officer. The full Board receives a report on the respective quarterly discussions with senior management from the chair of the Risk Oversight Committee each quarter.
Board Education and Director orientation and continuing education programs.
The Governance and Nominating Committee is responsible for overseeing and annually reviewing Director orientation and continuing education programs, including educational seminars, presentations, conferences and other Director education programs andor opportunities presented by external and internal resources, on matters that may relate to, among other topics: compensation, compliance, governance, board process, risk oversight, audit and accounting, regulatory and other current issues. Directors also may elect to attend additional third-party educational events. The Company reimburses Directors for costs associated with any related seminars and conferences, including travel expenses.
The Governance and Nominating Committee is also responsible for overseeing and annually reviewing the Company’s Director orientation program. The program is designed to familiarize new Directors with, among other matters, the Company’s business, operations, financial reporting, risk management and executive officers. In addition, new Directors receive extensive onboarding materials which address topics including the Company’s strategy, policies, director roles and responsibilities, corporate governance policies and procedures, and leadership structure.
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| ITEM 11. | Executive Compensation |
Compensation Discussion and Analysis
 |      | |||
 | ||||
This Compensation Discussion and Analysis (“CD&A”) includes disclosure ofdescribes the compensation, relatedwhich continues to three distinct programs: those of Viatris, Mylan and Upjohn. Although Viatris is not a successor registrant of Mylan or Pfizer, we are presenting consolidated full-year compensation information with respectbe closely linked to the Viatris NEOs for 2020 consistent with applicable SEC regulations and to provide insight with respect to the full year as well as context for the Viatris compensation program moving forward. Specifically, this CD&A includes a discussion of both pre-Combination compensationCompany’s performance objectives, of our NEOs with Mylan or Pfizer, as applicable,Named Executive Officers (“NEOs”) for 2022.
Strong Say-on-Pay Support in 2022
Our shareholders expressed strong support for our compensation programs at our 2022 Annual Meeting, and we received approximately 90.7% approval for our shareholder advisory vote regarding executive compensation. We believe this result is an endorsement of the Company’s compensation philosophy and our NEOs’ post-Combination compensation with Viatris. Notably, significant portions of the reported 2020 compensation include one-time transaction-related items that will not be components of the Viatris 2021 compensation program.
Conclusion of Certain Legacy Compensation Payouts and Future Commitments
Impact of Legacy Matters on 2022 Compensation. The Summary Compensation Table for 2022 reflects certain legacy retention payments for Messrs. Malik and Mauro relating to their legacy Transition and Succession Agreements with Mylan Inc. that were previously disclosed in the Company’s 2021 and 2022 proxy statements (among other filings). To incentivize Mr. Malik and Mr. Mauro to remain with Viatris in light of their importance to the launch, integration, leadership, and operation of Viatris, as well as development and execution of strategies going forward, and because of their existing Transition and Succession Agreement severance rights, Viatris entered into a retention agreement with each pursuant to which each earned the value of the separation benefit under his respective Transition and Succession Agreement.
Demonstration of Our Commitment. Although it is common among peer companies, we did not provide a cash-based retention award to Mr. Smith, who joined Viatris as CEO in April 2023. In doing so, we believe our Compensation Committee demonstrated its willingness to accept feedback from shareholders in making executive compensation determinations.
Our Continued Performance-Based Approach to Compensation
Viatris has carefully selected its compensation-related performance metrics to align with the strategic priorities that the Company is uniquely positionedhas previously outlined to its shareholders. When it was formed in November 2020, Viatris laid out a clear and deliberate strategy to build a highly diversified company with multiple capabilities spanning numerous geographies and therapeutic areas. Under the leadership of the Board along with management, we established a two-phased roadmap that detailed and emphasized our strategic priorities to deliver increased accessvalue to affordable, quality medicinesour shareholders. In Phase 1 of its strategy (2020-2023), the Company has focused on commercial performance and profitability to generate strong cash flows that could be used to return capital to shareholders. Phase 1 also includes a global reshaping initiative designed to stabilize the business, unlock trapped value and provide the financial flexibility to deliver on our vision. Phase 1 has focused on building a strong foundation and setting us up for patients worldwide.Phase 2 (2024 and beyond), which is expected to be a period of renewed growth and leadership in our sector.
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2022 Pay-for-Performance Pay Mix
Our 2022 compensation program consisted of base salary, performance-based annual incentive awards, and performance-based long-term incentive awards subject to financial metrics and a relative total shareholder return (“TSR”) modifier. There is strong alignment of pay and performance in our program, with approximately 71% of total target compensation delivered in the form of long-term equity and approximately 63% of total target compensation subject to performance conditions.
|  |
Summary of 2022 Incentive Compensation Pay Outcomes
Short-term incentive compensation comprised approximately 17% of 2022 NEO target total compensation. In 2022, our management team’s operational execution resulted in short-term incentive payouts above target. Drivers of our 2022 short-term incentive results included:
Above-target adjusted EBITDA and free cash flow for short-term incentive compensation purposes, driven by the focus and efforts of the Company’s management and the success of the Company’s cash optimization efforts. For more information on and the differences between how adjusted EBITDA and free cash flow are calculated for purposes of the Company’s 2022 short-term incentive compensation and public reporting purposes, see “Elements of 2022 Compensation — 2022 Annual Incentive Compensation Program — Annual Incentive Compensation Payouts for 2022” on page 30.
Above-target global product submissions, across broad and therapeutic-area agnostic product categories, driven by the strength of the Company’s development programs and successful acceleration of certain additional submissions.
Long-term incentive compensation. Performance-based restricted stock units (“PRSUs”) are subject to a free cash flow metric and relative market performance metric (i.e., relative TSR using the S&P 500 Pharmaceutical Index, which is used as a modifier to determine the final payout percentage) over a three-year time period. Although we believe that Viatris stock is significantly undervalued and this modifier is measured on a three-year time frame, at the combined companyrelevant stock price as of the close of business (5:00 p.m. Eastern Time) on April 21, 2023, any payouts of PRSUs vesting in 2024 would be automatically reduced by 30%. For more information on and the differences between how free cash flow is calculated for purposes of the Company’s 2022 long-term incentive compensation and public reporting purposes, see “Elements of 2022 Compensation — 2022 Long-Term Incentive Compensation Programs — 2022 Three-Year PRSU Performance Metrics” on pages 31 and 32.
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Selected Highlights and Recent Developments
Viatris’ management continues to execute on the strategic priorities outlined to shareholders and led the Company in achieving several notable accomplishments in 2022.
Financial and Operational Performance
In 2022, Viatris delivered another four quarters of consistent, solid operational performance across all segments. The Company:
Reported total revenues of $16.26 billion; U.S. GAAP net earnings of $2.08 billion; adjusted EBITDA of $5.78 billion; U.S. GAAP net cash provided by operating activities of $2.95 billion; and free cash flow of $2.55 billion.
Captured an additional approximately $250 million (approximately $750 million since the beginning of 2021) in synergies due to integration efforts.
Paid down approximately $3.3 billion of debt, exceeding the 2022 target of approximately $2 billion.
Exited substantially all transition services agreements with Pfizer.
Increased the quarterly dividend payment to $0.12 per share.
Paid approximately $580 million in dividends. Since the beginning of 2021, the Company has industry leading R&D, medical,returned nearly $1 billion to shareholders through dividend payments.
Completed approximately $250 million in share repurchases in January and February 2023 as part of its previously announced $1 billion stock repurchase program that the Board authorized.
Completed the Biocon Biologics Transaction; received a $2 billion cash payment, adjusted as set forth in the agreement, and approximately $1 billion of compulsory convertible preferred shares representing a stake of approximately 12.9% (on a fully diluted basis) in Biocon Biologics.
Established an eye care division in early 2023 in conjunction with the acquisitions of Oyster Point Pharma and Famy Life Sciences.
Science and Regulatory Achievements
The Company has industry-leading science, regulatory and manufacturing supply chain, and commercial expertisecapabilities complemented by an unequivocala strong commitment to quality and a globalan unparalleled geographic footprint thatto deliver high-quality medicines. This includes more than 3,000 scientists and medical professionals working across 12 development centers globally in multiple technology platforms and therapeutic areas, coupled with in-country regulatory expertise in 55 markets. In 2022, Viatris advanced key development programs across complex injectables, novel products, complex generics, as well as progressing its efforts to establish a Phase III-ready eye care pipeline. The Company:
| • | Announced positive top-line results for the GA Depot Phase III clinical trial with partner Mapi Pharma. |
Received U.S. Food and Drug Administration (“FDA”) approvals of Fingolimod and Levothyroxine Oral Solution.
| • | Expanded first-to-market opportunities of complex injectables with generics of Sandostatin® LAR Depot, Ozempic® and Abilify Maintena®. |
| • | Initiated Phase III trials for Effexor® Generalized Anxiety Disorder in Japan. |
Achieved FDA acceptance of the new drug application review for the reversal of mydriasis program and was granted a Prescription Drug User Fee Act date of September 28, 2023.
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Started enrollment in the first pivotal Phase III trial for presbyopia.
Made more than 100 additional submissions globally in 2022.
| • | Has 10 products under review with the health authorities in China, including complex products, such as generic Symbicort®. |
External Recognition
Viatris received a number of external recognitions in 2022, including:
| • | Forbes® annual list of the “World’s Best Employers” for the second year in a row. |
Top Employers Institute certification as a Top Employer in the United Kingdom and United Arab Emirates and as one of the top 101 employers in China.
| • | LMG Life Sciences’ U.S. In-House Legal Team of the Year for Intellectual Property Litigation. |
| • | Great Place to Work® certification in India. |
Capital Magazine’s Best Employers in France.
HR Asia’s Best Companies to Work for in Asia (Taiwan) ranking.
GoodCompany’s Top 40 Best Workplaces to Give Back 2022 in Australia.
CSR Accomplishments
Our focus on corporate responsibility is capablereflected in our values, policies, decisions, and strategies and extends to our expectations of delivering high-quality medicines to patientsour partners as well. Ultimately, we know we are stronger together, working collaboratively and relentlessly across our Company and with the broader global community, in pursuit of access. In 2022, we sold more than 80 billion doses of medicine across more than 165 countries and territories. Viatris’ sustainable, diverse,territories, reaching about 90% of low- and differentiated portfolio compriseslower-middle-income countries. We offer more than 1,400 approved molecules across a wide range of key therapeutic areas, including globally recognized iconic and key brands, generics, complex generics, and biosimilars. Viatris operates manufacturing sites worldwide that produce oral solid doses, injectables, complex dosage forms, and active pharmaceutical ingredients.
Had our near-term science-based emissions reduction targets for scope 1, 2 and 3 validated and approved by the Science Based Target initiative (SBTi). The SBTi classified Viatris’ scope 1 and 2 target ambition and has determined that it is in line with a 1.5°C trajectory, a worldwide goal of death. Additionally, Viatris is a leading provider of antiretrovirals to treat HIV/AIDS and other infectious diseases. Roughly 40% of thelimiting global warming.
Donated for humanitarian needs more than 23450 million people receiving treatment for HIV usedoses of medicines through our products, including 60% ofpartners around the world’s HIV-positive children receiving treatment.world.
| • | Partnered with Sesame Workshop to launch new emotional health and wellbeing resources for families grappling with effects of COVID-19. |
Donated $1 million to aid in supporting access to expanded markets through an innovative global infrastructure that connects peoplehealthcare, food security and water stewardship in communities around the world, tothrough four organizations: Direct Relief, World Central Kitchen, WaterAid and World Food Program USA, the high-quality medicines and services they need. Powered by our best-in-class manufacturing, scientific, and legal expertise and proven commercial capabilities with unparalleled reach, we believe the Global Healthcare Gateway
Hiring of Scott A. Smith as New Chief Executive Officer
On February 24, 2023, the Company appointed Scott A. Smith to serve as the Chief FinancialExecutive Officer
In connection with his appointment, Mr. Smith entered into an offer letter with the Company providing for an annual base salary of $1.4 million, an annual target bonus opportunity equal to 150% of base
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salary (pro-rated for 2023), and eligibility for an annual long-term incentive award with a target of 700% of base salary (800% for 2023). The Board believes that Mr. Smith is best suited to lead the Company’s one-of-a-kindpreviously announced Phase 2 (2024 and beyond) strategy and execution and brings experience that positions him to manage the global platform were keynature and complexity of a business that we expect to Mylan’sreturn to growth.
Executive Compensation Philosophy
The Compensation Committee’s and Board’s compensation philosophy for 2022 reflects the Company’s continued delivery of medicines to patients around the world, including numerous critically needed treatments (e.g., ICU drugsfocus on a performance-based, shareholder-value-focused business model and anti-infectives). Mylan supported our global colleagues by implementing various measures to protect their well-being, while also supporting public health efforts and taking actionis intended to help ensure that Mylan remained in a position of financial strength. Additionally, Mylan’s commercial teams aroundViatris continues to attract and retain high-performing executives given the world deployed new virtual tools to maintain essential internal connectivity and continued strong levels of customer service. In total, Mylan sold approximately 63.5 billion doses of medicines in 2020. During 2020, Mylan management also prepared the organizationhighly competitive market for an effective and highly efficient integration, and the R&D and Regulatory teams continued to progress important work to advance the development and launch of more complex generics and biosimilars to complement Mylan’s broad product portfolio. To help patients in need, Mylan also donated more than 500 million doses of medicines in 2020.
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Attract, Motivate, and Retain Highly-Skilled Executives. In order to attract and retain the leaders needed to drive execution of our ambitious goals, we | ||||||||||||||||
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Align with Shareholder Interests. We | ||||||||||||||||
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Drive Company Performance. | ||||||||||||||||
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2022 Performance-Based Compensation Program
NEO | Base Salary | Target Annual Incentive (as % of Base Salary) | Target LTI (as % of Base Salary) | |||||||||
Robert J. Coury | $ | 1,800,000 | 150 | % | 600 | % | ||||||
Michael Goettler | $ | 1,300,000 | 150 | % | 700 | % | ||||||
Rajiv Malik | $ | 1,200,000 | 125 | % | 600 | % | ||||||
Sanjeev Narula | $800,000 | 100 | % | 350 | % | |||||||
Anthony Mauro | $800,000 | 115 | % | 400 | % | |||||||
2022 Total Target Compensation
The chart below shows the target total direct compensation opportunity for each of our NEOs in 2021.
Executive | Base Salary | Target Annual Incentive | Target Long-Term Incentive | 2021 Total Target Compensation (1) | ||||||||||||
Robert J. Coury | $1,800,000 | $2,700,000 | $10,800,000 | $15,300,000 | ||||||||||||
Michael Goettler | $1,300,000 | $1,950,000 | $9,100,000 | $12,350,000 | ||||||||||||
Rajiv Malik | $1,200,000 | $1,500,000 | $7,200,000 | $9,900,000 | ||||||||||||
Sanjeev Narula | $800,000 | $800,000 | $2,800,000 | $4,400,000 | ||||||||||||
Anthony Mauro | $800,000 | $920,000 | $3,200,000 | $4,920,000 | ||||||||||||
NEO | Base Salary | Target Annual Incentive | Target Long-Term Incentive | 2022 Total Target Compensation(1) | ||||||||||||
Michael Goettler(2) | $1,300,000 | $1,950,000 | $9,100,000 | $12,350,000 | ||||||||||||
Rajiv Malik | $1,200,000 | $1,500,000 | $7,200,000 | $9,900,000 | ||||||||||||
Sanjeev Narula | $850,000 | $850,000 | $3,400,000 | $5,100,000 | ||||||||||||
Anthony Mauro | $800,000 | $920,000 | $3,200,000 | $4,920,000 | ||||||||||||
Robert J. Coury | $1,800,000 | $2,700,000 | $10,800,000 | $15,300,000 | ||||||||||||
| (1) | Total Target Compensation is defined as the sum of base salary, target annual incentive, and target long-term incentive. |
| (2) | Mr. Goettler ceased to serve as the Company’s Chief Executive Officer and ceased to serve on the Board effective as of April 1, 2023. As noted above, Scott A. Smith became CEO of the Company effective April 1, 2023. |
Considerations for Setting 2022 Incentive Performance Goals
In setting annual and long-term incentive performance goals, the Compensation Committee considered a broad variety of data, including potential divestitures, industry forecasts, internal projections, demographic
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data, advice from outside advisors, benchmarking data against the peer company medians, and the Company’s annual operating plan and strategies. The Compensation Committee also considered the variability and cyclicality of the business, noting that targets may increase or decrease from year-to-year due to factors impacting the business, such as market conditions, the regulatory environment, timing of product approvals, and both immediate and long-term strategic priorities of the business. Although the targets may vary from year-to-year, the Compensation Committee is committed to maintaining high levels of rigor and motivational impact on the executive team and aligning with the Company’s long-term strategy for sustainable business development and its goal of creating value for shareholders. Consistent with our philosophy of driving long-term company performance, the Compensation Committee, with the advice of its independent compensation consultant, will annually consider potential alternative performance metrics that link to our strategy and align with shareholder interests in long-term value creation.
2022 Peer Group
The peer group is used as one of several reference points for determining executive compensation and includes Viatris’ business competitors and companies that Viatris competes with for executive talent. Although the competitive market for our executives is one factor the Viatris Compensation Committee considers when making compensation decisions, the Committee does not target the compensation of NEOs within a specific percentile of any set of peer companies and considers peer group and industry data along with many other factors when determining compensation.
Below is the peer group selected by the Viatris Compensation Committee followingfor 2022, with the Combination.
Abbott Laboratories | Biogen Inc. | Novartis AG | ||
Abbvie Inc. | ||||
Bristol-Myers Squibb Company | Pfizer Inc. | |||
Amgen Inc. | ||||
Eli Lilly and Company | Regeneron Pharmaceuticals, Inc. | |||
Bausch Health Companies Inc. | Gilead Sciences, Inc. | Sanofi | ||
Baxter International Inc. | ||||
Merck & Co., | Teva Pharmaceutical Limited | |||
Elements of 20202022 Compensation (Mylan, Upjohn, and Viatris)
Base Salaries
The Compensation Committee considers a variety of factors in deciding base salary, including, among others: individual performance, responsibilities, and the base salaries of Messrs. Goettler and Narula were establishedexpected future performance; Company performance; management structure; marketplace practices (including external benchmarks prepared by Pfizer.
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As reflected in the table below, in 2022, there were no changes to NEO base salaries with the exception of a 6.25% increase for the NEOs commensurateCFO to align with their new roles with Viatris. Messrs. Goettler and Narula received base salary increases commensurate with their assumption of significantly more responsibilitychanges in their roles as the Chief Executive Officer and Chief Financial Officer, respectively, of an approximately $20 billion market cap public company, as of December 31, 2020, as compared to their prior roles as executives within an operating division of Pfizer. Mr. Malik’s base salary was adjusted in part in recognition of his increased responsibilities with Viatris, which include oversight of the integration and leading efforts to meet synergy targets. Base salaries for Messrs. Coury and Mauro remained flat compared to their salaries prior to the closing of the Combination.
NEO | Legacy Salary | Viatris Salary | ||||||
Robert J. Coury | $ | 1,800,000 | $ | 1,800,000 | ||||
Michael Goettler | $825,000 | $ | 1,300,000 | |||||
Rajiv Malik | $ | 1,150,000 | $ | 1,200,000 | ||||
Sanjeev Narula | $515,000 | $800,000 | ||||||
Anthony Mauro | $800,000 | $800,000 | ||||||
NEO | 2021 Base Salary | 2022 Base Salary | ||||||
Michael Goettler | $1,300,000 | $1,300,000 | ||||||
Rajiv Malik | $1,200,000 | $1,200,000 | ||||||
Sanjeev Narula | $800,000 | $850,000 | ||||||
Anthony Mauro | $800,000 | $800,000 | ||||||
Robert J. Coury | $1,800,000 | $1,800,000 | ||||||
2022 Annual Incentive Compensation Programs
Annual Incentive Compensation Committee and Board decided that annual incentive payoutsAwards for 2020 would be based on a combination of Mylan’s, Pfizer’s and 2022
Viatris’ bonus programs based on (a) actual performance (in their legacy roles) during the first three fiscal quarters of 2020 and (b) target bonus for the remaining fiscal quarter of 2020. The following discussion provides details regarding 2020 annual incentive compensation determinations relating to the NEOs based on the above-noted timeframes and calculations.
The Compensation Committee identified the following metrics as important measures of Company performance relating to its stated strategy:
| • | Adjusted EBITDA (40% Weighting): Measures the Company’s profitability and motivates the organization to focus on commercial execution and driving new product revenue, maintaining efficiency of our operations, capturing synergies, and disciplined expense management. |
| • | Free Cash Flow (40% Weighting): Creates organizational emphasis and focus on cash through improved cash flow conversion, optimized working capital, and overall cash generation which can increase the return to shareholders. |
| • | Global Regulatory Submissions (20% Weighting): Emphasizes the importance of developing a robust pipeline of molecules that Viatris could manufacture and sell over subsequent years. A robust product pipeline can help Viatris move its products up the value chain and also support sustainability while serving Viatris’ mission of providing access to high quality, affordable medications. In addition, we view this metric as a stepping stone to implementing ESG/sustainability metrics in the future. |
The setting of annual incentive targets reflected the Company’s expectations regarding incremental research and development expense, incremental cost inflation and expectations regarding exchange rates. Incremental investments were intended to support long-term value creation for shareholders and other stakeholders by, among other things, furthering Viatris’ efforts to move its portfolio and pipeline up the value chain. The Compensation Committee recognized these expectations together would be expected to reduce the adjusted EBITDA compensation metric in 2022.
In addition, an increase in the number of global regulatory submissions was not expected due in part to a continued emphasis on more challenging specialty and complex generic products and Viatris’ focus on submission of products expected to generate greater economic profit.
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Individual annual incentive payout targets were established for each NEO, expressed as a percentage of base salary, as noted in the table below. Actual payouts could range from 0% to 200% of each NEO’s annual incentive target based on achievement of performance goals.
NEO | Target Annual Incentive (as % of Base Salary) | Target Annual Incentive ($)* | ||||||
Robert J. Coury | 150 | % | $ | 2,700,000 | ||||
Rajiv Malik | 125 | % | $ | 1,445,355 | ||||
Anthony Mauro | 115 | % | $920,000 | |||||
NEO | Target (as % of Base Salary) | Annual Incentive Target | ||||||
Michael Goettler | 150 | % | $1,950,000 | |||||
Rajiv Malik | 125 | % | $1,500,000 | |||||
Sanjeev Narula | 100 | % | $850,000 | |||||
Anthony Mauro | 115 | % | $920,000 | |||||
Robert J. Coury | 150 | % | $2,700,000 | |||||
Annual Incentive Compensation Payouts for 2022
In 2022, Viatris achieved the following performance against the Compensation Committee-approved performance goals:
Metric | Weighting | Threshold | Target | Maximum | Results | |||||
Adjusted EBITDA* | 40% | $5,700 million | $6,000 million | $6,300 million | $6,200 million | |||||
Free Cash Flow** | 40% | $2,400 million | $2,700 million | $3,000 million | $3,168 million | |||||
Global Regulatory Submissions | 20% | 110 | 120 | 130 | 134 |
| * |
Metric | Weighting | Threshold | Target | Maximum | Mylan Results* | |||||
Adjusted EBITDA** | 50% | $2,170 million | $2,290 million -$2,531 million | $2,652 million | $2,614 million | |||||
Global Regulatory Submissions*** | 50% | 72 | 80 | 88 | 95 |
Adjusted EBITDA is derived from |
| ** | Free cash flow is derived from Viatris’ audited financial statements in the same manner as Viatris’ publicly reported free cash flow, except that the calculation for 2022 incentive program utilized budgeted foreign exchange rates and |
The following table shows the Viatris Compensation Committee and Board decided in November 2020 that, with respect to the legacy Mylan executives (Messrs. Coury, Malik and Mauro), 2020 annual incentive payouts would be based on (a)2022 actual performance against targets during the first three quarters, and (b) target bonus for the remaining fiscal quarter of 2020. Operational results were prorated three-quarters based on Mylan’s actual results (reflecting the three completed quarters prior to the Combination) and one-quarter based on target performance (reflecting the remaining quarter of 2020). The operational performance through the 9-month period for Mylan equated to 184.23%. Taking into consideration the target measurement for the fourth quarter, the full-year pro-rata results provided a full-year payout of 163.17%.
NEO | Actual Annual Incentive Award | |||
Michael Goettler | $ | 3,639,285 | ||
Rajiv Malik | $ | 2,799,450 | ||
Sanjeev Narula | $ | 1,586,355 | ||
Anthony Mauro | $ | 1,716,996 | ||
Robert J. Coury | $ | 5,039,010 | ||
2022 Long-Term Incentive Compensation Programs
Long-Term Incentive Compensation Grants for 2022
The Compensation Committee believes that the value of long-term incentives should be directly related to the performance of Viatris’ ordinary shares over several years, as well as other measures associated with the growth, success, and Narula would be based on (a) accrued results (as accrued by Pfizer) forlong-term sustainability of Viatris. The Compensation Committee approved annual long-term incentive (“LTI”) award grants in the first three fiscal quarters and (b) a target bonus for the final fiscal quarter of 2020. Operational results were prorated three-quarters based on Upjohn results (reflecting2022.
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In 2022, we increased the three completed quarters priorpercentage of performance-based awards (which are subject to a TSR modifier) from 60% to 65%, with 65% of each NEO’s award in the Combination)form of PRSUs and one-quarter based on target (reflecting35% in the remaining quarterform of 2020)restricted stock units (“RSUs”).
NEO | Upjohn Division Target Annual Incentive* | Viatris Target Annual Incentive ** | Blended 2020 Target Annual Incentive*** | |||||||||
Michael Goettler | $ | 732,225 | $ | 1,950,000 | $885,279 | |||||||
Sanjeev Narula | $ | 207,400 | $800,000 | $281,880 | ||||||||
Each NEO’s 2022 LTI award had a targeted value at grant equal to a percentage of the Combination,NEO’s base salary. In setting each NEO’s LTI targeted value, the Viatris Compensation Committee madeconsidered a variety of factors, including, among others, peer group compensation and expectations regarding individual roles and responsibilities.
For 2022, the determination to pay bonuses at target achievement; therefore the prorated value of the combined bonus for the full year equates to 107.5%.
NEO | PRSUs | RSUs | Total LTI Award | |||||||||
Michael Goettler | $ | 5,915,000 | $ | 3,185,000 | $9,100,000 | |||||||
Rajiv Malik | $ | 4,680,000 | $ | 2,520,000 | $7,200,000 | |||||||
Sanjeev Narula | $ | 2,210,000 | $ | 1,190,000 | $3,400,000 | |||||||
Anthony Mauro | $ | 2,080,000 | $ | 1,120,000 | $3,200,000 | |||||||
Robert J. Coury | $ | 7,020,000 | $ | 3,780,000 | $ | 10,800,000 | ||||||
2022 Three-Year PRSU Performance Metrics
The 2022 grant of PRSUs RSUs and stock options to Messrs. Malik and Mauro, consistent with other Mylan executives. Treatment of 2020 long-term incentive compensation was in accordance with the terms of the Business Combination Agreement between Mylan and Pfizer and is explained in more detail below in the section titled “Combination-Related Treatment of Mylan Equity Awards”. The mix of the awards consisted of 50% PRSUs, 40% RSUs, and 10% stock options. Mr. Coury was appointed as Executive Chairman of Mylan in April 2020, shortly after long-term incentive grants were approved for other executives, but did not receive a long-term incentive award at that time. Had Mr. Coury been granted an award at that time, the value would have been approximately $10.8 million.
NEO | PRSU | RSU | Stock Options | |||||||||
Robert J. Coury | No Annual Equity Grant Provided in 2020 | |||||||||||
Rajiv Malik | $ | 3,450,000 | $ | 2,760,000 | $ | 690,000 | ||||||
Anthony Mauro | $ | 1,600,000 | $ | 1,280,000 | $ | 320,000 | ||||||
Metric | Weighting | Threshold | Target | Maximum | ||||
ROIC* | 50% | 8% | 10% | 12% | ||||
Adjusted FCF/Credit Agreement Debt** | 50% | 13% | 15% | 18% | ||||
Relative TSR of Peer Group*** | Multiplier | At or Below 25th Percentile of Peer Group | Between 25th and 75th Percentiles of Peer Group | At or Above 75th Percentile of Peer Group | ||||
Payout Opportunity (as % of Target) | 40% | 100% | 180% | |||||
As shown in the table below, payouts under the 2022 PRSUs will be determined in two steps. First, in the first quarter of 2025, the outcome of the free cash flow metric will be assessed, resulting in an initial payout percentage of 50% for threshold performance (with 0% payout for below threshold performance) up to 150% for maximum performance, with linear interpolation for achievement between threshold and maximum. Second, the relative TSR metric will be applied as a modifier to the initial payout percentage, decreasing it by 30%, leaving it unaffected, or increasing it by 30%, in order to calculate the final payout percentage.
Metric | Weighting | Threshold | Target | Maximum | ||||
Free Cash Flow* | 100% | $6,900 million | $7,900 million | $8,900 million | ||||
Relative TSR of Peer Group** | Multiplier | At or Below 25th Percentile of Peer Group | Between 25th and 75th Percentiles of Peer Group | At or Above 75th Percentile of Peer Group | ||||
Payout Opportunity (as % of Target) | 35% | 100% | 195% |
| * | Free cash flow is derived from Viatris’ audited financial statements in the same manner as |
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| ** |
Relative TSR |
Payouts with respect to PRSUs granted in 2022 will be determined in early 2025 following the performance metrics relating to Viatris’ long-term incentive grants going forward, see “Description of Viatris’ 2021 Performance-Based Compensation Program” on page 27.
Governance and Mylan, all previously-granted and outstanding Mylan equity-based awards (including the above-described February 2020 grants) were treated as follows:
NEO | Cash Long-Term Incentive Award | |||
Michael Goettler | $ | 2,400,000 | ||
Sanjeev Narula | $425,000 | |||
NEO | Forfeited Pfizer Long-Term Incentive Value | Number of Make-Whole Viatris RSUs | ||||||
Michael Goettler* | $ | 2,759,055 | 177,432 | |||||
Sanjeev Narula** | $330,367 | 21,246 | ||||||
The Mylan Board subsequently disclosed, prior to the shareholder vote on the Combination, its intended compensation program for Mr. Coury in that role. Shortly after the closing of the Combination, on November 20, 2020, the Viatris Compensation Committee and Board approvedproactively consider external governance-related developments and trends relating to executive compensation. In setting or approving executive compensation, the Compensation Committee and Board may consider, in addition to any corporate goals and objectives applicable to an employment agreement with Mr. Coury in connection with his service as Executive Chairmanindividual executive, some or all of the following: recognition of individual performance and contributions; pay for performance; alignment with long-term shareholder interests; advancement of Company (the “Executive Chairman Agreement”).
The Compensation Committee and Board believe that each company must independently assess which has a term through December 31, 2025,market practices and trends are generally consistent with those previously described in Mylan’s definitive proxy statement filed on February 13, 2020 andappropriate for the information statement included as Exhibit 99.1 to Viatris’ Form 8-K filed with the SEC on August 6, 2020.
Commitment to Responsible, Shareholder-Aligned Compensation Governance Practices
The following table summarizes certain specific compensation-related governance practices adopted by the CombinationCompensation Committee and integration planning mattersBoard with respect to the Combination; and his expected leadership, direction and efforts for the combined company so2022 compensation. We note that implementation of many of these practices was responsive to comments from shareholders can realize the significant opportunity and benefits that are expected from the Combination. The Executive Chairman Agreement also provides that, upon termination of employment without cause, resignation for good reason, termination upon non-renewal, disability or death, each as defined in the Executive Chairman Agreement, Mr. Coury would receive (i) a severance payment equal to three times the sum of (x) his base salary at the time of termination and (y) the greater of his target bonus or highest bonus paid under the Executive Chairman Agreement through such date, (ii) a prorated annual bonus for the year of termination, (iii) accelerated vesting of equity awards held at the time of termination, and (iv) continued benefits for a three year period.otherwise endorsed by shareholders.
What We Do |
✓ Maintain a significant portion of compensation aligned with shareholder interests and tied to share price or financial and operational business performance |
✓ Employ metrics for annual and long-term incentives that support both short- and long-term strategies and align with shareholder interests, including a non-financial metric in the annual program tied to important product development initiatives |
✓ Base long-term incentives heavily on performance-based metrics and short-term incentives entirely on performance-based metrics |
✓ Set rigorous and measurable performance goals and periodically review and discuss our executives’ performance |
✓ Use double-trigger vesting for annual long-term incentive awards upon a change in control |
✓ Retain independent compensation consultants that report directly to the Compensation Committee |
✓ Maintain strong share ownership guidelines |
✓ Maintain a robust clawback policy |
✓ Engage with shareholders on compensation and governance matters |
✓ Consider peer groups and market data in determining compensation |
✓ Annual Say-on-Pay Vote |
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What We Don’t Do |
X New fixed-term NEO employment agreements |
X Excise tax gross-ups |
X Supplemental retirement agreements |
X Exercise positive discretion in determining annual incentive compensation or LTI payouts |
X Re-pricing of stock options without shareholder approval |
X Hedging or pledging of shares |
Limited Perquisites
We provide certain limited perquisites to our NEOs, including the following:
Each NEO receives a car allowance or the use of a leased vehicle and payment of certain ancillary expenses. The NEOs are responsible for paying any taxes incurred relating to this perquisite.
Our NEOs take an extraordinarily active approach to overseeing and managing Viatris’ global operations, which necessitates and will continue to necessitate a significant amount of U.S. domestic and international travel time after the lifting of COVID-based restrictions due to our diverse business centers, manufacturing and other facilities, and many client and vendor locations around the world. Viatris provides management with access to corporate aircraft to assist in the management of Viatris’ global platform by providing a more efficient and secure traveling environment, including where sensitive business issues may be discussed or reviewed, as well as maximum flexibility to our executives in the conduct of business. For reasons of business efficiency and continued security-related concerns (including personal security, especially given the global nature of Viatris’ business, as well as privacy of business information and communications), we also may from time-to-timetime to time require certain executives to use corporate aircraft for business and personal purposes.
| • | Because of continued security-related concerns, we may from time-to-time provide certain NEOs with personal security. |
401(k) Restoration Plan
The 401(k) Restoration Plan (the “Restoration Plan”) permits employees (including NEOs) who earn compensation in excess of the limits imposed by Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the “Code”) to (i) defer a portion of base salary and bonus compensation, (ii) forbe (for employees (otherother than the NEOs with a Retirement Benefit Agreement) be credited with a Company matching contribution in respect of deferrals under the Restoration Plan, and (iii) be credited with Company non-elective contributions (to the extent so made by Viatris), in each case, to the extent that participants otherwise would be able to defer or be credited with such amounts, as applicable, under Viatris’ 401(k) plan if not for the limits on contributions and deferrals imposed by the Code. Company matching contributions immediately vest and Company non-elective contributions are subject to an initial three-year vesting period. Upon a change in control (as defined in the Restoration Plan), a participant will become 100% vested in any unvested portion of his or her non-elective contributions. Distributions of such participant’s vested account balance will be made in a lump sum within 60 days following a participant’s separation from service (or such later date as may be required by Section 409A of the Code).
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2022 Share Ownership Requirements
Viatris maintains robust share ownership requirements for our NEOs. The requirement is expressed as a multiple of base salary and shown in the table below.
Position | Ownership Requirement | |||
Executive Chairman | 6x | |||
Chief Executive Officer | 6x | |||
President | 4x | |||
Other NEOs | 3x | |||
In addition to the NEOs, the Viatris share ownership policy covers the most senior employees at Viatris to promote an ownership culture and further align the interests of the leadership teamthose leaders with those of shareholders. Each covered employee has five years from the date they became subject to the policy to achieve the minimum ownership requirement. Common stock actually owned by the covered employee (including shares of common stock held by the covered employee in the Restoration Plan), as well as restricted shares and unvested RSUs and PRSUs (including corresponding dividend equivalent units (“DEUs”)) count toward compliance with these requirements.
Clawback Policy
The Viatris Board has approved a clawback policy relating to incentive compensation programs. The policy provides that Viatris may take action to recoup annual incentive compensation and equity-based incentive compensation gains resulting from specified misconduct that causes Viatris to materially restate its financial statements.
The policy also provides that Viatris may take action to recoup some or all bonus and equity incentive compensation in the event of executive misconduct involving material violations of law or Viatris policy as well as failure to manage or monitor another individual who committed such misconduct, and that the Board or a designated Board committee will disclose the circumstances of any recoupment relating to such misconduct if required by law or regulation or if it determines that disclosure is in the best interests of Viatris and its shareholders.
In addition, Viatris has a number of other policies in effect that govern our executive team’s behavior and that set out clear ethical expectations. Those policies, including our Code of Business Conduct and Ethics, empower Viatris to take a full range of disciplinary responses for any violations, and the Board and the
On October 26, 2022, the SEC adoptsadopted rules implementing the clawback provisions of the Dodd-Frank Act. The final rules direct the stock exchanges to establish listing standards requiring listed companies to develop and implement a policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers and to satisfy related disclosure obligations. We intend to timely amend our clawback policies that require changespolicy to our policy, we will respond accordingly.reflect these new requirements.
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Anti-Hedging and Anti-Pledging Policy
Viatris has a securities trading policy that prohibits directors and “officers” (as defined in Rule 16a-1(f) of the Exchange Act) (“Section 16 Officers”)Officers and their respective designees from trading in hedging instruments or otherwise engaging in any transaction that limits or eliminates, or is designed to limit or eliminate, economic risks associated with the ownership of our securities. Hedging instruments are defined as any prepaid variable forward contracts, equity swaps, collars, exchange funds, insurance contracts, short sales, options, puts, calls or other instruments that hedge or offset, or are designed to hedge or offset, movements in the market value of our securities. For purposes of this policy, our securities include shares and options to purchase shares, and any other type of securities that we may issue, including but not limited to, preferred shares, notes, debentures, and warrants issued by Viatris or any parent, subsidiary, or subsidiary of any parent of Viatris, as well as any derivative financial instruments pertaining to such securities, whether or not issued by us, such as options and forward contracts.
The policy also prohibits Directors and Section 16 Officers and their respective designees from entering into any transaction that involves the holding of our securities in a margin account (other than the “cashless exercise” of stock options) or the pledging of our securities as collateral for loans. The Viatris Compensation Committee may approve exceptions to the prohibition on the use of margin accounts or pledging or securities if, among other factors, the directorDirector or Section 16 Officer demonstrates, in advance, that he or she has the continuing financial capacity to repay any underlying loan or potential margin call without resorting to our securities held in such margin account or our pledged securities and is not in possession of any material information about the Company that has not been made widely available to the investing public.
Consideration of Risk in Company Compensation Policies
The Viatris Compensation Committee has considered risk management in determining compensation policies and believes that our programs are designed appropriately to encourage outstanding, consistent, sustainable business performance over extended periods of time. Management and the Viatris Compensation Committee have considered and discussed the risks inherent in our business and the design of our compensation plans, policies and programs that are intended to drive the achievement of our long-term business objectives while avoiding excessive short-term risk-taking. In addition, we utilize a mix of objective performance measures, so that undue emphasis is not placed on one particular measure, and we employ different types of compensation to provide value over the short-, medium- and long-term. These performance measures are reevaluated annually in light of the evolving risk environment facing our business. When making compensation decisions, we also consider qualitative factors to avoid the consequenceconsequences that an overly formulaic approach may have on excessive risk-taking by management. At least annually, the Viatris Compensation Committee also receives and discusses a report from Meridian Compensation Partners, LLC (“Meridian”), its independent compensation consultant, on risk management in connection with the Company’s compensation program.
The Viatris Compensation Committee believes that our compensation policies and practices do not encourage excessive risk and are not reasonably likely to have a material adverse effect on the Company.
Role of the Viatris Compensation Committee
The Viatris Compensation Committee is comprised solely of independent Directors and oversees the design and implementation of our executive compensation programs. The Compensation Committee reviews and evaluates the performance of our NEOs and determines their compensation and objectives, or, in the case of our Executive Chairman and CEO, recommends compensation and objectives to the independent, non-executive members of the Board. The Compensation Committee monitors compensation trends and
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developments periodically and undertakes a comprehensive assessment of our compensation programs at least annually. In fulfilling these responsibilities, the Compensation Committee utilizes the support of independent compensation consulting firms, independent outside counsel, and an internal executive compensation team.
The Compensation Committee has retained Meridian to provide advice and information regarding the design and implementation of Viatris’ executive compensation programs. Meridian also provided information to the Mylan Compensation Committee regarding regulatory and other technical developments that may be relevant to Mylan’sour executive compensation programs. In addition, Meridian provided the Mylan Compensation Committee with competitive market information, analyses and trends on executive base salary, annual incentives, long-term incentives, benefits and perquisites.
The Viatris Compensation Committee also receives advice from outside counsel including, but not limited to, Cravath, Swaine & Moore LLP.
The Viatris Compensation Committee performs an annual review of the independence of its outside advisors, consistent with NASDAQ requirements and the Viatris Compensation Committee charter.
Tax Deduction Cap on Executive Compensation
Section 162(m) of the Code restricts the deductibility for U.S. Federalfederal income tax purposes of the compensation paid to the CEO, CFO, each of the other NEOs who was an executive officer at the end of the applicable fiscal year, and certain other executives to the extent that such compensation for such executive exceeds $1 million. As a result, except to the extent provided in limited transition relief, compensation over $1 million paid to any NEO is no longer deductible under Section 162(m) of the Code. The Board and the Viatris Compensation Committee reserve the right to provide compensation to our executives that is not deductible, including, but not limited to, when necessary to comply with contractual commitments, or to maintain the flexibility needed to attract talent, promote retention, or recognize and reward desired performance.
Compensation Committee Report
We have reviewed and discussed the CD&A with management. Based on such review and discussions, we recommended to the Board that the CD&A be included in this Amendment.
Respectfully submitted,
Melina Higgins,
James M. Kilts
Harry A. Korman
Pauline van der Meer Mohr
Compensation Committee Interlocks and Insider Participation
None of the members of the Viatris Compensation Committee during 2020 (Ms. Dillon, Ms. Higgins and Ms. van der Meer Mohr)2022 was an officer or employee of Viatris, was formerly an officer of Viatris, or had any relationship requiring disclosure by Viatris under Item 404 of Regulation S-K. During 2020,2022, no executive officer of Viatris served on the compensation committee or board of another entity, one of whose executive officers served on the Compensation Committee or the Board of Viatris.
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Executive Compensation Tables
2022 Summary Compensation Table
The following summary compensation table sets forth the cash and non-cash compensation paid or granted to or earned by the NEOs forNEOs. The 2021 and 2022 compensation reflects the first full years of Viatris’ simplified performance-based compensation program. Portions of reported 2020 undercompensation include one-time transaction-related items and address certain legacy company (Upjohn and Mylan) commitments that are not components of the combined Mylan, Upjohn,Viatris 2021 and Viatris2022 compensation programs.
Name and Principal Position | Fiscal Year | Salary ($) (1) | Bonus ($) (2) | Stock Awards ($) (3) | Option Awards ($) (4) | Non-Equity Incentive Plan Compensation ($) (5) | Changes in Pension Value and Non- qualified Deferred Compensation Earnings ($) (6) | All Other Compensation ($) (7) | Total ($) | |||||||||||||||||||||||||||
Robert J. Coury Executive Chair man | 2020 | 1,800,000 | 10,000,000 | 12,451,936 | — | 4,405,590 | — | 399,850 | 29,057,376 | |||||||||||||||||||||||||||
Michael Goettler Chief Executive Officer | 2020 | 871,875 | 1,000,000 | 2,400,000 | — | 951,675 | — | 249,355 | 5,472,905 | |||||||||||||||||||||||||||
Sanjeev Narula Chief Financial Officer | 2020 | 539,183 | 1,000,000 | 425,000 | — | 303,021 | — | 661,719 | 2,928,923 | |||||||||||||||||||||||||||
Rajiv Malik President | 2020 | 1,155,769 | 2,500,000 | 6,210,015 | 690,001 | 2,358,386 | 336,290 | 851,522 | 14,101,983 | |||||||||||||||||||||||||||
Anthony Mauro President, Developed Markets | 2020 | 800,000 | 1,000,000 | 2,880,022 | 320,005 | 1,501,164 | — | 243,446 | 6,744,637 | |||||||||||||||||||||||||||
| Name and Principal Position | Fiscal Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(4) | Non-Equity Incentive Plan Compensation ($)(5) | Change in Pension Value and Non- Deferred Compensation Earnings ($)(6) | All Other Compensation ($)(7) | Total ($) | |||||||||||||||||||||||||||
Michael Goettler Chief Executive Officer | 2022 | 1,300,000 | — | 9,100,001 | — | 3,639,285 | — | 731,984 | 14,771,270 | |||||||||||||||||||||||||||
| 2021 | 1,300,000 | — | 9,100,015 | — | 3,716,115 | — | 663,440 | 14,779,570 | ||||||||||||||||||||||||||||
| 2020 | 871,875 | 1,000,000 | 2,400,000 | — | 951,675 | — | 249,355 | 5,472,905 | ||||||||||||||||||||||||||||
Sanjeev Narula Chief Financial Officer | 2022 | 840,385 | — | 3,400,006 | — | 1,586,355 | — | 281,660 | 6,108,406 | |||||||||||||||||||||||||||
| 2021 | 800,000 | — | 2,800,011 | — | 1,524,560 | — | 526,114 | 5,650,685 | ||||||||||||||||||||||||||||
| 2020 | 539,183 | 1,000,000 | 425,000 | — | 303,021 | — | 661,719 | 2,928,923 | ||||||||||||||||||||||||||||
Rajiv Malik President | 2022 | 1,200,000 | 10,950,000 | 7,200,007 | — | 2,799,450 | — | 405,434 | 22,554,891 | |||||||||||||||||||||||||||
| 2021 | 1,200,000 | — | 7,200,017 | — | 2,858,550 | — | 363,683 | 11,622,250 | ||||||||||||||||||||||||||||
| 2020 | 1,155,769 | 2,500,000 | 6,210,015 | 690,001 | 2,358,386 | 336,290 | 851,522 | 14,101,983 | ||||||||||||||||||||||||||||
Anthony Mauro President, Developed Markets | 2022 | 800,000 | 6,553,800 | 3,200,005 | — | 1,716,996 | — | 317,968 | 12,588,769 | |||||||||||||||||||||||||||
| 2021 | 800,000 | — | 3,200,017 | — | 1,753,244 | — | 296,654 | 6,049,915 | ||||||||||||||||||||||||||||
| 2020 | 800,000 | 1,000,000 | 2,880,022 | 320,005 | 1,501,164 | — | 243,446 | 6,744,637 | ||||||||||||||||||||||||||||
Robert J. Coury Executive Chairman | 2022 | 1,800,000 | — | 10,800,015 | — | 5,039,010 | — | 859,620 | 18,498,645 | |||||||||||||||||||||||||||
| 2021 | 1,800,000 | — | 10,800,010 | — | 5,145,390 | — | 806,678 | 18,552,078 | ||||||||||||||||||||||||||||
| 2020 | 1,800,000 | 10,000,000 | 12,451,936 | — | 4,405,590 | — | 399,850 | 29,057,376 | ||||||||||||||||||||||||||||
(1) | Represents the base salary actually paid to the NEO |
(2) | In connection with the Combination in 2020, Messrs. Malik and Mauro were each granted a retention bonus (equal to $10,950,000 and $6,553,800, respectively), which became payable in 2022 upon the two-year anniversary of the Combination, subject to Messrs. Malik’s and Mauro’s continued employment through such date. In connection with the Combination in 2020, Messrs. Goettler and Narula each became entitled to receive a $1 million transaction-related payment previously granted to them by Pfizer. In connection with the Combination in 2020, Mr. Malik and Mr. Mauro received cash awards equal to $2.5 million and $1 million, respectively, in recognition of their significant efforts in connection with integration planning matters related to the Combination in addition to their customary responsibilities. In connection with the Combination in 2020, Mr. Coury received a one-time cash recognition award of $10 million (which recognized and rewarded Mr. Coury for, among other things: the fact that Mr. Coury assumed an executive role with Mylan in April 2020 but did not receive an annual equity grant at that time (which, had it been awarded, would have been valued at approximately $10.8 million); his strategic leadership of Mylan; the unexpected and significantly increased efforts expended by Mr. Coury on company matters since April 2020, including during the COVID-19 pandemic; |
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his significant leadership in the analysis and negotiation relating to the Combination and integration planning matters with respect to the Combination; and his expected leadership, direction and efforts for the combined company so that shareholders can realize the significant opportunity and benefits that are expected from the Combination). |
(3) | Represents the grant date fair value of the long-term incentive awards granted to the NEO in 2022, 2021 and 2020, as applicable. |
With respect to Messrs. Malik and |
(4) | Represents the grant date fair value of the option awards granted by Mylan in 2020 prior to the Combination. |
(5) | Represents amounts paid under the Company’s |
(6) | Represents the aggregate change in present value of Mr. Malik’s accumulated benefit under |
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(7) | Amounts shown in this column are detailed in the following chart. |
Name | Fiscal Year | Use of Company Provided Automobile ($) (a) | Personal Use of Company Aircraft ($) (b) | Expatriate Benefits ($) (c) | 401(k) and Profit Sharing Plan Matching and Profit Sharing Contribution ($) (d) | Restoration Plan Contribution ($) (e) | Other ($) (f) | Total ($) | ||||||||||||||||||||||||
Robert J. Coury | 2020 | 25,111 | 30,363 | — | 28,300 | 275,306 | 40,770 | 399,850 | ||||||||||||||||||||||||
Michael Goettler | 2020 | 2,400 | — | 43,863 | 9,750 | 193,199 | 143 | 249,355 | ||||||||||||||||||||||||
Sanjeev Narula | 2020 | 2,400 | — | 631,856 | 7,231 | 20,089 | 143 | 661,719 | ||||||||||||||||||||||||
Rajiv Malik | 2020 | 2,204 | 9,482 | 606,221 | 31,222 | 182,052 | 20,341 | 851,522 | ||||||||||||||||||||||||
Anthony Mauro | 2020 | 19,200 | — | — | 31,484 | 189,360 | 3,402 | 243,446 | ||||||||||||||||||||||||
| Name | Fiscal Year | Use of Company Provided Automobile ($)(a) | Personal Use of Company Aircraft ($)(b) | Expatriate Benefits ($)(c) | 401(k) and Profit Sharing Plan Matching and Profit Sharing Contribution ($)(d) | Restoration Plan Contribution ($)(e) | Other ($)(f) | Total ($) | ||||||||||||||||||||||||
Michael Goettler | 2022 | 21,162 | 68,081 | 95,554 | 31,350 | 514,149 | 1,688 | 731,984 | ||||||||||||||||||||||||
| 2021 | 19,451 | 58,797 | 227,481 | 30,300 | 325,762 | 1,649 | 663,440 | |||||||||||||||||||||||||
| 2020 | 2,400 | — | 43,863 | 9,750 | 193,199 | 143 | 249,355 | |||||||||||||||||||||||||
Sanjeev Narula | 2022 | 19,262 | — | 4,756 | 27,504 | 228,450 | 1,688 | 281,660 | ||||||||||||||||||||||||
| 2021 | 19,200 | — | 336,440 | 26,454 | 139,419 | 4,601 | 526,114 | |||||||||||||||||||||||||
| 2020 | 2,400 | — | 631,856 | 7,231 | 20,089 | 143 | 661,719 | |||||||||||||||||||||||||
Rajiv Malik | 2022 | 30,998 | 71,273 | — | 37,519 | 262,749 | 2,895 | 405,434 | ||||||||||||||||||||||||
| 2021 | 6,847 | 62,141 | 26,036 | 32,700 | 228,787 | 7,172 | 363,683 | |||||||||||||||||||||||||
| 2020 | 2,204 | 9,482 | 606,221 | 31,222 | 182,052 | 20,341 | 851,522 | |||||||||||||||||||||||||
Anthony Mauro | 2022 | 19,200 | — | — | 39,666 | 244,857 | 14,245 | 317,968 | ||||||||||||||||||||||||
| 2021 | 19,200 | 9,150 | — | 31,570 | 230,711 | 6,023 | 296,654 | |||||||||||||||||||||||||
| 2020 | 19,200 | — | — | 31,484 | 189,360 | 3,402 | 243,446 | |||||||||||||||||||||||||
Robert J. Coury | 2022 | 22,680 | 5,926 | — | 32,427 | 726,188 | 72,399 | 859,620 | ||||||||||||||||||||||||
| 2021 | 24,563 | 29,184 | — | 31,377 | 680,312 | 41,242 | 806,678 | |||||||||||||||||||||||||
| 2020 | 25,111 | 30,363 | — | 28,300 | 275,306 | 40,770 | 399,850 | |||||||||||||||||||||||||
(a) | In the case of Messrs. |
(b) | Amounts disclosed represent the actual aggregate incremental costs associated with the personal use of corporate |
(c) | For 2022, amounts disclosed for Messrs. Goettler and Narula |
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Mylan’s request, to the United States, while Mylan generally paid for all additional taxes, including Mr. Malik’s tax obligations on the imputed income associated with Mylan’s payment of taxes on his behalf. |
| (d) | For 2022, amounts for each NEO include a matching contribution for Messrs. Goettler ($10,000), Narula ($6,154), Malik ($16,169), Mauro ($18,316), and Coury ($11,077) and a profit sharing contribution received |
| (e) | For 2022, amounts disclosed include a matching contribution under the Restoration Plan for Messrs. Goettler ($184,371), Narula ($82,254), Mauro ($ |
(f) | For 2022, amounts disclosed represent health insurance for Messrs. Malik and Coury ($30,699); certain personal security services for Mr. Coury ($38,447); international travel assistance premiums for each of the NEOs; events for Mr. Mauro ($10,788); tax preparation services related to U.K. tax returns for Messrs. Mauro and Coury; and long-term disability premiums for Messrs. Goettler, Narula, Malik, Mauro and Coury. For 2021, amounts disclosed represent health insurance for Messrs. Malik and Coury ($11,601); certain personal security services for Mr. Coury ($29,233); international travel assistance premiums for each of the NEOs; events for Messrs. Narula, Malik, and Mauro; tax preparation services related to U.K. tax returns for Messrs. Malik and Mauro; and long-term disability premiums for Messrs. Goettler, Narula, Malik, and Mauro. For 2020, amounts disclosed represent health insurance for Messrs. Malik and Coury ($29,102) |
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Grants of Plan-Based Awards for 2020
The following table summarizes grants of plan-based awards made to each NEO during 2020.
Estimated Future Payments Under Non-Equity Incentive Plan Awards (1) | Estimated Future Payments Under Equity Incentive Plan Awards (2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
NAME | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) (3) | All Other Option Awards: Number of Securities Underlying Options (#) (4) | EXERCISE OR BASE PRICE OF OPTION AWARDS ($/SH) | Grant Date Fair Value of Stock and Option Awards ($) (5) | ||||||||||||||||||||||||||||||||||||||||||||
Robert J. Coury | 1,350,000 | 2,700,000 | 5,400,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 11/23/2020 | 11/20/2020 | — | — | — | 320,000 | 960,000 | 1,600,000 | — | — | — | 12,451,936 | |||||||||||||||||||||||||||||||||||||||||||||
Michael Goettler | 442,640 | 885,279 | 1,770,558 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 2/27/2020 | — | — | — | — | — | — | — | — | — | — | 2,400,000 | (6) | ||||||||||||||||||||||||||||||||||||||||||||
Sanjeev Narula | 140,940 | 281,880 | 563,760 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 2/27/2020 | — | — | — | — | — | — | — | — | — | — | 425,000 | (6) | ||||||||||||||||||||||||||||||||||||||||||||
Rajiv Malik | 722,678 | 1,445,355 | 2,890,710 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 3/2/2020 | 2/19/2020 | — | — | — | 78,948 | 197,369 | 355,265 | — | — | — | 3,450,010 | |||||||||||||||||||||||||||||||||||||||||||||
| 3/2/2020 | 2/19/2020 | — | — | — | — | — | — | 157,895 | — | — | 2,760,005 | |||||||||||||||||||||||||||||||||||||||||||||
| 3/2/2020 | 2/19/2020 | — | — | — | — | — | — | — | 84,871 | 17.48 | 690,001 | |||||||||||||||||||||||||||||||||||||||||||||
Anthony Mauro | 460,000 | 920,000 | 1,840,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| 3/2/2020 | 2/19/2020 | — | — | — | 36,614 | 91,534 | 164,762 | — | — | — | 1,600,014 | |||||||||||||||||||||||||||||||||||||||||||||
| 3/2/2020 | 2/19/2020 | — | — | — | — | — | — | 73,227 | — | — | 1,280,008 | |||||||||||||||||||||||||||||||||||||||||||||
| 3/2/2020 | 2/19/2020 | — | — | — | — | 39,361 | 17.48 | 320,005 | ||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payments Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payments Under Equity Incentive Plan Awards(2) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Grant Date Fair Value of Stock and Option | ||||||||||||||||||||||||||||||||||||||||||||
Michael Goettler | 975,000 | 1,950,000 | 3,900,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 3/4/2022 | 3/4/2022 | — | — | — | 202,966 | 579,902 | 1,130,809 | — | — | — | 5,915,000 | |||||||||||||||||||||||||||||||||||||||||||||
| 3/4/2022 | 3/4/2022 | — | — | — | — | — | — | 312,255 | — | — | 3,185,001 | |||||||||||||||||||||||||||||||||||||||||||||
Sanjeev Narula | 425,000 | 850,000 | 1,700,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 3/4/2022 | 3/4/2022 | — | — | — | 75,834 | 216,667 | 422,501 | — | — | — | 2,210,003 | |||||||||||||||||||||||||||||||||||||||||||||
| 3/4/2022 | 3/4/2022 | — | — | — | — | — | — | 116,667 | — | — | 1,190,003 | |||||||||||||||||||||||||||||||||||||||||||||
Rajiv Malik | 750,000 | 1,500,000 | 3,000,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 3/4/2022 | 3/4/2022 | — | — | — | 160,589 | 458,824 | 894,707 | — | — | — | 4,680,005 | |||||||||||||||||||||||||||||||||||||||||||||
| 3/4/2022 | 3/4/2022 | — | — | — | — | — | — | 247,059 | — | — | 2,520,002 | |||||||||||||||||||||||||||||||||||||||||||||
Anthony Mauro | 460,000 | 920,000 | 1,840,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 3/4/2022 | 3/4/2022 | — | — | — | 71,373 | 203,922 | 397,648 | — | — | — | 2,080,004 | |||||||||||||||||||||||||||||||||||||||||||||
| 3/4/2022 | 3/4/2022 | — | — | — | — | — | — | 109,804 | — | — | 1,120,001 | |||||||||||||||||||||||||||||||||||||||||||||
Robert J. Coury | 1,350,000 | 2,700,000 | 5,400,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| 3/4/2022 | 3/4/2022 | — | — | — | 240,883 | 688,236 | 1,342,061 | — | — | — | 7,020,007 | |||||||||||||||||||||||||||||||||||||||||||||
| 3/4/2022 | 3/4/2022 | — | — | — | — | — | — | 370,589 | — | — | 3,780,008 | |||||||||||||||||||||||||||||||||||||||||||||
(1) | The performance goals under the annual incentive compensation program applicable to the NEOs during |
(2) | Consists of PRSUs awarded under |
Consists of |
| (4) |
Represents the grant date fair value of the specific award granted to the NEO. For information regarding assumptions used in determining such value, please refer to Note |
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Outstanding Equity Awards at the End of 2020
The following table sets forth information concerning all of the outstanding LTI awards held by each NEO as of December 31, 2020.
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
NAME | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable (1) | Option Exercise Price ($a) | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#) (2) | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3) | ||||||||||||||||||||||||||||||
Robert J. Coury | 4,413 | — | 22.66 | 3/2/2021 | — | — | — | — | ||||||||||||||||||||||||||||||||
| 4,266 | — | 23.44 | 2/22/2022 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 3,236 | — | 30.90 | 3/6/2023 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 58,952 | — | 55.84 | 3/5/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 63,235 | — | 50.66 | 11/17/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 82,776 | — | 46.27 | 2/17/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | 250,000 | 4,685,000 | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | — | — | 1,600,000 | (4) | 29,984,000 | ||||||||||||||||||||||||||||||||
Michael Goettler | — | — | — | — | 3,499 | (5) | 65,571 | — | — | |||||||||||||||||||||||||||||||
| — | — | — | — | 53,958 | (5) | 1,011,173 | — | — | ||||||||||||||||||||||||||||||||
| — | — | — | — | 119,975 | (5) | 2,248,332 | — | — | ||||||||||||||||||||||||||||||||
Sanjeev Narula | — | — | — | — | 21,246 | (5) | 398,150 | — | — | |||||||||||||||||||||||||||||||
Rajiv Malik | 34,389 | — | 55.84 | 3/5/2024 | — | — | — | — | ||||||||||||||||||||||||||||||||
| 41,637 | — | 50.66 | 11/17/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 50,168 | — | 46.27 | 2/17/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 65,574 | — | 45.18 | 3/3/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 47,733 | 23,867 | 40.97 | 3/2/2028 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 20,018 | 40,035 | 27.45 | 3/1/2029 | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | 84,871 | 17.48 | 3/2/2030 | 14,645 | 274,447 | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | 73,225 | (6) | 1,372,237 | — | — | ||||||||||||||||||||||||||||||||
| — | — | — | — | 67,031 | 1,256,161 | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | 125,684 | (6) | 2,355,318 | — | — | ||||||||||||||||||||||||||||||||
| — | — | — | — | 157,895 | 2,958,952 | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | 197,369 | (6) | 3,698,695 | — | — | ||||||||||||||||||||||||||||||||
Anthony Mauro | 4,266 | — | 23.44 | 2/22/2022 | — | — | — | — | ||||||||||||||||||||||||||||||||
| 3,236 | — | 30.90 | 3/6/2023 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 12,009 | — | 55.84 | 3/5/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 16,265 | — | 50.66 | 11/17/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 27,314 | — | 46.27 | 2/17/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 29275 | — | 45.18 | 3/3/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 19,889 | 9,944 | 40.97 | 3/2/2028 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 9,284 | 18,567 | 27.45 | 3/1/2029 | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | 39,361 | 17.48 | 3/2/2030 | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | 6,102 | 114,351 | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | 30,511 | (6) | 571,776 | — | — | ||||||||||||||||||||||||||||||||
| — | — | — | — | 31,087 | 582,570 | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | 58,288 | (6) | 1,092,317 | — | — | ||||||||||||||||||||||||||||||||
| — | — | — | — | 73,227 | 1,372,274 | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | 91,534 | (6) | 1,715,347 | — | — | ||||||||||||||||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date |
|
| Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Vested ($)(2) | Equity Incentive Plan Number of Unearned Shares, Units or Other Rights Vested (#) | Equity Incentive Plan Awards: Market or Payout Shares, Units or Have Not Vested ($)(2) | ||||||||||||||||||||||||||||||
Michael Goettler | — | — | — | — | 128,728 | (3) | 1,432,740 | — | — | |||||||||||||||||||||||||||||||
| — | — | — | — | 183,245 | (4) | 2,039,514 | 409,962 | (6) | 4,562,877 | |||||||||||||||||||||||||||||||
| — | — | — | — | 323,480 | (5) | 3,600,327 | 600,748 | (7) | 6,686,325 | |||||||||||||||||||||||||||||||
Sanjeev Narula | — | — | — | — | 22,796 | (3) | 253,719 | — | — | |||||||||||||||||||||||||||||||
| — | — | — | — | 56,383 | (4) | 627,546 | 126,142 | (6) | 1,403,960 | |||||||||||||||||||||||||||||||
| — | — | — | — | 120,861 | (5) | 1,345,181 | 224,456 | (7) | 2,498,195 | |||||||||||||||||||||||||||||||
Rajiv Malik | 34,389 | — | 55.84 | 3/5/2024 | — | — | — | — | ||||||||||||||||||||||||||||||||
| 41,637 | — | 50.66 | 11/17/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 50,168 | — | 46.27 | 2/17/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 65,574 | — | 45.18 | 3/3/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 71,600 | — | 40.97 | 3/2/2028 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 60,053 | — | 27.45 | 3/1/2029 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 56,581 | 28,290 | 17.48 | 3/2/2030 | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | 52,632 | (8) | 585,794 | — | — | ||||||||||||||||||||||||||||||||
| — | — | — | — | 197,369 | (9) | 2,196,717 | — | — | ||||||||||||||||||||||||||||||||
| — | — | — | — | 144,985 | (4) | 1,613,686 | 324,365 | (6) | 3,610,182 | |||||||||||||||||||||||||||||||
| — | — | — | — | 255,940 | (5) | 2,848,612 | 475,318 | (7) | 5,290,289 | |||||||||||||||||||||||||||||||
Anthony Mauro | 3,236 | — | 30.90 | 3/6/2023 | — | — | — | — | ||||||||||||||||||||||||||||||||
| 12,009 | — | 55.84 | 3/5/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 16,265 | — | 50.66 | 11/17/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 27,314 | — | 46.27 | 2/17/2026 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 29,275 | — | 45.18 | 3/3/2027 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 29,833 | — | 40.97 | 3/2/2028 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 27,851 | — | 27.45 | 3/1/2029 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 26,241 | 13,120 | 17.48 | 3/2/2030 | — | — | — | — | |||||||||||||||||||||||||||||||||
| — | — | — | — | 24,409 | (8) | 271,672 | — | — | ||||||||||||||||||||||||||||||||
| — | — | — | — | 91,534 | (9) | 1,018,773 | — | — | ||||||||||||||||||||||||||||||||
| — | — | — | — | 64,438 | (4) | 717,198 | 144,163 | (6) | 1,604,534 | |||||||||||||||||||||||||||||||
| — | — | — | — | 113,751 | (5) | 1,266,050 | 211,253 | (7) | 2,351,246 | |||||||||||||||||||||||||||||||
Robert J. Coury | 3,236 | — | 30.90 | 3/6/2023 | — | — | — | — | ||||||||||||||||||||||||||||||||
| 58,952 | — | 55.84 | 3/5/2024 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 63,235 | — | 50.66 | 11/17/2025 | — | — | — | — | |||||||||||||||||||||||||||||||||
| 82,776 | — | 46.27 | 2/17/2026 | — | — | 1,600,000 | (10) | 17,808,000 | ||||||||||||||||||||||||||||||||
| — | — | — | — | 217,477 | (4) | 2,420,523 | 486,547 | (6) | 5,415,268 | |||||||||||||||||||||||||||||||
| — | — | — | — | 383,910 | (5) | 4,272,923 | 712,976 | (7) | 7,935,423 | |||||||||||||||||||||||||||||||
(1) | Vesting dates applicable to unvested stock options are as follows, in each case, generally subject to continued employment with Viatris: on March 2, |
42
employment, vested stock options will generally remain exercisable for 30 days following termination, except that (i) in the case of termination because of disability, 100% of options become vested and vested options will remain exercisable for two years following termination; (ii) in the case of a termination due to a reduction in force, vested options will remain exercisable for one year following termination; (iii) in the case of death, including within two years following termination because of disability, or, in the case of options granted prior to January 1, 2017, retirement, 100% of options become vested and vested options will remain exercisable for the remainder of the original term; and (iv) in the case of an involuntary termination without cause or a voluntary resignation for good reason that occurs within two years following a change in control, 100% of options become vested |
| (2) | The market value of |
In connection with the Combination, |
| (4) | Of the 183,245 RSUs held by Mr. Goettler, 91,623 vested on March 2, 2023 and the |
| (5) | Of the 323,480 RSUs held by Mr. Goettler, 107,827 vested on March 4, 2023 and the remaining unvested RSUs were forfeited in connection with Mr. Goettler’s separation from Viatris on April 1, 2023; of the 120,861 RSUs held by Mr. Narula, 40,287 vested on March 4, 2023 and 40,287 will vest on each of March 4, 2024 and March 4, 2025; of the 255,940 RSUs held by Mr. Malik, 85,314 vested on March 4, 2023 and 85,313 will vest on each of March 4, 2024 and March 4, 2025; of the 113,751 RSUs held by Mr. Mauro, 37,917 vested on March 4, 2023 and 37,917 will vest on each of March 4, 2024 and March 4, 2025; of the 383,910 RSUs held by Mr. Coury, 127,970 vested on March 4, 2023 and 127,970 will vest on each of March 4, 2024 and March 4, 2025. Amounts include all accrued and unvested whole share DEUs that vest only to the extent and at the same time the underlying award on which they are issued vest. |
| (6) | The PRSUs will vest on March 2, 2024, subject to attainment of performance goals. Amounts include all accrued and unvested whole share DEUs that vest only to the extent and at the same time the underlying award on which they are issued vest. |
| (7) | The PRSUs will vest on March 4, 2025, subject to attainment of performance goals. Amounts include all accrued and unvested whole share DEUs that vest only to the extent and at the same time the underlying award on which they are issued vest. |
| (8) | The 52,632 RSUs held by Mr. Malik, and 24,409 RSUs held by Mr. Mauro vested on March 2, 2023. In accordance with their terms, all of these awards would have vested upon an involuntary termination without |
43
cause or a voluntary resignation for good reason that occurs within two years following a change in control (double-trigger awards) or upon the |
| (9) | The 197,369 RSUs held by Mr. Malik, and 91,534 RSUs held by Mr. Mauro vested on March 2, 2023 which represents 100% of their original target PRSUs. In accordance with their terms, all of these awards would have vested upon an involuntary termination without cause or a voluntary resignation for good reason that occurs within two years following a change in control (double-trigger awards) or upon the |
The PRSUs were granted on November 23, 2020 and are divided into five separate vesting tranches requiring share price appreciation and shareholder returns (including dividends and other distributions) of 25%, 50%, 75%, 100% and 150% from the date of grant through December 30, 2025. In the case of the first three tranches, the PRSUs are subject to a retention requirement through the first anniversary of achieving the shareholder return goal, and in the case of the final two tranches, the PRSUs are subject to a retention requirement through the term of the award. The PRSUs would vest and be settled in full upon termination of employment without cause, resignation for good reason, disability, or death. |
Option Exercises and Stock Vested for 2020
The option awards and stock awards reflected in the table below were exercised or became vested for the NEOs during 2020.
Option Awards | Stock Awards | |||||||||||||||||||
NAME | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||||
Robert J. Coury | — | — | — | — | ||||||||||||||||
Michael Goettler | — | — | — | — | ||||||||||||||||
Sanjeev Narula | — | — | — | — | ||||||||||||||||
Rajiv Malik | — | — | 91,544 | 1,548,563 | ||||||||||||||||
Anthony Mauro | — | — | 41,013 | 693,861 | ||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||
| Name | Number of Shares Acquired Exercise (#) | Value Realized Exercise ($) | Number Acquired Vesting (#) | Value Realized Vesting ($) | ||||||||||||||||
Michael Goettler | — | — | 142,825 | 1,526,030 | ||||||||||||||||
Sanjeev Narula | — | — | 26,751 | 280,350 | ||||||||||||||||
Rajiv Malik | — | — | 280,617 | 2,940,866 | ||||||||||||||||
Anthony Mauro | — | — | 128,813 | 1,349,960 | ||||||||||||||||
Robert J. Coury | — | — | 103,179 | 1,081,316 | ||||||||||||||||
Pension Benefits for 2020
The following table summarizes theMr. Malik’s benefits accrued by Mr. Malik as of December 31, 2020,2022 under theThe Executive Plan for Rajiv Malik (the “Executive Plan”) and Mr. Malik’s Retirement Benefit Agreement (the “Malik RBA”). The Malik RBA was frozen in effect duringNovember 2020. Mr. Malik will not accrue any additional benefits pursuant to the agreement. The Executive Plan is a deferred compensation plan to which the Company no longer contributes, though the value of the benefit may change depending on the performance of investments. The Company does not sponsor any other defined benefit pension programs covering the NEOs.
| Name | Plan Name(1) | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($)(2) | Payments During Last Year ($) | ||||||||||
Michael Goettler | N/A | N/A | — | — | ||||||||||
Sanjeev Narula | N/A | N/A | — | — | ||||||||||
Rajiv Malik | The Executive Plan for Rajiv Malik(3) | N/A | 433,475 | — | ||||||||||
Rajiv Malik | Retirement Benefit Agreement(4) | 16 | 5,342,449 | — | ||||||||||
Anthony Mauro | N/A | N/A | — | — | ||||||||||
Robert J. Coury | N/A | N/A | — | — | ||||||||||
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Name | Plan Name (1) | Number of Years of Credited Service (#) | Present Value of Accumulated Benefit ($) (2) | Payments During Last Fiscal Year ($) | ||||||||||
Robert J. Coury | N/A | N/A | — | — | ||||||||||
Michael Goettler | N/A | N/A | — | — | ||||||||||
Sanjeev Narula | N/A | N/A | — | — | ||||||||||
Rajiv Malik | The Executive Plan for Rajiv Malik (3) | N/A | 441,652 | — | ||||||||||
Rajiv Malik | Retirement Benefit Agreement (4) | 14 | 5,342,449 | — | ||||||||||
Anthony Mauro | N/A | N/A | — | — | ||||||||||
(1) | Messrs. |
(2) | See pages |
(3) | This is a deferred compensation plan established for the benefit of Mr. Malik. The Company is no longer contributing to this plan. |
(4) | The Malik RBA has been frozen. Mr. Malik |
Nonqualified Deferred Compensation
The following table sets forth information relating to the Restoration Plan for 2020.
NAME | Aggregate Balance at Last FYE | Executive Contributions in Last FY | Company Profit Sharing and Match Contributions in Last FY | Aggregate Earnings (Loss) in Last FY | Aggregate Withdrawals/ Distributions | Aggregate Balance at FYE | ||||||||||||||||||
Robert J. Coury | — | 39,633 | 39,633 | 6,530 | — | 85,796 | ||||||||||||||||||
Michael Goettler | — | — | — | — | — | — | ||||||||||||||||||
Sanjeev Narula | — | — | — | — | — | — | ||||||||||||||||||
Rajiv Malik | 421,610 | — | 152,198 | 135,440 | — | 709,248 | ||||||||||||||||||
Anthony Mauro | 2,356,177 | 75,984 | 226,782 | (145,112 | ) | — | 2,513,831 | |||||||||||||||||
| Name | Aggregate Balance at Last FYE ($) | Executive Contributions in Last FY ($) | Company Profit Sharing and Match Contributions in Last FY ($) | Aggregate Earnings (Loss) in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at FYE ($) | ||||||||||||||||||
Michael Goettler | 166,659 | 188,445 | 325,761 | (69,356 | ) | — | 611,509 | |||||||||||||||||
Sanjeev Narula | 52,988 | 82,398 | 141,034 | (23,400 | ) | — | 253,020 | |||||||||||||||||
Rajiv Malik | 1,020,325 | — | 224,509 | (208,190 | ) | — | 1,036,644 | |||||||||||||||||
Anthony Mauro | 2,868,785 | 89,930 | 229,330 | (110,605 | ) | — | 3,077,440 | |||||||||||||||||
Robert J. Coury | 655,993 | 265,616 | 678,309 | (175,915 | ) | — | 1,424,003 | |||||||||||||||||
Estimated Potential Payments in Connection with a Termination of Employment or Change in Control
The following discussion summarizes the potential payments and benefits that would have been payable to each of the NEOs upon a termination of employment on December 31, 2022 by Viatris without “cause”, by the NEO for “good reason” (each as defined in the applicable agreement), due to the NEO’s death or upondisability or as a result of a CIC Termination. A “CIC Termination” occurs if an NEO’s employment is terminated other than for cause or if he terminates employment for good reason, in each case, within two years following the occurrence of a change in control, in each case, as of December 31, 2020.control. The amounts discussed below exclude (i) 401(k) retirement plan contributions and distributions that are generally available to all salaried employees, (ii) payments pursuant to vested Restoration Plan balances and vested rights under Retirement Benefit Agreements, (iii) payments pursuant to awards scheduled to vest on or before December 31, 20202022 by their terms, (iv) any amounts that may be due at the time of an event in the table below in respect of accrued and unpaid salary, bonuses, or vacation, and (v) the value of each NEOs’NEO’s annual bonus for the 20202022 completed fiscal year as the year was complete as of December 31, 2020.2022. These are estimates only and actual amounts payable upon such terminations may be different and will only be determined upon the actual occurrence of any such event.
Michael Goettler
Mr. Goettler was entitled to severance payments and benefits upon certain terminations of employment pursuant to an agreement with Viatris and his equity award agreements with Viatris.
Termination Without Cause Absent a Change in Control.If Mr. Goettler’s employment was terminated on December 31, 2022 by Viatris without cause, he would have been entitled to a payment equal to two and a half times the sum of his base salary and his target annual bonus in effect at the time of such termination, payable in equal installments. The estimated value of such payments and benefits, assuming a December 31, 2022 termination, would have been $8,125,000.
45
Termination Due to Death or Disability Absent a Change in Control. If Mr. Goettler’s employment was terminated on December 31, 2022 due to death or disability, he would have been entitled to full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such equity vesting, assuming a December 31, 2022 termination, would have been $18,321,767. Mr. Goettler is not entitled to cash severance payments in connection with a termination of employment due to death or disability.
Termination in Connection with a Change in Control. If Mr. Goettler incurred a CIC Termination on December 31, 2022, in addition to the payments and benefits provided for above, he would have been entitled to full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such equity vesting, assuming a December 31, 2022 CIC Termination, would have been $18,321,767.
Sanjeev Narula
Mr. Narula is entitled to severance payments and benefits upon certain terminations of employment pursuant to the Mylan N.V. Severance Plan and Global Guidelines (which was assumed by Viatris) (the “Severance Plan”) and his equity award agreements with Viatris.
Termination Without Cause Absent a Change in Control.If Mr. Narula’s employment was terminated on December 31, 2022 by Viatris without cause, he would have been entitled to twelve (12) months of base salary continuation and twelve (12) months of continued health and other benefits. The estimated value of such payments, assuming a December 31, 2022 termination, would have been $913,508.
Termination Due to Death or Disability Absent a Change in Control. If Mr. Narula’s employment was terminated on December 31, 2022 due to death or disability, he would have been entitled to full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such equity vesting, assuming a December 31, 2022 termination, would have been $6,128,595. Mr. Narula is not entitled to cash severance payments in connection with a termination of employment due to death or disability.
Termination in Connection with a Change in Control. If Mr. Narula incurred a CIC Termination on December 31, 2022, he would have been entitled to (1) a payment equal to two times the sum of his base salary and his target annual bonus in effect at the time of such termination, payable in equal installments, (2) twenty-four (24) months of continued health and other benefits, and (3) full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such payments and benefits, assuming a December 31, 2022 CIC Termination, would have been (i) $3,489,367, in respect of cash severance and other benefits and (ii) $6,128,595, in respect of the vesting of his equity awards.
Rajiv Malik
Mr. Malik is entitled to severance payments and benefits upon certain terminations of employment pursuant to the Severance Plan and his equity award agreements with Viatris.
Termination Without Cause Absent a Change in Control.If Mr. Malik’s employment was terminated on December 31, 2022 by Viatris without cause, he would have been entitled to twelve (12) months of base salary continuation and twelve (12) months of continued health and other benefits. The estimated value of such payments, assuming a December 31, 2022 termination, would have been $1,263,508. Mr. Malik is also entitled to participate in the Company’s Supplemental Health Insurance Plan for certain retired executives following a termination of employment.
46
Termination Due to Death or Disability Absent a Change in Control. If Mr. Malik’s employment was terminated on December 31, 2022 due to death or disability, he would have been entitled to full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such equity vesting, assuming a December 31, 2022 termination, would have been $16,145,271. Mr. Malik is not entitled to cash severance payments in connection with a termination of employment due to death or disability.
Termination in Connection with a Change in Control. If Mr. Malik incurred a CIC Termination on December 31, 2022, he would have been entitled to (1) a payment equal to two times the sum of his base salary and his target annual bonus in effect at the time of such termination, payable in equal installments, (2) twenty-four (24) months of continued health and other benefits, and (3) full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such payments and benefits, assuming a December 31, 2022 CIC Termination, would have been (i) $5,489,367, in respect of cash severance and other benefits and (ii) $16,145,271, in respect of the vesting of his equity awards.
Anthony Mauro
Mr. Mauro is entitled to severance payments and benefits upon certain terminations of employment pursuant to the Severance Plan and his equity award agreements with Viatris.
Termination Without Cause Absent a Change in Control.If Mr. Mauro’s employment was terminated on December 31, 2022 by Viatris without cause, he would have been entitled to twelve (12) months of base salary continuation and twelve (12) months of continued health and other benefits. The estimated value of such payments, assuming a December 31, 2022 termination, would have been $864,150.
Termination Due to Death or Disability Absent a Change in Control. If Mr. Mauro’s employment was terminated on December 31, 2022 due to death or disability, he would have been entitled to full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such equity vesting, assuming a December 31, 2022 termination, would have been $7,229,457. Mr. Mauro is not entitled to cash severance payments in connection with a termination of employment due to death or disability.
Termination in Connection with a Change in Control. If Mr. Mauro incurred a CIC Termination on December 31, 2022, he would have been entitled to (1) a payment equal to two times the sum of his base salary and his target annual bonus in effect at the time of such termination, payable in equal installments, (2) twenty-four (24) months of continued health and other benefits, and (3) full vesting of his unvested equity awards with any PRSUs vesting based on target performance. The estimated values of such payments and benefits, assuming a December 31, 2022 CIC Termination, would have been (i) $3,530,715, in respect of cash severance and other benefits and (ii) $7,229,457, in respect of the vesting of his equity awards.
Robert J. Coury
Mr. Coury is entitled to severance payments and benefits upon certain terminations of employment pursuant to thehis Executive ChairmanEmployment Agreement as summarized above under “Executive Chairman Employment Agreement” and his equity award agreements with Viatris.
Resignation for Good Reason, Termination Without Cause or Termination dueDue to Death or Disability
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continued health and other benefits, and (3) full vesting of his RSUs and PRSUs.PRSUs (including his Value Creation Incentive Award and with any PRSUs vesting based on target performance). Mr. Coury is also entitled to participate in the Company’s Supplemental Health Insurance Plan for certain retired executives following a termination of employment. The estimated values of such payments and benefits, assuming a December 31, 20202022 termination, would have been (i) $13,648,501,$20,981,368, in respect of cash severance and other benefits, and (ii) $34,669,000,$39,148,128, in respect of the vesting of his RSUs and PRSUs. These amounts would not be enhanced if these events occurred following a change in control of Viatris.
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CEO Pay Ratio
Pursuant to the requirements of Item 402(u) of Regulation S-K, as the stub Viatris fiscal year 2020 represents a transition period. Therefore, we are not providing athe following information about the relationship of the annual total compensation of our global employee population and the annual total compensation of our CEO for 2022, Michael Goettler. Under Instruction 2 to Item 402(u), the median-paid employee may be identified once every three years if there is no significant impact to the pay ratio disclosuredisclosure. We identified our median-paid employee in 2021. In 2022, such employee received a promotion. In light of the prior median employee’s promotion during 2022 and the resulting compensation adjustment which would impact the pay ratio, a new employee representing the median-paid employee has been selected for this Amendment.
The pay ratio included in this CD&A. Viatris intends on fully complyinginformation is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K beginningItem 402(u). The ratio of Mr. Goettler’s annual total compensation for 2022, as reported in the Summary Compensation Table on page 37 in this Amendment, to the median employee annual total compensation determined on the same basis was 424:1. For 2022, the annual total compensation along with the value of employer provided benefits of our disclosures relatedmedian employee was $34,858 and $14,787,272 for the CEO.
To identify our median employee, we prepared a list of Viatris employees throughout the world as of December 31, 2022. We chose base salary as our consistently applied compensation measure. We then calculated an annual base salary for each employee, annualizing pay for those employees who commenced work during 2022 and for any employees who were on leave for a portion of 2022. For hourly employees, we used a reasonable estimate of hours worked to fiscal year 2021.determine annual base pay. We determined that as of December 31, 2022, our total number of U.S. employees was approximately 4,150 and our total number of non-U.S. employees was approximately 34,150. No employees were excluded from the employee population.
Our median employee is located in India, which reflects the true global nature of our organization and the fact that we are a diversified company within our peer group whose employees participate in all aspects of bringing our products to market, from R&D to manufacturing. This diversification should be considered by readers who would compare our CEO Pay Ratio to those within our peer or industry group and reflects differences in pay demographics among those groups. Pay ratios may not be comparable because of different employee populations, geographic distribution of employees, and compensation practices and companies may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios
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Non-Employee Director Compensation for 2020
The following table sets forth information concerning the compensation earned by Viatris’ non-employee Directors directors (each a “Non-Employee Director,”“Non-Employee Director” and, together, the “Non-Employee“Non-Employee Directors”) for 2020.2022. Directors who are employees of Viatris (Messrs. Coury, Goettler, and Malik) receive no compensation for their Board service. With respect to the Non-Employee Directors who served on the Mylan Board of Directors until the closing of the Combination (Mses. Dillon, Higgins and van der Meer Mohr and Messrs. Dimick, Korman, Mark and Parrish), since Viatris holds the Mylan business as a result of the Combination, such service has a direct relationship with Viatris and therefore the amounts below include the 2020 pro-rated compensation received from Mylan by such Non-Employee Directors prior to the closing of the Combination as well as the 2020 pro-rated compensation received from Viatris by such Non-Employee Directors after the closing of the Combination. With respect to the Non-Employee Directors who served on Pfizer’s board of directors until the closing of the Combination (Messrs. Cornwell and Kilts), since prior to the Combination Pfizer had, among other things, transferred to Viatris substantially all of the assets and liabilities comprising the Upjohn Business and thereafter distributed to Pfizer shareholders all of the issued and outstanding shares of Viatris, such service does not have a direct relationship with Viatris and therefore the amounts below only include the 2020 pro-rated compensation received from Viatris by such Non-Employee Directors following the closing of the Combination. Mr. Read did not serve on the Mylan or Pfizer boards of directors in 2020 prior to the closing of the Combination and, therefore, the amounts below only include the 2020 pro-rated compensation received from Viatris by Mr. Read following the closing of the Combination. Prior to the closing of the Combination, the Upjohn board of directors consisted of three employee directors, Ms. Madden, Mr. Giordano and Mr. Supran, who were not independent and did not receive compensation for their service on the Upjohn board of directors. A discussion of the elements of Non-Employee Director compensation follows the table.
Name | Fees Earned or Paid in Cash ($) | RSUs ($) (4) | Option Awards ($) (4) | All Other Compensation ($) (5) | Total ($) | |||||||||||||
W. Don Cornwell (1) | 12,500 | — | — | — | 12,500 | |||||||||||||
JoEllen Lyons Dillon (2) | 197,500 | 165,011 | 50,008 | 25,898 | 438,417 | |||||||||||||
Neil Dimick (2) | 185,000 | 165,011 | 50,008 | 29,538 | 429,556 | |||||||||||||
Melina Higgins (2) | 177,500 | 165,011 | 50,008 | 23,177 | 415,695 | |||||||||||||
James Kilts (1) | 12,500 | — | — | — | 12,500 | |||||||||||||
Harry A. Korman (2) | 148,750 | 165,011 | 50,008 | 14,791 | 378,559 | |||||||||||||
Richard Mark (2) | 125,000 | 165,011 | 50,008 | 6,667 | 346,686 | |||||||||||||
Mark W. Parrish (2) | 265,000 | 165,011 | 50,008 | 24,013 | 504,031 | |||||||||||||
Ian Read (1) | 12,500 | — | — | — | 12,500 | |||||||||||||
Pauline van der Meer Mohr (2) | 130,000 | (3) | 165,011 | 50,008 | 10,136 | 355,155 | ||||||||||||
Name | Fees Earned or Paid ($) | RSUs ($)(3) | All Other Compensation ($)(4) | Total ($) | ||||||||||||
W. Don Cornwell | 150,000 | 200,002 | 20,000 | 370,002 | ||||||||||||
JoEllen Lyons Dillon | 200,000 | 200,002 | — | 400,002 | ||||||||||||
Neil Dimick | 200,000 | 200,002 | — | 400,002 | ||||||||||||
Elisha W. Finney(1) | — | — | — | — | ||||||||||||
Melina Higgins | 225,000 | 200,002 | 20,000 | 445,002 | ||||||||||||
James Kilts | 150,000 | 200,002 | 20,000 | 370,002 | ||||||||||||
Harry A. Korman | 175,000 | 200,002 | — | 375,002 | ||||||||||||
Richard Mark | 150,000 | 200,002 | 15,000 | 365,002 | ||||||||||||
Mark W. Parrish | 250,000 | 200,002 | — | 450,002 | ||||||||||||
Ian Read | 175,000 | 200,002 | — | 375,002 | ||||||||||||
Scott A. Smith(1) | — | — | — | — | ||||||||||||
Pauline van der Meer Mohr(2) | 150,000 | 200,002 | — | 350,002 | ||||||||||||
(1) | On December 29, 2022 Messrs. |
(2) |
Fees earned by Ms. van der Meer Mohr were paid in Euros. Such amounts were converted into Euros using the monthly conversion rate in effect when each payment was made. |
Represents the grant date fair value of the specific award granted to the Non-Employee Director. RSU awards |
The amounts represent charitable contributions made in |
In addition to the above, as previously disclosed, legacy Mylan directors were eligible to receive tax-equalization payments for incremental tax liabilities, if any, incurred as a result of attendance at Mylan Board meetings held outside the U.S. prior to the Combination. In 2022, these legacy Mylan directors received a one-time payment for such tax-equalization benefit with respect to years prior to the Combination (2015 to 2020). Messrs. Dimick, Korman, Mark and Parrish received $99,049, $94,245, $79,431, and $173,339, respectively, and Mses. Dillon and Higgins received $362,700 and $300,533, respectively. This benefit has now been finalized and concluded.
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Viatris’ compensation philosophy for Non-Employee Directors is designed to attract and retain Directors with the experience necessary to represent the Company and oversee executive management. On an annual basis, the Viatris Compensation Committee considers market data for our Compensation Peer Group and input received from the Viatris Compensation Committee’s consultant regarding market practices for Director compensation. Any changes to Director compensation are approved by the Viatris Compensation Committee and the independent Directors.
Director Compensation Structure for 2021
In March 2021,2023, the Viatris Compensation Committee and the independent Directors approved the following Non-EmployeeDirector compensation structure effective as of January 2021:
Element of Compensation | Amount | |||
Board Member Retainer | $ | 150,000 | ||
Committee Chair Fee | $25,000 | |||
Executive Committee Member Fee | $25,000 | |||
Lead Independent Director Compensation | $50,000 | |||
Annual Equity Grant Value (RSUs) | $ | 200,000 | ||
Non-Employee Directors are also eligible to receive matching charitable contributions under the Company’s Director Matching Gift Program. Under this program, to the extent Non-EmployeeDirectors choose to make charitable contributions to qualifying charitable organizations, the Company matches those contributions dollar-for-dollar up to an annual limit of $20,000 per person per calendar year.
Non-Employee Director Share Ownership Guidelines
Effective January 1, 2021, the Board adopted revised share ownership guidelines for Non-Employee Directors, requiring each to hold common stock valued at five times the amount of their annual cash retainer, excluding any cash retainer paid for committee service. Each Non-Employee Director has five years from his or her start date to attain compliance. These guidelines further demonstrate alignment of Viatris Directors’ interests with shareholders’ interests for the duration of their Board service. Common stock actually owned by the non-employee directorNon-Employee Director as well as restricted shares and unvested RSUs (including corresponding DEUs) count toward compliance with these requirements.
ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Certain information concerning securities authorized for issuance under equity compensation plans is contained in the discussion entitled “Equity Compensation Plan Information” in Item 12 of Part III of the Original Filing.
Security Ownership of Directors, NomineesNEOs and Executive Officers
The following table sets forth information regarding the beneficial ownership of common stock of Viatris Inc. as of April 26, 202124, 2023 by (i) each Viatris Director, (ii) each NEO, and (iii) all Directors and executive officers of Viatris Inc. as a group (based on 1,208,643,4111,199,008,181 shares of common stock of Viatris Inc. outstanding as of such date). For purposes of this table, and in accordance with the rules of the SEC, shares are considered “beneficially owned” if the person, directly or indirectly, has sole or shared voting or investment power over such shares. A person also is considered to beneficially own shares that he or she has the right to acquire within 60 days of April 26, 2021.24, 2023. To Viatris’ knowledge, the persons in the following table have sole voting and investment power, either directly or through one or more entities controlled by such person, with
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respect to all the shares shown as beneficially owned by them, unless otherwise indicated in the footnotes below. The address for each beneficial owner listed in the table below is c/o Viatris Inc., 1000 Mylan Boulevard, Canonsburg, PA, 15317. As noted above, each Non-Employee Director has five years from his or her statestart date to attain compliance with our Stock Ownership Guidelines. In addition, each of our covered employees has five years to achieve minimum ownership requirements, as discussed in more detail in the Compensation Discussion & Analysis section of this document.
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Options Exercisable and Restricted Shares Vesting within 60 days | Percent of Class | |||||||||
W. Don Cornwell | 3,000 | — | * | |||||||||
Robert J. Coury | 1,383,587 | 462,465 | (1) | * | ||||||||
JoEllen Lyons Dillon | 25,067 | (2) | 24,780 | * | ||||||||
Neil Dimick | 60,703 | 24,780 | * | |||||||||
Michael Goettler | 6,081 | — | * | |||||||||
Melina Higgins | 122,571 | (3) | 31,403 | * | ||||||||
James Kilts | 64,905 | — | * | |||||||||
Harry A. Korman | 36,141 | 30,770 | * | |||||||||
Rajiv Malik | 722,701 | (4) | 331,694 | * | ||||||||
Richard A. Mark | 18,668 | 12,260 | * | |||||||||
Anthony Mauro | 168,124 | (5) | 153,886 | * | ||||||||
Sanjeev Narula | 7,314 | — | * | |||||||||
Mark W. Parrish | 67,753 | 24,780 | * | |||||||||
Ian Read | — | — | * | |||||||||
Pauline van der Meer Mohr | 15,705 | 13,949 | * | |||||||||
All Directors and executive officers as a group (20 persons (6) ) | 2,739,662 | 1,239,883 | * | |||||||||
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Options Exercisable and Restricted Shares Vesting within 60 days | Percent of Class | |||||||||
W. Don Cornwell | 42,510 | — | * | |||||||||
Robert J. Coury | 1,174,515 | 204,963 | * | |||||||||
JoEllen Lyons Dillon | 59,877 | (1) | 24,780 | * | ||||||||
Elisha W. Finney | — | — | * | |||||||||
Michael Goettler(2) | 321,653 | — | * | |||||||||
Melina Higgins | 157,381 | (3) | 31,403 | * | ||||||||
James M. Kilts | 98,590 | — | * | |||||||||
Harry A. Korman | 70,951 | 26,504 | * | |||||||||
Rajiv Malik | 1,111,815 | (4) | 408,292 | * | ||||||||
Richard A. Mark | 53,478 | 12,260 | * | |||||||||
Anthony Mauro | 345,904 | (5) | 181,908 | * | ||||||||
Sanjeev Narula | 73,877 | — | * | |||||||||
Mark W. Parrish | 102,563 | 24,780 | * | |||||||||
Scott A. Smith | — | — | * | |||||||||
Pauline van der Meer Mohr | 40,245 | 13,949 | * | |||||||||
All directors and executive officers as a group (18 persons)(6) | 3,624,728 | 1,041,433 | * | |||||||||
* | Less than 1%. |
(1) |
Includes 18 shares of common stock held by Ms. Dillon’s spouse. |
Mr. Goettler ceased to serve as the Company’s CEO and ceased to serve on the Board effective as of April 1, 2023. |
| (3) | Includes 74,000 shares of common stock held by Ms. Higgins’ spouse. |
(4) | Includes |
(5) | Includes 5,574 shares held in Mr. Mauro’s 401(k) account. |
(6) | Includes the |
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Security Ownership of Certain Beneficial Owners
The following table lists the names and addresses of shareholders known to management to own beneficially more than five percent of the shares of common stock of Viatris as of April 26, 202124, 2023 (based on 1,208,643,4111,199,008,181 shares of common stock of Viatris Inc. outstanding as of such date):
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | ||||||
The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355 | 129,072,141 | (1) | 10.68% | |||||
BlackRock, Inc., 55 East 52nd Street, New York, NY 10055 | 89,526,414 | (2) | 7.41% | |||||
Wellington Management Group LLP and affiliates, 280 Congress Street, Boston, MA 02210 | 69,811,210 | (3) | 5.78% | |||||
Name and Address of Beneficial Owner | Amount and Nature of Ownership | Percent of Class | ||||||
The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355 | 149,318,666 | (1) | 12.5% | |||||
BlackRock, Inc., 55 East 52nd Street, New York, NY 10055 | 93,214,306 | (2) | 7.8% | |||||
State Street Corporation, State Street Financial Center, One Lincoln Street, Boston, MA 02111 | 61,903,672 | (3) | 5.2% | |||||
(1) | Based on the Schedule |
(2) | Based on the Schedule |
(3) | Based on the Schedule 13G filed by |
ITEM 13. | Certain Relationships and Related Transactions, and Director Independence |
Based on a review of any transactions between Viatris and its Directors and executive officers, their immediate family members, and their affiliated entities, Viatris has determined that since the beginning of 2020,2022, it was or is to be a participant in the following transactions in which the amount involved exceeds $120,000 and in which any of Viatris’ Directors, executive officers, or greater than five percent shareholders, or any of their immediate family members, had or will have a direct or indirect material interest:
Since approximately 1995, The Coury Firm LLC (together with its predecessors, “TCF”) and, in the past, other affiliated entities of TCF, has been serving as the broker of record in connection with several of Mylan’s and, since the closing of the Combination, Viatris’ employee benefit programs. TCF is in the business of providing strategic corporate benefits advice and services, among others. TCF provides certain services to Viatris and its subsidiaries pursuant to a contract between Mylan Inc., thea subsidiary of Viatris, and TCF. The principals of whichTCF are brothers and a son of Robert J. Coury, Executive Chairman, to provide certain services to Mylan.and TCF is beneficially owned by brothers and trusts on behalf of brothers and children of Mr. Coury. TCF is inCommencing on September 1, 2020, the business of providing strategic corporate benefits advice and services, among others. Since approximately 1995, TCF and, in the past, other affiliated entities of TCF, served as the broker in connection with several of Mylan’s employee benefit programs. Effective January 1, 2018, Mylanparties extended its previous contract with TCF for an additional three year periodtheir agreement through December 31, 2023 on substantially the same terms as itstheir prior arrangement, which included a fixed base fee of $37,500 per month to be paid by Mylan to TCF, corresponding to the term of agreements negotiated with certain benefit plan carriers and capping payments over that time period. However, where required by law, TCF will continue to receive commissions directly from certain other benefit plan carriers, and in 20202022 and early 2021,2023, received payments totaling approximately $200,000$165,000 in commissions for these services directly from the insurance carriers (including
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payments for 20192021 business paid in 2020)2022). In August 2020 and commencing on September 1, 2020,The parties expect to extend the parties further extended this agreement through December 31, 2023 on substantially the same terms; in connection with the consummation of the Combination, Mylan Inc. is now a subsidiary of Viatris, and Viatris andterms prior to its subsidiaries receive the services contemplated by the extended agreement.
Angela Campbell, Mr. Campbell’s spouse and herself a related person of Viatris, held roles of increasing responsibility at Mylan Inc. since June 2007 and is currently servingmost recently served as Head of Operations Strategic Initiatives at Viatris.until her departure effective December 31, 2022. Ms. Campbell earned approximately $300,000$360,000 in compensation from Mylan Inc.Viatris in 20202022 (consisting of base salary, an annual short-term incentive bonus, amounts realized from the exercise or vesting of long-term incentive awards and miscellaneous other benefits) where she was Head of Global Commercial Incentive Compensation and her compensation in 2021 is expected to be approximately $325,000 (consisting of base salary,2023 will receive an annual short-term cash incentive bonus amounts realized from the exercise or vesting of long-term incentiveapproximately $93,000 related to work performed in 2022 and standard Company severance payments of approximately $166,000. Upon her departure, all of her unvested equity awards and miscellaneous other benefits).
Mr. Malik is an executive officer of the Company and was party to an employment agreement with Mylan Inc., which contained standard indemnification provisions, and is currently party to a standard indemnification agreement with the Company. The Company has made payments to counsel to Mr. Malik of approximately $710,000 in 2020 and approximately $50,000 in 2021$650,000 from January 1, 2022 through April 24, 2023 for services provided to Mr. Malik in connection with certain previously disclosed drug pricing matters. The Company anticipates making additional payments of approximately $1.3 million$500,000 in 20212023 for ongoing services to be provided to Mr. Malik in connection with such matters. Viatris anticipates additional payment, repayment or advancement of these and other expenses during the pendency of these matters and anticipates that it will make payments for any such claims.
Viatris has a written related party transactions policy that establishes guidelines for reviewing and approving, as appropriate, transactions involving any Director, nominee for Director, “officer” (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (“Section 16 Officer,Officer”), person known by the Company to be the beneficial owner of more than 5% of any class of the Company’s voting securities, or person known by the Company to be an immediate family member of any such person in which (1) the amount involved will or may be expected to exceed $100,000; (2) Viatris or an affiliate of Viatris is or will be a participant; and (3) any related party has or will have a direct or indirect material interest. The Board also annually reviews certain relationships and related party transactions as part of its assessment of each Director’s independence.
Director Independence
Viatris’ Board has determined that Mr. Cornwell, Ms. Dillon, Mr. Dimick,Ms. Finney, Ms. Higgins, Mr. Kilts, Mr. Korman, Mr. Mark, Mr. Parrish, and Ms. van der Meer Mohr are independent Directors under the applicable NASDAQ listing rules. In making these determinations, the Board considered, with respect to Mr. Cornwell’s independence, that Mr. Cornwell’s son iswas a partner of PJT Partners (“PJT”), which until January 2023 when he became a member of its board of directors. PJT served as a financial advisor to Mylan in connection with the Combination;Combination and the Biocon Biologics Transaction. Mr. Cornwell’s son was not involved in PJT’s work for Mylan.related to either the Combination or the Biocon Biologics Transaction. With respect to Mr. Korman’s independence, the Board considered (a) Mr. Korman’s past employment by Mylan Inc. from 1996 through July 2014 and his prior consulting services for Mylan Inc. from July 2014 to July 1, 2015 and (b) that Mr. Korman’s son had a paid internship with a Mylan subsidiary during the summer of 2019. With respect to Mr. Mark, the Board considered his prior service as a partner at Deloitte, Viatris’ independent registered public accounting firm. The Board determined that any such past arrangements, transactions or relationships would not interfere with the exercise of independent judgment by Mr. Cornwell, Mr. Korman or Mr. Mark in carrying out his respective responsibilities as a Director of Viatris.
Messrs. Coury, Goettler, Malik, and ReadSmith are not independent Directors under applicable NASDAQ listing rules.
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Viatris’ Board had previously determined that Mr. Dimick, who served on the Board until December 28, 2022, was independent under the applicable NASDAQ listing rules. Mr. Goettler, who served on the Board until April 1, 2023, and Mr. Read, who served on the Board until December 28, 2022, were not independent Directors under applicable NASDAQ listing rules.
ITEM 14. | Principal Accounting Fees and Services |
Deloitte served as the Company’sViatris’ independent registered public accounting firm during 2022 and appointed Deloitte to serve in that role going forward. Mylan is the accounting acquirer in the Combination,2021 and Deloitte had served as Mylan’s independent registered public accounting firm since 1976. As a result, the fees described below relate to fees paid by Mylan to Deloitte prior to the Combination and fees paid by Viatris to Deloitte following the closing of the Combination on November 16, 2020. Deloitte has audited Viatris’ financial statements for the fiscal yearyears ended December 31, 2020.2022 and 2021. No relationships exist with Deloitte other than the usual relationship between such a firm and its client. Details about the nature of the services provided by, and fees Viatris and Mylan paid to, Deloitte and affiliated firms for such services during 20202022 and 20192021 are set forth below.
In Millions | ||||||||
2020 | 2019 | |||||||
Audit Fees(1) | $11.93 | $10.29 | ||||||
Audit Related Fees (2) | 0.21 | 0.56 | ||||||
Tax Fees (3) | 2.38 | 0.22 | ||||||
All Other Fees (4) | — | 0.04 | ||||||
Total Fees | $14.52 | $11.11 | ||||||
| In Millions | ||||||||
| 2022 | 2021 | |||||||
Audit Fees(1) | $ | 15.41 | $ | 12.29 | ||||
Audit Related Fees(2) | 0.35 | 0.19 | ||||||
Tax Fees(3) | 0.15 | 0.27 | ||||||
All Other Fees(4) | — | 0.10 | ||||||
|
|
|
| |||||
Total Fees | $ | 15.91 | $ | 12.85 | ||||
|
|
|
| |||||
(1) | Represents fees for professional services provided for the audit of the Company’s annual consolidated financial statements, the audit of the Company’s internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, reviews of the Company’s quarterly condensed consolidated financial statements, audit services provided in connection with other statutory or regulatory filings, and accounting, reporting and disclosure matters. |
(2) | Represents fees for assurance services related to the audit of the Company’s annual consolidated financial statements, including statutory audits of certain of the Company’s subsidiaries, |
(3) | Represents fees primarily related to tax return preparation, tax planning and tax compliance support services, as well as fees related to tax advice provided in connection with the Combination. |
(4) | Represents fees related primarily to advisory services. |
Audit Committee Pre-Approval Policy
The Audit Committee has a policy regarding pre-approval of audit, audit-related, tax and other services that the independent registered public accounting firm may perform for Viatris. Under the policy, the Committee must review and pre-approve on an individual basis any requests for audit, audit-related, tax and other services not covered by certain services pre-approved by the Committee up to certain amounts. All services performed by Deloitte during 20202022 and 20192021 were pre-approved by the Audit Committee or, with respect to periods prior to November 16, 2020, the Mylan Audit Committee in accordance with their respective its pre-approval policies. policy.
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PART IV
ITEM 15. | Exhibits |
Exhibit Index
| 31.1 | ||
| 31.2 | ||
| 104 | Cover Page Interactive Data File—the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (included in Exhibit 101). | |
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: April | VIATRIS INC. | |||
By: | /s/ Sanjeev Narula | |||
Sanjeev Narula Chief Financial Officer (Principal Financial Officer) | ||||
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Appendix A
Reconciliations of
Adjusted EBITDA
Adjusted EBITDA for purposes of 2020the 2022 annual incentive performance relating to Mylan legacy executivescompensation awards is calculatedderived from Viatris’ financial statements in the same manner Mylanas Viatris’ publicly reported adjusted EBITDA for 2022 (“as set forth below,reported”), except that the calculation for the 2022 incentive program (“for 2022 annual incentive compensation”) utilized budgeted foreign exchange rates. Below is a reconciliationrates (“currency impact”) and further adjusts for unbudgeted IPR&D costs and the December 2022 results of Mylan’s U.S. GAAP net earnings (loss) to EBITDA and adjusted EBITDA for the nine months ended September 30, 2020:
Nine months ended September 30, 2020 | ||||||||
(in millions) | As Reported | Adjusted for Currency Impact | ||||||
U.S. GAAP net earnings (loss) | $ | 245.9 | $ | 222.7 | ||||
Add/(deduct) adjustments: | ||||||||
Clean energy investments pre-tax loss | 37.4 | 37.4 | ||||||
Income tax provision (benefit) | 46.4 | 42.0 | ||||||
Interest expense (a) | 353.4 | 353.5 | ||||||
Depreciation and amortization (b) | 1,263.0 | 1,263.4 | ||||||
EBITDA | $ | 1,946.1 | $ | 1,919.0 | ||||
Add/(deduct) adjustments: | ||||||||
Share-based compensation expense (income) | 49.8 | 49.8 | ||||||
Litigation settlements and other contingencies, net | 36.5 | 36.5 | ||||||
Restructuring , acquisition related and other special items (c) | 606.6 | 609.5 | ||||||
Adjusted EBITDA | $ | 2,639.0 | $ | 2,614.8 | ||||
(in millions) | Year ended December 31, 2022 | |||
U.S. GAAP net earnings | $ | 2,079 | ||
Add/(deduct) adjustments: | ||||
Income tax provision | 735 | |||
Interest expense(a) | 592 | |||
Depreciation and amortization(b) | 3,028 | |||
EBITDA | $ | 6,433 | ||
Add/(deduct) adjustments: | ||||
Share-based compensation expense | 116 | |||
Litigation settlements and other contingencies, net | 4 | |||
Biocon Biologics gain on divestiture | (1,754 | ) | ||
Impairment of goodwill related to assets held for sale | 117 | |||
Restructuring, acquisition and divestiture related and other special items(c) | 860 | |||
Adjusted EBITDA (as reported) | $ | 5,777 | ||
December 2022 results of the divested biosimilars business | 31 | |||
Unbudgeted IPR&D costs | 36 | |||
Currency impact | 356 | |||
Adjusted EBITDA (for 2022 annual incentive compensation) | $ | 6,200 | ||
| (a) | Includes |
| (b) | Includes purchase accounting related amortization. |
| (c) | Includes restructuring related costs, acquisition and divestiture related costs (primarily |
Free Cash Flow
Free cash flow is derived from Viatris’ audited financial statements in the same manner as Viatris’ publicly reported free cash flow by Credit Agreement Debt, each as described below.
A-1
three-year PRSUs, free cash flow is derived from Viatris’ audited financial statements in the same manner as Viatris publicly reports adjusted EBITDA,the calculation for 2022 annual incentive compensation, except that the calculation for the incentive program will utilize budgeted foreign exchange rates. See “
(in millions) | Year Ended December 31, 2022 | |||
U.S. GAAP net cash provided by operating activities | $ | 2,953 | ||
Add/(deduct): | ||||
Capital expenditures | (406 | ) | ||
Free cash flow (as reported) | 2,547 | |||
Biocon Biologics transaction related taxes and transaction costs | 252 | |||
Results of the divested biosimilars business from the closing of the transaction on November 29, 2022 through December 31, 2022 | 20 | |||
Unplanned litigation – Lyrica settlement | 86 | |||
Unbudgeted IPR&D costs | 36 | |||
Proceeds from the sale of certain property, plant and equipment | 14 | |||
Currency impact | 213 | |||
Free cash flow (for 2022 annual incentive compensation) | $ | 3,168 | ||
A-2