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Check the appropriate box:
¨	Preliminary Proxy Statement

¨	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)14A-6(E)(2))

þ	Definitive Proxy Statement

¨	Definitive Additional Materials

¨	Soliciting Material Pursuant to § 240.14a-12under §240.14a-12

Payment of Filing Fee (Check all boxes that apply):
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¨	Fee computed on table belowin exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

	LETTER TO CARDINAL HEALTH SHAREHOLDERS	2
	¨	Fee paid previously with preliminary materials.

Our Director Nominees	14
NoticeOur Board’s Composition and Structure	21
Our Board’s Primary Role and Responsibilities and Processes	26
Shareholder Engagement	32
Standards of Business Conduct	33
Related Person Transactions Policy and Process	33
Director Compensation	34
AUDIT COMMITTEE MATTERS	36
PROPOSAL 2 — Ratification of Appointment of Ernst & Young LLP as Independent Auditor	36
Audit Committee Report	36
Fees Paid to Ernst & Young LLP	37
Policy on Pre-Approval of Services Provided by Ernst & Young LLP	37
EXECUTIVE COMPENSATION	38
PROPOSAL 3 — Advisory Vote to Approve the Compensation of Our Named Executive Officers	39
PROPOSAL 4 — Advisory Vote on the Frequency of Future Advisory Votes to Approve the Compensation of Our Named Executive Officers	39
Compensation Discussion and Analysis	40
Human Resources and Compensation Committee Report	54
Executive Compensation Tables	55
Pay Ratio Disclosure	67
Pay Versus Performance	68
Equity Compensation Plan Information	71
SHAREHOLDER PROPOSALS	72
Proposal 5 — Executives to Retain Significant Stock	72
Proposal 6 — Shareholder Ratification of Excessive Termination Pay	74
SHARE OWNERSHIP INFORMATION	76
Beneficial Ownership	76
Delinquent Section 16(a) Reports	77
OTHER MATTERS	78
General Information About the Annual Meeting	78
Communicating with the Board	80
Shareholder Recommendations for Director Nominees	80
Submitting Proxy Proposals and Director Nominations for the Next Annual Meeting of Shareholders To Be Held November 8, 2017	81
Corporate Governance Documents	81
Transfer Agent	81
ANNEX A: USE OF NON-GAAP FINANCIAL MEASURES	82
Exclusions from Non-GAAP Financial Measures	82
	Fiscal 2023 GAAP to Non-GAAP Reconciliations	83
	Definitions	83

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GREGORY B. KENNY Chairman of the Board

LETTER TO CARDINAL HEALTH SHAREHOLDERS SEPTEMBER 27, 2023 The past year brought about key changes at Cardinal Health and, with them, strong results. The Board and management remain committed to our refreshed strategic priorities, and we look forward to continuing this work in the year ahead. FISCAL 2023 PERFORMANCE We delivered strong financial performance in fiscal 2023, growing revenue and earnings at the enterprise level. We grew Pharmaceutical segment profit an impressive 13%, and, in the Medical segment, we drove significant sequential improvement in operating performance — from a segment loss in the first quarter to over $80 million of segment profit in the fourth quarter. We also generated $2.8 billion of operating cash flow and returned $2.5 billion to shareholders through share repurchases and dividends. TAKING ACTION TO MAXIMIZE AND SUSTAIN VALUE As a result of the Board’s succession planning process, in August 2022, we named Jason Hollar as the company’s new CEO. Under Jason’s leadership, we took decisive action this year to advance our three strategic priorities: building on the growth and resiliency of our Pharmaceutical segment; executing our Medical Improvement Plan initiatives; and relentlessly focusing on shareholder value creation. Consistent with what we shared at our Investor Day in June, our strong fiscal 2023 results were achieved through a commitment to prioritize the core of our business and to better serve our customers, so they, in turn, could focus on caring for their patients. We simplified our operations by streamlining our organizational structure, exiting non-core product lines, and rationalizing our geographic and manufacturing footprints to meet our current business needs. We made key leadership changes, adding talent in critical positions across the enterprise. We formed and recently extended the term of the Board’s Business Review Committee tasked with evaluating our strategy, portfolio, capital allocation framework, and operations. Key outputs of this review to date include the completion of a review of the Pharmaceutical segment and the launch of our new NavistaTMNetwork supporting community oncologists, our recent announcement of further investment in our Nuclear and Precision Health Solutions business, and the merger of the segment’s OutcomesTMbusiness into Transaction Data System. UPDATES TO THE COMPOSITION OF OUR BOARD The cooperation agreement we entered into with Elliott Management last September included the addition of four new independent directors, each of whom bring a depth of experience and skills, including healthcare and technology, which are core to our strategic direction. These new directors were welcomed by our existing directors, and they contributed to the Board’s dialogue over the past year.

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As noted in the proxy statement, Carrie Cox and Bruce Downey will be departing the Board when their terms expire this year. Both Carrie and Bruce have provided indispensable guidance over the past 14 years, helping to position Cardinal Health well for the future. On behalf of the Board, I would like to thank Carrie and Bruce for their many years of service and valuable contributions.

Following Carrie’s and Bruce’s departures, the total number of directors will be reduced to eleven, ten of whom are independent and seven of whom are gender or racially or ethnically diverse.

OPERATING SUSTAINABLY

The Board is highly engaged on our environmental, social, and governance, or ESG, priorities and provides oversight of the company’s overall efforts through our Governance and Sustainability Committee. As detailed in our robust ESG report released this past January, we remain steadfast in our strategic approach to deliver a sustainable future. We believe that our existing ESG initiatives align well with, and can help drive, our existing business strategies. Our ESG priorities are organized into four broad categories focused on empowering our people, creating value for our customers and communities, operating sustainably and responsibly, and having strong governance, ethics, and compliance. These priorities inform our ESG strategies, goals, and disclosure. Details on progress against key goals are available in our ESG reports and on our website.

SHAREHOLDER ENGAGEMENT

This past summer, the company contacted shareholders representing 52% of our outstanding shares and met with shareholders representing 37% of our outstanding shares. Another independent director and I participated in select meetings with shareholders. In these discussions, we provided updates on our strategy and ongoing business review process, Board composition and refreshment, senior leadership transitions, executive compensation, and sustainability topics. These are important conversations, and we greatly value the insights that our shareholders provide.

LOOKING FORWARD

Our success would not be possible without the commitment of our employees, who remain focused on our mission to improve the lives of people every day. They continue to deliver for our customers and are foundational to our success.

On behalf of our Board, I thank you for your share ownership and continued support of Cardinal Health. Following a strong first year under Jason Hollar’s leadership, the Board is excited to oversee execution of the company’s strategic priorities designed to achieve our targeted growth for fiscal 2024 and beyond. We look forward to working with you and all our partners to ensure that Cardinal Health continues its essential role in healthcare.

Sincerely,

 

Gregory B. Kenny

Chairman of the Board

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NOTICE

of Annual Meeting of Shareholders

September 27, 2023

The 2023 annual meeting of shareholders (the “Annual Meeting”) will be conducted virtually. You will be able to participate in the virtual meeting online, vote your shares electronically, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/CAH2023.  

VIRTUAL MEETING 

The Annual Meeting is a virtual shareholder meeting at www.virtualshareholdermeeting.com/CAH2023. 

RECORD DATE 

Shareholders of record as of September 18, 2023 are entitled to vote at the Annual Meeting. 

PROXY VOTING 

Please vote your shares promptly to ensure the presence of a quorum during the Annual Meeting. Voting your shares now via the Internet, by telephone, or by signing, dating, and returning the enclosed proxy card or voting instruction form will save the expense of additional solicitation. Submitting your proxy now will not prevent you from voting your shares during the Annual Meeting, as your proxy is revocable at your option. 

WEDNESDAY, NOVEMBER 15, 2023

8:00 a.m. Eastern Time

Virtual Meeting
www.virtualshareholdermeeting.com/CAH2023

	VOTE IN ADVANCE OF THE MEETINGIN ONE OF FOUR WAYS:
		INTERNET Visit 24/7 www.proxyvote.com
Date and time:	Wednesday, November 8, 2017, at 8:00 a.m., local time	BY TELEPHONE Call the toll-free number 1-800-690-6903 within the United States, U.S. territories, or Canada
Location:	Cardinal Health, Inc., 7000 Cardinal Place, Dublin, Ohio 43017	BY MAIL Mark, sign, and date proxy card and return by mail in enclosed postage-paid envelope
Purpose:	(1)	To electVIRTUAL MEETING See page 78 for instructions on how to attend and vote your shares
	Please refer to the enclosed proxy materials orthe information forwarded by your bank, broker,or other holder of record to see which votingmethods are available to you.

We are requesting your vote to:

ITEMS OF BUSINESS 

	Elect the 11 director nominees named in the proxy statement;
	Ratify the appointment of Ernst & Young LLP as our independent auditor for the fiscal year ending June 30, 2024;
	Approve, on a non-binding advisory basis, the compensation of our named executive officers;
	To vote, on a non-binding advisory basis, on the frequency of future advisory votes to approve the compensation of our named executive officers;
	Vote on two shareholder proposals described in the proxy statement, if properly presented at the Annual Meeting; and
	Transact such other business as may properly come before the meeting or any adjournment or postponement.

MEETING DETAILS

See “Proxy Summary” and “Other Matters” for details. 

By Order of the Board of Directors.

Patrick C. Pope

Executive Vice President, General Counsel, and Secretary

September 27, 2023

Important notice regarding the availability of proxy materials for the Annual Meeting to be held on November 15, 2023: The notice of annual meeting of shareholders, the accompanying proxy statement, and our 2023 annual report to shareholders are available at www.proxyvote.com. These proxy materials are first being sent or made available to shareholders commencing on September 27, 2023.

CARDINALHEALTH   2023 Proxy Statement  |4

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PROXY SUMMARY

This summary highlights certain information contained elsewhere in our proxy statement. This summary does not contain all the information that you should consider, and you should carefully read the entire proxy statement and our 2023 annual report to shareholders before voting. References to our fiscal years in the proxy statement mean the fiscal year ended or ending on June 30 of such year. For example, “fiscal 2023” refers to the fiscal year ended June 30, 2023.

About Us

Headquartered in Dublin, Ohio, Cardinal Health, Inc. is a global healthcare services and products company providing customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. We distribute pharmaceuticals and medical products and provide cost-effective solutions that enhance supply chain efficiency. We connect patients, providers, payers, pharmacists, and manufacturers for integrated care coordination and better patient management. We manage our business and report our financial results in two segments: Pharmaceutical and Medical.

Fiscal 2023 Performance

Fiscal 2023 was an inflection point for Cardinal Health, with improved performance, strong execution, and notable progress made against both short and long-term plans in new CEO Jason Hollar’s first year in the role. We finished the fiscal year well, with continued strong growth in the Pharmaceutical segment, robust cash flow generation, and improvement in the Medical segment, driven by execution of our Medical Improvement Plan.

(1)	Total shareholder return (“TSR”) over the period from July 1, 2022 through June 30, 2023, expressed as a percentage, calculated based on changes in stock price assuming reinvestment of dividends.

•	Revenue was $205.0 billion, up 13% from the prior year.
•	GAAP operating earnings were $727 million, which included $1.2 billion in pre-tax goodwill impairment charges in the Medical segment. Non-GAAP operating earnings were $2.1 billion, a 3% increase over the prior year, reflecting Pharmaceutical segment profit growth, partially offset by a decrease in Medical segment profit.
•	GAAP diluted earnings per share (“EPS”) were $1.00, which included the pre-tax goodwill impairment charges ($1.1 billion after tax or $4.38 per share) in the Medical segment. Non-GAAP EPS was $5.79, a 14% increase over the prior year, reflecting the increase in non-GAAP operating earnings, lower interest and other expense, and a lower share count.
•	Pharmaceutical segment profit grew 13%, while Medical segment profit decreased 49%.
•	We generated $2.8 billion in operating cash flow and returned over $2.5 billion to shareholders in share repurchases ($2.0 billion) and dividends ($525 million), strengthened the balance sheet by repaying $550 million in long-term debt, and invested over $480 million back into our businesses to drive organic growth.
•	We continued to streamline our cost structure and surpassed our enterprise cost savings target for the fifth consecutive year.
•	The Board’s Business Review Committee and management made progress on the ongoing review of the company’s strategy, portfolio, capital allocation framework, and operations

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that began early in fiscal 2023. We announced at our Investor Day held on June 8, 2023, that we had completed the business and portfolio review of the Pharmaceutical segment, which included the launch of the new Navista^TMNetwork supporting community oncologists, the announcement that we would retain and invest in the segment’s Nuclear and Precision Health Solutions business, and the merger of the segment’s Outcomes^TMbusiness into Transaction Data Systems. Prior to our Investor Day, we announced that the term of the Business Review Committee had been extended until July 15, 2024.

See Annex A for reconciliations to the comparable financial measures prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and the reasons why we use non-GAAP financial measures.

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Our 2023 Board Nominees

Director

Committees

Nominee

Age

Occupation

Since

Independent

A

B(1)

G(2)

H(2)

R(2)

Steven K. Barg

61

Global Head of Engagement, Elliott Management Corporation

2022

Michelle M. Brennan

58

Retired Value Creation Leader, Johnson & Johnson

2022

Sujatha Chandrasekaran

56

Retired Senior EVP and Chief Digital and Information Officer, CommonSpirit Health

2022

Sheri H. Edison

66

Retired EVP and General Counsel, Amcor plc

2020

David C. Evans

60

Retired EVP and CFO, Scotts Miracle-Gro Company and Battelle Memorial Institute

2020

Patricia A. Hemingway Hall

70

Retired President and CEO, Health Care Service Corporation

2013

Jason M. Hollar

50

CEO, Cardinal Health, Inc.

2022

Akhil Johri

62

Operating Advisor to Clayton, Dubilier & Rice; Retired EVP and CFO, United Technologies Corporation

2018

Gregory B. Kenny

70

Retired President and CEO, General Cable Corporation

2007

Nancy Killefer

69

Retired Senior Partner, Public Sector Practice, McKinsey & Company, Inc.

2015

Christine A. Mundkur

54

Retired CEO, Impopharma Inc.

2022

(1)	The Business Review Committee was formed on September 6, 2022 under the cooperation agreement that the company entered into with Elliott Associates, L.P. and Elliott International, L.P. On May 3, 2023, the term of the Business Review Committee was extended until July 15, 2024.
(2)	Current Human Resources and Compensation Committee Chair and Governance and Sustainability Committee member Carrie S. Cox has decided not to stand for re-election at the Annual Meeting. Ms. Cox will continue to serve as the Human Resources and Compensation Committee Chair through the November quarterly meeting, following which a new Committee Chair will be appointed. Current Governance and Sustainability Committee and Risk Oversight Committee member Bruce L. Downey was not nominated for re-election because he has reached the director retirement age of 75.

Key:			Chairman of the Board
			Chair	A: Audit	B: Business Review	H: Human Resources and Compensation
			Member	G: Governance and Sustainability	R: Risk Oversight

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Governance and Board Highlights

	10 of our 11 director nominees are independent		Audit Committee assists the Board in monitoring financial and cybersecurity risks and enterprise risk management		Business Review Committee is conducting a review of the company’s strategy, portfolio, capital allocation framework, and operations
	Independent, non-executive Chairman of the Board		Human Resources and Compensation Committee assists the Board in monitoring human capital and cultural health		Long-standing, proactive shareholder engagement program with director participation
	7 of our 11 director nominees are gender or racially/ethnically diverse		Governance and Sustainability Committee assists the Board in overseeing ESG matters		Robust Board evaluation process facilitated by an independent third party
	Diverse candidates are included in new director searches		Risk Oversight Committee assists the Board in monitoring ethical, quality, and legal and regulatory compliance risks		Annual review of director commitments

Shareholder Engagement

It has been our longstanding practice to meet with shareholders throughout the year so that management and the Board can better understand shareholder perspectives on governance, executive compensation, sustainability, and other topics.

Typically, our shareholder engagement process begins in the summer by soliciting feedback from institutional investors on governance practices and other topics, which feedback is shared with the Board. In the fall, we file our proxy statement and discuss proxy topics with institutional investors before the Annual Meeting. In the winter, we review voting results from the Annual Meeting.

Our independent Board Chairman, another independent director, and members of management engaged with shareholders during the summer of 2023 to provide updates on our strategy and ongoing business review process, Board composition and refreshment, senior leadership transitions, executive compensation, and ESG topics.

For more information on our approach to shareholder engagement and actions we have taken in response to shareholder feedback, see pages 32 and 33. For more information on our shareholder engagement efforts with respect to executive compensation and consideration of last year’s say-on-pay vote, see pages 41 and 42 of the Compensation Discussion and Analysis (“CD&A”).

Agreement with Elliott

On September 5, 2022, we entered into a cooperation agreement (the “Cooperation Agreement”) with Elliott Associates, L.P. and Elliott International, L.P. (together, “Elliott”). On May 3, 2023, we amended the Cooperation Agreement to extend its term until the later of (i) July 15, 2024 and (ii) five days following the date on which Mr. Barg, Elliott’s investor designee to the Board, or his successor ceases to serve on, or resigns from, the Board. Under the Cooperation Agreement, we agreed to appoint Mses. Brennan, Chandrasekaran, and Mundkur and Mr. Barg as new independent members of the Board effective September 6, 2022. Ms. Mundkur was initially identified by the Board’s Governance and Sustainability Committee.

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We also agreed under the Cooperation Agreement to establish an advisory Business Review Committee to conduct a comprehensive review of the company’s strategy, portfolio, capital allocation framework, and operations. In connection with the extension of the Cooperation Agreement’s term, the Board extended the term of the Business Review Committee until July 15, 2024.

The amendment to the Cooperation Agreement extended Elliott’s agreement to abide by certain standstill restrictions and voting commitments.

Summaries of the Cooperation Agreement and the First Amendment to the Cooperation Agreement are included in Form 8-Ks filed with the U.S. Securities and Exchange Commission (“SEC”) on September 6, 2022 and May 4, 2023, respectively. The full Cooperation Agreement and First Amendment to the Cooperation Agreement are filed as exhibits to the Form 8-Ks.

CARDINALHEALTH   2023 Proxy Statement  |9

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Approach to ESG Topics

Our Priorities

Our ESG priorities below, which we had refreshed with the assistance of an ESG consultant in fiscal 2022 through a series of internal and external surveys and interviews, inform our ESG strategy, goals, and disclosures. We manage these issues through dedicated teams throughout the company with oversight from the Board’s Governance and Sustainability Committee and management’s ESG Governance Committee, who ensure that ESG matters are aligned with and support our business strategy. 

Highlights

We continue to advance ESG efforts across the company, working together with colleagues across the business on our priorities and transparently reporting on our progress. Here are a few of our fiscal 2023 ESG highlights:

Empowering our People

We focused in fiscal 2023 on advancing a workplace culture where every employee is invited and encouraged to be their authentic selves, through our ongoing focus on diversity, equity, and inclusion (“DE&I”) initiatives and providing mental health resources for employees and their families. A variety of learning and development programs supported career advancement, and a robust employee assistance program helped promote employees’ well-being.

Establishing a Scope 3 Emissions Target

This past year, we baselined our Scope 3 greenhouse gas (“GHG”) emissions and submitted a near-term science-based target to the Science Based Targets initiative (SBTi) for validation that combines our existing public Scope 1 and Scope 2 emission reduction goal of 50% by fiscal 2030 with a new Scope 3 target. In fiscal 2023, we also signed on to the White House and Health and Human Services Health Sector Climate Pledge. We believe that these initiatives align well with, and can help drive, our existing business strategies. And while we continue to make progress on achieving our GHG reduction goals, we believe that collaborating with our customers and others across the healthcare industry will be essential to addressing the impacts of climate change.

Reporting and Transparency

In our fiscal 2022 ESG report issued in January 2023, we provided extensive information on different ESG matters and included appendices that organized and reported the information according to the most widely used reporting standards and frameworks, including those of the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and Task Force on Climate-related Financial Disclosures (TCFD). We expect to issue our fiscal 2023 ESG report in January 2024.

Impacting our Communities

In fiscal 2023, the Cardinal Health Foundation and the company donated $8.4 million to charitable causes. Cardinal Health employees donated an additional $1.0 million to charitable causes representing more than 1,300 organizations across the globe and gave more than 54,600 hours of volunteer service. 

Where to Find More Information

More information about our ESG efforts can be found in our ESG reports and on our website at www.cardinalhealth.com under “About Us — Environmental, Social and Governance (ESG).”  The information in our ESG reports and on our website is not incorporated by reference into, and does not form any part of, this proxy statement. Any targets or goals discussed in this proxy statement and our ESG reports may be aspirational, and as such, no guarantees or promises are made that these goals will be met. Furthermore, statistics and metrics disclosed in this proxy statement and in our ESG reports are estimates and may be based on assumptions that turn out to be incorrect. We do not undertake or assume any obligation to update or revise any of this information. 

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Virtual Annual Meeting

TIME AND DATE	PLACE	RECORD DATE
Wednesday, November 15, 2023 8:00 a.m. Eastern Time	Virtual Meeting www.virtualshareholdermeeting.com/CAH2023	September 18, 2023

This year’s Annual Meeting will be conducted virtually. You will be able to participate in the virtual Annual Meeting online, vote your shares electronically, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/CAH2023 and entering the 16-digit control number included in the notice of internet availability of proxy materials, voting instruction form, or proxy card that was sent to you with this proxy statement.

If you do not have a 16-digit control number, you may still attend the meeting as a guest in listen-only mode. To attend as a guest, please visit www.virtualshareholdermeeting.com/CAH2023 and enter the information requested on the screen to register as a guest. Note that you will not have the ability to vote or ask questions during the meeting if you participate as a guest.

For further information on how to attend and participate in the virtual Annual Meeting, please see “Other Matters” beginning on page 78 in this proxy statement.

Roadmap to Voting Matters

Shareholders will be asked to vote on the following proposals at the Annual Meeting:

Proposal	Board Recommendation	Page Reference
PROPOSAL 1: to elect the 11 director nominees named in this proxy statement	FOR each director nominee	13
PROPOSAL 2: to ratify the appointment of Ernst & Young LLP as our independent auditor for the fiscal year ending June 30, 2018;2024	FOR	36
	(3)	ToPROPOSAL 3: to approve, on a non-binding advisory basis, the compensation  of our named executive officers;officers	FOR	39
	(4)	ToPROPOSAL 4: to vote, on a non-binding advisory basis, on the frequency of future advisory votes to approve the compensation of our named executive compensation;officers	FOR every ONE YEAR	39
	(5)	To vote on twoPROPOSALS 5 AND 6: shareholder proposals, described in the accompanying proxy statement, if properly presented at the meeting; and
Annual  Meeting	(6)AGAINST	To transact such other business as may properly come before the meeting or any adjournment or postponement.
Who may vote:	Shareholders of record at the close of business on September 11, 2017 are entitled to notice of, and to vote at, the meeting or any adjournment or postponement.72, 74

INTERNET	TELEPHONE	MAIL
September 21, 2017Visit 24/7 www.proxyvote.com
Call the toll-free number 1-800-690-6903 within the United States, U.S. territories, or Canada and follow the instructions provided by the recorded message	JESSICA L. MAYER
	Executive Vice President, Deputy General CounselMark, sign, and     Corporate Secretary date your proxy card and return it by mail in the enclosed postage-paid envelope

Forward-Looking Statements

Certain statements in this proxy statement may be considered “forward-looking” statements within the meaning of the applicable securities laws. Forward-looking statements include those preceded by, followed by, or that include the generic pharmaceutical pricing environment, partially offsetwords “will,” “may,” “could,” “would,” “should,” “believes,” “expects,” “forecasts,” “anticipates,” “plans,” “estimates,” “targets,” “projects,” “intends,” or similar expressions. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, the benefits from Red Oak Sourcing.

CARDINALHEALTH   2023 Proxy Statement  |12

CORPORATE GOVERNANCE

PROPOSAL 1 — Election of Directors

Our Board currently has 13 members. Eleven of our directors are standing for election at the Annual Meeting to serve until the next annual meeting of shareholders and until their successor is elected and qualified or until their earlier resignation, removal from office, or death. Each of the nominees is a current director who was elected at last year’s annual meeting of shareholders. 

Carrie S. Cox, a director since 2009, has decided not to stand for re-election at the Annual Meeting. Bruce L. Downey, a director since 2009, was not nominated for re-election because he has reached the director retirement age of 75 set forth in our Corporate Governance Guidelines. The size of the Board will be reduced to 11 at the time of the Annual Meeting.

Each director nominee agreed to be named in this proxy statement and to serve if elected. If, due to death or other unexpected occurrence, one or more of the director nominees is not available for election, proxies will be voted for the election of any substitute nominee the Board selects.

THE BOARD RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE NOMINEES LISTED ON PAGES 14 THROUGH 19.

Board Membership Criteria: What We Look For

The Board’s Governance and Sustainability Committee considers and reviews with the Board the appropriate skills and characteristics for directors in the context of the Board’s current composition and objectives. Criteria for identifying and evaluating director candidates include, among other things:

Our Corporate Governance Guidelines provide that, as part of the search process for each new director, the Governance and Sustainability Committee includes, and instructs any search firm to include, women and racially and ethnically diverse candidates in the pool from which candidates are selected.

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Our Director Nominees

The Board seeks members that possess the experience, skills, and diverse backgrounds to perform effectively in overseeing our current and evolving business and strategic direction. All director nominees bring to the Board a wealth of executive leadership experience derived from their diverse professional backgrounds and areas of expertise. As a group, they have business acumen, healthcare, global business, and technology experience, and operations and financial expertise. In addition, seven of the 11 director nominees are gender or racially or ethnically diverse.

Each director nominee has sound judgment and integrity and is able to commit sufficient time and attention to the activities of the Board. All director nominees other than our CEO are independent.

STEVEN K. BARG Age 61 Director since: 2022 Independent Director Board Committees: •  Business Review •  Governance and Sustainability		Global Head of Engagement at Elliott Management Corporation
		Other Public Company Boards:
		Current	Within Last Five Years
		•  Catalent, Inc.	•  None
		Background Mr. Barg has served as Global Head of Engagement at Elliott Management Corporation (“EMC”), an investment management firm and affiliate of Elliott Investment Management L.P. (“EIM”), since February 2020. Mr. Barg served as CFO of Elliott Opportunity II Corp., a special purpose acquisition company sponsored by an affiliate of EIM, from February 2021 to July 2023. Prior to joining EMC, Mr. Barg was a Participating Managing Director at The Goldman Sachs Group, Inc., an investment bank and financial services company, from 2010 until November 2019. Earlier in his career, Mr. Barg ran the Asian equity and integrated capital markets businesses for UBS Group AG and served as a Managing Director in Equity Capital Markets at Credit Suisse Group AG.
		Qualifications: Mr. Barg brings to the Board financial expertise and extensive investment banking, capital markets, international markets, and corporate governance experience. Mr. Barg established and led what became Goldman Sachs’ Activism and Shareholder Advisory practice, founded and led Goldman Sachs’ M&A Capital Markets practice, and served as Co-head of Asian Equity Capital Markets in Hong Kong at Goldman Sachs.

CARDINALHEALTH   2023 Proxy Statement  |14

SUJATHA CHANDRASEKARAN Age 56 Director since: 2022 Independent Director Board Committees: •  Audit •  Risk Oversight		Senior Executive Vice President and Chief Digital and Information Officer of CommonSpirit Health (retired)
		Other public company boards:
		Current	Within last five years
		•  American Eagle Outfitters, Inc.	•  Barry Callebaut (SIX: BARN)
		•  Brenntag SE (FRA: BNR)
		Background Ms. Chandrasekaran has been an advisor and independent consultant in the technology and consulting sectors since July 2022. Previously, she served as Senior Executive Vice President and Chief Digital and Information Officer for CommonSpirit Health, a non-profit health system, from 2019 to 2022. Prior to that, she was Global Chief Information Officer for Kimberly-Clark Corporation, a multinational personal care corporation focused on consumer products, from 2016 to 2019 and Senior Vice President, Global Chief Technology and Data Officer for Walmart Inc. from 2011 to 2016. Before joining Walmart, Ms. Chandrasekaran held senior technology, digital, and e-commerce roles at The Timberland Company and leadership roles at Nestlé S.A.
		Qualifications Ms. Chandrasekaran brings to the Board substantial business operations, technology, artificial intelligence, and digital experience in a global context, spanning customer engagement, marketing, supply chain, healthcare operations, industrial manufacturing, and cybersecurity. Her deep technical and operational expertise contributes to the Board’s discussions regarding the technology, information security, and operational aspects of our business and strategy. She also brings to the Board valuable perspectives and insights from her service on the board of directors of American Eagle Outfitters (including service on its Audit, Compensation, and Nominating Committees) and on the supervisory board of Frankfurt Stock Exchange-listed Brenntag SE (including service on its Audit and Compliance Committee) and her prior service on the board of directors of Barry Callebaut AG, which is listed on the SIX Swiss Exchange.

SHERI H. EDISON Age 66 Director since: 2020 Independent Director Board Committees: •  Audit •  Risk Oversight (Chair)		Executive Vice President and General Counsel of Amcor plc (retired)
		Other Public Company Boards:
		Current	Within Last Five Years
		•  Union Pacific Corporation	•  AK Steel Holding Corporation
		Background Ms. Edison served as Executive Vice President and General Counsel of Amcor plc, a global packaging company, from 2019 through June 2021. Prior to that, she served as Senior Vice President, Chief Legal Officer, and Secretary of Bemis Company, Inc., also a global packaging company, from 2017 until Bemis was acquired by Amcor in 2019. Ms. Edison also served as Vice President, General Counsel, and Secretary of Bemis from 2010 to 2016. She came to Bemis from Hill-Rom Holdings Inc., a global medical device company, where she had served as Senior Vice President and Chief Administrative Officer from 2007 to 2010 and Vice President, General Counsel, and Secretary from 2004 to 2007. Ms. Edison began her career in private legal practice.
		Qualifications: Having served in general counsel and other functional leadership roles at publicly traded manufacturing companies in industries such as medical devices and packaging, Ms. Edison brings to the Board substantial experience in the areas of healthcare, legal, regulatory compliance, corporate governance, strategy, and international markets. She also brings prior private legal practice experience as well as broad business experience, which further bolsters her understanding of a dynamic commercial, legal, compliance, and regulatory environment. Ms. Edison draws on her extensive legal, regulatory, and leadership experience in chairing the Risk Oversight Committee. She also brings to the Board valuable perspectives and insights from her service on the board of directors of Union Pacific (where she chairs the Corporate Governance, Nominating, and Sustainability Committee and serves on the Compensation and Benefits Committee) and from her prior service on the board of directors of AK Steel.

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DAVID C. EVANS Age 60 Director since: 2020 Independent Director Board Committees: •  Audit •  Risk Oversight		Executive Vice President and CFO of The Scotts Miracle-Gro Company and Battelle Memorial Institute (retired)
		Other Public Company Boards:
		Current	Within Last Five Years
		•  The Scotts Miracle-Gro Company	•  None
		Background Most recently, Mr. Evans served as interim CFO of Scotts Miracle-Gro Company, a consumer lawn and garden products company, from August 2022 until December 2022, and he also served as Cardinal Health’s interim CFO from September 2019 through May 2020. Mr. Evans was Executive Vice President and CFO of Battelle Memorial Institute, a private research and development organization, from 2013 to 2018. Prior to that, he was CFO of The Scotts Miracle-Gro from 2006 until 2013 and Executive Vice President, Strategy and Business Development of Scotts from 2011 until 2013. In all, he spent 20 years in managerial roles at Scotts Miracle-Gro.
		Qualifications: Mr. Evans has a deep financial background as the former CFO at Scotts Miracle-Gro and Battelle. Having spent 25 years in financial leadership positions with these organizations, Mr. Evans brings to the Board substantial experience in the areas of finance and accounting, investor relations, capital markets, strategy, tax, and information technology. He also provides valuable insights in the areas of financial reporting and internal controls. Through his experience with Scotts Miracle-Gro, he provides a deep understanding of the financial aspects of, and capital deployment for, a publicly traded company. His service in an interim executive role at Cardinal Health brings company and industry knowledge to the Board. Mr. Evans also brings valuable perspectives and insights from his service on the board of directors of Scotts Miracle-Gro, where he chairs the Audit Committee.

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AKHIL JOHRI Age 62 Director since: 2018 Independent Director Board Committees: •  Audit (Chair) •  Business Review		Operating Advisor to Clayton, Dubilier & Rice; Executive Vice President and CFO of United Technologies Corporation (retired)
		Other Public Company Boards:
		Current	Within Last Five Years
		•  The Boeing Company	•  None
		Background Mr. Johri has served as an Operating Advisor to Clayton, Dubilier & Rice, a global private equity manager, since 2021. Mr. Johri served as Executive Vice President and CFO of United Technologies Corporation (“UTC”), a provider of high technology products and services to the building systems and aerospace industries, from 2015 to November 2019 and retired from UTC in April 2020. From 2013 to 2014, he served as CFO and Chief Accounting Officer of Pall Corporation, a global supplier of filtration, separations, and purifications products, and from 2011 to 2013, he was Vice President of Finance and CFO of UTC Propulsion & Aerospace Systems, which included Pratt & Whitney and UTC Aerospace Systems. Mr. Johri’s prior roles with UTC include leading investor relations as well as holding senior financial roles with global business units, including 12 years in the Asia Pacific Region.
		Qualifications: Having spent more than 25 years in financial leadership positions with UTC and Pall Corporation, Mr. Johri brings to the Board substantial experience in the areas of global finance and accounting, investor relations, capital markets, mergers and acquisitions, tax, information technology, and international markets. He also provides valuable insights in the areas of financial reporting and internal controls. Through his experience in senior leadership roles with UTC’s businesses, he provides a deep understanding of the financial aspects of, and capital deployment for, a publicly traded multinational company. Mr. Johri also brings to the Board valuable perspectives and insights from his service on Boeing’s board of directors, including chairing its Audit Committee.

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Director Skills Matrix

Our director nominees possess relevant skills and experience that contribute to a well-functioning Board that effectively oversees our strategy and management.

Director Nominee Skills and Experience
Board leadership as a board chair, lead director, or committee chair equips directors to lead our Board and its committees
Financial expertise as a finance executive or CEO brings valuable experience to the Board and our management team
Healthcare expertise as a leader of a healthcare company or a consulting firm with a healthcare practice provides industry experience
Operations experience increases the Board’s understanding of our distribution and manufacturing operations
Regulatory/legal/public policy experience helps the Board assess and respond to an evolving business and healthcare regulatory environment
International experience brings critical insights into the opportunities and risks of our international businesses
Information technology/cybersecurity experience contributes to the Board’s understanding of the information technology aspects of our business as well as cybersecurity policy
Demographic Background
African American/Black
Asian
White
Gender
Female
Male

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Our Board’s Composition and Structure

Our Board Leadership Structure

The Board has an independent, non-executive chair leadership structure. Mr. Kenny has served as Chairman of the Board since we first implemented this structure in 2018.

In addition to serving as a liaison between the Board and management, key responsibilities of the Chairman include:

Mr. Kenny’s prior experience serving as our independent Lead Director and chairing our Governance and Sustainability and Compensation Committees, as well as his experience chairing other public company boards and board committees, positions him to effectively lead the Board. Our CEO, Mr. Hollar, draws on his knowledge of our daily operations and of our industry, customers, suppliers, employees, and shareholders to provide the Board with a unique and important perspective on our business. The Board believes the current leadership structure of an independent Chairman of the Board and a separate CEO best serves the company and its shareholders. The structure facilitates robust communications between management and the Board and provides effective oversight by independent directors.

Our Corporate Governance Guidelines provide that, whenever possible, the Chairman of the Board shall be an independent director. The Guidelines further provide that if the Chairman is not independent, the independent directors will elect an independent director to serve as Lead Director. The Governance and Sustainability Committee and the Board periodically evaluate succession plans for the Board chair role.

Board Diversity

Our Corporate Governance Guidelines provide that the Board seeks to achieve diversity of occupational and personal backgrounds on the Board, including race and gender diversity. We believe that our Board nominees reflect an appropriate mix of skills, experience, and backgrounds and strike the right balance of longer serving and newer directors.

Our Corporate Governance Guidelines provide that, as part of the search process for each new director, the Governance and Sustainability Committee includes, and instructs any search firm to include, women and racially and ethnically diverse candidates in the pool from which candidates are selected. See the director skills matrix on page 20 for the self-identified gender and race/ethnicity of our director nominees.

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Identifying and Onboarding Directors

The Governance and Sustainability Committee is responsible for identifying, reviewing, and recommending director candidates, and our Board is responsible for selecting candidates for election as directors based on the Governance and Sustainability Committee’s recommendations.

Considering the impending director departures at the Annual Meeting, the Governance and Sustainability Committee is assessing the composition of the board to ensure that it has the right mix of experience, skills, and diverse backgrounds to effectively oversee the company. The Governance and Sustainability Committee has engaged a search firm to assist with identifying and evaluating potential Board candidates. 

New directors typically participate in a comprehensive director orientation program, which includes meetings with senior management. This orientation program helps new directors become familiar with our business and strategy, significant financial matters, information technology and security matters, our legal, governance, quality, and compliance programs, and our approach to human resources management.

Director Education

We encourage our directors to attend outside director and other continuing education programs and make available to directors information on director education programs that might be of interest on developments in our industry, corporate governance, regulatory requirements and expectations, the economic environment, and other matters relevant to their duties as directors. In the past year, our directors have attended programs sponsored by the National Association of Corporate Directors, among others.

We also provide additional director educational opportunities internally through presentations on topics such as healthcare industry trends, ESG developments, regulatory compliance, cybersecurity, and directors’ legal duties. During fiscal 2023, directors held one of their quarterly meetings off-site and had the opportunity to tour facilities and meet with employees.

Director Retirement

The Governance and Sustainability Committee and the Board believe that setting a retirement age for Cardinal Health directors is advisable to facilitate the addition of new directors. Accordingly, our Corporate Governance Guidelines provide that a director will not be nominated for re-election after their 75th birthday.

Additional Board Service

Directors are expected to commit sufficient time and attention to the activities of the Board. In accordance with our Corporate Governance Guidelines, except as approved by the Board:

Directors must advise the Chairman of the Board, the Chair of the Governance and Sustainability Committee, and the Corporate Secretary in advance of accepting an invitation to serve on another board.

In August 2022, the Governance and Sustainability Committee approved amendments to the Corporate Governance Guidelines that formalized an annual review of director capacity and outside public company board commitments. In this annual review, the Governance and Sustainability Committee may consider all factors it deems to be relevant, including the following:

The Governance and Sustainability Committee conducted a review of director capacity for our 2023 director nominees and affirms that they are compliant with our outside board commitments policy. 

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Director Attendance

The Board held 12 meetings during fiscal 2023. Each director attended 75% or more of the meetings of the Board and Board committees on which they served during the fiscal year. Average director attendance across all Board and Board committee meetings was 96%.

All our then-current directors attended the annual meeting of shareholders last year. Absent unusual circumstances, each director is expected to attend the annual meeting of shareholders.

Board Committees

The Board has four standing committees: the Audit Committee; the Governance and Sustainability Committee; the Human Resources and Compensation Committee (the “Compensation Committee”); and the Risk Oversight Committee. Each member of these committees is independent under our Corporate Governance Guidelines and under applicable committee independence rules.

The charter for each of these committees is available on our website at www.cardinalhealth.com under “About Us — Corporate — Investor Relations — Governance — Committee Composition.” This information also is available in print (free of charge) to any shareholder who requests it from our Investor Relations department.

In addition to its four standing committees, the Board has a Business Review Committee that was formed on September 6, 2022 under the Cooperation Agreement. On May 3, 2023, the term of the Business Review Committee was extended until July 15, 2024. The Board also had an Ad Hoc Committee on Opioids, which was formed in 2018 to assist the Board in its oversight of opioid-related issues, until November 2022 when it met for the last time, transitioned its responsibilities to the Risk Oversight Committee, and terminated. 

Audit Committee

Members:(1)							4 Meetings in fiscal 2023
Akhil Johri (Chair)	Michelle M. Brennan(2)	Sujatha Chandrasekaran(2)	Sheri H. Edison(2)	David C. Evans

The Audit Committee’s primary duties are to:

The Board has determined that each of Messrs. Evans and Johri is an “audit committee financial expert” for purposes of the SEC rules.

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Governance and Sustainability Committee

Members:(1)							7 Meetings in fiscal 2023
Patricia A. Hemingway Hall (Chair)	Steven K. Barg(2)	Carrie S. Cox(2)	Bruce L. Downey(3)	Gregory B. Kenny	Nancy Killefer(2)

The Governance and Sustainability Committee’s primary duties are to:

Human Resources and Compensation Committee

Members:(1)							8 Meetings in fiscal 2023
Carrie S. Cox (Chair)(2)	Michelle M. Brennan(3)	Patricia A. Hemingway Hall	Nancy Killefer	Christine A. Mundkur(3)

The Compensation Committee’s primary duties are to:

The CD&A, which begins on page 40, discusses how the Compensation Committee makes compensation-related decisions regarding our named executive officers.

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Risk Oversight Committee

Members:(1)							4 Meetings in fiscal 2023
Sheri H. Edison (Chair)(2)	Sujatha Chandrasekaran(2)	Bruce L. Downey(2)	David C. Evans(2)	Christine A. Mundkur(2)

The Risk Oversight Committee assists the Board in monitoring and overseeing risks associated with the company’s operations, including risks associated with ethical, quality, and legal and regulatory compliance matters (other than financial matters overseen by the Audit Committee). The Risk Oversight Committee’s primary duties are to:

The Risk Oversight Committee coordinates with the Audit Committee in monitoring compliance by the company with legal and regulatory requirements as they relate to the responsibilities of the Audit Committee. Mses. Chandrasekaran and Edison and Mr. Evans sit on the Audit Committee.

Business Review Committee

Members:							11 Meetings in fiscal 2023
Jason M. Hollar (Chair)	Steven K. Barg	Akhil Johri

Under the Cooperation Agreement, the Board established an advisory Business Review Committee to conduct a comprehensive review of the company’s strategy, portfolio, capital allocation framework, and operations. Since its formation on September 6, 2022, the Business Review Committee has been reviewing and making recommendations to the Board regarding the following matters:

Results of the review to date were reported to the company’s shareholders at an Investor Day held on June 8, 2023. On May 3, 2023, in connection with the extension of the term of the Cooperation Agreement, the Board extended the term of the Business Review Committee until July 15, 2024.

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Our Board’s Primary Role and Responsibilities and Processes

Our Board’s Primary Role and Responsibilities

Our Corporate Governance Guidelines provide that our Board serves as the representative of, and acts on behalf of, all the shareholders of Cardinal Health. The Board, operating directly and through its committees, fulfills the following primary functions:

How Our Board Oversees Our Strategy and Capital Deployment

The Board receives updates on company performance and regularly discusses our strategy considering the competitive environment, developments in the rapidly changing healthcare industry, and the global business and economic environment. The Board reviews and approves capital deployment, including dividends, financing and share repurchase plans, and significant acquisitions and divestitures.

At least annually, the Board conducts a dedicated strategy session with in-depth discussions of our industry, specific businesses, and new business opportunities. At these sessions, the Board also discusses risks related to our strategies, including risks resulting from possible actions by competitors, disrupters, customers, and suppliers. The Board also considers various elements of strategy at each regular quarterly meeting. The collective backgrounds, skills, and experiences of our directors, including broad industry experience, contribute to robust discussions of strategy and the related risks.

As described elsewhere in this proxy statement, on September 6, 2022, we established an advisory Business Review Committee under the Cooperation Agreement to conduct a comprehensive review of the company’s strategy, portfolio, capital allocation framework, and operations. In connection with the extension of the Cooperation Agreement term, the Board extended the term of the Business Review Committee until July 15, 2024.

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How Our Board Oversees Risk

A summary of the allocation of general risk oversight functions among management, the Board, and the Board’s committees follows below.

Management has day-to-day responsibility for assessing and managing risks, and the Board is responsible for risk oversight. Management has developed and administers an enterprise risk management (“ERM”) program, which the Audit Committee oversees. Through this ERM program, management identifies and prioritizes enterprise risks and develops systems to assess, monitor, and mitigate those risks. Management reviews and discusses with the Board and its committees significant risks facing the company. 

Our internal audit function, which the Audit Committee oversees, also helps to identify and mitigate risks and improve internal controls. 

Risks Associated with Operations

The Risk Oversight Committee assists the Board in monitoring and overseeing risks associated with our operations, including risks associated with ethical, quality, and legal and regulatory matters.

The Risk Oversight Committee oversees our ethics and compliance program, product quality and safety program, and our compliance with legal and regulatory requirements other than audit, accounting, and financial disclosure matters and related internal controls, which are overseen by the Audit Committee. The Risk Oversight Committee receives quarterly updates from senior leadership regarding all the areas that the Committee oversees, and the Board receives annual updates from senior leadership regarding our ethics and compliance program and our product quality and safety program.

The Risk Oversight Committee coordinates with the Audit Committee in monitoring compliance by the company with legal and regulatory requirements as they relate to the responsibilities of the Audit Committee. To facilitate this coordination, Risk Oversight Committee Chair Edison and Risk Oversight Committee members Chandrasekaran and Evans sit on the Audit Committee.

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Controlled Substance Distribution Risks

The Board remains active in overseeing our response to the opioid epidemic. The Ad Hoc Committee on Opioids formed in 2018 assisted the Board in its oversight of opioid-related issues until November 2022, when it met for the last time, transitioned its responsibilities to the Risk Oversight Committee, and terminated. The Risk Oversight Committee now addresses, and receives quarterly updates from senior leadership regarding, among other things:

Cybersecurity and Other Information Technology Risks

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

Oversight of ESG Matters

Given the breadth of ESG matters for a company of our size and scale, oversight of those issues is allocated throughout the Board and its committees:

At the management level, our ESG matters are led and coordinated by our Vice President, ESG who regularly engages with the Board’s Governance and Sustainability Committee. The Vice President, ESG is responsible for, among other things:

Providing management oversight to our performance. While we achieved 89%ESG program is an ESG Governance Committee composed of the adjusted non-GAAP operating earnings goal underCEO, the CEO’s direct reports, and other senior business and functional leaders. 

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The Board’s Role in Oversight of Corporate Culture and Human Capital

The Board continues to assess and monitor corporate culture at Cardinal Health and how it enables our business strategies. The Board and its Compensation Committee engage with management on various specific aspects of human capital and cultural health, including talent management and succession planning, DE&I initiatives, and employee engagement.

Our Path Forward

Our Path Forward (see illustrative graphic below) is a comprehensive, enterprise-wide strategy that creates clarity regarding our mission, where we are going, how we will grow, what we believe, and how we act. This initiative reflects our vision and strategy to position the company for the future. 

Our Path Forward goals have been a part of our annual cash incentive plan, we did not meetand performance share unit (“PSU”) grants over the thresholdpast four years to help align our senior leaders’ incentives with this important strategic initiative. Our Path Forward goals for the fiscal 2023 compensation programs are discussed in the CD&A beginning on page 45.

Our Path Forward

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Human Capital Strategy

Our Compensation Committee plays a payout, largelyleading role in overseeing and advising the Board about our human capital management strategies and policies, including with respect to:

The Board is periodically updated on specific aspects of our human capital management strategy, as appropriate.

Talent Management and Succession Planning

The Compensation Committee and the Board are actively engaged in our talent management program. The Compensation Committee oversees the process for succession planning for the CEO and other senior executives, and management provides an organizational update at each quarterly Committee meeting and shares key talent metrics.

The full Board holds a formal succession planning and talent review session annually, which includes succession planning for the CEO and other senior executives. These sessions include identification of internal candidates and desired leadership skills and key capabilities and experience. Directors also interact with our leaders through Board presentations and discussions as well as through informal events and planned one-on-one meetings.

As a result of its CEO succession planning process, the challenging generic pharmaceutical pricingBoard elected Mr. Hollar as CEO, effective September 1, 2022. Mr. Hollar succeeded Michael C. Kaufmann, who served as CEO for almost five years. In selecting Mr. Hollar as our CEO, the Board considered his extensive management, operational, and financial expertise and his strong performance as CFO since joining the company in 2020. 

Also during the last fiscal year, the Board elected an experienced internal hire and former President of our Pharmaceutical Distribution business, Deborah L. Weitzman, as CEO, Pharmaceutical Segment, effective September 19, 2022. Later in the fiscal year, the Board elected external hire Aaron E. Alt to fill our open CFO role, effective February 10, 2023. Mr. Alt joined us from food service distribution company Sysco Corporation, where he also served as CFO.

Diversity, Equity, and Inclusion

The Compensation Committee receives an annual update on DE&I initiatives.

We remain focused on continuing to build and foster a workplace that values the unique perspectives and contributions of all our employees. Our people are our most important assets — and we believe that a diverse and inclusive workforce leads to better business results. 

With oversight from the Compensation Committee, we formulated a comprehensive talent strategy that furthers our aspiration to be an employer of choice for all. Our DE&I program helps identify and eliminate barriers to equal opportunity and development, inspires outreach and recruitment efforts to reach a broader base of qualified individuals, and allows all individuals to feel comfortable bringing their authentic selves to work. We believe these efforts will help us drive progress in our program, including toward our aspirational diverse management representation goals.

Consistent with our aspirational goals, we are focused on attracting, developing, and retaining diverse talent, from entry-level to senior leadership positions. We have eliminated the college degree requirement from 80% of positions at the company and are focusing instead on experience and accomplishments as we recruit and hire new employees. We have increased the number of diverse candidate slates and our interview panels include people with differing experiences and backgrounds in the new hire process within the U.S. We conduct “stay conversations” to help leaders understand why employees stay and what might cause them to leave.

During fiscal 2023, we made progress toward our 2030 aspirational goals. We plan to report on our DE&I initiatives in more detail in our fiscal 2023 ESG report, which we expect to issue in January 2024.

Employee Engagement

Management reviews with the Board our employee engagement survey results across multiple categories, such as sustainable engagement, communication, leadership, customer focus, DE&I, and work environment. Mr. Barrett's cash compensation (salary plusThese questions give insight into the experience of the employee and their supervisor, team, senior leadership, and the enterprise. 

With respect to our 2023 biennial full employee engagement survey, we experienced an 88% participation rate, which was in line with historical levels at the company and was considered to be well above our outside consultant’s global high performance norm benchmark. 

Our Board Evaluation Process

Each year, our Board conducts a rigorous self-evaluation process, which includes individual director evaluations. This process is overseen by the Governance and Sustainability Committee, led by our Governance and Sustainability Committee Chair, and conducted by an outside facilitator with corporate governance experience. The outside facilitator interviews each director to obtain anonymous feedback regarding Board performance and effectiveness and reviews the feedback during an executive session of the Board. This feedback helps the Board identify follow-up items and provide feedback to management.

The Board evaluation process includes an assessment of both Board process and substance, including:

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Feedback received regarding individual directors is shared with the Governance and Sustainability Committee Chair and the individual directors. The Board believes that this annual incentive payout) was down 64% comparedevaluation process supports its effectiveness and continuous improvement.

Actions taken in response to feedback from past Board evaluations and other feedback received include:

In addition to the prior fiscal year.full Board’s evaluation process, each of the Audit, Compensation, Governance and Sustainability, and Risk Oversight Committees annually review their charters and conduct their own committee self-evaluation.

Director Independence

The Board has established director independence standards based on the New York Stock Exchange (“NYSE”) rules. These standards can be found in our Corporate Governance Guidelines on our website at www.cardinalhealth.com under “About Us — Corporate — Investor Relations — Governance — Governance Documents.” These standards address, among other things, employment and compensation relationships, relationships with our auditor and customers, and business relationships.

The Board assesses director independence at least annually, based on the recommendations of the Governance and Sustainability Committee. The Board has determined that each of Mses. Brennan, Chandrasekaran, Cox, Edison, Hemingway Hall, Killefer, and Mundkur, and each of Messrs. Barg, Downey, Evans, Johri, and Kenny, is independent.

Messrs. Scarborough and Weiland, who served on our Board until their terms expired at the 2022 annual meeting of shareholders, were determined to be independent as disclosed in our proxy statement for the 2022 annual meeting of shareholders.

Public Policy Engagement

We participate on public policy issues related to our industry and business priorities, employees, customers, shareholders, and the communities we serve. The Governance and Sustainability Committee provides oversight of our policies and practices regarding political and lobbying activities and expenditures, including an annual review of our political contributions policy, corporate political

contributions, lobbying activities, and trade association payments. Additional information about our public policy engagement can be found in our annual Political Activities and Contributions Reports available at www.cardinalhealth.com under “About Us — Environmental, Social and Governance (ESG) — Policies and principles.”

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Directors may elect to defer payment of their cash retainers into the Cardinal Health Deferred Compensation Plan (“DCP”). For directors, deferred balances under the DCP are paid in cash upon termination from Board service, death, or disability in a single lump sum or annual installment payments over a period of five or ten years, depending upon the director’s election. A director also may defer receipt of common shares that otherwise would be issued on the date that RSUs vest until termination from Board service.

Our directors may participate in our matching gift program. Under this program and subject to certain restrictions, the Cardinal Health Foundation (our philanthropic affiliate) will match contributions for eligible non-profit organizations.

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Table of

Back to Contents Table of Contents AUDIT COMMITTEE MATTERS PROPOSAL 2 — Ratification of Appointment of Ernst & Young LLP as Independent Auditor The Audit Committee is directly responsible for the appointment, compensation, retention, and oversight of our independent auditor and approves the audit engagement with Ernst & Young LLP and its audit fees. The Audit Committee has appointed Ernst & Young LLP as our independent auditor for fiscal 2024 and believes that the continued retention of Ernst & Young LLP as our independent auditor is in the best interest of Cardinal Health and its shareholders. Ernst & Young LLP has served as our independent auditor since 2002. In accordance with SEC rules, lead audit partners are subject to rotation requirements, which limit the number of consecutive years an individual partner may serve us. The Audit Committee oversees the rotation of the audit partners. The Audit Committee Chair interviews candidates for audit partner and the Audit Committee discusses them. While not required by law, we are asking our shareholders to ratify the appointment of Ernst & Young LLP as our independent auditor for fiscal 2024 at the Annual Meeting as a matter of good corporate governance. If shareholders do not ratify this appointment, the Audit Committee will consider whether it is appropriate to appoint another audit firm. Even if the appointment is ratified, the Audit Committee in its discretion may appoint a different audit firm at any time during the fiscal year if it determines that such a change would be in the best interest of Cardinal Health and its shareholders. Our Audit Committee approved, and our shareholders ratified with 96% support, the appointment of Ernst & Young LLP as our independent auditor for fiscal 2023. We expect representatives of Ernst & Young LLP to attend the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and to respond to appropriate questions from shareholders.   Page GENERAL INFORMATION 1 THE BOARD RECOMMENDS THAT YOU VOTE FORTHE PROPOSAL 1—ELECTION OF DIRECTORS 3 CORPORATE GOVERNANCE 10 PROPOSAL 2—RATIFICATIONTO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT AUDITOR FOR FISCAL 2024. Audit Committee Report The Audit Committee is responsible for overseeing: the integrity of Cardinal Health’s financial statements; the independent auditor’s qualifications, independence, and performance; Cardinal Health’s internal audit function; Cardinal Health’s compliance with legal and regulatory requirements; and Cardinal Health’s processes for assessing and managing risk. As of the date of this report, the Audit Committee consists of five members of the Board of Directors. The Board of Directors has determined that each of Messrs. Evans and Johri is an “audit committee financial expert” for purposes of the SEC rules and that each Committee member is independent. The Audit Committee’s activities are governed by a written charter, which is available on Cardinal Health’s website at www.cardinalhealth.com under “About Us — Corporate — Investor Relations — Governance — Committee Composition.” Management has primary responsibility for the financial statements and for establishing and maintaining the system of internal control over financial reporting. Management also is responsible for reporting on the effectiveness of Cardinal Health’s internal control over financial reporting. Cardinal Health’s independent auditor, Ernst & Young LLP, is responsible for performing an independent audit of Cardinal Health’s consolidated financial statements and for issuing a report on the financial statements and a report on the effectiveness of Cardinal Health’s internal control over financial reporting based on its audit. The Audit Committee reviewed and discussed the audited financial statements for the fiscal year ended June 30, 2023 with management and with Ernst & Young LLP. The Audit Committee also reviewed and discussed with management and Ernst & Young LLP the effectiveness of Cardinal Health’s internal control over financial reporting as well as management’s report and Ernst & Young LLP’s report on the subject. The Audit Committee discussed with Ernst & Young LLP the matters required to be discussed under the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC and matters related to Cardinal Health’s financial statements, including critical accounting estimates and judgments. The Audit Committee received from Ernst & Young LLP the written disclosures and letter required by the applicable requirements of the PCAOB regarding Ernst & Young LLP’s communications with the Audit Committee concerning independence and discussed with Ernst & Young LLP its independence. The Audit Committee meets regularly with Ernst & Young LLP, with and without management present, to review the overall scope and plans for Ernst & Young LLP’s audit work and to discuss the results of its examinations, the evaluation of Cardinal Health’s internal control over financial reporting, and the overall quality of Cardinal Health’s accounting and financial reporting. In addition, the Audit Committee annually considers the performance of Ernst & Young LLP. In reliance on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements for the fiscal year ended June 30, 2023 be included in Cardinal Health’s Annual Report on Form 10-K for filing with the SEC. Submitted by the Audit Committee of the Board of Directors on August 1, 2023. Akhil Johri, Chairman Michelle M. Brennan Sujatha Chandrasekaran Sheri H. Edison David C. Evans CARDINALHEALTH   2023 Proxy Statement  |36 17Back to Contents Fees Paid to Ernst & Young LLP The following table sets forth the fees billed to us by Ernst & Young LLP for services in fiscal 2023 and 2022.     Fiscal 2023   Fiscal 2022      ($)   ($) Audit fees(1)   14,783,030   14,817,561 Audit-related fees(2)   2,285,500   4,272,672 Tax fees(3)   1,198,055   2,037,629 All other fees   —   — TOTAL FEES   18,266,585   21,127,862 (1) Audit fees include fees paid to Ernst & Young LLP related to the annual audit of consolidated financial statements, the annual audit of the effectiveness of internal control over financial reporting, the review of financial statements included in Quarterly Reports on Form 10-Q, and statutory audits of various international subsidiaries. Audit fees also include fees for services performed by Ernst & Young LLP that are closely related to the audit and in many cases could only be provided by the independent auditor, such as comfort letters and consents related to SEC registration statements. AUDIT COMMITTEE REPORT AND AUDIT MATTERS (2) 17 Audit-related fees include fees for services related to acquisitions and divestitures, audit-related research and assistance, service auditor’s examination reports, and employee benefit plan audits. (3) Tax fees include fees for tax compliance and other tax-related services. The aggregate fees billed to us by Ernst & Young LLP for tax compliance for fiscal 2023 and 2022 were $179,556 and $162,492, respectively. Policy on Pre-Approval of Services Provided by Ernst & Young LLP The Audit Committee must pre-approve the audit and permissible non-audit services performed by our independent accountants in order to help ensure that the accountants remain independent of Cardinal Health. The Audit Committee has adopted a policy governing this pre-approval process. Under the policy, the Audit Committee annually pre-approves certain services and assigns specific dollar thresholds for these types of services. If a proposed service is not included in the annual pre-approval, the Audit Committee must separately pre-approve the service before the engagement begins. The Audit Committee has delegated pre-approval authority to the Audit Committee Chairman for proposed services up to $500,000. Proposed services exceeding $500,000 require full Audit Committee approval. All audit and non-audit services provided for us by Ernst & Young LLP for fiscal 2023 and 2022 were pre-approved by the Audit Committee. CARDINALHEALTH   2023 Proxy Statement  |37 Back to Contents EXECUTIVE COMPENSATION PROPOSAL 3—3 — Advisory Vote to Approve the Compensation of Our Named Executive Officers 39 PROPOSAL 4 — Advisory Vote on the Frequency of Future Advisory Votes to Approve the Compensation of our Named Executive Officers 39 Compensation Discussion and Analysis 40 Executive Summary 40 Shareholder Engagement and Consideration of 2022 Say-on-Pay Vote 41 Executive Compensation Governance Features 42 Compensation Philosophy and Practices 42 Elements of Compensation for Executive Officers 42 Fiscal 2023 Base Salary 44 Fiscal 2023 Annual Incentive Compensation 44 Fiscal 2021-2023 Performance Share Unit Payouts 47 Fiscal 2023 Long-Term Incentive Targets and Grants 49 Fiscal 2023-2025 Performance Share Unit Grants 50 Other Elements of Compensation 50 Our Policies, Guidelines, and Practices Related to Executive Compensation 52 Human Resources and Compensation Committee Report 54 Executive Compensation Tables 55 Summary Compensation Table 55 All Other Compensation 56 Grants of Plan-Based Awards for Fiscal 2023 57 Incentive Plans 58 Performance Measure Calculations 58 Potential Impact on Compensation from Executive Misconduct (“Clawbacks”) 60 Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023 61 Option Exercises and Stock Vested for Fiscal 2023 62 Deferred Compensation 62 Nonqualified Deferred Compensation in Fiscal 2023 63 Potential Payments upon Termination of Employment or Change of Control at Fiscal Year-End 64 Pay Ratio Disclosure 67 Pay Versus Performance 68 Most Important Performance Measures 69 Description of Compensation Actually Paid Versus Company Performance 69 Equity Compensation Plan Information 71 CARDINALHEALTH   2023 Proxy Statement  |38 Back to Contents PROPOSAL 3 — Advisory Vote to Approve the Compensation of Our Named Executive Officers In accordance with Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”), we are asking our shareholders to approve, on a non-binding advisory basis, the compensation of our named executive officers, as defined and disclosed in the CD&A, the Summary Compensation Table, and the related compensation tables, notes, and narrative in this proxy statement. We urge shareholders to read the CD&A beginning on page 40 of this proxy statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and other related compensation tables and narrative disclosures appearing on pages 55 through 70, which provide detailed information on the compensation of our named executive officers. The Board and the Compensation Committee believe that the policies and procedures articulated in the CD&A are effective in achieving our goals and that the compensation of our named executive officers reported in this proxy statement has contributed to our long-term success. Additionally, we believe the fiscal 2023 pay outcomes demonstrate alignment between pay and performance. Although this advisory vote is not binding on the Board, the Board and the Compensation Committee will review and consider the voting results when evaluating our executive compensation program. The Board has adopted a policy providing for annual say-on-pay advisory votes such as the one in this Proposal 3. Accordingly, subject to the outcome of Proposal 4 and the decision of the Board, the next say-on-pay advisory vote will be held at our 2024 annual meeting of shareholders. THE BOARD RECOMMENDS THAT YOU VOTE FOR THE APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THE CD&A, THE SUMMARY COMPENSATION TABLE, AND THE RELATED COMPENSATION TABLES, NOTES, AND NARRATIVE IN THIS PROXY STATEMENT. PROPOSAL 4 — Advisory Vote on the Frequency of Future Advisory Votes to Approve the Compensation of Our Named Executive Officers In accordance with Section 14A of the Exchange Act, we are asking shareholders to recommend, in an advisory vote, whether future shareholder advisory approval of the compensation of our named executive officers should occur every one, two, or three years. At our 2017 annual meeting of shareholders, our shareholders voted to hold say-on-pay votes annually and our Board adopted this practice. Under SEC rules, we are required to conduct this advisory vote again in 2023 (and the next such vote will occur in 2029). After careful consideration, the Board recommends that future say-on-pay votes continue to be held annually. Our Board believes that holding a vote every year is the most appropriate option because it would continue to enable our shareholders to provide us with timely input regarding the compensation of named executive officers. Shareholders are not voting to approve or disapprove the Board’s recommendation. Instead, shareholders may indicate their preference regarding the frequency of future say-on-pay votes by selecting one year, two years, or three years, or abstaining. Although the vote is non-binding, the Compensation Committee and the Board value your opinion and will consider the outcome of the vote in establishing the frequency with which future say-on-pay votes will be held. THE BOARD RECOMMENDS THAT YOU VOTE TO CONDUCT FUTURE ADVISORY VOTES TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS 19 EVERY ONE YEAR. CARDINALHEALTH   2023 Proxy Statement  |39 PROPOSAL 4—ADVISORY VOTE ON FUTURE ADVISORY VOTES TO APPROVE EXECUTIVE COMPENSATION 19 SHARE OWNERSHIP INFORMATION 20 COMPENSATION DISCUSSION AND ANALYSIS 22 EXECUTIVE COMPENSATION 29 DIRECTOR COMPENSATION 42 PROPOSAL 5—SHAREHOLDER PROPOSAL TO URGE THE BOARD OF DIRECTORS TO ADOPT A POLICY THAT THE CHAIRMAN OF THE BOARD BE AN INDEPENDENT DIRECTOR 44 PROPOSAL 6—SHAREHOLDER PROPOSAL TO REQUEST THAT THE BOARD OF DIRECTORS ADOPT A BYLAW PROVISION RESTRICTING MANAGEMENT'S ACCESS TO VOTE TALLIES PRIOR TO THE ANNUAL MEETING WITH RESPECT TO CERTAIN EXECUTIVE PAY MATTERS 46 OTHER MATTERS 47 Back to Contents Compensation Discussion and Analysis Executive Summary This CD&A focuses on the fiscal 2023 compensation of the following current and former executive officers (the “named executive officers” or “named executives”) and describes the executive compensation program and the Compensation Committee’s decisions under it.   Jason M. Hollar Chief Executive Officer and Former Chief Financial Officer Aaron E. Alt Chief Financial Officer Stephen M. Mason Chief Executive Officer, Medical Segment Deborah L. Weitzman Chief Executive Officer, Pharmaceutical Segment Jessica L. Mayer Chief Legal and Compliance Officer Michael C. Kaufmann Former Chief Executive Officer Patricia M. English Former Interim Chief Financial Officer Victor L. Crawford Former Chief Executive Officer, Pharmaceutical Segment Fiscal 2023 Performance Fiscal 2023 was an inflection point for Cardinal Health, with improved performance, strong execution, and notable progress made against both short and long-term plans in new CEO Jason Hollar’s first year in the role. We finished the fiscal year well, with continued strong growth in the Pharmaceutical segment, robust cash flow generation, and improvement in the Medical segment, driven by execution of our Medical Improvement Plan. (1) TSR over the period from July 1, 2022 through June 30, 2023, expressed as a percentage, calculated based on changes in stock price assuming reinvestment of dividends. • Revenue was $205.0 billion, up 13% from the prior year. • GAAP operating earnings were $727 million, which included $1.2 billion in pre-tax goodwill impairment charges in the Medical segment. Non-GAAP operating earnings were $2.1 billion, a 3% increase over the prior year, reflecting Pharmaceutical segment profit growth, partially offset by a decrease in Medical segment profit. • GAAP diluted EPS was $1.00, which included the pre-tax goodwill impairment charges ($1.1 billion after tax or $4.38 per share) in the Medical segment. Non-GAAP EPS was $5.79, a 14% increase over the prior year, reflecting the increase in non-GAAP operating earnings, lower interest and other expense, and a lower share count. • Pharmaceutical segment profit grew 13%, while Medical segment profit decreased 49%. • We generated $2.8 billion in operating cash flow and returned over $2.5 billion to shareholders in share repurchases ($2.0 billion) and dividends ($525 million), strengthened the balance sheet by repaying $550 million in long-term debt, and invested over $480 million back into our businesses to drive organic growth. • We continued to streamline our cost structure and surpassed our enterprise cost savings target for the fifth consecutive year. • The Board’s Business Review Committee and management made progress on the ongoing review of the company’s strategy, portfolio, capital allocation framework, and operations that began early in fiscal 2023. We announced at our Investor Day held on June 8, 2023, that we had completed the business CARDINALHEALTH   2023 Proxy Statement  |40 Back to Contents and portfolio review of the Pharmaceutical segment, which included the launch of the new NavistaTM Network supporting community oncologists, the announcement that we would retain and invest in the segment’s Nuclear and Precision Health Solutions business, and the merger of the segment’s OutcomesTM business into Transaction Data Systems. Prior to our Investor Day, we announced that the term of the Business Review Committee had been extended until July 15, 2024. See Annex A for reconciliations to the comparable financial measures prepared in accordance with GAAP and the reasons why we use non-GAAP financial measures. Fiscal 2023 Compensation Highlights • Non-GAAP operating earnings growth, strong operating cash flow, and above-target cost savings drove a fiscal 2023 annual cash incentive funding of 120% at the enterprise level. • PSUs for the fiscal 2021 through fiscal 2023 performance cycle (the “Fiscal 21-23 PSUs”) paid out at 137% based on below-target performance against a three-year cumulative adjusted non-GAAP EPS goal and over-performance on cost savings and a corporate culture goal focused on leadership score improvement from our employee engagement survey, with an upward modifier applied based on our TSR finishing in the 94th percentile of the S&P 500 Health Care Index.  • Mr. Hollar received 132% of his annual cash incentive target based on strong performance in his first year as CEO, growing non-GAAP operating earnings, advancing our long-term strategy, establishing his leadership team, simplifying the enterprise and restructuring the business organizations and corporate functions, leading the ongoing business review being conducted by the Board’s Business Review Committee, and driving significant improvement in employee engagement. Other named executives received between 75% and 136% of their targets based on enterprise, business, and individual performance. • In connection with the ongoing work of the Business Review Committee, the Compensation Committee took certain actions following the fiscal year-end with respect to executive severance protection for a two-year period, as described under “Recent Developments Regarding Severance Benefits for Involuntary Terminations without Cause” on page 51 of the CD&A. These actions will ensure that we effectively align our executive team with long-term shareholders’ interests and allow them to focus on business decisions associated with the review without consideration for how a potential business transaction may affect them personally. Executive Transitions during Fiscal 2023 • On August 11, 2022, we announced that the Board elected Mr. Hollar as CEO effective September 1, 2022. Mr. Hollar also joined the Board effective August 11, 2022. Mr. Kaufmann, previously the CEO, departed from the company and the Board on September 1, 2022. • On September 8, 2022, we announced that Ms. Weitzman, the former President of Pharmaceutical Distribution, was promoted to CEO, Pharmaceutical Segment, effective September 19, 2022. Ms. Weitzman replaced Mr. Crawford, who remained with the company through November 13, 2022. • On December 16, 2022, we announced that the Board elected Mr. Alt, formerly the CFO of Sysco Corporation, as our CFO effective February 10, 2023. Mr. Alt replaced Ms. English, who served in place of Mr. Hollar as interim CFO from September 1, 2022 to February 10, 2023. Prior to serving in that interim role, Ms. English was our Chief Accounting Officer. Shareholder Engagement and Consideration of 2022 Say-on-Pay Vote Our annual say-on-pay vote is an opportunity to receive feedback from shareholders regarding our executive compensation program. The Compensation Committee takes the result of this vote into consideration when it determines the compensation of our executive officers. Shareholders demonstrated strong support for our executive compensation program in 2022, as evidenced by the 91% of votes cast in favor of say-on-pay last year. A general overview of our annual shareholder engagement process can be found on page 32. Our Board Chairman, another independent director, and members of senior management engaged with shareholders during the summer of 2023 to discuss executive compensation as well as to provide updates on our strategy and ongoing business review process, Board composition and refreshment, senior leadership transitions, and ESG topics. CARDINALHEALTH   2023 Proxy Statement  |41 Back to Contents In our meetings, shareholders continued to express support for the structure of our executive compensation program and its alignment of pay with performance. Shareholders also provided positive feedback on our return to setting three-year PSU goals beginning with the fiscal 2023 annual grant, rather than using a three-year cumulative PSU goal, which was the sum of annual targets. See pages 32 and 33 of this proxy statement for additional information about shareholder engagement. Executive Compensation Governance Features WHAT WE HAVE WHAT WE DO NOT HAVE Significant portion of executive pay consists of performance-based “at risk” elements No employment agreements with executive team Performance goals for cost savings and Our Path Forward No payment of dividend equivalents on PSUs or RSUs until, and only to the extent that, the underlying award vests Caps on annual cash incentive and PSU payouts No executive pensions Minimum vesting period for long-term incentive awards No repricing of underwater options without shareholder approval Stock ownership guidelines for directors and executive officers No hedging or pledging of company stock Compensation recoupment (“clawback”) No “single trigger” change of control arrangements Long-standing, proactive shareholder engagement program and history of responsiveness No excise tax gross-ups upon change of control Compensation Philosophy and Practices Our compensation program is designed to support our long-term growth, with accountability for key annual results. It has the following key objectives: • Reward performance. We tie our executive pay to financial, operational, and individual performance as well as to performance against key strategic initiatives, such as achieving cost savings and Our Path Forward culture goals, as discussed below. Assessing our executives’ individual performance includes alignment with our Standards of Business Conduct, values, and behaviors. • Emphasize long-term, stock-based incentive compensation. We emphasize performance and retention using long-term, stock-based incentive compensation, which supports sustainable long-term shareholder return. Combined with stock ownership guidelines, this approach provides executives with meaningful ownership stakes and aligns their interests with shareholders. • Maintain a competitive program that will attract and retain critical talent. We have designed our compensation program to be competitive in the marketplace and to invest in and reward talent, driving our long-term growth while holding employees accountable to our strategy and our values. Elements of Compensation for Executive Officers Our executive officers’ total direct compensation has three primary elements: base salary; annual incentive; and long-term incentive. In fiscal 2023, long-term incentive awards were granted 60% in PSUs and 40% in RSUs. A significant portion of executive compensation is based on company performance and is at-risk (annual incentive and PSUs). At the beginning of each performance period, the Compensation Committee sets performance goals under our annual incentive program and for our PSUs. After the performance period ends, the Compensation Committee evaluates the performance and determines payouts. The charts below show the components of fiscal 2023 target total direct compensation and the elements of fiscal 2023 pay for our CEO and other named executives. CARDINALHEALTH   2023 Proxy Statement  |42 iv Back to Contents Pay Element Description and Purpose Links to Business and Talent Strategies Base salary •  Fixed cash compensation, which is reviewed annually and adjusted when appropriate •  Based on qualifications, experience, role, performance, career progression, market data, and internal pay equity • Competitive base salaries support our ability to attract and retain executive talent Annual incentive •  Variable cash compensation based on achieving goals for annual adjusted non-GAAP operating earnings, operating cash flow, cost savings, and Our Path Forward, and individual performance •  Target as a percentage of base salary reflects market data and internal pay equity •  Primary financial measure reflects our focus on operating earnings and liquidity-focused measure aligns with our focus on capital deployment •  Cost savings and Our Path Forward goals align with key strategic initiatives •  Executives are assessed on their individual performance, including their alignment with our Standards of Business Conduct, values, and behaviors Long-term incentive •  Weighted 60% in PSUs and 40% in RSUs •  PSUs vest based on achievement over a three-year performance period of adjusted non-GAAP EPS compound annual growth rate (“CAGR”), average annual dividend yield, cost savings, and Our Path Forward goals, with a relative TSR modifier •  RSUs vest ratably over three years •  Target annual grant value reflects market data and internal pay equity •  Primary financial measure supports sustainable long-term shareholder return and closely aligns management’s interests with shareholders’ interests •  Cost savings and Our Path Forward goals align with key strategic initiatives •  Long-term incentives help to retain executive talent CARDINALHEALTH   2023 Proxy Statement  |43 Back to Contents Fiscal 2023 Target Total Direct Compensation The Compensation Committee established fiscal 2023 target total direct compensation for our current named executives as shown below.(1) The Compensation Committee takes a number of factors into consideration when setting target total direct compensation and each of the individual elements, including job responsibilities, time in role, and competitive market data derived from our Comparator Group discussed on pages 52 and 53. Further information on the primary elements of compensation can be found in the following pages, where each pay element is described more fully. Name   Base Salary (Annualized Rate) ($)        Annual Incentive Target (% of Base Salary)        Annual Incentive Target ($)        Long-Term Incentive Target ($)        Target Total Direct Compensation ($) Hollar   1,350,000   150   2,025,000   11,000,000   14,375,000 Alt   825,000   110   907,500   3,500,000   5,232,500 Mason   700,000   100   700,000   3,000,000   4,400,000 Weitzman   625,000   100   625,000   2,500,000   3,750,000 Mayer   675,000   100   675,000   2,750,000   4,100,000 Consistent with the company’s past practice for an internally promoted CEO, when the Compensation Committee set Mr. Hollar’s initial target total direct compensation as CEO, it was positioned approximately at the 25th percentile of the competitive market range, as established using the company’s existing Comparator Group. This percentile placement includes annual vesting of Mr. Hollar’s August 2022 alignment equity grant over a three-year period and assumes attainment of the applicable performance metrics for the performance portion of the award. Fiscal 2023 Base Salary The Compensation Committee annually reviews our named executives’ base salaries. The Compensation Committee approved base salary increases of between 3.7% and 8.0% for Messrs. Crawford and Mason and Ms. Mayer at the beginning of fiscal 2023 to move their target total direct compensation closer to the median of the Comparator Group market data for their respective roles as well as for internal pay equity considerations. The Compensation Committee set Messrs. Hollar’s and Alt’s base salaries at $1,350,000 and $825,000, respectively, and set Ms. Weitzman’s and Ms. English’s base salaries at $625,000 and $300,000, respectively, in connection with their appointment to their new roles. Fiscal 2023 Annual Incentive Compensation Consistent with last year, the Compensation Committee based the goals for the fiscal 2023 annual cash incentive award program on adjusted non-GAAP operating earnings, operating cash flow, cost savings, and Our Path Forward objectives. Operating Earnings Goal The earnings goal continued to be based on non-GAAP operating earnings because it is one of our primary measures of operating performance. The Compensation Committee set the adjusted non-GAAP operating earnings target of $2,018 million at the beginning of fiscal 2023. Based on the Board-approved budget, the earnings target represented approximately 7.9% growth over the prior year’s actual adjusted non-GAAP operating earnings of $1,871 million. In our August 11, 2022 earnings call, we explained that our key assumptions for fiscal 2023 non-GAAP operating earnings outlook included, among other things, continued stability in overall pharmaceutical volumes and consistent market dynamics within our generic pharmaceutical program in the Pharmaceutical segment and a net negative impact similar to fiscal 2022 in our Medical segment from inflation and global supply constraints, offset by planned mitigation actions. Operating Cash Flow Goal The operating cash flow goal was based on GAAP net cash provided by operating activities. The Compensation Committee set the operating cash flow target at the beginning of fiscal 2023 based on the Board-approved budget.  The fiscal 2023 target was lower than the fiscal 2022 target and actual results largely due to the receipt of a significant tax refund from a net operating loss carryback in fiscal 2022 that did not repeat in fiscal 2023,as well as to the timing of customer and vendor payments. The Compensation Committee included this liquidity-focused measure in the annual incentive program to align with our focus on capital deployment. Our ability to generate cash is critical to our growth and necessary to fund the activities needed to meet our capital deployment objectives. Cost Savings Goal The Compensation Committee set the target for new cost savings projects during fiscal 2023 to align with our internal projections and a publicly announced cost savings goal of more than $750 million over five years against a fiscal 2018 base year. This initiative is designed to streamline our cost structure and position us for sustainable future growth.  (1) The compensation of named executives who departed in fiscal 2023 is discussed separately herein. CARDINALHEALTH   2023 Proxy Statement  |44 Back to Contents Our Path Forward Goal Our Path Forward, which is discussed on page 29, is a comprehensive, enterprise-wide strategy setting forth our mission, where we are going, how we will grow, what we believe, and how we act. The initiative reflects our vision and strategy to position the company for the future. For fiscal 2023, the Our Path Forward goal required incentive-eligible employees to complete trainings focused on building general manager and DE&I-related capabilities. A greater than 90% training completion rate across all eligible employees was required to earn a 100% payout. If a payout was earned, the Compensation Committee had the ability to apply a modifier to adjust the payout either up or down by up to five percentage points considering certain other pre-established DE&I-related goals. We describe how we calculate the measures referenced above under “Performance Measure Calculations” beginning on page 58. The table below shows goals for the fiscal 2023 annual incentive program, actual performance, and enterprise funding. (dollars in millions) Weight Threshold Target Max Percent of Target Impact on Enterprise Funding Adjusted non-GAAP operating earnings(1) 103% 67 pp Operating cash flow(1) 181% 30 pp Cost savings(2) 127% 13 pp Our Path Forward(3) Payout is earned only if employee training goal is achieved (with possible 5 pp +/- modifier) 100% 10 pp Enterprise funding percentage 120% (1) A payout level between 20% and 200% is earned for achieving the adjusted non-GAAP operating earnings and operating cash flow goals. (2) A payout level between 50% and 200% is earned for achieving the cost savings goal. (3) A payout is earned only if a greater than 90% completion rate is achieved by all incentive-eligible employees for general manager and DE&I-related capabilities trainings. If a payout is earned, the Compensation Committee has the ability to apply a progress modifier to adjust the payout either up or down by up to five percentage points considering other pre-established DE&-related goals. The employee training goal was achieved, and no modifier was applied. Annual Incentive Targets and Payouts The Compensation Committee annually reviews our named executives’ annual incentive targets as a percentage of base salary. After the review at the beginning of fiscal 2023, the Committee increased Ms. Mayer’s target to 100% (from 90%) to move her target total direct compensation closer to the median of the Comparator Group market data for her role as well as for internal pay equity considerations. The Compensation Committee set the targets for Messrs. Hollar and Alt and Ms. Weitzman at 150%, 110%, and 100% of their respective base salaries in connection with their appointments to their new roles. The Compensation Committee awarded each named executive a fiscal 2023 annual incentive award based on the 120% enterprise funding percentage, segment performance with respect to Ms. Weitzman and Messrs. Crawford and Mason, and an individual performance factor. Name           Target (% of Base Salary)              Target Amount ($)              Actual Amount ($)              Actual (% of Target)    Hollar     145 (1)      1,805,877 (1)      2,383,757 (1)      132 (1)  Alt     110        412,726 (2)      544,798 (2)      132    Mason     100        695,959        521,969        75    Weitzman     94 (1)      570,701 (1)      773,979 (1)      136 (1)  Mayer     100        666,918        800,302        120    Kaufmann     150        349,521        419,425        120    English     45        131,159        146,705        112    Crawford     100        280,673        345,228        123    (1) Mr. Hollar’s and Ms. Weitzman’s target and actual amounts reflect the different base salaries and target rates attributable to the different roles they held during  fiscal 2023. (2) Mr. Alt’s target and actual amounts reflect a prorated portion of his fiscal 2023 annual incentive. CARDINALHEALTH   2023 Proxy Statement  |45 Back to Contents Mr. Hollar’s annual incentive was based on enterprise performance and his individual performance in his first year as CEO, which exceeded expectations. Mr. Hollar was instrumental in growing our non-GAAP operating earnings, advancing our long-term strategy, establishing his leadership team, and simplifying and restructuring the enterprise and its business organizations and corporate functions. Mr. Hollar also led the ongoing business review being conducted by the Board’s Business Review Committee and drove significant improvement in employee engagement. Mr. Alt’s annual incentive, which was prorated from when he joined us on January 16, 2023, was based on enterprise performance and his individual performance, which exceeded expectations. After on-boarding, Mr. Alt quickly assumed a key leadership role in the ongoing business review, helping the company conduct a successful Investor Day in June, and immediately influenced our capital deployment strategy and focused the company on generating strong operating cash flow. Mr. Mason’s annual incentive was based on Medical segment performance, which, although below expectations, reflected progress made towards the segment’s Medical Improvement Plan, including improvement in segment profit later in the fiscal year, strong customer retention, and new customer wins. Ms. Weitzman’s annual incentive was based on Pharmaceutical segment performance and her individual performance in her first year as segment CEO, both of which exceeded expectations. Ms. Weitzman led the restructuring of the segment’s organizational structure, developed and prioritized strategic growth initiatives for the segment’s Specialty and other businesses, and helped to complete the business review for the Pharmaceutical segment. Ms. Mayer’s annual incentive was based on enterprise performance and her individual performance leading our legal, quality, regulatory, and compliance functions and restructuring functional leadership roles. Ms. English’s annual incentive was based on performance of the enterprise (in her Interim CFO role) and corporate function (in her other roles held during the fiscal year) and her individual performance leading the finance organization as interim CFO before Mr. Alt joined us. Messrs. Kaufmann and Crawford each received a prorated portion of their fiscal 2023 annual incentive award based on enterprise and Pharmaceutical segment performance, respectively, under the Cardinal Health, Inc. Senior Executive Severance Plan (“Severance Plan”).  CARDINALHEALTH   2023 Proxy Statement  |46 Back to Contents Fiscal 2021-2023 Performance Share Unit Payouts In August 2023, the Compensation Committee certified the payout level of the Fiscal 21-23 PSUs at 137%. The Fiscal 21-23 PSUs were eligible to be earned based on achievement versus a three-year cumulative adjusted non-GAAP EPS goal, a three-year cost savings goal, and an Our Path Forward measure focused on leadership score improvement from our employee engagement survey. In addition, operating cash flow must have exceeded net earnings for the first two years of the performance period for any of the Fiscal 21-23 PSUs to vest, regardless of whether the other goals were achieved.  The final payout was also subject to adjustment based on a relative TSR modifier, which decreased the payout by 20% if relative TSR was below the 20th percentile of the S&P 500 Health Care Index and increased it by 20% if relative TSR was above the 80th percentile of the index. The three-year cumulative EPS goal was the sum of annual targets set by the Compensation Committee which aligned with the Board-approved budget in each fiscal year and were consistent with our public EPS guidance range issued at the beginning of each fiscal year.  The Compensation Committee set the three-year cost savings target to align with our internal projections and our publicly announced cost savings goal at the time of more than $500 million over five years against a fiscal 2018 base year. (dollars in millions, except for per share amounts) Weighting Fiscal Year Threshold Target Maximum Percent of Target Impact on Payout Level Adjusted non-GAAP EPS(1) 2021 2022   2023 3-Year Cumulative 97% 60 pp Cost savings(2) 209% 40 pp Our Path Forward(3) 150% 15 pp No change in leadership score 2 pp increase in leadership score 9 pp increase in leadership score Payout level before relative TSR modifier applied 115% Relative TSR modifier(4) 94th percentile Final payout level 137% (1) The adjusted non-GAAP EPS goal is a three-year cumulative goal, which is the sum of annual targets set by the Compensation Committee. Achieving threshold performance of 90% of the cumulative EPS goal results in a 50% payout level, achieving target performance of 100% of the cumulative EPS goal results in a 100% payout level, and achieving maximum performance of 115% of the cumulative EPS goal results in a 200% payout level. (2) A payout level between 50% and 200% is earned for achieving the cost savings goal. (3) A payout level between 50% and 150% is earned for achieving the Our Path Forward goal. (4) The relative TSR modifier decreases the payout by 20% if relative TSR is below the 20th percentile of the S&P 500 Health | 2017 Proxy StatementCare Index and increases it by 20% if relative TSR is above the 80th percentile of the index. CARDINALHEALTH   2023 Proxy Statement  |47 Back to Contents Table The chart below shows our PSU payouts (after application of Contents 2017the relative TSR modifier) over the last five performance cycles, illustrating the correlation of pay with performance. The relative TSR modifier was introduced beginning with the PSUs for fiscal 2018 through fiscal 2020 performance cycle. three-year TSR is calculated as TSR over the three fiscal year period expressed as a percentage, calculated based on changes in stock price assuming reinvestment of dividends.         3-year TSR (33.7)% (25.3)% 31.1% 24.2% 100.0%     Application of relative TSR modifier NA 20% reduction in payout 20% reduction in payout No modification 20% increase in payout   The table below shows the target and earned Fiscal 21-23 PSUs for those named executives who had received this grant. Name   Target Number of Shares (#)                              Number of Shares Earned (#)   Hollar   27,943   38,282   Mason   27,943   38,282   Weitzman   9,314   12,760   Mayer   20,678   28,329   Kaufmann   80,918 (1)  110,858 (1)  English   2,049   2,807   Crawford   24,304 (1)  33,296 (1)  (1) Messrs. Kaufmann and Crawford each received a prorated portion of these PSUs since they qualified for retirement treatment under our long-term incentive plans when they departed the company. CARDINALHEALTH   2023 Proxy Statement|48 General Information Back to Contents Fiscal 2023 Long-Term Incentive Targets and Grants The Compensation Committee annually reviews our named executives’ long-term incentive targets. After the review at the beginning of fiscal 2023, the Committee increased each of Messrs. Crawford and Mason’s targets to $3.0 million (from $2.75 million) and Ms. Mayer’s target to $2.75 million (from $2.5 million) to move their target total direct compensation closer to the median of the Comparator Group market data for their respective roles as well as for internal pay equity considerations. The Compensation Committee set Mr. Hollar’s long-term incentive target at $11.0 million in connection with his appointment to CEO, the same as his predecessor’s. This new target was used for Mr. Hollar’s fiscal 2023 annual grant. The following table shows the long-term incentive awards made in the fiscal 2023 annual grant (made in August 2022) to the named executives. The annual grant award mix was 60% in PSUs and 40% in RSUs, except with respect to Mses. Weitzman’s and English’s annual grants, which were made when they were in their former roles.   Long-Term Incentive Targets ($)   Fiscal 2023 Annual Grant Awards Name                 RSUs ($)   Target PSUs ($)   Total ($) Hollar 11,000,000     4,400,000   6,600,000   11,000,000 Mason 3,000,000     1,200,000   1,800,000   3,000,000 Weitzman 1,000,000 (1)    500,000   500,000   1,000,000 Mayer 2,750,000     1,100,000   1,650,000   2,750,000 English 250,000     150,000   100,000   250,000 Crawford 3,000,000     1,200,000 (2)                 1,800,000 (2)                 3,000,000 (1) In September 2022, the Compensation Committee set Ms. Weitzman’s target at $2.5 million in connection with her promotion to CEO, Pharmaceutical Segment. (2) Mr. Crawford forfeited these grants when he departed the company in November 2022 since they were not outstanding for at least six months, which was required to receive retirement treatment of long-term incentive awards. In addition to Mr. Hollar’s annual grant, the Compensation Committee approved a $3.0 million alignment grant to give him, as a new CEO, an appropriate ownership stake to align with shareholders. This alignment grant was made as part of Mr. Hollar’s fiscal 2023 annual grant and was split equally between PSUs and RSUs.  In addition to Ms. Weitzman’s annual grant, in September 2022, the Compensation Committee approved a grant of $750,000 in PSUs to her in connection with her promotion to CEO, Pharmaceutical Segment. She had also received an additional $750,000 in value of RSUs in her August 2022 annual grant, which was made when she was in her former role, to help retain her considering leadership changes. As part of Ms. English’s compensation for serving as Interim CFO, she received an additional $500,000 in value of PSUs in her annual grant. When Mr. Alt joined us as CFO, the Compensation Committee approved initial long-term incentive grants of $2.5 million in PSUs and $1.0 million in RSUs, which were made in February 2023. These grants and a cash sign-on bonus were intended to address compensation he forfeited when he left his prior employer. CARDINALHEALTH   2023 Proxy Statement  |49 Back to Contents Fiscal 2023-2025 Performance Share Unit Grants When granting the PSUs for the fiscal 2023 through fiscal 2025 performance cycle (the “Fiscal 23-25 PSUs”), the Compensation Committee returned to setting a three-year EPS goal and, consistent with prior grants, also included strategic measures for cost savings and Our Path Forward goals. (dollars in millions) Weighting Threshold Target Maximum Adjusted non-GAAP EPS CAGR and average annual dividend yield(1) Cost savings(1) Our Path Forward(2) Achieved based on progress against long-term aspirational diverse management representation goals Relative TSR modifier(3) (1) A payout level between 50% and 200% is earned for achieving the adjusted non-GAAP EPS and cost savings goals. (2) A payout level between 50% and 150% is earned for achieving the Our Path Forward goal. (3) The relative TSR modifier decreases the payout by 20% if relative TSR is below the 20th percentile of the S&P 500 Health Care Index and increases it by 20% if relative TSR is above the 80th percentile of the index (unless absolute TSR is negative). EPS CAGR and Dividend Yield Goal Returning to a three-year EPS goal, seventy percent of the payout for the Fiscal 23-25 PSUs will be earned based on the sum of adjusted non-GAAP EPS CAGR and average annual dividend yield over the three-year performance cycle. The measures are the same that we used for PSU grants prior to fiscal 2018.  These measures influence TSR over the long term, align management’s interests with shareholders’ interests, and reflect operating performance as well as capital deployment through acquisitions, dividends, and share repurchases. The financial goal set by the Compensation Committee aligned with the long-term target to average double-digit combined non-GAAP EPS growth and dividend yield that we had reiterated on our August 11, 2022 earnings call.  Cost Savings Goal Consistent with last year’s PSU grant, the Fiscal 23-25 PSUs included a three-year cost savings measure. The Compensation Committee set the three-year cost savings target to align with our internal projections. Our Path Forward Goal The Fiscal 23-25 PSUs included an Our Path Forward measure (see page 29 for a discussion of Our Path Forward) focused on progress against long-term aspirational diverse management representation goals that we established in 2021. The overall payout level for the metric is based on the three-year increases needed to be on pace for the long-term aspirational goals. Relative TSR Modifier A relative TSR modifier measured over a three-year period continues to link this long-term incentive compensation directly to our relative shareholder returns and provide further alignment with shareholder interests while also recognizing factors that impact our industry and peers. We use the S&P 500 Health Care Index as the peer group because it is an objective, widely available index with broad representation in the healthcare sector. We describe how we calculate the measures referenced above under “Performance Measure Calculations” beginning on page 58. Other Elements of Compensation 401(k) Savings and Deferred Compensation Plans Our 401(k) Savings Plan and DCP allow U.S.-based employees to accumulate value on a tax-deferred basis and allow us to be competitive in recruiting and retaining talent. Our DCP permits certain management employees, including the named executives, to defer payment and taxation of a portion of their salary and annual incentive compensation into a variety of different investment alternatives. We make matching contributions subject to limits discussed under “Deferred Compensation” on page 62. We also may make additional contributions to the 401(k) Savings Plan and DCP on the same basis for all employees. Named executives also may elect to defer payment and taxation of PSUs and RSUs. CARDINALHEALTH   2023 Proxy Statement  |50 Back to Contents Other Benefits and Perquisites The Compensation Committee encourages use of our corporate aircraft for the personal travel of our CEO because it increases his time available for business purposes and enhances his safety and security. Mr. Hollar’s fiscal 2023 personal travel allowance as CEO was $350,000. Prior to becoming CEO, Mr. Hollar was authorized to commute by corporate aircraft between his out-of-state residence and our corporate headquarters to increase his time available for business purposes. Mr. Hollar did not receive tax reimbursement for any imputed income associated with personal travel during fiscal 2023. In November 2022, Mr. Hollar entered into an aircraft time-sharing agreement with us, under which he can reimburse us for incremental costs when he uses the aircraft for personal travel. Reimbursed travel does not count against the personal travel allowance. Relocation assistance is an important tool for us to recruit talent. We provided Mr. Alt a $250,000 lump sum payment for relocation. Our offer letter agreement with Mr. Alt allows us to recover the full relocation payment if he is terminated with cause or if he voluntarily leaves the company during the first year following his start date and 50% of it if he is terminated for cause or leaves during the second year following his start date. Severance and Change of Control Benefits Under our Board-adopted Severance Plan, our named executives are eligible for severance benefits under certain circumstances. Specifically, if • we terminate a named executive without cause, or • a named executive resigns for good reason during the two-year period commencing upon a change of control (the “change of control period”) then (except as noted in the next section below), the named executive will receive: • in the case of the CEO, cash severance equal to 2.0 times (or 2.5 times if the termination occurs during the change of control period) the sum of annual base salary and target bonus; • in the case of other named executives, cash severance equal to 1.5 times (or 2.0 times if the termination occurs during the change of control period) the sum of annual base salary and target bonus; • a prorated annual bonus for the year of termination based on actual performance (or the greater of target performance and actual performance if the termination occurs during the change of control period); and • up to 18 months of health insurance premiums and up to 12 months of outplacement services. Receipt of severance benefits is subject to the terms of the Severance Plan, including the required execution of a general release and compliance with certain restrictive covenants. We believe that the Severance Plan is competitive with market practices and provides appropriate levels of benefits under standard terms and conditions related to executive separations. These benefits are an important component of our compensation packages designed to attract and retain top caliber talent in senior leadership roles and define terms and conditions of separation events. We do not have any agreements to provide change-of-control excise tax gross-ups. We have a Policy Regarding Shareholder Approval of Severance Agreements, which requires shareholder approval prior to our entering into severance agreements with executives that would provide cash severance benefits exceeding 2.99 times base salary and target bonus.  We discuss our severance benefits in detail, including the payments and benefits that Messrs. Kaufmann and Crawford received under the Severance Plan upon their departures, under “Potential Payments on Termination of Employment or Change of Control” beginning on page 64. As previously disclosed, the Board determined that Messrs. Kaufmann’s and Crawford’s departures from the company during fiscal 2023 entitled them to severance benefits as involuntary terminations without cause under the Severance Plan.  Recent Developments Regarding Severance Benefits for Involuntary Terminations without Cause As noted in the Proxy Summary on pages 8 and 9, the Board has formed an advisory Business Review Committee under the Cooperation Agreement to review the company’s strategy, portfolio, capital allocation framework, and operations. This review began in early fiscal 2023 and remains ongoing.  In order to ensure that we effectively align our executive team through this ongoing review with long-term shareholders’ interests and allow them to focus on business decisions associated with the ongoing review without consideration for how a potential business transaction may affect them personally, on September 21, 2023, the Compensation Committee approved the Third Amendment (the “Amendment”) to the Severance Plan, in which all our currently-employed named executives participate.  The Amendment effects an increase in the cash severance multiple for executive officers if we terminate them without cause before September 21, 2025 (and not during the change of control period). The multiple for the CEO was increased from 2 times to 2.25 times the sum of annual base salary and target bonus and the multiple applicable to other named executives was increased from 1.5 times to 1.75 times the sum of annual base salary and target bonus.  The Amendment also effected a change to the treatment of unvested equity awards held by executive officers if we terminate them without cause before September 21, 2025, which would provide for prorated vesting of unvested awards through the period of employment (with performance awards also remaining subject to actual performance). If terminated under this scenario, under existing equity agreements, the underlying shares would not be delivered until six months after the named executive’s termination or, if earlier, the date of their death. This treatment of unvested equity awards generally mirrors the existing treatment of unvested equity awards held by retirement-eligible executives. Mses. Weitzman and Mayer are currently retirement eligible, and Mr. Mason will become retirement eligible in October 2023. The Compensation Committee believes that the combination of an increase in severance multiples and retirement treatment of unvested equity awards best suits the Committee’s goal of maintaining management continuity throughout the business review. The above-described changes to the Severance Plan remain in place only until September 21, 2025, following which the Severance Plan will automatically revert to its prior non-change of control severance formulation. CARDINALHEALTH   2023 Proxy Statement  |51 Back to Contents Our Policies, Guidelines, and Practices Related to Executive Compensation Role of Compensation Committee’s Compensation Consultant The Compensation Committee has utilized Korn Ferry as its independent executive compensation consultant since 2018. In its role as the Compensation Committee’s executive compensation consultant during fiscal 2023, Korn Ferry (among other things): • reviewed materials prepared for the Compensation Committee by management; • assisted the Compensation Committee in the design and implementation of our executive compensation program, including the selection of the key elements of the program, setting of targeted payments for each element, and establishment of performance targets; • made recommendations regarding the compensation of our CEO and other named executives and the compensation of our directors; • conducted an annual review of the composition of our Comparator Group, advised the Compensation Committee with respect to the competitiveness of our executive and director compensation programs and pay levels in comparison to those of Comparator Group companies, and identified trends in executive and director compensation; • attended Compensation Committee meetings; and • responded to various ad hoc requests from the Compensation Committee. Fees paid to Korn Ferry in fiscal 2023 for executive and director compensation consulting services provided to the Compensation Committee were $265,600. Korn Ferry also provided leadership development services to management during the fiscal year. Fees paid to Korn Ferry in fiscal 2023 for these other services were $412,550. The Compensation Committee has determined that Korn Ferry is independent and its work for the company does not raise any conflicts of interest. The Compensation Committee reached this determination by reviewing the fees paid to Korn Ferry and evaluating its work under applicable SEC and NYSE rules on conflicts of interest and independence. This evaluation included considering all the services provided to the company, the amount of fees received as a percentage of Korn Ferry’s annual revenue, Korn Ferry’s policies and procedures designed to prevent conflicts of interest and maintain independence, any business or personal relationships between Korn Ferry and the members of our Compensation Committee or executive officers, and any ownership of our stock by Korn Ferry’s team that provided executive and director compensation consulting services. The Compensation Committee must pre-approve the engagement of Korn Ferry for any consulting services provided in addition to those provided to the Compensation Committee. Role of Executive Officers Our CEO and Chief Human Resources Officer participate in Compensation Committee meetings to make recommendations regarding program design and compensation amounts, present performance assessments of the named executives (other than our CEO), and discuss company performance. The Compensation Committee may delegate authority to our executive officers to administer certain compensation plans for participants who are not officers subject to Section 16 of the Exchange Act. Our CEO reviews performance objectives with the Compensation Committee at the beginning of the fiscal year. Following the end of the fiscal year, the Committee reviews and discusses the performance and compensation of the CEO in executive session and with the Chairman of the Board. The CEO does not participate in discussions regarding his own compensation. Comparator Group Each year, the Compensation Committee, in consultation with Korn Ferry, evaluates a “Comparator Group” of similarly situated public companies that serves as a reference for comparing our named executives’ pay to the market. Our Comparator Group reflects the industry in which we primarily compete for executive talent and includes direct competitors and other companies in the healthcare field. Our Comparator Group also includes air/freight and logistics companies and retailers because of their similar sizes and business models. The following companies comprised the Comparator Group for fiscal 2023 executive pay decisions, which did not change from the prior fiscal year: Abbott Laboratories The Kroger Co. Baxter International Inc. Laboratory Corp. of America Becton, Dickinson and Company McKesson Corporation Boston Scientific Corporation Medtronic plc Cencora, Inc. Owens & Minor, Inc. CIGNA Corporation Stryker Corporation CVS Health Corporation Sysco Corporation Danaher Corporation Target Corporation Elevance Health, Inc. Thermo Fisher Scientific Inc. FedEx Corporation United Parcel Service, Inc. Henry Schein, Inc. UnitedHealth Group Inc. Johnson & Johnson Walgreens Boots Alliance, Inc. CARDINALHEALTH   2023 Proxy Statement  |52 Back to Contents The Compensation Committee uses the following guidelines when it reviews the Comparator Group’s composition to ensure that the companies remain relevant for comparison purposes: • firm size (firms generally falling in the range of 0.2 to 2.0 times our revenue and 0.2 to 5.0 times our market capitalization); • industry; • business model; and • other secondary considerations, such as talent market, customer base, and market presence. Our revenue is in the top quintile of the Comparator Group and our market capitalization is in the bottom quintile. How We Use Comparator Group Data Each spring, Korn Ferry presents to the Compensation Committee an annual review of the market competitiveness of our named executives’ target total direct compensation using Comparator Group proxy statement data. The review assesses the market positioning of each named executive by position and, for the named executives other than the CEO and CFO, pay rank, and indicates where target total pay falls within a competitive range (generally within 20%) of the median of the Comparator Group. The review also indicates the competitive positioning of each named executive’s base salary, target annual incentives, target total cash compensation, target long-term incentives, target pay mix, and long-term incentive vehicles. At the beginning of the fiscal year, the Compensation Committee determines target total direct compensation for each named executive using the market competitiveness assessment from the prior spring as a reference point. In addition, the Compensation Committee also takes into consideration internal pay equity and an executive’s experience, scope of responsibility, individual performance, potential, and unique or hard-to-replace skills, as well as retention and other considerations. Risk Assessment of Compensation Programs Management has assessed our compensation programs and concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on Cardinal Health. This risk assessment included reviewing the design and operation of our compensation programs, identifying and evaluating situations or compensation elements that could raise more significant risks, and evaluating other controls and processes designed to identify and manage risk. The Compensation Committee along with Korn Ferry reviewed the risk assessment for fiscal 2023 and concurred with management’s conclusion. Compliance Review with Risk Oversight Committee At the beginning of fiscal 2022, the Compensation Committee adopted a formal process which provides that when it assesses executives’ individual performance for annual incentive awards, it considers executives’ alignment with our Standards of Business Conduct, values, and behaviors. The Risk Oversight Committee with the support of the company’s Ethics and Compliance organization, provides input in this process. CFO Offer Letter Mr. Alt joined us as on January 16, 2023 and became CFO on February 10, 2023. Mr. Alt’s offer letter was the result of an arms-length negotiation and set his initial base salary and annual and long-term incentive targets. To address compensation forfeited at his former employer, the offer letter also provided for Mr. Alt to receive: • initial long-term incentive awards of $2.5 million in PSUs that are eligible to vest after a three-year performance period and $1.0 million in RSUs that vest ratably over three years; • a $1.0 million cash sign-on bonus; and • a $250,000 lump sum payment for relocation.  Under the terms of the offer letter, Mr. Alt must repay 100% of the sign-on bonus and the relocation payment if he is terminated for cause or if he voluntarily leaves the company during the first year following his start date and 50% of those amounts if he is terminated for cause or leaves during the second year following his start date. We discuss the terms of Mr. Alt’s offer letter in more detail under “CFO Offer Letter” on page 56. Stock Ownership Guidelines We have established stock ownership guidelines to align the interests of our executive officers and directors with the interests of our shareholders. The guidelines specify a dollar value (expressed as a multiple of salary or cash retainer) of shares that executive officers and directors must accumulate and hold while serving in these positions. In August 2022, in consultation with Korn Ferry, the Board adjusted the CEO’s stock ownership guideline to six times base salary from 10 times base salary effective when Mr. Hollar assumed the CEO role. This change was made to align with market practice and in recognition that Mr. Hollar is shorter tenured and has had less of an opportunity to acquire shares than his predecessor.  Multiple of Base Salary/Annual Cash Retainer CEO 6x CFO and Segment CEOs 4x Other executive officers 3x Non-management directors 5x We count common shares, RSUs, and phantom shares held through the DCP as shares owned for purposes of the stock ownership guidelines. Executive officers and directors must retain 100% of the net after-tax shares received under any equity awards until they satisfy the required ownership levels.  CARDINALHEALTH   2023 Proxy Statement  |53 Back to Contents Potential Impact on Compensation from Executive Misconduct (“Clawbacks”) We may require repayment of cash incentives and gains realized under equity awards and cancel outstanding equity awards in specified instances of executive misconduct, including misconduct causing a financial statement restatement or a violation of our Standards of Business Conduct. We will adopt a clawback policy that complies with the requirements of NYSE clawback listing standards, as required by SEC Rule 10D-1 in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), which policy will augment our existing clawback provisions. We will disclose publicly the incentive compensation forfeitures or repayments from our executive officers if required by law or NYSE listing standard or if we have already disclosed publicly the underlying event triggering the forfeiture or repayment and the disclosure would not violate any individual’s privacy rights, is not likely to result in or exacerbate any existing or threatened employee, shareholder, or other litigation, arbitration, investigation, or proceeding against us, and is not otherwise prohibited. These clawback provisions support our compliance and risk management programs. We discuss the provisions in more detail under “Potential Impact on Compensation from Executive Misconduct (“Clawbacks”)” on page 60. Hedging and Pledging Shares Our Board has adopted a policy prohibiting all employees (including executives) and directors from entering into short sales, publicly traded options, puts and calls, forward sale contracts, and other swap, hedging, or derivative transactions relating to our securities. The Board also has adopted a policy prohibiting our executive officers and directors from holding our securities in margin accounts or pledging our securities as collateral for a loan. Equity Grant Practices The Compensation Committee typically approves the annual equity grant in August of each year and sets August 15 as the grant date. The Compensation Committee expects the annual grant date to follow the release of earnings for the prior fiscal year in early August, without regard to whether we are aware of material nonpublic information. Equity Dilution Practices Our fiscal 2023 annual equity run rate was 0.69%. We calculate our equity run rate as the total number of shares subject to equity awards granted in the fiscal year divided by the weighted average number of our common shares outstanding during the fiscal year.  Human Resources and Compensation Committee Report We have reviewed and discussed the foregoing CD&A with management. Based on that review and discussion, we have recommended to the Board that the CD&A be included in this proxy statement and in Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023. Submitted by the Human Resources and Compensation Committee of the Board. Carrie S. Cox, Chair  Michelle M. Brennan  Patricia A. Hemingway Hall  Nancy Killefer  Christine A. Mundkur CARDINALHEALTH   2023 Proxy Statement  |54 Back to Contents Executive Compensation Tables The table below summarizes fiscal 2023 (and, where required, prior year) compensation for: • our current and former CEOs who served in that position in fiscal 2023; • our current and former CFOs who served in that position in fiscal 2023; • our three other most highly compensated executive officers as of June 30, 2023, the last day of our fiscal 2023; and • Mr. Crawford, who was an executive officer through November 13, 2022, and would have been one of the three other most highly compensated executive officers as of June 30, 2023 had he remained employed on such date. Summary Compensation Table Name and Principal Position    Year    Salary ($)    Bonus ($)      Stock Awards ($)(1)      Option Awards ($)    Non-Equity Incentive Plan Compensation ($)    All Other Compensation ($)(2)    Total ($)    Jason M. Hollar(3)   2023   1,245,534   0     14,828,888 (4)    0   2,383,757   318,254   18,776,433   Chief Executive Officer and Former Chief Financial Officer   2022   729,247   0     2,762,792     0   320,869   69,791   3,882,699     2021   700,000   0     2,549,444     0   630,000   71,416   3,950,860   Aaron E. Alt(5)   2023   375,205   1,000,000 (5)    3,815,637 (5)    0   544,798   265,008   6,000,648   Chief Financial Officer                                       Stephen M. Mason   2023   695,959   0     3,184,155     0   521,969   13,200   4,415,283   Chief Executive Officer, Medical Segment   2022   666,781   0     2,762,792     0   166,695   15,403   3,611,671     2021   625,000   0     2,549,444     0   562,500   17,256   3,754,200   Deborah L. Weitzman(6)   2023   606,139   0     2,672,523 (7)    0   773,979   17,810   4,070,451   Chief Executive Officer, Pharmaceutical Segment                                       Jessica L. Mayer   2023   666,918   0     2,918,878     0   800,302   13,200   4,399,298   Chief Legal and Compliance Officer   2022   616,781   0     4,261,614     0   244,245   12,426   5,135,066     2021   575,000   0     1,886,574     0   465,750   11,810   2,939,134   Michael C. Kaufmann(2)   2023   233,014   0     0     0   0   3,295,954   3,528,968   Former Chief Executive Officer   2022   1,341,781   0     11,051,066     0   805,068   265,642   13,463,557     2021   1,300,000   0     10,197,832     0   780,000   204,546   12,482,378   Patricia M. English(8)   2023   291,465   0     811,405 (9)    0   146,705 �� 13,174   1,262,749   Former Interim Chief Financial Officer                                       Victor L. Crawford(10)   2023   280,673   0     3,184,155 (11)    0   0   1,304,776   4,769,604   Former Chief Executive Officer, Pharmaceutical Segment   2022   741,295   0     2,762,792     0   296,518   12,200   3,812,805     2021   725,000   0     2,804,433     0   652,500   35,894   4,217,827   (1) The amounts reported represent the aggregate accounting value of PSUs and RSUs granted during each fiscal year. The amounts reported in each fiscal year do not represent amounts paid to or realized by the named executives. See the Grants of Plan-Based Awards for Fiscal 2023 table on page 57 and the accompanying footnotes for information on how the accounting value of each award granted in fiscal 2023 was determined. The accounting values of the PSUs granted during fiscal 2023 assuming that the highest level of performance conditions will be achieved are: Mr. Hollar — $20,893,591; Mr. Alt — $6,588,560; Mr. Mason — $4,642,995, Weitzman — $3,328,699; Ms. Mayer — $4,256,188; Ms. English — $1,521,235; and Mr. Crawford — $4,642,995. (2) The elements of compensation included in the “All Other Compensation” column for fiscal 2023 are set forth in the table below. (3) Mr. Hollar was elected CEO and Mr. Kaufmann departed from the company, each effective September 1, 2022. Prior to that date, Mr. Hollar served as our CFO since May 26, 2020. (4) The amount shown in this column includes an additional accounting value of $1,653,513 of PSUs and an additional accounting value of $1,500,017 of RSUs granted to Mr. Hollar in connection with his appointment as CEO.  (5) Mr. Alt joined us on January 16, 2023 and became CFO on February 10, 2023. To address compensation forfeited at his former employer, Mr. Alt received a cash sign-on bonus of $1,000,000, PSUs with an accounting value of $2,815,628, and RSUs with an accounting value of $1,000,009. He must repay the full sign-on bonus if he is terminated for cause or if he voluntarily leaves the company during the first year following his start date and 50% of it if he is terminated for cause or leaves during the second year following his start date. (6) Ms. Weitzman was not previously a named executive. (7) The amount shown in this column includes PSUs with an accounting value of $871,338 granted to Ms. Weitzman in connection with her promotion to CEO, Pharmaceutical Segment. (8) Ms. English served as Interim  CFO from September 1, 2022 until February 10, 2023. She was not previously a named executive. (9) The amount shown in this column includes an additional accounting value of $551,171 of PSUs granted to Ms. English in her annual grant in connection with her appointment to Interim CFO.  (10) Mr. Crawford ceased to serve as CEO, Pharmaceutical Segment effective September 19, 2022, and departed from the company on November 13, 2022. (11) Mr. Crawford forfeited his stock award grants when he departed the company since they were not outstanding for at least six months, which was required to receive retirement treatment of long-term incentive awards. CARDINALHEALTH   2023 Proxy Statement  |55 Back to Contents All Other Compensation The amounts shown for “All Other Compensation” for fiscal 2023 include: company contributions to the named executive’s account under our 401(k) plan; company contributions to the named executive’s account under our DCP; and perquisites and severance benefits, in the following amounts: Name         Company 401(k) Savings Plan Contributions ($)         Company Deferred Compensation Plan Contributions  ($)         Perquisites and Severance Benefits ($) (1)       Total ($)   Hollar   13,200   5,621   299,433 (2)     318,254   Alt   13,200   1,808   250,000 (3)    265,008   Mason   13,200   0   —     13,200   Weitzman   13,810   4,000   —     17,810   Mayer   13,200   0   —     13,200   Kaufmann   0   0   3,295,954 (4)    3,295,954   English   13,174   0   —     13,174   Crawford   0   0   1,304,776 (5)    1,304,776   (1) The amounts shown include the value of perquisites and other personal benefits if the aggregate value exceeded $10,000. We quantify each reported perquisite or personal benefit if it exceeds the greater of $25,000 or 10% of the total amount of perquisites for each named executive. (2) The amount reported for Mr. Hollar includes the incremental cost to us of his personal use of corporate aircraft ($292,212), home security system installation and monitoring fees, and personal liability insurance coverage. We calculate the incremental cost of personal use of corporate aircraft based on the average cost of fuel, average trip-related maintenance costs, crew travel expenses, per flight landing fees, hangar and parking costs, and smaller variable costs. Since we use our aircraft primarily for business travel, we do not include fixed costs, such as depreciation, pilot salaries, and certain maintenance costs. For fiscal 2023, Mr. Hollar received up to $350,000 in personal use of corporate aircraft as CEO. Prior to becoming CEO, Mr. Hollar was authorized to commute by corporate aircraft between his out-of-state residence and our corporate headquarters to increase his time available for business purposes. He did not receive tax reimbursement for any imputed income associated with personal travel during fiscal 2023. In November 2022, Mr. Hollar entered into an aircraft time-sharing agreement with us, under which he can reimburse us for incremental costs when he uses the aircraft for additional personal travel consistent with Federal Aviation Administration regulations. Reimbursed travel does not count against his personal travel allowance. (3) The amount reported for Mr. Alt is a lump sum payment for relocation. He must repay 100% of this relocation assistance if he is terminated for cause or if he voluntarily leaves the company during the first year following his start date and 50% of it if he is terminated for cause or leaves during the second year following his start date.  (4) The amount reported for Mr. Kaufmann includes benefits paid under the Severance Plan during fiscal 2023 in connection with his involuntary termination without cause on September 1, 2022 ($3,165,331), a contribution made by the Cardinal Health Foundation to establish a scholarship at The Ohio State University to honor Mr. Kaufmann’s decades of service to the company and his commitment to DE&I ($100,000), and the incremental cost to us of his personal use of corporate aircraft ($30,622). Mr. Kaufmann’s severance benefits are described in more detail under “Kaufmann and Crawford Departures” on page 67. (5) The amount reported for Mr. Crawford are benefits paid under the Severance Plan during fiscal 2023 in connection with his involuntary termination without cause on November 13, 2022. Mr. Crawford’s severance benefits are described in more detail under “Kaufmann and Crawford Departures” on page 67. CFO Offer Letter Mr. Alt became our CFO on February 10, 2023. His December 2022 offer letter provided for: • an annual base salary of $825,000; • a target annual bonus of 110% of his annual base salary prorated from his start date to the end of the fiscal year; and • target long-term incentive awards of $3,500,000 for the fiscal 2024 annual grant. To address compensation forfeited at his former employer, the offer letter provided that Mr. Alt receive initial long  term incentive grants of $2.5 million in PSUs and $1.0 million in RSUs and a $1.0 million cash sign-on bonus. The offer letter also provided for a $250,000 lump sum payment for relocation. Under the terms of the offer letter, Mr. Alt must repay the full sign-on bonus and the relocation payment if he is terminated for cause or if he voluntarily leaves the company during the first year following his start date and 50% of it if he is terminated for cause or leaves during the second year following his start date. CARDINALHEALTH   2023 Proxy Statement  |56 Back to Contents Grants of Plan-Based Awards for Fiscal 2023 The table below supplements our Summary Compensation Table by providing additional information about our plan-based compensation for fiscal 2023.             Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1)   Estimated Potential Payouts Under Equity Incentive Plan Awards(2)   All Other Stock Awards: Number of   Grant Date   Name/ Award Type   Grant Date   Approval Date   Threshold ($)   Target ($)   Maximum ($)   Threshold (#)   Target (#)   Maximum (#)   Shares of Stock or Units (#)(3)   Fair Value of  Stock Awards ($)(4)   Hollar                                                         Annual Incentive             361,175     1,805,877     3,521,460                               PSUs(5)   8/15/2022   8/9/2022                       57,882     115,764     270,888         8,928,878   RSUs(5)   8/15/2022   8/9/2022                                         200,086   5,900,010   Alt                                                         Annual Incentive             82,545     412,726     804,816                               PSUs(6)   2/15/2023   12/14/2022                     15,908     31,815   74,447         2,815,628   RSUs(6)   2/15/2023   12/14/2022                                       44,541   1,000,009   Mason                                                         Annual Incentive             139,192     695,959     1,357,120                               PSUs   8/15/2022   8/9/2022                       12,863     25,725     60,197         1,984,169   RSUs   8/15/2022   8/9/2022                                         42,875   1,199,986   Weitzman                                                         Annual Incentive             114,140     570,701     1,112,867                               PSUs   8/15/2022   8/15/2022                       3,573     7,146     16,722         551,171   RSUs   8/15/2022   8/15/2022                                         36,308   1,250,014   PSUs(7)   9/15/2022   9/3/2022                       5,649     11,297     26,345         871,338   Mayer                                                         Annual Incentive             133,384     666,918     1,300,490                               PSUs   8/15/2022   8/9/2022                       11,791     23,582     55,182         1,818,880   RSUs   8/15/2022   8/9/2022                                         39,303   1,099,998   Kaufmann                                                         Annual Incentive(8)             69,904     349,521     681,566                               English                                                         Annual Incentive             26,232     131,159     255,760                               PSUs(9)   8/15/2022   8/10/2022                       4,288     8,575     20,066         661,390   RSUs   8/15/2022   8/10/2022                                         10,719   150,015   Crawford                                                         Annual Incentive(10)             56,135     280,673     547,312                               PSUs(10)   8/15/2022   8/9/2022                       12,863     25,725     60,197         1,984,169   RSUs(10)   8/15/2022   8/9/2022                                         42,875   1,199,986   (1) This information relates to annual cash incentive award opportunities with respect to fiscal 2023 performance. Amounts actually earned under the annual cash incentive awards are reported in the Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column. (2) “Equity Incentive Plan Awards” are PSUs granted during the fiscal year under our 2021 LTIP. PSUs are eligible to vest after a three-year performance period based on (i) the sum of non-GAAP diluted EPS CAGR and average annual dividend yield, (ii) cost savings, and (iii) an Our Path Forward measure, with a modifier based on TSR relative to the S&P 500 Health Care Index. PSUs accrue cash dividend equivalents that are payable when, and only to the extent that, the PSUs vest. (3) “All Other Stock Awards” are RSUs granted during the fiscal year under our 2021 LTIP that vest ratably over three years and accrue cash dividend equivalents that are payable when, and only to the extent that, the RSUs vest. (4) We valued PSUs using a Monte Carlo simulation valuation model based on the probable outcome of the performance conditions as of the grant date. The Monte Carlo model applies a risk-free interest rate and expected volatility assumptions. The risk-free interest rate is assumed to equal the yield on U.S. Treasury bonds on the grant date with remaining terms consistent with the remaining performance measurement period. Expected volatility is based on the average of historical volatility over a look-back period commensurate with the remaining performance measurement period ending on the grant date and the implied volatility from exchange-traded options as of the grant date. The assumed per-share value was $77.13 for the PSUs granted on August 15, 2022 and September 15, 2022, using a risk-free rate of 3.12% and expected volatility of 32.41%, and $88.50 for the PSUs granted on February 15, 2023, using a risk-free rate of 4.47% and expected volatility of 26.81%. We valued RSUs by multiplying the closing price of our common shares on the NYSE on the grant date by the number of RSUs awarded. Accounting values differ from the compensation values of PSU and RSU awards discussed in the CD&A.  CARDINALHEALTH   2023 Proxy Statement  |57 Back to Contents (5) Mr. Hollar received an additional accounting value of $1,653,513 of PSUs and an additional accounting value of $1,500,017 of RSUs in connection with his appointment to CEO. (6) Mr. Alt received these PSUs and RSUs when he joined us as CFO. His sign-on bonus and initial long-term incentive awards were intended to address compensation forfeited at his former employer.   (7) Ms. Weitzman received these PSUs in connection with her promotion to CEO, Pharmaceutical Segment. (8) Mr. Kaufmann received a prorated portion of his fiscal 2023 annual incentive award as a benefit under the Severance Plan. (9) Ms. English received an additional accounting value of $551,171 of PSUs in connection with her appointment to Interim CFO. (10) Mr. Crawford received a prorated portion of his fiscal 2023 annual incentive award as a benefit under the Severance Plan. He forfeited the PSU and RSU awards when he departed the company on November 13, 2022 since they were not outstanding for at least six months, which was required to receive retirement treatment of long-term incentive awards. Incentive Plans Annual Cash Incentive Awards Our key executive employees, including our named executives, were eligible to receive fiscal 2023 annual cash incentive awards under the Cardinal Health, Inc. Management Incentive Plan (“MIP”). As discussed in the CD&A, the Compensation Committee set performance goals of adjusted non-GAAP operating earnings for 65% of the payout, operating cash flow for 15% of the payout, cost savings for 10% of the payout, and Our Path Forward for 10% of the payout. Based on performance against these goals, an aggregate funding percentage determined the named executives’ annual incentive awards before considering segment performance, where applicable, and applying an individual performance factor. The performance goals established by the Compensation Committee may vary from year to year. The MIP provides that the Compensation Committee determines the timing of payment of any award; provided, however, that such payment will occur in all events within the “short term deferral period” specified in Section 409A of the U.S. Internal Revenue Code (the “Code”). The MIP also grants the Compensation Committee broad discretion to assess and determine the amounts payable, including how performance was achieved and whether there were inappropriate risks undertaken or misconduct by individual participants. In practice, the Compensation Committee has deferred decisions on payment of awards under the annual cash incentive program until fiscal year-end audited financial statements are substantially complete to support its assessment of the company’s and the named executives’ performance.  The Compensation Committee retains discretion to adjust upward or downward any final award for participants based on such further considerations as the Committee determines in its sole discretion. The MIP also permits the Compensation Committee to require deferral of payment of awards and provides that MIP awards will be subject to the company’s recoupment (or “clawback”) policy. The Compensation Committee may make annual incentive awards to named executives even if we do not achieve threshold performance goals. Long-Term Incentive Plans Under our 2021 LTIP, we may grant stock options, stock appreciation rights, stock awards, other stock-based awards, and cash awards to employees. During fiscal 2023, we granted PSUs and RSUs under the 2021 LTIP to our named executives, as shown in the Grants of Plan-Based Awards for Fiscal 2023 table on page 57 and discussed in the CD&A. The 2021 LTIP provides for “double trigger” vesting in connection with a change of control, under which the vesting of awards will accelerate only if there is a qualifying termination within two years after the change of control or if the surviving entity does not provide qualifying replacement awards. We have one-year minimum vesting provisions in the 2021 LTIP. Under these provisions, stock options and stock awards are subject to a one-year vesting condition, except upon a change of control or the death or disability of the grantee or for up to an aggregate not to exceed 5% of the total number of shares provided for in the 2021 LTIP. PSUs granted under the 2021 LTIP settle after a performance period by the issuance of shares, which may be a fraction or multiple of the target number of PSUs subject to an award. Issuance of the shares is subject to both continued employment and the achievement of performance goals established by the Compensation Committee (which may vary from award to award). As discussed in the CD&A, the Compensation Committee established performance goals for the Fiscal 23-25 PSUs based on the sum of adjusted non-GAAP EPS CAGR and average annual dividend yield over the three-year performance cycle for 70% of the payout, cost savings for 20% of the payout, and Our Path Forward for 10% of the payout. A modifier based on TSR relative to the S&P 500 Health Care Index is then applied to determine the final payout. We describe how we calculate the measures referred to in this section under “Performance Measure Calculations” below. Performance Measure Calculations Our primary annual incentive and PSU performance measures are based on the same non-GAAP financial measures that we use internally for planning and evaluating our performance and present externally in our earnings materials and SEC reports. We generally adjust these non-GAAP financial measures to exclude some items that are included in our GAAP measures, such as restructuring and employee severance costs, amortization and other acquisition-related costs, net impairments and gain or loss on disposal of assets, and net litigation recoveries or charges. We make these adjustments primarily because they are not part of our ongoing operations or included in our financial planning, or they relate to events that may have occurred in prior or multiple periods or their timing or amount is inherently unpredictable. We explain the adjustments to our non-GAAP financial measures and provide a reconciliation to GAAP measures in Annex A. CARDINALHEALTH   2023 Proxy Statement  |58 Back to Contents Award Performance Measure Calculation Fiscal 2023 Annual Cash Incentive Adjusted non-GAAP operating earnings Non-GAAP operating earnings(1) adjusted to exclude annual cash incentive expense to the extent below or above target performance, equity compensation expense to the extent below or above budgeted performance, and income or expense related to the performance of our DCP assets that is included within distribution, selling, general, and administrative expenses in our consolidated statements of earnings.(2) Operating cash flow Net cash provided by operating activities as shown in our consolidated statements of cash flows.(3) Cost savings Annual cost savings achieved through cost optimization initiatives. Our Path Forward Incentive-eligible employees were required to complete trainings focused on building general manager and DE&I-related capabilities. A greater than 90% training completion rate across all eligible employees was required to earn a 100% payout. If a payout was earned, the Compensation Committee had the ability (but was not required) to apply a modifier to adjust the payout either up or down by up to five percentage points considering certain other pre-established DE&I-related goals. Fiscal 21-23 PSUs Adjusted non-GAAP EPS payout level Level of achievement of cumulative adjusted non-GAAP EPS(4) goal, which is the sum of the annual adjusted non-GAAP EPS goals established at the beginning of each of the three fiscal years during the performance period. Cost savings Attaining realized cost savings during the performance period incremental to the cost savings realized prior to the beginning of the performance period. Our Path Forward Maintaining or increasing a leadership score in the final employee engagement pulse survey completed during the performance period from the current baseline score. Relative TSR modifier Cumulative TSR for the performance period assuming dividend reinvestment and determined based on the average daily closing stock prices for the 20 trading days ending immediately prior to the first day and last day of the three-year performance period, respectively. TSR percentile rank references companies in the S&P 500 Health Care Index on both the first and the last day of the performance period and any company that filed for bankruptcy during the performance period is assigned a -100% TSR. Cash flow threshold Operating cash flow(5) exceeding net earnings(6) for the first two years of the performance period. Fiscal 23-25 PSUs Sum of adjusted non-GAAP diluted EPS CAGR and average annual dividend yield Adjusted non-GAAP diluted EPS CAGR is adjusted non-GAAP diluted EPS(4) for the last fiscal year of the performance period divided by adjusted non-GAAP diluted EPS for the last fiscal year preceding the performance period; the quotient is then raised to the power of one divided by the number of years in the performance period. Average annual dividend yield is the sum of all cash dividends paid per share during a performance period divided by the number of years in the performance period; the quotient is then divided by our closing share price on the grant date. Cost savings Same calculation as used for Fiscal 21-23 PSUs. Our Path Forward Measures progress against long-term aspirational DE&I management representation goals that we established in 2021. The overall payout level for the metric is based on the three-year increases needed to be on pace for the long-term aspirational goals. Relative TSR modifier Same calculation as used for Fiscal 21-23 PSUs, except that no upward adjustment will occur if absolute TSR is negative regardless of the TSR percentile rank. (1) Non-GAAP operating earnings is operating earnings excluding state opioid assessment related to prior fiscal years, shareholder cooperation agreement costs, restructuring and employee severance, amortization and other acquisition-related costs, impairments and (gain)/loss on disposal of assets, net, and litigation (recoveries)/charges, net. (2) Historically, we have excluded the results of acquired or divested businesses from the adjusted non-GAAP operating earnings if they were not included in our Board-approved annual budget. The Compensation Committee also may make other adjustments for purposes of determining whether we achieved our performance goals. (3) For purposes of the annual incentive awards, the operating cash flow calculation may be adjusted at the Compensation Committee’s discretion for significant, unforeseen differences due to the timing of customer payments (exceeding $100 million and within two business days of the start or end of the fiscal year) and the timing of litigation and tax settlements payments. (4) Adjusted non-GAAP EPS is adjusted non-GAAP net earnings attributable to Cardinal Health, Inc. divided by diluted weighted average shares outstanding. Adjusted non-GAAP net earnings attributable to Cardinal Health, Inc. is net earnings attributable to Cardinal Health, Inc. excluding surgical gown recall costs/(income), state opioid assessment related to prior fiscal years, shareholder cooperation agreement costs, restructuring and employee severance, amortization and other acquisition-related costs, impairments and (gain)/loss on disposal of assets, net, litigation (recoveries)/charges, net, loss on early extinguishment of debt, (gain)/loss on sale of equity interest in naviHealth, any federal, state or other assessments or taxes on the distribution or sale of opioids and any unbudgeted taxes, tariffs, assessments or other items, whether benefit or expense, that individually exceed $20 million, tax benefits and expenses associated with each of the foregoing items, transitional tax benefit, net, and such other adjustments that the Compensation Committee may approve to reflect a change by us to the definition of that measure as presented to shareholders, exceptional acquisitions or divestitures, changes in accounting principles, or other exceptional items that are not reflective of our operating performance. (5) For purposes of the PSUs, operating cash flow is net cash provided by operating activities as shown on the consolidated statements of cash flows for the relevant fiscal year, with adjustments that the Compensation Committee may approve to address the comparability of items within operating cash flow and net earnings. (6) Net earnings attributable to Cardinal Health, Inc. CARDINALHEALTH   2023 Proxy Statement  |59 Back to Contents Potential Impact on Compensation from Executive Misconduct (“Clawbacks”) We may seek repayment of incentive awards if a named executive engages in misconduct that causes or contributes to the need to restate previously filed financial statements and the payment was based on financial results that we subsequently restate. We will adopt a clawback policy that complies with the requirements of NYSE clawback listing standards, as required by SEC Rule 10D-1 in accordance with the Dodd-Frank Act, which policy will augment our existing clawback provisions. Unpaid annual cash incentive awards, unexercised stock options, unvested PSUs and RSUs, and certain vested PSUs and RSUs are forfeited if a named executive breaches our Standards of Business Conduct, discloses confidential information, commits fraud, gross negligence, or willful misconduct, solicits business or our employees, disparages us, or engages in competitive actions while employed by Cardinal Health or during a set time period after termination of employment. We also may require a named executive to repay the gross gain realized from any stock option exercises or the value of annual cash incentive awards paid or PSUs and RSUs settled within a set time period prior to such conduct. CARDINALHEALTH   2023 Proxy Statement  |60 Back to Contents Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023 The table below shows the number of shares underlying exercisable and unexercisable stock options and unvested PSUs and RSUs held by our named executives on June 30, 2023.     Option Awards   Stock Awards Name   Option Grant Date   Number of Securities Underlying Unexercised Options (#) Exercisable   Number of Securities Underlying Unexercised Options (#) Unexercisable   Option Exercise Price ($/Sh)   Option Expiration Date   Number of Shares or Units of Stock That Have Not Vested (#)   Market Value of Shares or Units of Stock That Have Not Vested ($)(1)   Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2)   Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) Hollar                                                             104,717 (3)  9,903,087   326,256 (4)  30,854,030 Alt                                                             12,726 (5)  1,203,498   62,039 (6)  5,867,028 Mason                                         8/15/2015   5,990   0   84.27   8/15/2025                     8/15/2016   8,971   0   83.19   8/15/2026                                         37,545 (7)  3,550,631   150,680 (8)  14,249,808 Weitzman                                         8/15/2014   6,712   0   71.43   8/15/2024                     8/15/2015   5,990   0   84.27   8/14/2025                     8/15/2016   6,279   0   83.19   8/15/2026                     8/15/2017   15,373   0   66.43   8/15/2027                                         26,921 (9)  2,545,919   67,582 (10)  6,391,230 Mayer                                         8/15/2013   813   0   51.49   8/15/2023                     8/15/2014   1,142   0   71.43   8/15/2024                     8/15/2015   973   0   84.27   8/15/2025                     8/15/2016   3,139   0   83.19   8/15/2026                     8/15/2017   5,534   0   66.43   8/15/2027                                         56,332 (11)  5,327,317   130,891 (12)  12,378,362 Kaufmann                                         8/15/2014   53,698   0   71.43   8/15/2024                     8/15/2015   47,067   0   84.27   8/15/2025                     8/15/2016   59,655   0   83.19   8/15/2026                     8/15/2017   70,102   0   66.43   8/15/2027                                         0   0   207,933 (13)  19,664,224 English                                         8/15/2015   998   0   84.27   8/15/2025                     8/15/2016   1,047   0   83.19   8/15/2026                     8/15/2017   1,291   0   66.43   8/15/2027                                         5,103 (14)  482,591   23,299 (15)  2,203,386 Crawford                                                             0   0   61,713 (16)  5,836,198 (1) The market value is the product of $94.57, the closing price of our common shares on the NYSE on June 30, 2023, and the number of shares subject to unvested awards. (2) Fiscal 21-23 PSUs are actual amounts that vested based on our performance over the performance period. Based on current performance in accordance with the SEC rules, PSUs for the fiscal 2022 through fiscal 2024 performance cycle (“Fiscal 22-24 PSUs”) and Fiscal 23-25 PSUs assume payout at the maximum payout level (without giving effect to the relative TSR modifier). Outstanding PSUs, if earned, will pay out in August 2023, August 2024, and August 2025. CARDINALHEALTH   2023 Proxy Statement  |61 Back to Contents (3) Reflects RSUs that vest as follows: 41,409 shares on August 15, 2023; 35,200 shares on August 15, 2024; and 28,108 shares on August 15, 2025.  (4) Reflects 38,282 Fiscal 21-23 PSUs, 62,234 Fiscal 22-24 PSUs, and 225,740 Fiscal 23-25 PSUs. (5) Reflects RSUs that vest as follows: 4,242 shares on February 15, 2024; 4,242 shares on February 15, 2025; and 4,242 shares on February 15, 2026. (6) Reflects 62,039 Fiscal 23-25 PSUs. (7) Reflects RSUs that vest as follows: 19,018 shares on August 15, 2023; 12,810 shares on August 15, 2024; and 5,717 shares on August 15, 2025. (8) Reflects 38,282 Fiscal 21-23 PSUs, 62,234 Fiscal 22-24 PSUs, and 50,164 Fiscal 23-25 PSUs. (9) Reflects RSUs that vest as follows: 11,908 shares on August 15, 2023; 9,058 shares on August 15, 2024; and 5,955 shares on August 15, 2025. (10) Reflects 12,760 Fiscal 21-23 PSUs, 18,858 Fiscal 22-24 PSUs, and 35,964 Fiscal 23-25 PSUs. (11) Reflects RSUs that vest as follows: 16,282 shares on August 15, 2023; 11,560 shares on November 15, 2023; 11,688 shares on August 15, 2024; 11,561 shares on November 15,  2024; and 5,241 shares on August 15, 2025. (12) Reflects 28,329 Fiscal 21-23 PSUs, 56,577 Fiscal 22-24 PSUs, and 45,985 Fiscal 23-25 PSUs. (13) Reflects 110,858 Fiscal 21-23 PSUs and 97,075 Fiscal 22-24 PSUs. Under the standard equity plan terms applicable to all retirement-eligible participants, Mr. Kaufmann will receive a prorated portion of Fiscal 21-23 PSUs and Fiscal 22-24 PSUs based on actual performance. Mr. Kaufmann was originally granted 111,773 Fiscal 21-23 PSUs and 127,660 Fiscal 22-24 PSUs at target. (14) Reflects RSUs that vest as follows: 2,706 shares on August 15, 2023; 1,682 shares on August 15, 2024; and 715 shares on August 15, 2025. (15) Reflects 2,807 Fiscal 21-23 PSUs, 3,771 Fiscal 22-24 PSUs, and 16,721 Fiscal 23-25 PSUs. (16) Reflects 33,296 Fiscal 21-23 PSUs and 28,417 Fiscal 22-24 PSUs. Under the standard equity plan terms applicable to all retirement-eligible participants, Mr. Crawford will receive a prorated portion of Fiscal 21-23 PSUs and Fiscal 22-24 PSUs based on actual performance. Mr. Crawford was originally granted 30,738 Fiscal 21-23 PSUs and 31,915 Fiscal 22-24 PSUs at target. Option Exercises and Stock Vested for Fiscal 2023 The table below shows stock options that were exercised, and PSUs and RSUs that vested, during fiscal 2023 for each of our named executives.     Option Awards   Stock Awards Name   Number of Shares Acquired on Exercise (#)     Value Realized on Exercise ($)     Number of Shares Acquired on Vesting (#) (1)    Value Realized on Vesting ($)   Hollar     —       —       39,111       2,841,130   Alt     —       —       —       —   Mason     16,864       219,532       50,338       3,522,150   Weitzman     —       —       25,450       1,784,267   Mayer     442       13,043       54,392       3,855,647   Kaufmann     164,607       4,797,808       255,887 (2)      17,959,909 (2)  English     —       —       3,262       228,242   Crawford     —       —       71,669 (2)      5,080,824 (2)  (1) This column represents the vesting during fiscal 2023 of PSUs granted during fiscal 2020 for the fiscal 2020 through fiscal 2022 performance cycle and RSUs  granted during fiscal 2020, 2021, and 2022. The number of shares acquired on vesting includes 17,472 PSUs deferred at the election of Mr. Hollar, net of required withholding. See “Deferred Compensation” below for a discussion of deferral terms. (2) Includes prorated portions of RSUs that Messrs. Kaufmann and Crawford received when they left the company under the standard terms of our long-term incentive plans applicable to all retirement-eligible participants.  Delivery of these shares was delayed for six months to comply with applicable tax rules. Deferred Compensation Our DCP permits certain management employees, including the named executives, to defer between 1% and 50% of base salary and between 1% and 80% of incentive compensation. In addition, we may make additional matching and non-matching contributions to the deferred balances of participants. We make matching contributions on amounts deferred under the DCP from compensation in excess of $330,000, but not in excess of $430,000 (subject to future annual adjustments based on certain U.S. Internal Revenue Service limits), at the same rate as contributions are matched under the 401(k) Savings Plan. We also may credit participants’ accounts with additional company contributions in the same amount as company contributions made to the 401(k) Savings Plan based on a percentage of fiscal year compensation in excess of $330,000, but not in excess of $430,000. Each participant may direct the investment of his or her DCP account by selecting among certain notional investment options that generally track publicly available mutual funds and investments and by periodically changing investment elections as the participant deems appropriate. We pay participants’ deferred balances in cash upon retirement, termination from employment, death, or total disability in a single lump sum or annual installment payments over a period of five or ten years. The DCP does not qualify under Section 401(a) of the Code and is exempt from many of the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) as a “top hat” plan for a select group of management or highly compensated employees. Apart from the DCP, a named executive also may defer receipt of shares that otherwise would be issued on the date that PSUs and RSUs vest until after the named executive is no longer employed by Cardinal Health or until a fixed future date. CARDINALHEALTH   2023 Proxy Statement  |62 Back to Contents Nonqualified Deferred Compensation in Fiscal 2023 The table below provides information regarding the named executives’ accounts under our DCP and deferred share arrangements.  Name/Award Type        Executive Contributions in Last FY ($)(1)(2)        Cardinal Health Contributions in Last FY ($)(2)        Aggregate Earnings in Last FY ($)(3)        Aggregate Withdrawals/ Distributions ($)        Aggregate Balance at Last FYE ($)(4) Hollar                     DCP   185,623   5,500   45,893   —   364,451 Deferred shares   1,222,516   —   429,811   —   1,652,327 Alt                     DCP   4,760   762   208   —   5,729 Deferred shares   —   —   —   —   — Mason                     DCP   —   —   52,342   —   410,053 Deferred shares   —   —   —   —   — Weitzman                     DCP   254,361   4,000   261,278   —   3,552,179 Deferred shares   —   —   —   —   — Mayer                     DCP   —   —   9,037   —   264,467 Deferred shares   —   —   —   —   — Kaufmann                     DCP   58,495   —   445,288   —   4,753,657 Deferred shares   —   —   948,831   —   2,121,300 English                     DCP   —   —   —   —   — Deferred shares   —   —   —   —   — Crawford                     DCP   —   —   270   —   3,530 Deferred shares   —   —   —   —   — (1) The DCP amounts shown include salary and fiscal 2022 cash incentive awards deferred during fiscal 2023. (2) DCP amounts included as contributions in the table and also reported as fiscal 2023 compensation in the Summary Compensation Table of this proxy statement are as follows: Mr. Hollar — $66,732; Mr. Alt — $5,521; Ms. Weitzman — $183,919; and Mr. Kaufmann — $14,019.  (3) We calculate the aggregate DCP earnings based upon the change in value of the investment options selected by the named executive during the year. Aggregate deferred share earnings are calculated based upon the change in their total value from the first day of the fiscal year (or the vesting date, if later) to the last day of the fiscal year. (4) DCP amounts included in the aggregate balance at June 30, 2023 in the table and also reported as fiscal 2022 and 2021 compensation in the Summary Compensation Table of this proxy statement are as follows: Mr. Hollar — $95,952; Mr. Mason — $56,033; and Mr. Kaufmann — $140,577. CARDINALHEALTH   2023 Proxy Statement  |63 Back to Contents Potential Payments upon Termination of Employment or Change of Control at Fiscal Year-End In accordance with the SEC rules, the table below presents the potential payments and benefits in the event of termination of employment or a change of control for each named executive, other than Messrs. Kaufmann and Crawford, calculated as if the named executive’s employment had terminated under the indicated circumstances as of June 30, 2023, the last day of fiscal 2023.  Messrs. Kaufmann and Crawford departed from the company on September 1, 2022 and November 13, 2022, respectively. As previously disclosed, the Board determined that their departures entitled them to severance benefits as involuntary terminations without cause under the Severance Plan. The payments and benefits that they became entitled to receive in connection with their departures from the company are discussed under the heading “Kaufmann and Crawford Departures” on page 67. The table below uses the closing market price of our common shares on June 30, 2023 ($94.57). The table: • does not reflect the temporary adjustments to our Severance Plan, which were implemented after the end of fiscal 2023 and are described under “Recent Developments Regarding Severance Benefits for Involuntary Terminations without Cause” on page 51 of the CD&A; and • does not include certain other benefits that are available to all of our salaried employees upon retirement, death, or disability, including 401(k) Savings Plan distributions, group and supplemental life insurance benefits, and short-term and long-term disability benefits.  The amounts reported in the table below are hypothetical amounts. Actual payments will depend on the circumstances and timing of any termination of employment or change of control. The paragraphs following the table explain the general provisions applicable to each termination or change of control situation.     Voluntary Termination ($)(1)     Involuntary Termination Without Cause ($)(1)     Death or Disability ($)     Qualifying Termination Following Change of Control ($)   Hollar                                 Cash severance     0       6,750,000       0       8,437,500   Annual cash incentive award(2)     0       1,805,877       1,805,877       1,805,877   Long-term incentive awards(3)     0       0       27,489,418 (4)      27,489,418 (4)  Medical benefits     0       24,375       0       24,375   Outplacement services     0       25,000       0       25,000   TOTAL     0       8,605,252       29,295,295       37,782,171   Alt                                 Cash severance     0       2,598,750       0       3,465,000   Annual cash incentive award(2)     0       412,726       412,726       412,726   Long-term incentive awards(3)     0       0       4,212,242 (4)      4,212,242 (4)  Medical benefits     0       20,780       0       20,780   Outplacement services     0       25,000       0       25,000   TOTAL     0       3,057,256       4,624,968       8,135,749   Mason                                 Cash severance     0       2,100,000       0       2,800,000   Annual cash incentive award(2)     0       695,959       695,959       695,959   Long-term incentive awards(3)     0       0       12,621,974 (4)      12,621,974 (4)  Medical benefits     0       22,104       0       22,104   Outplacement services     0       25,000       0       25,000   TOTAL     0       2,843,063       13,317,933       16,165,037   Weitzman                                 Cash severance     0       1,875,000       0       2,500,000   Annual cash incentive award(2)     570,701       570,701       570,701       570,701   Long-term incentive awards(3)     3,925,033 (5)      3,925,033 (5)      6,411,373 (4)      6,411,373 (4)  Medical benefits     0       21,949       0       21,949   Outplacement services     0       25,000       0       25,000   TOTAL     4,495,734       6,417,683       6,982,074       9,529,023   CARDINALHEALTH   2023 Proxy Statement  |64 Back to Contents     Voluntary Termination ($)(1)     Involuntary Termination Without Cause ($)(1)     Death or Disability ($)     Qualifying Termination Following Change of Control ($)   Mayer                                 Cash severance     0       2,025,000       0       2,700,000   Annual cash incentive award(2)     0       666,918       666,918       666,918   Long-term incentive awards(3)     0       8,886,081 (5)      12,980,394 (4)      12,980,394 (4)  Medical benefits     0       15,738       0       15,738   Outplacement services     0       25,000       0       25,000   TOTAL     0       11,618,737       13,647,312       16,388,051   English                                 Cash severance     0       652,500       0       870,000   Annual cash incentive award(2)     0       131,159       131,159       131,159   Long-term incentive awards(3)     0       0       1,741,885 (4)      1,741,885 (4)  Medical benefits     0       22,104       0       22,104   Outplacement services     0       25,000       0       25,000   TOTAL     0       830,763       1,873,044       2,790,147   (1) Ms. Weitzman satisfied the standard age and service requirements to qualify for retirement under our 2021 LTIP in the event of either a voluntary termination or an involuntary termination without cause. Ms. Mayer satisfied the standard age and service requirements to qualify for retirement under our 2021 LTIP in the event of an involuntary termination without cause. (2) Assumes that the annual cash incentive payouts were at the following fiscal 2023 target amounts: Mr. Hollar — $1,805,877 (actual payout was $2,383,757); Mr. Alt — $412,726 (actual payout was $544,798); Mr. Mason — $695,959 (actual payout was $521,969); Ms. Weitzman — $570,701 (actual payout was $773,979); Ms. Mayer — $666,918 (actual payout was $800,302); and Ms. English — $131,159 (actual payout was $146,705). (3) We valued the vesting of PSUs and RSUs by multiplying the closing price of our common shares on June 30, 2023 by the number of PSUs and RSUs. PSUs are valued using the same payout assumptions as noted in footnote 2 to the Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023 table on page 61. (4) Assumes the full vesting of long-term incentive awards, as follows: Mr. Hollar — 185,961 PSUs and 104,717 RSUs; Mr. Alt — 31,815 PSUs and 12,726 RSUs; Mr. Mason —95,922 PSUs and 37,545 RSUs; Ms. Weitzman — 40,874 PSUs and 26,921 RSUs; Ms. Mayer — 80,925 PSUs and 56,332 RSUs; and Ms. English — 13,316 PSUs and 5,103 RSUs. Because Mr. Alt did not have long-term incentive awards outstanding for at least six months, he would not have received vesting if he was disabled. (5) Assumes the prorated vesting of long-term incentive awards, as follows: Ms. Weitzman — 24,391 PSUs and 17,113 RSUs; and Ms. Mayer — 55,484 PSUs and 38,479 RSUs. Voluntary Termination If a named executive voluntarily terminates, and they qualify for retirement under our MIP and 2021 LTIP, they generally receive: • a prorated annual cash incentive award based on actual performance; • prorated vesting of stock options and RSUs outstanding for at least six months and outstanding stock options remain exercisable until the expiration of the option term; and • a prorated number of PSUs outstanding for at least six months that vest on the original vesting date based on actual performance. The named executives qualify for retirement upon a voluntary termination if they are age 55 or greater and have at least 10 years of service, or they are age 60 or greater and have at least five years of service. If the named executives voluntarily terminate and do not qualify for retirement, they are not eligible for any of the post-termination benefits described in this section. Involuntary Termination Without Cause(1)  If a named executive is involuntarily terminated without cause prior to a change of control or following the second anniversary of a change of control, they generally receive under our Severance Plan: • cash severance equal to 2.0 times in the case of the CEO, and 1.5 times in the case of the other named executives, the sum of annual base salary and target annual cash incentive payable in equal installments over 18 to 24 months; • a prorated annual cash incentive award based on actual performance; and • up to 18 months of health insurance premiums and up to 12 months of outplacement services (up to a maximum value of $25,000). In addition, if the named executive qualifies for retirement under our MIP and 2021 LTIP, they receive the same post-termination benefits with respect to equity awards as in a voluntary termination. Retirement qualification is the same as in a voluntary termination, except that the named executives can also qualify for retirement upon an involuntary termination without cause if they are age 53 or greater and have at least eight years of service, or they are age 59 or greater and have at least four years of service. If a named executive is involuntarily terminated without cause and does not qualify for retirement, a named executive will only receive equity awards that vest before termination; otherwise unvested equity awards are forfeited, and the named executive must exercise vested stock options within 90 days. (1) This description reflects the termination benefits in place as of June 30, 2023, the last day of fiscal 2023, and does not reflect temporary changes to our Severance Plan implemented thereafter and described under “Recent Developments Regarding Severance Benefits for Involuntary Terminations without Cause” on page 51 of the CD&A. CARDINALHEALTH   2023 Proxy Statement  |65 Back to Contents Involuntary Termination for Cause If a named executive is involuntarily terminated for cause, the named executive is not eligible for any of the post-termination benefits described in this section. In addition, we may require repayment of an annual cash incentive award if the named executive commits misconduct, including a breach of our Standards of Business Conduct, and we may cancel unexercised stock options and unvested stock awards and require repayment of proceeds realized from vested awards for a specified period. “Cause” generally means termination of employment for the following: willful failure to perform substantially the named executive’s duties; the willful engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to us; conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving dishonesty or moral turpitude; committing or engaging in fraud, embezzlement or theft against us; the material breach of any restrictive covenant in favor of the company; or willfully and materially violating our Standards of Business Conduct or any other written company policy. Death If a named executive dies while employed, the post-termination benefits generally consist of: • a prorated annual cash incentive award based on actual performance; • vesting of stock options and RSUs and outstanding stock options remain exercisable until the expiration of the option term; and • vesting of PSUs on the original vesting date based on actual performance. Disability If a named executive is disabled while employed, the post-termination benefits generally consist of: • a prorated annual cash incentive award based on actual performance; • vesting of stock options and RSUs outstanding for at least six months and outstanding stock options remain exercisable until the expiration of the option term; and • PSUs outstanding for at least six months vest on the original vesting date based on actual performance. “Disability” generally means when a named executive who is under the regular care of a physician is continuously unable to substantially perform his or her job or to be employed in any occupation for which the named executive is qualified by education, training, or experience. Change of Control The following discussion describes the benefits that are triggered by the occurrence of a change of control that is followed, within two years after a change of control, by the named executive’s employment terminating involuntarily without cause or voluntarily with good reason. The discussion assumes that the surviving entity provides qualifying replacement equity awards. If it does not, the named executives would receive vesting of equity awards immediately upon a change of control. In general terms, we will experience a “change of control,” as defined in our compensation plans, if any of the following events occur: • a person or group acquires 30% or more of Cardinal Health’s outstanding common shares or voting securities, subject to limited exceptions; • during any two-year period, individuals who as of the beginning of such two-year period constituted the Board cease for any reason to constitute at least a majority of the Board, unless the replacement directors are approved as described in the compensation plans; • there is a consummation of a reorganization, merger, consolidation, or sale or other disposition of all or substantially all of Cardinal Health’s assets or another business combination unless: after the transaction all or substantially all the owners of Cardinal Health’s outstanding common shares or voting securities prior to the transaction own more than 50% of such securities after the transaction in substantially the same proportions; no person, subject to certain exclusions, owns 30% or more of the outstanding common shares or voting securities of the resulting entity (unless such ownership level existed before the transaction); and a majority of the directors of the resulting entity were members of Cardinal Health’s Board (including applicable replacements as described above) when the transaction was approved or the transaction agreement was executed; or • our shareholders approve a complete liquidation or dissolution of Cardinal Health. A termination is for “good reason” if we materially reduce the named executive’s total compensation, annual or long-term incentive opportunities, or duties, responsibilities, or authority, or we require the named executive to relocate more than 50 miles from his or her office or location. If a named executive is involuntarily terminated without cause, or he or she voluntarily terminates employment with good reason within two years after a change of control, he or she receives under our Severance Plan: • cash severance equal to 2.5 times in the case of the CEO, and 2.0 times in the case of the other named executives, the sum of annual base salary and target annual cash incentive payable in equal installments over 24 to 30 months; • a prorated annual cash incentive award based on the greater of target performance and actual performance; and • up to 18 months of health insurance premiums and up to 12 months of outplacement services (up to a maximum value of $25,000). The actual payments made under the Severance Plan will be reduced to the extent necessary to eliminate any “golden parachute” excise tax under the Code provided that the value of the adjusted payments and benefits is not less than the amount the named executive otherwise would have received on an after-tax basis. Under our 2021 LTIP, a named executive receives vesting of equity awards and stock options remain exercisable until the earlier of three years from termination or expiration of the option term. The number of PSUs received is based on the actual performance before the change of control and expected performance for the remainder of the performance period. Our plans do not provide for any tax gross-ups for taxes due on any payments described in this section. CARDINALHEALTH   2023 Proxy Statement  |66 Back to Contents Conditions Applicable to Receipt of Payments Our named executives are subject to certain conditions and obligations applicable to the receipt of payments or benefits upon a termination of employment. Our Severance Plan conditions the payment of severance benefits upon continued compliance with restrictive covenants that, among other things, prohibit the named executives for a period of two years after termination of employment from being furnished to solicit proxiesemployed by certain entities that compete with us and from soliciting on behalf of a competitor the business of any customer or any known potential customer of Cardinal Health. These covenants also prohibit disclosure of confidential information, disparagement, and recruitment or employment of our employees. The named executives are also subject to certain restrictive covenants in long-term incentive plans and agreements discussed under “Potential Impact on Compensation from Executive Misconduct (“Clawbacks”)” at page 60. Kaufmann and Crawford Departures Our former CEO Mr. Kaufmann departed the company on September 1, 2022. Former CEO, Pharmaceutical Segment Mr. Crawford departed the company on November 13, 2022. As previously disclosed, the Board determined that Messrs. Kaufmann’s and Crawford’s departures entitled them to severance benefits as involuntary terminations without cause under the Severance Plan. The following table sets forth the estimated payments and benefits Messrs. Kaufmann and Crawford became entitled to receive upon their departures.             Long-Term                 Annual Cash   Incentive       Outplacement        Cash Severance      Incentive Award      Awards      Medical Benefits      services Name   ($)(1)   ($)(2)   ($)(3)   ($)(4)   ($) Kaufmann   6,750,000   419,425   17,761,604   19,945   0 Crawford   2,233,500   345,228   5,584,507   19,999   4,165 (1) As provided under the Severance Plan, cash severance for Mr. Kaufmann equates to 2.0 times the sum of annual base salary and target annual cash incentive payable in equal installments over 24 months and for Mr. Crawford equates to 1.5 times the sum of annual base salary and target annual cash incentive payable in equal installments over 18 months. (2) As provided under the Severance Plan, prorated fiscal 2023 annual cash incentive award based on actual performance. (3) Assumes the prorated vesting of long-term incentive awards, as follows: Mr. Kaufmann — 207,933 PSUs and 41,108 RSUs; and Mr. Crawford — 61,713 PSUs and 12,480 RSUs. The vesting of PSUs and RSUs were valued by multiplying the closing prices of our common shares on Messrs. Kaufmann’s and Crawford’s respective departure dates ($71.32 on September 1, 2022 and $75.27 on November 11, 2022) by the number of PSUs and RSUs. PSUs are valued using the same payout assumptions as noted in footnote 2 to the Outstanding Equity Awards at Fiscal Year-End for Fiscal 2023 table on page 61. Upon their departures, Messrs. Kaufmann and Crawford satisfied the standard age and service requirements to qualify for retirement treatment under our long-term incentive plans and, like all other retirement-eligible participants, they received prorated vesting of outstanding long-term incentive awards and continued exercisability of stock options. Any payout of prorated PSUs will be based on actual performance. (4) As provided under the Severance Plan, Messrs. Kaufmann and Crawford received up to 18 months of health insurance premiums. Pay Ratio Disclosure The Dodd-Frank Act and SEC rules require us to provide the ratio of the annual total compensation of Mr. Hollar, our CEO since September 1, 2022, to the annual total compensation of our median employee. As permitted by SEC rules, we used the same median employee this year that we used for our pay ratio disclosure in our 2021 proxy statement, because there has been no change in our global employee population or employee compensation arrangements that we believe would result in a significant impact to the pay ratio. We identified our median employee using our global employee population identified as of June 30, 2021. For fiscal 2023, the median annual total compensation of all our employees (other than the CEO) was $69,024. Mr. Hollar’s annual total compensation for fiscal 2023 for purposes of the pay ratio disclosure was $18,536,924. Based on this information, for fiscal 2023, the ratio of the compensation of the CEO to the median annual total compensation of all other employees was estimated to be 269 to 1. The median employee was a non-exempt, full-time employee located in the United States. The annual total compensation was calculated for both Mr. Hollar and the median employee in accordance with the SEC rules applicable to the Summary Compensation Table, except that it also includes the company-paid portion of health insurance premiums, which is not required to be included in the Summary Compensation Table. Since Mr. Hollar was appointed CEO effective September 1, 2022, we annualized his base salary and annual cash incentive award. The pay ratio disclosure presented above is a reasonable estimate calculated in a manner consistent with SEC rules. Because the SEC rules for identifying the median employee and calculating the pay ratio allow companies to use different methodologies, exclusions, estimates, and assumptions that reflect their employee populations and compensation practices, the pay ratio disclosure of other companies may not be comparable to the pay ratio reported by us. CARDINALHEALTH   2023 Proxy Statement  |67 Back to Contents Pay Versus Performance The table and graphs below summarize the relationship between the “compensation actually paid” (as required to be defined under the SEC rules, “CAP”) of the principal executive officers (“PEOs”) and the non-PEO named executive officers (“Non-PEO NEOs”), and the financial performance of the company over the time horizon set forth below in accordance with applicable SEC rules. The Compensation Committee does not use the CAP amounts as a basis for making compensation decisions. For a discussion of how our Compensation Committee seeks to align pay with performance when making compensation decisions, please see the CD&A beginning on page 40 of this proxy statement. The financial performance measures used for purposes of this disclosure are the company’s TSR, the peer group TSR (as disclosed under Item 201(e) of Regulation S-K under the Exchange Act (“Regulation-S K”)), and the company’s net income, each of which are required financial performance measures under the SEC rules. The SEC rules also require us to select our most important other financial performance measure that is used to link the CAP amounts paid to these officers to the company’s performance, which for fiscal 2023 was determined to be non-GAAP EPS, as reflected in the SEC-required table below.     Summary Compensation Table Total for PEO(1)   Compensation Actually Paid to PEO(2)   Average       Value of Initial Fixed $100 Investment Based On:       Company      Hollar    Kaufmann    Hollar    Kaufmann    Summary Compensation Table Total for Non-PEO NEOs    Average Compensation Actually Paid to Non-PEO NEOs    Total Shareholder Return    Peer Group Total Shareholder Return    GAAP Net Income/ (Loss)    Selected Measure: Non-GAAP EPS Year   ($)   ($)   ($)   ($)   ($)(1)   ($)(2)   ($)(3)   ($)(3)   ($ millions)(4)   ($)(5) 2023   18,776,433   3,528,968   40,924,299   12,886,904   4,153,005   9,228,441   202   132   261   5.79 2022   N/A   13,463,557   N/A   3,445,022   4,110,560   3,024,965   109   127   (933)   5.06 2021   N/A   12,482,378   N/A   10,381,831   3,715,505   4,193,246   115   125   611   5.57 (1) The PEOs for fiscal 2023 were Messrs. Hollar and Kaufmann. The PEO for fiscal 2022 and 2021 was Mr. Kaufmann. The Non-PEO NEOs for fiscal 2023 were Mses. English, Mayer, and Weitzman, and Messrs. Alt, Crawford, and Mason. The Non-PEO NEOs for fiscal 2022 and 2021 were Ms. Mayer and Messrs. Crawford, Hollar, and Mason. Amounts set forth in the table for PEOs do not include Mr. Hollar’s compensation for years in which he did not serve as PEO. Where applicable, such amounts are included in the Non-PEO NEO amounts. (2) The following table describes the adjustments, each of which is prescribed by the SEC rules, to calculate the CAP amounts from the Summary Compensation Table (“SCT”) amounts. The SCT amounts and the CAP amounts do not reflect the actual amount of compensation earned by or paid to our executives during the applicable years, but rather are amounts determined in accordance with Item 402 of Regulation S-K. Pursuant to the applicable rules, the amounts in the “Stock Awards” column from the SCT are subtracted from the SCT amounts and the values reflected in the table below are added or subtracted as applicable:     2023   2022   2021     Hollar   Kaufmann   Non-PEO NEOs   Kaufmann   Non-PEO NEOs   Kaufmann   Non-PEO NEOs     ($)   ($)   ($)*   ($)   ($)*   ($)   ($)* SCT total compensation   18,776,433   3,528,968   4,153,005   13,463,557   4,110,560   12,482,378   3,715,505 Adjustments for stock awards                             Stock award values reported in SCT for the covered fiscal year   (14,828,888)   0   (2,764,459)   (11,051,066)   (3,137,498)   (10,197,832)   (2,447,474) Fair value of stock awards granted in the covered fiscal year — value at fiscal-year-end   29,849,423   0   4,439,800   10,213,707   2,948,596   10,748,666   2,579,674 Change in fair value from end of prior fiscal year to vesting date for stock awards granted in prior fiscal years that vested during the covered fiscal year   460,516   2,703,218   464,885   (4,290,114)   (138,220)   (4,389,981)   25,940 Change in fair value from end of prior fiscal year to end of the covered fiscal year for stock awards granted in prior fiscal years that were unvested at the end of the covered fiscal year   5,649,120   5,791,292   2,636,182   (6,590,127)   (1,185,583)   (482,158)   (30,365) Change in dividends accrued   1,017,695   863,427   299,027   1,699,065   427,110   2,220,758   349,967 Compensation Actually Paid (as calculated)   40,924,299   12,886,904   9,228,441   3,445,022   3,024,965   10,381,831   4,193,246 * Amounts presented are averages for the entire group of Non-PEO NEOs in each respective year. (3) Pursuant to the SEC rules, TSR measures the cumulative value of an initial investment of $100 on June 30, 2020, including the reinvestment of dividends, through and including the end of the applicable fiscal year for which TSR is calculated, or June 30, 2021, June 30, 2022, and June 30, 2023, respectively. As permitted by the SEC rules, the peer group referenced for purpose of the TSR comparison is the S&P 500 Health Care Index, which is the industry peer group used by the company for purposes of Item 201(e) of Regulation S-K. The separate peer group used by the Compensation Committee for purposes of determining compensation paid to our executive officers is described in the CD&A beginning on page 52. (4) Represents the amounts of GAAP net earnings/(loss) attributable to Cardinal Health, Inc. (5) The primary financial metric for our PSU program is adjusted non-GAAP EPS, which is defined on page 59. See Annex A for a reconciliation to the comparable financial measure prepared in accordance with GAAP and the reasons why we use non-GAAP financial measures. CARDINALHEALTH   2023 Proxy Statement  |68 Back to Contents Most Important Performance Measures The following table lists the four performance measures that, in our assessment, represent the most important performance measures we used in fiscal 2023 to link compensation for our named executive officers to company performance. For further information regarding these performance metrics and their function in our executive compensation program, please see the CD&A, beginning on page 40. Non-GAAP EPS Non-GAAP operating earnings Operating cash flow Annual dividend yield Description of Compensation Actually Paid Versus Company Performance The following charts illustrate the relationships over the past three fiscal years of the CAP amounts for our PEOs and Non-PEO NEOs as compared to our cumulative TSR, peer group TSR, GAAP net income/(loss), and non-GAAP EPS. Compensation Actually Paid vs. Company and Total Shareholder Return CARDINALHEALTH   2023 Proxy Statement  |69 Back to Contents Compensation Actually Paid vs. Net Income Compensation Actually Paid vs. Non-GAAP EPS CARDINALHEALTH   2023 Proxy Statement  |70 Back to Contents Equity Compensation Plan Information The table below summarizes information relating to our equity compensation plans at June 30, 2023.     Common Shares to be Issued Upon Exercise of Outstanding Options and Rights     Weighted Average Exercise Price of Outstanding Options     Common Shares Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a))   Plan Category   (#)     ($)     (#)       (a)     (b)     (c)   Equity compensation plans approved by shareholders   6,169,771 (1)    $ 77.60 (1)    20,730,033 (2)  Equity compensation plans not approved by shareholders   1,398 (3)    — (3)    —   TOTAL AT JUNE 30, 2023   6,171,169           20,730,033   (1) In addition to stock options outstanding under the 2021 LTIP and Amended Cardinal Health, Inc. 2011 Long-Term Incentive Plan (“2011 LTIP”), also includes 777,390 PSUs and 1,317,217 RSUs outstanding under the 2021 LTIP, 1,055,501 PSUs and 976,194 RSUs outstanding under the 2011 LTIP, and 81,573 RSUs outstanding under the Cardinal Health, Inc. 2007 Nonemployee Directors Equity Incentive Plan that are payable solely in common shares. PSUs and RSUs do not have an exercise price, and therefore were not included for purposes of computing the weighted-average exercise price. PSUs granted in fiscal 2021 are reported in this table at the actual amount that vested (137% of target). PSUs granted in fiscal 2022 and 2023 are reported in this table at the maximum payout level (234% of target) in accordance with SEC rules. (2) Reflects common shares remaining available for future issuance under the 2021 LTIP in the form of stock options and other stock-based awards. Under the 2021 LTIP’s fungible share counting provisions, stock options are counted against the plan as one share for every common share issued; awards other than stock options are counted against the plan as two and one-half shares for every common share issued. This means that only 8,292,013 shares could be issued under awards other than stock options while 20,730,033 shares could be issued under stock options. (3) RSUs outstanding under the Cardinal Health, Inc. Amended and Restated Outside Directors Equity Incentive Plan that are payable solely in common shares. RSUs do not have an exercise price, and therefore were not included for purposes of computing the weighted-average exercise price. CARDINALHEALTH   2023 Proxy Statement  |71 Back to Contents SHAREHOLDER PROPOSALS PROPOSAL 5 — Executives to Retain Significant Stock We received notice that John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, a shareholder owning 100 of our common shares as of June 14, 2023, intends to present the following proposal at the Annual Meeting. The proposed resolution and its supporting statement, for which neither we nor the Board accepts responsibility, are set forth below. The shareholder proposal and supporting statement read as follows: Proposal 5 – Executives to Retain Significant Stock Shareholders urge that the executive pay committee adopt a policy requiring the top 10 senior executives to retain 33% of stock acquired through equity pay programs until retirement and to report to shareholders regarding the policy in next annual meeting proxy. This single unified policy shall prohibit hedging transactions for shares subject to this policy which are not sales but reduce the risk of loss to the executive. Otherwise directors could maneuver to avoid the impact of this proposal. This policy shall supplement any other share ownership requirements that have been established for senior executives, and should be implemented without violating current company contractual obligations or the terms of any current pay or benefit plan. The Board is encouraged to obtain waivers of any current pay or benefit plan for senior executives that might delay implementation of this proposal. Requiring senior executives to hold a significant portion of stock obtained through executive pay plans would focus executives on Cardinal Health’s long-term success. A Conference Board Task Force report stated that hold-to-retirement requirements give executives an “ever-growing incentive to focus on long-term stock price performance.” Please vote yes: Executives To Retain Significant Stock – Proposal 5 The Board of Directors’ Statement in Opposition to Proposal 5 The Board recommends a vote AGAINST Proposal 5.  Our existing stock ownership guidelines accomplish the objective of the shareholder proposal by aligning the interests of our executive officers with shareholders. The Board has carefully evaluated the appropriate stock ownership for executive officers in determining the current stock ownership guidelines. We have stock ownership guidelines that require our CEO to own shares equal in value to six times his or her base salary, our CFO and Segment CEOs to own shares equal in value to four times their base salaries, and other executive officers to own shares equal in value to three times their base salaries. Executive officers must retain 100% of net after-tax shares received under any equity awards until they satisfy the required ownership levels. Except for our new CFO, who joined us in January 2023, all our executive officers currently exceed their applicable ownership guidelines. We believe these guidelines, along with our other compensation practices, emphasize performance and retention using long-term, stock-based incentive compensation, which supports sustainable long-term shareholder return. Overall, our compensation practices are designed to align our executives’ interests with our shareholders’ interests through meaningful stock ownership and retention requirements. Accordingly, we believe the proposal is unnecessary. Our executive officers also are prohibited from hedging their shares. Our insider trading policy already prohibits all employees from entering into short sales, publicly traded options, puts and calls, forward sale contracts, and other swap, hedging, or derivative transactions relating to our securities. We also prohibit our executives from holding our securities in margin accounts or pledging our securities as collateral for a loan. Accordingly, we believe the proposal is unnecessary. The terms of the proposal are overly restrictive and could deter qualified candidates from joining or remaining on our executive team. Our stock ownership guidelines are consistent with the policies of our compensation Comparator Group (as discussed in the CD&A) and with general market practice. For example, none of the companies in our Comparator Group have adopted a policy like the one requested by the proposal. The policy requested by the proposal, which would require strict stock retention compliance through an executive’s retirement, is unduly restrictive and could hinder our ability to attract and retain talent. Moreover, the ownership policy requested by the proposal is atypical, and we believe such policy would put us at a disadvantage to our peers. We believe the proposal is unnecessary because we currently have appropriate and robust policies governing stock retention and executive compensation. CARDINALHEALTH   2023 Proxy Statement  |72 Back to Contents Considering that we already have an executive stock retention requirement and an anti-hedging policy, and we believe that it is in the best interests of the company and of our shareholders for stock ownership guidelines to remain competitive in attracting top tier talent, the Board does not believe that any further action is necessary or appropriate and, therefore, recommends that you vote AGAINST this proposal. THE BOARD RECOMMENDS THAT YOU VOTE AGAINST THIS SHAREHOLDER PROPOSAL. CARDINALHEALTH   2023 Proxy Statement  |73 Back to Contents PROPOSAL 6 — Shareholder Ratification of Excessive Termination Pay We received notice that Kenneth Steiner, 14 Stoner Ave., 2M, Great Neck, NY 11021, a shareholder owning at least 500 of our common shares as of May 31, 2023, intends to present the following proposal at the Annual Meeting. The proposed resolution and its supporting statement, for which neither we nor the Board accepts responsibility, are set forth below. The shareholder proposal and supporting statement read as follows: Proposal 6 – Shareholder Ratification of Excessive Termination Pay Shareholders request that the Board adopt a policy to seek shareholder approval of the top 10 senior managers’ new or renewed pay package that provides for termination payments with an estimated value exceeding 2.99 times the sum of the executive’s base salary plus target short-term bonus. The Board shall retain the option to seek shareholder approval at an annual meeting after material terms are agreed upon. Generous performance-based pay can sometimes be justified but shareholder ratification of “golden parachute” severance packages with a total cost exceeding 2.99 times base salary plus target short-term bonus better aligns management pay with shareholder interests. This proposal is relevant even if there are current golden parachute limits. A limit on golden parachutes is like a speed limit. A speed limit by itself does not guarantee that the speed limit will never be exceeded. Like this proposal the rules associated with a speed limit provide consequences if the limit is exceeded. With this proposal the consequences are a non-binding shareholder vote is required for unreasonably high golden parachutes. This proposal places no limits on long-term equity pay or any other type pay. This proposal has no impact on the ability to attract executive talent because it places no limit on golden parachutes. It simply requires that unreasonably high golden parachutes be subject to a non binding shareholder vote. This proposal is relevant because the annual say on executive pay vote does not have a separate section for approving or rejecting golden parachutes. Shareholder Ratification of Excessive Termination Pay, the topic of this proposal, received between 51% and 65% support at: FedEx Spirit AeroSystems Alaska Air Fiserv Please vote yes: Shareholder Ratification of Excessive Termination Pay – Proposal 6 The Board of Directors’ Statement in Opposition to Proposal 6 The Board recommends a vote AGAINST Proposal 6.  We have a longstanding policy that requires shareholder approval of cash severance benefits that exceed 2.99 times base salary and target bonus. The actions required under the proposal are unnecessary because we have long maintained a Policy Regarding Shareholder Approval of Severance Agreements (the “Policy”), which requires shareholder approval prior to our entering into severance agreements with executives that would provide cash severance benefits exceeding 2.99 times base salary and target bonus. If the Board determines that it is not practical to obtain shareholder approval in advance, the Board may seek shareholder ratification after entering into a severance agreement. The Policy applies to our Section 16 officers and defines base salary as the annual rate of base salary in effect at termination and “bonus” as the target incentive amount for the year of termination under the annual and long-term cash incentive compensation plans applicable to the executive. Since the Policy was adopted in 2006, no cash severance pay has ever exceeded the amounts set forth in the Policy. We believe that our existing Policy addresses the issues raised in the proposal and provides shareholders with a voice in limiting excessive severance packages. While the Board and Compensation Committee are aware of concerns surrounding excessive severance compensation, they have already taken appropriate action to address these concerns in adopting our existing Policy. CARDINALHEALTH   2023 Proxy Statement  |74 Back to Contents The request made by the proposal is overly restrictive and could deter qualified candidates from joining our executive team. We believe our compensation packages must remain competitive with market practices to help us attract and retain top caliber talent in senior leadership roles. The Policy is consistent with market practice and maintains the flexibility that we believe is necessary for the company to attract and retain top talent, which ultimately benefits both the company and our shareholders. The Policy balances this need with providing shareholders an opportunity to voice their opinion on the merits of some larger severance arrangements, should they arise. Furthermore, the Policy is consistent with similar policies adopted by many other companies, and we believe that the Policy already meets the stated purpose of the shareholder proposal. Our shareholders have the ability to express their approval of our executive compensation program, including our severance policies, through our annual advisory vote on executive compensation. We regularly solicit investor feedback on our executive compensation program through our annual shareholder engagement program, where we solicit investor comments and sentiment regarding the program. In addition, our shareholders have the opportunity to express their approval of our executive compensation program and practices every year with the advisory vote on executive compensation. Last year, our program received strong shareholder support with 91% of the votes cast. We believe that if shareholders viewed our severance policies as requiring modification such as that sought in this proposal, they would not have approved our executive compensation with such strong support. Accordingly, we believe the actions required under the proposal are unnecessary. Considering that our existing Policy already requires shareholder approval of severance agreements exceeding 2.99 times base salary and target bonus, our executive compensation program must be competitive to attract and retain talent, and our shareholders have expressed support for our existing practices, the Board does not believe that any further action related to executive severance is necessary or appropriate and, therefore, recommends that you vote AGAINST this proposal. THE BOARD RECOMMENDS THAT YOU VOTE AGAINST THIS SHAREHOLDER PROPOSAL. CARDINALHEALTH   2023 Proxy Statement  |75 Back to Contents SHARE OWNERSHIP INFORMATION Beneficial Ownership The table below sets forth certain information regarding the beneficial ownership of our common shares by, and the percentage of our outstanding common shares represented by such ownership for: • each person known by us to own beneficially more than 5% of our outstanding common shares; • our directors; • our named executive officers; and • all current executive officers and directors as a group. A person has beneficial ownership of shares if the person has direct or indirect voting or investment power over the shares or the right to acquire such power in 60 days. Investment power means the power to direct the sale or other disposition of the shares. Except as otherwise described in the footnotes below the table, information on the number of shares beneficially owned is as of September 18, 2023 and the listed beneficial owners have sole voting and investment power.     Common Shares     Name of Beneficial Owner   Number Beneficially Owned   Percent of Class     Additional RSUs and PSUs(8) The Vanguard Group(1)   31,320,204   12.7     — BlackRock, Inc.(2)   29,572,939   12.0     — State Street Corporation(3)   17,568,683   7.1     — Aaron E. Alt   0   *     29,319 Steven K. Barg(4)   2,774   *     0 Michelle M. Brennan(4)   3,324   *     0 Sujatha Chandrasekaran(4)   2,774   *     0 Carrie S. Cox(4)   25,325   *     16,306 Victor L. Crawford(5)   105,699   *     0 Bruce L. Downey(4)   34,342   *     18,387 Sheri H. Edison(4)   10,086   *     0 Patricia M. English(5)   4,944   *     4,056 David C. Evans(4)   10,611   *     0 Patricia A. Hemingway Hall(4)   24,890   *     2,612 Jason M. Hollar   44,957   *     169,854 Akhil Johri(4)   18,106   *     0 Michael C. Kaufmann(5)(6)   801,597   *     0 Gregory B. Kenny(4)   36,903   *     19,584 Nancy Killefer(4)   22,862   *     0 Stephen M. Mason(6)   20,515   *     31,801 Jessica L. Mayer(6)   51,774   *     41,764 Christine A. Mundkur(4)   2,774   *     0 Deborah L. Weitzman(6)   41,344   *     30,500 All Executive Officers and Directors as a Group (19 Persons)(7)   377,182   *     370,830 * Indicates beneficial ownership of less than 1% of the outstanding shares. (1) Based on information obtained from a Schedule 13G/A filed with the SEC on February 9, 2023 by The Vanguard Group (“Vanguard”). The address of Vanguard is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. Vanguard reported that, as of December 30, 2022, it had shared voting power with respect to 376,824 shares, sole dispositive power with respect to 30,188,205 shares, and shared dispositive power with respect to 1,131,999 shares. The number and percentage of shares held by Vanguard may have changed since the filing of the Schedule 13G/A.  (2) Based on information obtained from a Schedule 13G/A filed with the SEC on January 26, 2023 by BlackRock, Inc. (“BlackRock”). The address of BlackRock is 55 East 52nd Street, New York, New York 10055. BlackRock reported that, as of December 31, 2022, it had sole voting power with respect to 26,821,695 shares and sole dispositive power with respect to all shares shown in the table. The number and percentage of shares held by BlackRock may have changed since the filing of the Schedule 13G/A. CARDINALHEALTH   2023 Proxy Statement  |76 Back to Contents (3) Based on information obtained from a Schedule 13G/A filed with the SEC on February 6, 2023 by State Street Corporation (“State Street”). The address of State Street is State Street Financial Center, One Lincoln Street, Boston, Massachusetts 02111. State Street reported that, as of December 31, 2022, it had shared voting power with respect to 15,926,135 shares and shared dispositive power with respect to 17,512,676 shares. The number and percentage of shares held by State Street may have changed since the filing of the Schedule 13G/A. (4) Common shares listed as being beneficially owned by our non-management directors include: outstanding RSUs that may be settled within 60 days, as follows: Mr. Barg — 2,308 shares; Ms. Brennan — 2,308 shares; Ms. Chandrasekaran — 2,774 shares; Ms. Cox — 24,890 shares; Mr. Downey — 24,890 shares; Ms. Edison — 6,017 shares; Mr. Evans — 10,611 shares; Ms. Hemingway Hall — 14,007 shares; Mr. Johri — 18,106 shares; Mr. Kenny — 36,903 shares; Ms. Killefer — 22,862 shares; and Ms. Mundkur — 2,774 shares. (5) Messrs. Kaufmann and Crawford left the company on September 1, 2022 and November 13, 2022, respectively, and Ms. English ceased to serve as Interim CFO on February 10, 2023. Information regarding the number of shares they beneficially own is as of those dates, except for outstanding equity awards. Mr. Kaufmann’s number of shares beneficially owned includes 10 common shares held by his spouse. (6) Common shares listed as being beneficially owned by our named executives include outstanding stock options that are currently exercisable, as follows: Mr. Kaufmann — 200,522 shares; Mr. Mason — 14,961 shares; Ms. Mayer — 8,673 shares; and Ms. Weitzman — 27,642 shares; and outstanding RSUs that will be settled within 60 days, as follows: Ms. Mayer — 11,560 shares. (7) Common shares listed as being beneficially owned by all executive officers and directors as a group include: 68,943 outstanding stock options that are currently exercisable; and 180,010 RSUs that may or will be settled in common shares within 60 days. (8) “Additional RSUs and PSUs” include vested and unvested RSUs and vested PSUs that will not be settled in common shares within 60 days. RSUs and PSUs do not confer voting rights and generally are not considered “beneficially owned” shares under the SEC rules. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires the company’s directors and certain officers, as well as persons who beneficially own more than 10% of the outstanding common shares, to file reports regarding their initial share ownership and subsequent changes to their ownership with the SEC. Based solely on a review of the reports filed for fiscal 2023 and related written representations, we believe that all Section 16(a) reports were filed on a timely basis. During fiscal 2024, a Form 4 reporting two stock purchases in fiscal 2022 through an automatic, broker-administered dividend reinvestment program was filed late by Chief Human Resources Officer Ola M. Snow.  CARDINALHEALTH   2023 Proxy Statement  |77 Back to Contents OTHER MATTERS General Information About the Annual Meeting Date, Time, and Place of Meeting Date: Wednesday, November 15, 2023 Time: 8:00 a.m. Eastern Time Virtual Meeting Access: www.virtualshareholdermeeting.com/CAH2023 This proxy statement was first mailed to shareholders on September 27, 2023. It is furnished in connection with the solicitation of proxies by the Board of Directors of Cardinal Health, Inc. for use at ourto be voted during the Annual Meeting of Shareholders to be held on Wednesday, November 8, 2017, and at any adjournment or postponement (the “Annual Meeting”). The Annual Meeting will take place at our principal executive office located at 7000 Cardinal Place, Dublin, Ohio 43017, at 8:00 a.m., local time. These proxy materials include ourfor the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders. Shareholders who execute proxies retain the right to revoke them at any time before the shares are voted by proxy during the meeting. A shareholder may change or revoke their proxy at any time before it is exercised at the Annual Meeting by Internet, telephone, or mail prior to 11:59 p.m. Eastern Time on Tuesday, November 14, 2023, or by attending the virtual Annual Meeting and following the voting instructions provided on the meeting platform. Proxy Statement and our 2017 Annual Report to Shareholders, which includes our Fiscal 2017 Form 10-K. In addition, theseMaterials are Available on the Internet We are furnishing proxy materials may include a proxy card for the Annual Meeting. These proxy materials are first being sent or made available to our shareholders commencing on September 21, 2017. References to our fiscal years in this proxy statement meanprimarily via the fiscal year ended or ending on June 30Internet instead of such year. For example, “fiscal 2017” refers to the fiscal year ended June 30, 2017. Noticemailing printed copies of Internet Availability of Proxy Materials As permitted by the Securities and Exchange Commission ("SEC"), we are providing proxythose materials to someeach shareholder. By doing so, we save costs and reduce the environmental impact of our shareholders via the Internet. Commencing onAnnual Meeting. On September 21, 2017,27, 2023, we mailed a notice of internet availability of proxy materials (“Notice”) to certain of our shareholders. The Notice of Internet Availability of Proxy Materials (the “Notice”) explainingcontains instructions about how to access our proxy materials online.and vote online or vote by telephone. If you received the Notice, you will notwould like to receive a printedpaper copy of our proxy materials, please follow the instructions included in the Notice. If you previously chose to receive our proxy materials electronically, you will continue to receive access to these materials via email unless you elect otherwise. Participating in the Annual Meeting The Annual Meeting will be conducted virtually. We aim to offer shareholders rights and participation opportunities during our virtual meeting that are comparable to those at an in-person annual meetings of shareholders. Shareholders of record and proxy holders as of the record date will be able to participate in the virtual meeting online, vote shares electronically, and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/CAH2023 and entering the 16-digit control number included in the Notice, voting instruction form, or proxy card. Only shareholders and proxy holders who enter a valid control number will be able to participate in the virtual Annual Meeting to submit questions and vote. The live webcast of the Annual Meeting will begin promptly at 8:00 a.m., Eastern Time. We encourage you to access the webcast early, starting at approximately 7:45 a.m., Eastern Time, to allow yourself time to log in and test your computer. If you encounter technical difficulties accessing the virtual Annual Meeting, please call the technical support telephone number posted on www.virtualshareholdermeeting.com/CAH2023. Shareholders will be able to ask questions during the virtual Annual Meeting. We will post Annual Meeting rules on www.virtualshareholdermeeting.com/CAH2023. We will make an audio replay of the Annual Meeting available and post questions and answers received at the Annual Meeting that were not addressed (if applicable to Cardinal Health’s business and otherwise appropriate under the Annual Meeting rules) on the Cardinal Health Investor Relations website after the meeting. Even if you plan to attend the Annual Meeting online, we encourage you to vote in advance of the Annual Meeting as described in this proxy statement, so that your vote will be counted if you later decide not to attend the Annual Meeting or if you encounter technical difficulties. If you wish to submit your vote before the virtual Annual Meeting, then you do not have to vote at the Annual Meeting unless you wish to change your vote. Attending the Annual Meeting as a Guest If you do not have a 16-digit control number, you may still attend the meeting as a guest in listen-only mode. To attend as a guest, please visit www.virtualshareholdermeeting.com/CAH2023 and enter the information requested on the screen to register as a guest. Please note that you will not have the ability to vote or ask questions during the meeting if you participate as a guest. CARDINALHEALTH   2023 Proxy Statement  |78 Back to Contents Soliciting Proxies The Board is soliciting the proxy accompanying this proxy statement. Proxies may be solicited by officers, directors, and employees of Cardinal Health, none of whom will receive any additional compensation for their services. Alliance Advisors may solicit proxies at a cost we anticipate will not exceed $19,000. These solicitations may be made personally or by mail, unless you request one by followingfacsimile, telephone, messenger, email, or the directions included onInternet. Cardinal Health will pay persons holding common shares in their names or in the Notice. Record Date We have fixednames of nominees, but not owning shares beneficially, such as brokerage houses, banks, and other fiduciaries, for the expense of forwarding solicitation materials to their principals. Cardinal Health will pay all proxy solicitation costs. Shareholders of record at the close of business on September 11, 2017 as the record date for determining our shareholders18, 2023, will be entitled to noticevote during the meeting on the basis of one vote for each share held. On September 18, 2023, there were 246,354,023 common shares outstanding, held of record by 6,511 shareholders. Householding Under the rules adopted by the SEC, we may deliver a single set of proxy materials to one address shared by two or more of our shareholders. This delivery method is referred to as “householding” and can result in significant cost savings. To take advantage of this opportunity, we have delivered only one set of proxy materials to votemultiple shareholders who share an address, unless we received contrary instructions from the impacted shareholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of the proxy materials, as requested, to any shareholder at the Annual Meeting. On that date, we had 315,215,877 common shares outstanding. Shareholders asshared address to which a single copy of these documents was delivered. If you prefer to receive separate copies of the proxy statement or annual report, contact Broadridge Financial Solutions, Inc. by calling 1-866-540-7095 or in writing at 51 Mercedes Way, Edgewood, New York 11717, Attention: Householding Department. In addition, if you currently are a shareholder who shares an address with another shareholder and would like to receive only one copy of future notices and proxy materials for your household, you may notify your broker if your shares are held in a brokerage account, or you may notify us if you are a shareholder of record. Shareholders of record date will have one vote per share formay notify us by contacting Broadridge Financial Solutions, Inc. at the election of each director nominee and on each other voting matter. above telephone number or address. Quorum Requirement We will have a quorum to conduct business at the Annual Meeting if the holders of a majority of our common shares are present, either in person or by proxy. Board Recommendation The Board recommends that youentitled to voteFOR the election of the 11 director nominees, FOR Proposals 2 and 3, ONE YEAR for Proposal 4, and AGAINST Proposals 5 and 6. How to Vote Shareholders of record. If you are a “shareholder of record” (meaning your shares are registered in your name with our transfer agent, Computershare Trust Company, N.A.), you may vote either in person at the Annual Meeting are present or represented by proxy. Voting Procedures How to Vote You may vote either electronically during the Annual Meeting at www.virtualshareholdermeeting.com/CAH2023 or by proxy.providing a proxy or voting instructions in advance of the meeting. If you decide to vote by proxy,prior to the Annual Meeting, you may do so in any one of the following three ways: By telephone.  You may vote your shares 24 hours a day by calling the toll free number 1-800-652-VOTE (8683) within the United States, U.S. territories or Canada, and following instructions provided by the recorded message. You will need to enter identifying information that appears on your proxy card or the Notice. The telephone voting system allows you to confirm that your votes were properly recorded. By Internet.  You may vote your shares 24 hours a day by logging on to a secure website, www.envisionreports.com/CAH, and following the instructions provided. You will need to enter identifying information that appears on your proxy card or the Notice. As with the telephone voting system, you will be able to confirm that your votes were properly recorded. By mail.  If you received a proxy card, you may mark, sign and date your proxy card and return it by mail in the enclosed postage-paid envelope. • By telephone. You may vote your shares 24 hours a day by calling the toll-free number 1-800-690-6903 within the United States, U.S. territories, or Canada, and following instructions provided by the recorded message. You will need to enter identifying information that appears on your proxy card, voting instruction form, or the Notice. The telephone voting system allows you to confirm that your votes were properly recorded. • By Internet. You may vote your shares 24 hours a day by logging on to a secure website, www.proxyvote.com, and following the instructions provided. You will need to enter identifying information that appears on your proxy card, voting instruction form, or the Notice. As with the telephone voting system, you will be able to confirm that your votes were properly recorded. • By mail. If you received proxy materials by mail, you may mark, sign, and date your proxy card or voting instruction form and return it by mail in the enclosed postage-paid envelope. Telephone and Internet voting is available through 2:00 a.m.11:59 p.m. Eastern timeTime on Wednesday,Tuesday, November 8, 2017.14, 2023. If you vote by mail, your proxy card or voting instruction form must be received before the Annual Meeting to assure that your vote is counted. We encourage you to vote promptly. Beneficial owners. If, like most shareholders, you are a beneficial owner of shares held in “street name” (meaning a broker, trustee, bank or other nominee holds shares on your behalf), you may vote in person at the Annual Meeting only if you obtain a legal proxy from the nominee that holds your shares. Alternatively, you may Cardinal Health | 2017 Proxy Statement 1 Table of Contents General Information vote by completing, signing and returning the voting instruction form that the nominee provides to you or by following any telephone or Internet voting instructions described on the voting instruction form, the Notice or other materials that the nominee provides to you. We encourage you to vote promptly. Changing or Revoking Your Proxy Your attendance at the Annual Meeting will not automatically revoke your proxy. If you are a shareholder of record, you may change or revoke your proxy at any time before a vote is taken at the meeting by giving notice to us in writing or at the Annual Meeting, by executing and forwarding to us a later-dated proxy or by voting a later proxy over the telephone or the Internet. If you are a beneficial owner of shares, you should check with the broker, trustee, bank or other nominee that holds your shares to determine how to change or revoke your vote. Voting Shares Held Though OurThrough Employee Plans If you hold shares through our 401(k) Savings Plans, or Deferred Compensation Plan ("DCP"), you will receive voting instructions from Computershare Trust Company, N.A.Broadridge Financial Solutions, Inc. and can vote through one of the three methods described above under "How“How to Vote."” Please note that employee plan shares have an earlier voting deadline of 2:00 a.m.11:59 p.m. Eastern timeTime on Monday,Thursday, November 6, 2017. 9, 2023. Broker Non-Votes   Non-Votes If you are a beneficial owner whose shares are held by a broker, as stated above you must instruct the broker how to vote your shares. Ifand you do not provide voting instructions prior to the meeting, your broker is not permitted to vote your shares on the election of directors, the advisory vote to approve the compensation of our named executive officers, the advisory vote on the frequency of future advisory votes to approve executive compensation, or the shareholder proposals. The inability of the broker to vote your shares on these proposals results in a “broker non-vote.” In the absence of voting instructions, the broker can only register your shares as being present at the Annual Meeting for purposes of determining a quorum and may vote your shares on ratification of the appointment of our auditor. CARDINALHEALTH   2023 Proxy Statement  |79 Voting Back to Contents Majority Vote Standard for Election of Directors To elect directors under Proposal 1, our governing documents require that a director nominee be elected by a majority of votes cast in an uncontested election. If an incumbent director nominee receives a greater number of votes “against” than votes “for” his or her election, our Corporate Governance Guidelines require the director to promptly tender a resignation to the Chairman of the Board. Within 90 days following the certification of the shareholder vote, the Governance and Sustainability Committee will recommend to the Board whether to accept the resignation. Thereafter, the Board will promptly act and publicly disclose its decision and the rationale behind the decision. Vote Required; Effect of Abstentions and Broker Non-Votes You may either vote FOR, AGAINST, or ABSTAINon each of the proposals, with the exception ofexcept for Proposal 4 where you may vote for ONE YEAR, TWO YEARS, THREE YEARS,or ABSTAIN.ABSTAIN. Votes will be tabulated by or under the direction of inspectors of election, who will certify the results following the Annual Meeting. To elect directors under Proposal 1, our governing documents require that in an uncontested election, a director nominee be elected by a majority of votes cast. Abstentions and broker non-votes are not considered as votes cast and are not counted in determining the outcome Each of the voting results. If a director nominee is not re-elected by a majority of votes cast, that individual is required to tender a resignation for the Board’s consideration. See “Resignation Policy for Incumbent Directors Not Receiving Majority Votes” on page 13. Proxies may not be voted for more than 11 director nominees, and shareholders may not cumulate their voting power. Each of Proposals 2 through 6proposals requires approval by a majority of votes cast, with the exception ofexcept for Proposal 4 which requires the majority of the votes cast for one of the options (i.e., one year, two years, or three years). Abstentions and broker non-votes are not considered as votes cast and will not be counted in determining the outcome of the voting results. Proxies may not be voted for more than 11 director nominees, and shareholders may not cumulate their voting power. How Shares Will Be Voted The shares represented by all valid proxies received by telephone, by Internet, or by mail will be voted in the manner specified. For shareholders of record who do not specify a choice for a proposal, proxies that are signed and returned will be voted FORthe election of all 11 director nominees, FORthe ratification of the appointment of Ernst & Young LLP as independent auditor, FORapproval of the compensation of our named executive officers, FORconducting future advisory votes to approve the compensation of our named executive compensationofficers every ONE YEAR, andAGAINST the shareholder proposals. If any other matters properly come before the Annual Meeting, the individuals named in your proxy, or their substitutes, will determine how to vote on those matters in their discretion. The Board of Directors does not know of any other matters that will be presented for action at the Annual Meeting. Attending Communicating with the Board Shareholders and other interested parties may communicate with the Board, any committee of the Board, any individual director or the independent directors as a group, by writing to Corporate Secretary, Cardinal Health, Inc., 7000 Cardinal Place, Dublin, Ohio 43017 or sending an email to bod@cardinalhealth.com. Communications from shareholders will be distributed to the entire Board unless addressed to a particular committee, director or group of directors. The corporate secretary will not distribute communications that are unrelated to the duties of the Board, such as spam, junk mail, mass mailings, business solicitations, and advertisements. Shareholder Recommendations for Director Nominees The Governance and Sustainability Committee will consider candidates recommended by shareholders for election as director. Shareholder recommendations will be evaluated against the same criteria used to evaluate other director nominees, which criteria are discussed under “Board Membership Criteria: What we look for” on page 13. Shareholders who wish to recommend a candidate may do so by writing to the Governance and Sustainability Committee in care of Corporate Secretary, Cardinal Health, Inc., 7000 Cardinal Place, Dublin, Ohio 43017. To be considered by the Governance and Sustainability Committee for consideration at the 2024 annual meeting of shareholders, a shareholder recommendation must be received no later than May 30, 2024. Recommendations must include, at a minimum, the following information: • the name and address of the shareholder making the recommendation; • the name and address of the person recommended for nomination; • if the shareholder is not a shareholder of record, a representation and satisfactory proof of share ownership; • a statement in support of the shareholder’s recommendation, including sufficient information to permit the Governance and Sustainability Committee to evaluate the candidate’s qualifications, skills, and experience; • a description of all direct or indirect arrangements or understandings between the shareholder and the candidate recommended by the shareholder; • information regarding the candidate as would be required to be included in a proxy statement filed in accordance with SEC rules; and • the candidate’s written, signed consent to serve if elected. Shareholders who wish to nominate directors directly for election at an annual meeting of shareholders in accordance with the procedures in our Restated Code of Regulations, including under our proxy access provision, should follow the instructions under “Submitting Proxy Proposals and Director Nominations for the Next Annual Meeting of Shareholders” below and the details contained in our Restated Code of Regulations. CARDINALHEALTH   2023 Proxy Statement  |80 To attend Back to Contents Submitting Proxy Proposals and Director Nominations for the Next Annual Meeting of Shareholders Shareholder Proposal If you intend to present a proposal to be included in the proxy statement and form of proxy relating to our 2024 annual meeting of shareholders under Rule 14a-8 under the Exchange Act, we must receive the proposal at our principal executive offices not later than the close of business (5:00 p.m. Eastern Time) on May 30, 2024. The proposal should be addressed to Corporate Secretary, Cardinal Health, Inc., 7000 Cardinal Place, Dublin, Ohio 43017. We will not be required to include in our proxy statement or form of proxy a shareholder proposal that we receive after that date or that otherwise fails to meet the requirements for shareholder proposals established by the SEC rules. Proxy Access Nominee Our Restated Code of Regulations includes a proxy access provision, under which a shareholder, or a group of up to 20 shareholders, owning at least 3% of our outstanding common shares continuously for at least three years, may nominate and include in our proxy materials director nominees constituting up to the greater of two nominees or 20% of the Board, if the shareholders and the nominees satisfy the requirements specified in our Restated Code of Regulations. If you intend to request that director nominees be included in our proxy materials under our proxy access provision, you must comply with the notice and other requirements set forth in our Restated Code of Regulations. Among other requirements, you must deliver proper written notice to our corporate secretary at our principal executive offices no earlier than April 30, 2024 and not later than the close of business on May 30, 2024. If the date of the 2024 annual meeting of shareholders is more than 30 days before, or more than 60 days after, November 15, 2024, written notice must be delivered after the close of business on the 150th day prior to the meeting, but before the close of business on the later of the 120th day prior to the meeting or the 10th day after we first publicly announce the date of the meeting. Advance Notice Provisions for Item of Business or Director Nominee If you intend to present a proposal for other business or a nomination for election to the Board at our 2024 annual meeting of shareholders (other than any such proposal included in our proxy statement and form of proxy under Rule 14a-8 under the Exchange Act), you must comply with the notice requirements set forth in our Restated Code of Regulations and such business must be a proper matter for shareholder as of September 11, 2017, the record date, and have an admission ticket or satisfactory proof of share ownership and photo identification. If you are a shareholder of record,action. Among other requirements, you must present an admission ticket (whichdeliver proper written notice to our corporate secretary at our principal executive offices no earlier than July 18, 2024 and no later than the close of business on August 17, 2024. If the date of the 2024 annual meeting of shareholders is attached to your proxy card)more than 30 days before, or youmore than 60 days after, November 15, 2024, written notice must presentbe delivered after the Noticeclose of Internet Availability. If you are a beneficial owner, in order to be admittedbusiness on the 120th day prior to the meeting, you must present either a valid legal proxy from your bank, broker or other nominee as to your shares,but before the Noticeclose of Internet Availability, a voting instruction form or a bank or brokerage account statement. Anyone holding an admission ticket or other documentation not issued in his or her name will not be admittedbusiness on the later of the 90th day prior to the meeting. Our annual meeting rules prohibit cameras, videotaping equipment and other recording devices, large packages, banners or placards in the meeting and prohibit use of a phone or other device. You can call our Investor Relations department at (614) 757-4757 if you need directions to10th day after we first publicly announce the Annual Meeting. Even if you expect to attend the Annual Meeting in person, we urge you to vote your shares in advance. 2 Cardinal Health | 2017 Proxy Statement Table of Contents Proposal 1—Election of Directors Our Board has nominated 11 directors for election at this Annual Meeting to serve until the next Annual Meeting of Shareholders and until his or her successor is duly elected and qualified. Alldate of the nominees are currently directorsmeeting. Universal Proxy Rules To comply with the universal proxy rules, shareholders who intend to solicit proxies in support of Cardinal Health. The Board seeks members that possess the experience, skills and diverse backgrounds to perform effectively in overseeing the company's current and evolving business and strategic direction and to properly perform its oversight responsibilities. All of our director nominees bring to the Board a wealth of executive leadership experience derived from their diverse professional backgrounds and areas of expertise. As a group, they have extensive healthcare and global business experience, financial expertise and business acumen , as well as public company board experience. Each of our director nominees has sound judgment and integrity and is able to commit sufficient time and attention to the activities of the Board. All director nominees other than Cardinal Health’s nominees must provide notice that sets forth the Chairman and Chief Executive Officer are independent. Each director nominee agreed to be named in this proxy statement and to serve if elected.information required by Rule 14a-19 under the Exchange Act no later than September 16, 2024. If due to death or other unexpected occurrence, one or morethe date of the director nominees2024 annual meeting of shareholders is not available for election, proxies will be voted for the election of all remaining nominees and any substitute nominee(s) the Board selects. Biographies of our Director Nominees David J. Anderson Age68 Director since 2014 Senior Vice President and Chief Financial Officer of Honeywell International Inc. (retired); Former Executive Vice President and Chief Financial Officer of Alexion Pharmaceuticals, Inc. Independent Director Director Qualification Highlights Other Public Boards: American Electric Power Company, Inc., a public utility holding company (since 2011); B/E Aerospace, Inc., a manufacturer of aircraft interior products (2014 -2017); Fifth Street Asset Management Inc., an alternative asset manager (2014 - 2015) ü Financial Literacy / Expertise - Former CFO roles ü Healthcare ü International ü Executive Leadership ü Strategic Planning / Acquisitions ü Technology ü Operations ü Regulatory / Public Policy Mr. Anderson served as Chief Financial Officer of Honeywell International Inc., a global diversified technology and manufacturing company, from 2003 to 2014 and as Chief Financial Officer of Alexion Pharmaceuticals, Inc. ("Alexion"), a biotechnology company, from December 2016 to August 2017. While at Honeywell, Mr. Anderson was responsible for the company’s corporate finance activities including domestic and international tax, accounting, treasury, audit, investments, financial planning, acquisitions and real estate. Prior to his roles at Honeywell and Alexion, Mr. Anderson held a number of other finance-related executive positions with ITT Corporation, Newport News Shipbuilding, RJR Nabisco and Quaker Oats Company. Skills and Qualifications of Particular Relevance to Cardinal Health Through his prior finance leadership positions as Chief Financial Officer at Honeywell and Alexion, as well as other leading companies, Mr. Anderson brings to the Board relevant experience in the areas of global finance and accounting, healthcare, management, executive leadership, strategic planning, acquisitions, information technology, manufacturing operations and international markets. Given his extensive financial expertise, Mr. Anderson provides valuable insight in the areas of financial reporting, accounting and internal controls, as well as international tax and finance. In addition, his recent experience as Chief Financial Officer of Alexion brings to the Board relevant experience in the areas of healthcare and pharmaceutical manufacturing. Mr. Anderson also brings to the Board valuable perspectives and insights from his service on the board of directors of American Electric Power, including service on its Audit and Finance Committees, as well as his prior service on B/E Aerospace's board of directors. Cardinal Health | 2017 Proxy Statement 3 Table of Contents Proposal 1—Election of Directors Colleen F. Arnold Age 60 Director since2007 Senior Vice President, Sales and Distribution, International Business Machines Corporation (retired) Independent Director Director Qualification Highlights Other Public Boards: None ü Technology ü International and Global Leadership ü Operations ü Executive Leadership ü Strategic Planning Ms. Arnold was Senior Vice President, Sales and Distribution of International Business Machines Corporation ("IBM"), a provider of systems, financing, software and services, from 2014 until March 2016. Prior to that, she held a number of senior positions with IBM from 1998 to 2014, including Senior Vice President, Application Management Services, IBM Global Business Services; General Manager of GBS Strategy, Global Consulting Services, Global Industries and Global Application Services; General Manager, Europe; General Manager, Australia and New Zealand Global Services; and CEO, Global Services Australia, an IBM joint venture. Skills and Qualifications of Particular Relevance to Cardinal Health A former senior executive of IBM for over 17 years, Ms. Arnold's significant experience in the areas of global business operations and information technology contributes to the Board's discussions regarding information technology in our business and global strategies. Given her extensive international business experience, including leadership of international commercial operations at IBM, Ms. Arnold provides valuable insight for our growing presence in international markets. She also brings to the Board more than 30 yearsdays before or after November 15, 2024, shareholders who intend to solicit proxies in support of relevant experience indirector nominees other than Cardinal Health’s nominees must provide such notice by the areaslater of operations, management, executive leadership and strategic planning. George S. Barrett Age 62 Director since 2009 Chairman and Chief Executive Officer, Cardinal Health, Inc. Other Public Boards: Eaton Corporation plc, a diversified power management company (2011 - 2015) Director Qualification Highlights ü Healthcare ü Operations ü Strategic Planning ü Executive Leadership ü International ü Regulatory / Public Policy ü Financial Expertise Mr. Barrett has served as Chairman and Chief Executive Officer of Cardinal Health, Inc. since 2009. He joined Cardinal Health in 2008 as Vice Chairman and Chief Executive Officer60 days prior to the meeting or the 10th day after we first publicly announce the date of the company's Healthcare Supply Chain Services segment. From 1997 to 2008, Mr. Barrett held a number of executive positions with Teva Pharmaceutical Industries Ltd., a multinational generic and branded pharmaceutical manufacturer, including President and Chief Executive Officer of Teva North America. Skills and Qualifications of Particular Relevance to Cardinal Health Having served in leadership positions with companies in the pharmaceutical industry for over 30 years, Mr. Barrett has extensive healthcare experience in the areas of distribution and manufacturing operations, management, regulatory compliance, finance, executive leadership, strategic planning, human resources, corporate governance and global markets. As a result, he provides the Board with unique perspectives and insights regarding our businesses and our growing international presence, industry, challenges and opportunities. He also brings to the Board valuable perspectives and insights from his service as Chairman of the Healthcare Leadership Council, an alliance of leading companies and organizations representing all sectors of U.S. healthcare. In addition, Mr. Barrett brings relevant experience and perspectives to the Board from his service on public and not-for-profit boards of directors, including his prior service on Eaton’s board of directors. 4 Cardinal Health | 2017 Proxy Statement Table of Contents Proposal 1—Election of Directors Carrie S. Cox Age60 Director since 2009 Chairman and Chief Executive Officer of Humacyte, Inc.; Executive Vice President and President of Global Pharmaceuticals, Schering-Plough Corporation (retired) Independent Director Director Qualification Highlights Other Public Boards:Texas Instruments Incorporated, a developer, manufacturer and marketer of semiconductors (since 2004); Celgene Corporation, a biopharmaceutical company (since 2009) ü Healthcare ü International ü Operations ü Executive Leadership ü Strategic Planning ü Regulatory / Public Policy Ms. Cox has served as Chief Executive Officer of Humacyte, Inc., a privately held, development stage company focused on regenerative medicine, since 2010 and as Chairman of Humacyte since 2013. She previously served as Executive Vice President and President of Global Pharmaceuticals at Schering-Plough Corporation, a multinational branded pharmaceutical manufacturer, from 2003 until its merger with Merck & Co. in 2009. Ms. Cox previously was Executive Vice President and President of Global Prescription Business of Pharmacia Corporation from 1997 to 2003. Skills and Qualifications of Particular Relevance to Cardinal Health Through her roles as a former executive officer of Schering-Plough, President of Pharmacia's Global Prescription business and a licensed pharmacist, and now with Humacyte, Ms. Cox brings to the Board substantial expertise in healthcare, particularly the pharmaceutical and international aspects of our business. She has worked in the global pharmaceutical industry for over 30 years, giving her relevant experience with large, multinational healthcare companies in the areas of manufacturing operations, management, regulatory compliance, executive leadership, strategic planning and global markets. She also brings to the Board valuable perspectives and insights from her service on the boards of directors of Celgene and Texas Instruments, including on Texas Instruments' Compensation Committee and her former service as its Lead Director. Calvin Darden Age 67 Director since 2005 Senior Vice President of U.S. Operations of United Parcel Service, Inc. (retired) Independent Director Director Qualification Highlights Other Public Boards: Target Corporation, an operator of large-format general merchandise discount stores (since 2003); Coca-Cola Enterprises, Inc., a marketer, manufacturer and distributor of nonalcoholic beverages in selected international markets (2004 - 2016) ü Operations ü Distribution / Supply Chain ü Executive Leadership ü Strategic Planning ü Labor Relations ü International Mr. Darden was Senior Vice President of U.S. Operations of United Parcel Service, Inc. ("UPS"), an express carrier and package delivery company, from January 2000 until 2005. During his 33-year career with UPS, he served in a number of senior leadership positions, including developing the corporate quality strategy for UPS and leading the business and logistics operations for its Pacific Region, the largest region of UPS at that time. Skills and Qualifications of Particular Relevance to Cardinal Health A former executive officer of UPS, Mr. Darden has expertise in supply chain networks and logistics that contributes to the Board’s understanding of this important aspect of our business. He has over 30 years of relevant experience in the areas of operations, distribution and supply chain, executive leadership, efficiency and quality control, strategic planning, human resources and labor relations. Drawing upon his past experience as a member of Coca-Cola Enterprises' board of directors, Mr. Darden provides the Board with a valuable understanding of distribution operations in international markets. He also brings to the Board valuable perspectives and insights from his service on Target’s board of directors, including its Compensation Committee, and his prior service on Coca-Cola Enterprises’ Human Resources and Compensation Committee. Cardinal Health | 2017 Proxy Statement 5 Table of Contents Proposal 1—Election of Directors Bruce L. Downey Age69 Director since 2009 Chairman and Chief Executive Officer of Barr Pharmaceuticals, Inc. (retired); Partner of NewSpring Health Capital II, L.P. Independent Director Director Qualification Highlights Other Public Boards: Momenta Pharmaceuticals, Inc., a biotechnology company (since 2009) ü Healthcare ü Regulatory / Public Policy ü Operations ü International ü Financial Expertise ü Executive Leadership ü Strategic Planning Mr. Downey was Chairman and Chief Executive Officer of Barr Pharmaceuticals, Inc., a global generic pharmaceutical manufacturer, from 1994 to 2008. Mr. Downey has served on a part-time basis as a Partner of NewSpring Health Capital II, L.P., a venture capital firm, since 2009. Skills and Qualifications of Particular Relevance to Cardinal Health Having spent 14 years as Chairman and Chief Executive Officer of Barr Pharmaceuticals, Mr. Downey brings to the Board substantial global healthcare experience in the areas of manufacturing operations, management, regulatory compliance, finance, executive leadership, strategic planning, human resources and corporate governance. He also offers valuable experience in the pharmaceutical and international aspects of our businesses. Mr. Downey brings to the Board valuable perspectives and insights from his service on Momenta Pharmaceuticals’ board of directors, including its Audit Committee, and from his prior service as Chairman of Barr Pharmaceutical's board of directors. Before his career at Barr Pharmaceuticals, Mr. Downey was a practicing attorney for 20 years, having worked in both private practice and with the U.S. Department of Justice. Patricia A. Hemingway Hall Age64 Director since 2013 President and Chief Executive Officer of Health Care Service Corporation (retired) Independent Director Director Qualification Highlights Other Public Boards: ManpowerGroup, Inc., a workforce solutions company (since 2011) ü Healthcare ü Regulatory / Public Policy / Government ü Operations ü Financial Expertise ü Executive Leadership ü Strategic Planning ü Technology Ms. Hemingway Hall served as President and Chief Executive Officer of Health Care Service Corporation, a mutual health insurer ("HCSC"), from 2008 until 2015. Previously, she held several leadership positions at HCSC, including President and Chief Operating Officer from 2007 to 2008 and Executive Vice President of Internal Operations from 2006 to 2007. Skills and Qualifications of Particular Relevance to Cardinal Health As retired President and Chief Executive Officer of HCSC, the largest customer-owned health insurer in the United States and fourth largest overall operating through Blue Cross and Blue Shield Plans in Texas, Illinois, Montana, New Mexico and Oklahoma, Ms. Hemingway Hall brings to the Board valuable experience regarding evolving healthcare payment models at a time of change and reform in the healthcare industry. She has worked in the healthcare industry for over 30 years, first as a registered nurse and most recently in health insurance, and has relevant experience in the areas of healthcare reform, operations, management, regulatory compliance, government relations, finance, executive leadership, strategic planning, technology and human resources. In addition, Ms. Hemingway Hall provides the Board with a deep understanding of operations, management and technology from her experience in previous roles at HCSC. She also brings to the Board valuable perspectives and insights from her service on ManpowerGroup's board of directors, including its Audit Committee. 6 Cardinal Health | 2017 Proxy Statement Table of Contents Proposal 1—Election of Directors Clayton M. Jones Age68 Director since 2012 Chairman, President and Chief Executive Officer of Rockwell Collins, Inc. (retired) Independent Director Director Qualification Highlights Other Public Boards:Deere & Company, an agricultural and construction machinery manufacturer (since 2007); Motorola Solutions, Inc., a data communications and telecommunications equipment provider (since 2015); Rockwell Collins, Inc. (2001 - 2014) üOperations ü Executive Leadership ü Strategic Planning ü Technology ü Financial Expertise ü International ü Regulatory / Public Policy / Government Mr. Jones served as Chairman of the Board of Rockwell Collins, Inc., a multinational aviation electronics and communications equipment company, from 2002 through 2014, and as Chief Executive Officer from 2001 until his retirement in 2013. He previously served as president of Rockwell Collins and corporate officer and senior vice president of Rockwell International, which he joined in 1979. Skills and Qualifications of Particular Relevance to Cardinal Health As retired Chairman, President and Chief Executive Officer of Rockwell Collins, Mr. Jones brings to the Board relevant experience in highly regulated industries as well as in the areas of manufacturing operations, management, finance, executive leadership, strategic planning, information technology, human resources, corporate governance, international markets and government contracting. He provides the Board with a valuable understanding of commercial operations in international markets. As a former member of the President's National Security Telecommunications Advisory Committee and a current member of The Business Council, Mr. Jones provides insights in regulatory affairs, government and public policy matters. He also brings to the Board valuable perspectives and insights from his service on Motorola Solutions' board of directors, including its Audit Committee, and Deere & Company's board of directors, as well as from his previous service as Chairman of Rockwell Collins' board of directors. Gregory B. Kenny Age64 Director since 2007 President and Chief Executive Officer of General Cable Corporation (retired) Independent Lead Director Director Qualification Highlights Other Public Boards: Ingredion Incorporated, a corn refining and ingredient company (since 2005); AK Steel Holding Corporation, an integrated producer of flat-rolled, carbon and electrical stainless steels and tubular products (since January 2016); General Cable Corporation (1997 - 2015) ü Executive Leadership ü Operations ü Strategic Planning ü International ü Financial Expertise Mr. Kenny served as President and Chief Executive Officer of General Cable Corporation, a global manufacturer of aluminum, copper and fiber-optic wire and cable products, from 2001 until 2015. Prior to that, he was President and Chief Operating Officer of General Cable from 1999 to 2001 and Executive Vice President and Chief Operating Officer from 1997 to 1999. Mr. Kenny previously also served in executive level positions at Penn Central Corporation, where he was responsible for corporate business strategy, and in diplomatic service as a Foreign Service Officer with the United States Department of State. Skills and Qualifications of Particular Relevance to Cardinal Health Mr. Kenny brings to the Board significant experience in the areas of Board and executive leadership, manufacturing operations, strategic planning, management, finance, human resources, corporate governance and international markets. He provides the Board with a deep understanding of strategic and financial implications impacting a global business with manufacturing and distribution operations. He also draws upon his Board governance and leadership experience as previous Chair of our Human Resources and Compensation Committee and current Chair of our Nominating and Governance Committee, and as Ingredion's Lead Director and meeting. Corporate Governance and Nominating Committee Chair. As our independent Lead Director, Mr. Kenny has promoted strong independent leadership on our Board and a robust, deliberative decision making process among independent directors. In addition, Mr. Kenny brings to the Board valuable perspectives and insights from his service on AK Steel's Board of Directors and his prior service on General Cable's and IDEX's board of directors. Cardinal Health | 2017 Proxy Statement 7 Table of Contents Proposal 1—Election of Directors Nancy Killefer Age 63 Director since2015 Senior Partner, Public Sector Practice, McKinsey & Company, Inc. (retired) Independent Director Director Qualification Highlights Other Public Boards: The Advisory Board Company, a provider of software and solutions to the healthcare and education industries (since 2013); Avon Products, Inc., a global manufacturer and marketer of beauty products (since 2013); CSRA, Inc., a provider of information technology services to the U.S. federal government (since 2015); Computer Sciences Corporation, a global provider of information technology services (2013 - 2015) ü Strategic Planning ü Healthcare ü Regulatory / Public Policy / Government ü Technology ü Executive Leadership ü Financial Expertise Ms. Killefer served as Senior Partner of McKinsey & Company, Inc., a global management consulting firm, from 1992 until 2013. She joined McKinsey in 1979 and held a number of key leadership roles, including serving as a member of the firm's governing board. Ms. Killefer founded McKinsey's Public Sector Practice in 2007 and served as its managing partner until her retirement. She also served as Assistant Secretary for Management, Chief Financial Officer and Chief Operating Officer for the United States Department of Treasury from 1997 to 2000. Skills and Qualifications of Particular Relevance to Cardinal Health Having served in key leadership positions in both the public and private sectors and provided strategic counsel to healthcare and consumer-based companies during her 30 years with McKinsey, Ms. Killefer brings to the Board substantial experience in the areas of strategic planning, including healthcare strategy, marketing and brand building, executive leadership and information technology. Her extensive experience as a partner of a global consulting firm and as a chief financial officer of a government agency provides valuable insight in these areas as well as in government relations and public policy. Ms. Killefer also brings to the Board valuable perspectives and insights from her service on the boards of directors of The Advisory Board, Avon Products (including its Compensation and Management Development Committee), and CSRA, Inc. (including her role as independent Chairman since August 2016). David P. King Age61 Director since 2011 Chairman, President and Chief Executive Officer of Laboratory Corporation of America Holdings Independent Director Director Qualification Highlights Other Public Boards: Laboratory Corporation of America Holdings (since 2007) ü Healthcare ü Regulatory / Public Policy ü Strategic Planning ü Operations ü Executive Leadership ü Financial Expertise ü International Mr. King has served as President and Chief Executive Officer of Laboratory Corporation of America Holdings, a global healthcare diagnostics company ("LabCorp"), since 2007, and as Chairman of LabCorp since 2009. Previously he held other senior positions with LabCorp, including Executive Vice President and Chief Operating Officer, Executive Vice President, Strategic Planning and Corporate Development, and Senior Vice President, General Counsel and Chief Compliance Officer. Skills and Qualifications of Particular Relevance to Cardinal Health Having spent 16 years in senior executive roles with LabCorp, including the past ten years as its Chief Executive Officer, Mr. King brings to the Board substantial experience in the areas of healthcare, operations, management, regulatory compliance, finance, executive leadership, strategic planning, human resources, corporate governance and global healthcare markets. He also brings to the Board valuable perspectives and insights from his position as Chairman of LabCorp’s board of directors. Prior to LabCorp, Mr. King was a practicing attorney for 17 years, having worked in both private practice focusing on healthcare and with the U.S. Department of Justice. The Board recommends that you vote FOR the election of these director nominees. 8 Cardinal Health | 2017 Proxy Statement Table of Contents Proposal 1—Election of Directors Our director nominees possess relevant experience, skills and qualifications that contribute to a well-functioning Board that effectively oversees the company's strategy and management. A chart of director skills and expertise is provided below:      Cardinal Health | 2017 Proxy Statement 9 Table of Contents Corporate Governance Board of Directors Our Board of Directors currently consists of 11 members, 10 of whom are independent. Our Board is led by Chairman and Chief Executive Officer George S. Barrett, independent Lead Director Gregory B. Kenny (who also chairs the Nominating and Governance Committee), Audit Committee Chair Clayton M. Jones, and Human Resources and Compensation Committee Chair David P. King. The Board held eight meetings during fiscal 2017. During fiscal 2017, each director attended 75% or more of the meetings of the Board and Board committees on which he or she served. All of our directors attended the 2016 Annual Meeting of Shareholders. Absent unusual circumstances, each director is expected to attend the Annual Meeting of Shareholders. Board Leadership Structure For a number of years, our Board has been led by a Chairman of the Board (who is also the Chief Executive Officer), a strong independent Lead Director, and active, independent chairs of the Audit, Nominating and Governance and Human Resources and Compensation Committees. Our Board is responsible for selecting the Chairman of the Board and the Chief Executive Officer and has determined that its current leadership structure effectively promotes strong Board governance and oversight. The combined Chairman and Chief Executive Officer structure has allowed us to focus on long-term shareholder value and respond effectively to rapidly evolving industry changes and market dynamics, as well as to acquisition opportunities and competitive market pressures. Under this leadership structure, our Board has continued to provide effective, independent oversight of strategic decisions, management and regulatory compliance. The effectiveness of this structure has been demonstrated by strong performance over the past several years, including compound annual non-GAAP diluted EPS growth rate of 13.4% and total shareholder return (TSR) of 272%† since August 31, 2009. The Board believes that our Chief Executive Officer is best suited to serve as Chairman because of his unique knowledge of our businesses, the healthcare industry and our shareholders. This structure fosters effective decision-making and alignment between the Board and management, enables a single person to speak on behalf of the Board and the company to our customers, vendors, employees, shareholders and regulators, and provides strong leadership and a powerful "tone from the top" to focus on our compliance and reputation, growth and long-term success. The Board ensures rigorous independent leadership through an active, engaged independent Lead Director with clearly defined responsibilities, who is elected annually by the independent directors. In selecting a Lead Director, the independent directors look for robust leadership skills, including fostering open dialogue among independent directors, candid input to management, an understanding of our strategy and businesses, and substantial governance experience and understanding. The independent Lead Director: works closely with the Chairman in developing the agenda, materials and schedule for Board meetings and approves the agenda and information sent to the Board; consults with and advises the Chairman on matters arising between Board meetings relating to our business, strategy, operations or governance; leads the Board's annual self-evaluation in coordination with the Nominating and Governance Committee; reviews the results of the evaluation of individual directors with those directors; contributes to the annual performance assessment of the Chief Executive Officer; participates in engagement with major shareholders; sets the agenda for and leads all executive sessions of independent directors; serves as a liaison between the Chairman and the independent directors; and has the authority to call additional executive sessions of the independent directors. ___________ † Total shareholder return over the period from August 31, 2009, when Mr. Barrett became Chairman and Chief Executive Officer, through June 30, 2017 expressed as a percentage, calculated based on changes in stock price assuming reinvestment of dividends. 10 Cardinal Health | 2017 Proxy Statement Table of Contents Corporate Governance Mr. Kenny, who has served as Lead Director since November 2014, has been actively engaged in Board leadership and shareholder engagement. Over the past year, Mr. Kenny has met regularly with Mr. Barrett and worked closely with him in developing Board agendas, schedules and topics, including discussions regarding long-term strategies and capital deployment. He has chaired regular executive sessions of the independent directors and met with Mr. Barrett regarding matters arising from these meetings. He has frequently gathered feedback and input from independent directors and provided it to Mr. Barrett and other members of management. Mr. Kenny has devoted significant time to understanding our businesses and strategy, and has access to members of senior management. Mr. Kenny also leads the annual evaluation of the Board and the individual evaluation of each director. In addition, Mr. Kenny participated in the Human Resources and Compensation Committee's meeting to review Mr. Barrett's annual performance and compensation. Finally, during the year, Mr. Kenny held governance discussions with several large investors and attended a major healthcare investor conference with management, where he also met with many of our investors. Committees of the Board of Directors The Board has an Audit Committee, a Nominating and Governance Committee and a Human Resources and Compensation Committee (the "Compensation Committee"). Each member of these Committees is independent under our Corporate Governance Guidelines and under applicable Committee independence rules. The charter for each committee is available on our website at www.cardinalhealth.com under “About Us—Corporate—Investor Relations—Corporate Governance—Board Committees and Charters.” This information also is available in print (free of charge) to any shareholder who requests it from our Investor Relations department. Audit Committee Members: The Audit Committee’s primary duties are to: Clayton M. Jones (Chair) • oversee the integrity of our financial statements, including reviewing annual and quarterly financial statements and earnings releases and the effectiveness of our internal and disclosure controls; • appoint the independent auditor and oversee its qualifications, independence and performance, including pre-approving all services by the independent auditor; • review our internal audit plan and oversee our internal audit department; • approve the appointment of our Chief Legal and Compliance Officer and oversee our ethics and compliance program and our compliance with applicable legal and regulatory requirements; and • oversee our major financial and information technology risk exposures and our process for assessing and managing risk through our enterprise risk management program. The Board has determined that each member of the Audit Committee is an “audit committee financial expert” for purposes of the SEC rules. David J. Anderson* Bruce L. Downey Patricia A. Hemingway Hall Meetings in fiscal 2017: 8 *Mr. Anderson served on the Audit Committee until December 2016 and was re-appointed to the Committee on September 14, 2017 after his employment with Alexion ended. Nominating and Governance Committee Members: The Nominating and Governance Committee’s primary duties are to: Gregory B. Kenny (Chair) • identify, review and recommend candidates for the Board, including recommending criteria to the Board for potential Board candidates and assessing the qualifications, attributes, skills, contributions and independence of individual directors and director candidates; • make recommendations to the Board concerning the structure, composition and functions of the Board and its committees; • advise the Board on Board leadership and leadership structure; • review our corporate governance guidelines and practices and recommend changes; • conduct the annual Board evaluation and oversee the process for the evaluation of each director; and • oversee our policies and practices regarding political expenditures. Colleen F. Arnold Patricia A. Hemingway Hall Meetings in fiscal 2017: 4 Cardinal Health | 2017 Proxy Statement 11 Table of Contents Corporate Governance Human Resources and Compensation Committee Members: The Compensation Committee’s primary duties are to: • approve compensation for the Chief Executive Officer, establish relevant performance goals, and evaluate his performance; • approve compensation for our other executive officers and oversee their evaluations; • make recommendations to the Board with respect to the adoption of, and administer, equity and incentive compensation plans; • review our non-management directors’ compensation program and recommend changes to the Board; • oversee the management succession process for the Chief Executive Officer and senior executives; • oversee workplace diversity initiatives and progress; • oversee and assess material risks related to compensation arrangements; and • assess the independence of Compensation Committee’s consultant and evaluate its performance. The Compensation Discussion and Analysis, which begins on page 22, discusses how the Compensation Committee makes compensation-related decisions regarding our named executive officers.The Compensation Committee acts as the administrator of our incentive plans and delegates to our officers authority to administer the plans with respect to participants who are not officers subject to Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act"). David P. King (Chair) Carrie S. Cox Calvin Darden Nancy Killefer Meetings in fiscal 2017: 6 Director Independence The Board has established director independence standards based on the NYSE Rules. These standards can be found within our Corporate Governance Guidelines on our website at www.cardinalhealth.com under “About Us—Corporate—Investor Relations—Corporate Governance—Corporate Governance Documents." These standards address, among other things, employment and compensation relationships, relationships with our auditor and customer and business relationships. The Board assesses director independence annually, and as needed, based on the recommendations of the Nominating and Governance Committee. The Board has determined that each of Messrs. Anderson, Darden, Downey, Jones, Kenny and King, and each of Mmes. Arnold, Cox, Hemingway Hall and Killefer, is independent. Mr. Anderson ceased to be independent in December 2016 when he became Chief Financial Officer of Alexion, which supplies pharmaceuticals to us in the ordinary course of its business. Mr. Anderson again became independent after his employment with Alexion ended. In determining that Mr. King is independent, the Nominating and Governance Committee considered that he is Chairman, President and Chief Executive Officer of LabCorp. We sell medical and laboratory products to LabCorp in the ordinary course of business. LabCorp's payments to us were less than 1% of our, and less than 2% of LabCorp's, revenue for each of the last three years. Director Qualification Standards The Nominating and Governance Committee considers and reviews with the Board the appropriate skills and characteristics for Board members. These include business experience, qualifications, attributes and skills, including healthcare industry and knowledge, as well as financial, international, operations, and technology experience, independence (including independence from the interests of a particular group of shareholders), judgment, integrity, ability to commit sufficient time and attention to the activities of the Board and the absence of potential conflicts with our interests. The Nominating and Governance Committee considers these skills and qualifications when assessing the composition of the Board as a whole, and seeks diversity of skills, experience and backgrounds on the Board. The Nominating and Governance Committee assesses the effectiveness of this process based on its review of qualifications in the Director skills matrix on page 9. This assessment is ongoing and occurs both during the Committee's regular meetings as well as during the Board's annual self-assessment process. 12 Cardinal Health | 2017 Proxy Statement Table of Contents Corporate Governance The Nominating and Governance Committee is responsible for identifying, reviewing and recommending candidates for the Board and is working with a firm that was retained to assist in identifying and selecting independent director candidates.The Board is responsible for selecting candidates for election as directors based on the recommendation of the Nominating and Governance Committee. Board Diversity Our Corporate Governance Guidelines provide that the Board should be diverse, engaged and independent. In developing and recommending criteria for identifying and evaluating candidates for the Board, the Nominating and Governance Committee considers the diversity of the Board, including ethnic and gender diversity. We believe the composition of our Board appropriately reflects a diversity of skills, professional and personal backgrounds and experiences and 45% of our Board members are ethnically or gender diverse. Board Performance Assessment For several years, our Board has had a rigorous self-evaluation process, which has included individual director evaluations. This process is overseen by the Nominating and Governance Committee and led by our independent Lead Director. Our Board uses an outside facilitator with corporate governance experience who interviews each director to obtain his or her feedback regarding the Board's performance as well as feedback on each director. Based on the feedback, which is compiled anonymously, the Board identifies follow-up items and provides feedback to management. The Board evaluation process includes an assessment of both Board process and substance, including: the Board's effectiveness, structure, composition and culture; quality of Board discussions, including time devoted to discussion and presentations; the Board's performance in oversight of strategy, succession planning, business performance, regulatory compliance, risk management and other key areas; and agenda topics for future meetings. The outside facilitator also compiles feedback regarding each individual director, which the Lead Director provides to each director in individual discussion. The Board believes this annual process supports its effectiveness and continuous improvement. Resignation Policy for Incumbent Directors Not Receiving Majority Votes Our Corporate Governance Guidelines require any incumbent director who is not re-elected by shareholders in an uncontested election to promptly tender a resignation to the Chairman of the Board. Within 90 days following the certification of the shareholder vote, the Nominating and Governance Committee will recommend to the Board whether to accept the resignation. Thereafter, the Board will promptly act and publicly disclose its decision and the rationale behind the decision. Shareholder Engagement We actively engage with our shareholders throughout the year so that management and the Board can better understand shareholder perspectives on governance, executive compensation and other topics that are important to them, and to assess emerging issues that may help shape our practices and enhance our corporate disclosures. We strive for a collaborative approach to shareholder engagement and value the variety of shareholders' perspectives received. During the past three years, our independent Lead Director has participated in outreach discussions with our large shareholders. In addition, as in past years, we held regular discussions with our largest shareholders and solicited feedback from our top 50 investors on corporate governance matters. During fiscal 2017 we contacted governance professionals from our largest shareholders collectively representing more than 50% of our outstanding shares during fiscal 2017. An overview of our engagement process is below. Cardinal Health | 2017 Proxy Statement 13 Table of Contents Corporate Governance After considering feedback from shareholders in recent years, we have: adopted a proxy access right for shareholders; enhanced our disclosures regarding the Board's role in strategy and risk oversight; formalized additional responsibilities for the independent Lead Director and enhanced our disclosure about the Lead Director’s role and activities; formalized our annual individual director evaluation process and expanded our disclosure about the annual Board evaluation process; enhanced our executive compensation clawback provision; provided more detailed disclosure in the Proxy Summary and the Compensation Discussion and Analysis Executive Summary; and added a chart of director qualifications and experience in the proxy statement. Strategy and Risk Oversight Board’s Oversight of Strategy and Capital Deployment The Board regularly discusses our strategy in light of company performance, developments in the rapidly changing healthcare industry and the general business and global economic environment, and reviews and approves our capital deployment, including dividends, share repurchase plans and significant acquisitions. At two of its in-person meetings each year, the Board conducts dedicated strategy sessions with in-depth discussions with senior management on the healthcare industry and environmental factors and reviews specific businesses and new business opportunities. These strategy sessions have included external speakers such as business partners and advisors, as well as off-site visits to company facilities and customer locations. The Board also discusses risks related to our strategies, including those resulting from possible competitor, customer and supplier actions, the changing healthcare environment and new technologies. The collective backgrounds, skills and experiences of our directors, including broad healthcare experience, contribute to robust discussions regarding strategic planning and risk oversight. As an example, our Board discussed the possible acquisition of the Patient Recovery Business from Medtronic plc over a number of meetings beginning in the fall of 2016, when we learned that these assets might be for sale. We devoted significant portions of two in-person Board meetings to a detailed review and discussion of the possible acquisition and related capital deployment, and had several Board updates between these meetings. The Board approved the acquisition at a special meeting in April 2017. Board’s Role in Risk Oversight Management has day-to-day responsibility for assessing and managing risks, and the Board is responsible for risk oversight. We have developed an enterprise risk management process, which our Audit Committee oversees and our Chief Legal and Compliance Officer administers. Under this process, management identifies and prioritizes enterprise risks and develops systems to assess, monitor and mitigate those risks. Management reviews and discusses with the Board significant risks identified through the process. The Audit Committee also is responsible for 14 Cardinal Health | 2017 Proxy Statement Table of Contents Corporate Governance discussing with management our major financial risk exposures, our ethics and compliance programs, and compliance with legal and regulatory requirements. The Board and Audit Committee receive regular updates on the effectiveness of our compliance programs, including our healthcare regulatory compliance, anti-corruption and controlled substance anti-diversion program, as well as updates on potential information system and cyber security exposures and mitigation strategies. In connection with its risk oversight role, the Audit Committee meets regularly with representatives from our independent registered public accounting firm and our Chief Financial Officer, Chief Legal and Compliance Officer and the head of our internal audit function. The Opioid Epidemic and Risk Management As a pharmaceutical distributor, we provide a safe and secure channel for transporting prescription medications of all types, including opioid pain medications, from manufacturers approved by the Food and Drug Administration to licensed pharmacies. Our role is to ensure medications of all kinds—oncology, blood pressure, antibiotic, pain and other medications—are available to pharmacies that are licensed by their state and regulated by the Drug Enforcement Administration to dispense these medications to patients with valid medical prescriptions. As a pharmaceutical distributor, we do not manufacture, market, promote or dispense these medications, and we do not interact with patients, diagnose medical conditions, write prescriptions or otherwise practice medicine. As part of our safe and secure distribution channel, we maintain a rigorous anti-diversion program to prevent opioid pain medications from being diverted for improper uses. Our Board is highly engaged in oversight of our anti-diversion program and is committed to helping with the complex national opioid abuse public health crisis. Our anti-diversion program includes state-of-the-art controls designed to prevent diversion of pain medication from legitimate uses. The Board regularly reviews and discusses with management the effectiveness of our anti-diversion program, which focuses on our regulatory obligation to detect and report suspicious orders. The Board also monitors and discusses the causes of, and our role in helping to address, this national epidemic. In 2014, in response to a shareholder demand, the Board appointed a committee of independent directors to conduct a review of our anti-diversion program utilizing independent counsel. The committee found, among other things, that we had implemented and maintained a robust system of controls to detect and report suspicious orders and that our Board was well informed of those controls. Since that review, the Board has continued to actively focus on the effectiveness of our anti-diversion program and to support its continued enhancements through regular reviews with management. Ethics and Compliance Program The Board has adopted written Standards of Business Conduct that outline our corporate values and standards of integrity and behavior. The Standards of Business Conduct are designed to foster a culture of integrity, drive compliance with legal and regulatory requirements and protect and promote the reputation of our company. The full text of the Standards of Business Conduct is posted on our website at www.cardinalhealth.com under “About Us—Our Business—Ethics and Compliance.” This information also is available in print (free of charge) to any shareholder who requests it from our Investor Relations department. Our Chief Legal and Compliance Officer has responsibility to implement and maintain an effective ethics and compliance program. He also provides quarterly updates on our ethics and compliance program to the Audit Committee and an update to the full Board at least once a year. He reports to the Chair of the Audit Committee and to the Chief Executive Officer and meets in separate executive sessions quarterly with the Audit Committee. Management Succession Planning The Board is actively engaged in our talent management program. The Compensation Committee oversees the process for succession planning for the Chief Executive Officer and senior executives, and management provides an organizational update at each quarterly Compensation Committee meeting. The Board maintains an emergency succession plan as well as a long-term succession plan for the position of Chief Executive Officer. The Board holds a formal succession planning and talent review session annually, which includes succession planning for other senior management positions. These talent review and Cardinal Health | 2017 Proxy Statement 15 Table of Contents Corporate Governance succession planning discussions take into account desired leadership skills, key capabilities and experience in light of our current and evolving business and strategic direction, and include identification and development of internal candidates. Directors also have exposure to leaders through Board presentations and discussions, as well as through informal events and interactions with key talent throughout the year, both in small group and one-on-one settings. In addition, the Board regularly discusses management talent and succession in its executive sessions. Certain Relationships and Related Transactions Related Person Transactions Policy The Board follows a written policy that the Audit Committee must approve or ratify any "related person transactions" (transactions exceeding $120,000 in which we are a participant and any related person has a direct or indirect material interest). "Related persons" include our directors, nominees for election as a director, persons controlling over 5% of our common shares, executive officers and the immediate family members of each of these individuals. Once a related person transaction is identified, the Audit Committee will review all of the relevant facts and circumstances and determine whether to approve the transaction. The Audit Committee will take into account such factors as it considers appropriate, including the material terms of the transaction, the nature of the related person’s interest in the transaction, the significance of the transaction to the related person and us, the nature of the related person’s relationship with us and whether the transaction would be likely to impair the judgment of a director or executive officer to act in our best interest. If advance approval of a transaction is not feasible, the Audit Committee will consider the transaction for ratification at its next regularly scheduled meeting. The Audit Committee Chairman may pre-approve or ratify any related person transactions in which the aggregate amount is expected to be less than $1 million. Related Person Transactions Since July 1, 2016, there have been no transactions, and there are no currently proposed transactions, involving an amount exceeding $120,000 in which we were or are to be a participant and in which any related person had or will have a direct or indirect material interest, except as described below. Mr. Anderson served as Chief Financial Officer of Alexion, a biotechnology company, from December 11, 2016 until July 31, 2017, and as an employee of Alexion until August 31, 2017. When Mr. Anderson joined Alexion, we had a pre-existing commercial relationship with Alexion which was negotiated at arm's length and in the ordinary course of business, and has continued since Mr. Anderson ended his employment with Alexion. From July 1, 2016 through July 31, 2017, we purchased for distribution to our customers approximately $394 million of Alexion product. Mr. Anderson has not been involved in any decisions or activities directly associated with the transactions between Alexion and us. These transactions were approved by our Audit Committee in accordance with the Related Person Transactions Policy. Corporate Governance Guidelines Documents You can find the full text of our Amended and Restated Articles of Incorporation, Restated Code of Regulations, and Corporate Governance Guidelines on our website at www.cardinalhealth.com under “About Us—Corporate—Us — Corporate — Investor Relations—Corporate Governance—CorporateRelations — Governance — Governance Documents.” This information also is available in print (free of charge) to any shareholder who requests it from our Investor Relations department. Transfer Agent Shareholders of record should direct communications regarding change of address, transfer of share ownership, lost share certificates, and other matters regarding their share ownership to Computershare Trust Company, N.A., P.O. Box 43078, Providence, RI 02940-3078. Our transfer agent may also be contacted via the Internet at www.computershare.com/investor or by telephone at (877) 498-8861 or (781) 575-2879.  CARDINALHEALTH   2023 Proxy Statement  |81 16 Cardinal Health | 2017 Proxy Statement Table of Contents Proposal 2—Ratification of Ernst & Young LLP as Independent Auditor The Audit Committee of the Board of Directors is directly responsible for the appointment, compensation, retention and oversight of our independent auditor and approves the audit engagement letter with Ernst & Young LLP and its audit fees. The Audit Committee has appointed Ernst & Young LLP as our independent auditor for fiscal 2018 and believes that the continued retention of Ernst & Young LLP as our independent auditor is in the best interest of Cardinal Health and its shareholders. Ernst & Young LLP has served as our independent auditor since 2002. In accordance with SEC rules, lead audit partners are subject to rotation requirements, which limit the number of consecutive years an individual partner may serve us. The Audit Committee oversees the rotation of the audit partners. The Audit Committee Chairman interviews candidates for audit partner and the Audit Committee discusses them. While not required by law, we are asking our shareholders to ratify the appointment of Ernst & Young LLP as our independent auditor for fiscal 2018 at the Annual Meeting as a matter of good corporate governance. If shareholders do not ratify this appointment, the Audit Committee will consider whether it is appropriate to appoint another audit firm. Even if the appointment is ratified, the Audit Committee in its discretion may appoint a different audit firm at any time during the fiscal year if it determines that such a change would be in the best interest of the company and its shareholders. Our Audit Committee approved, and our shareholders ratified, the appointment of Ernst & Young LLP as our independent auditor for fiscal 2017. We expect representatives of Ernst & Young LLP to be present at the Annual Meeting. They will have an opportunity to make a statement if they desire to do so and to respond to appropriate questions from shareholders. The Board recommends that you vote FOR the proposal to ratify the appointment of Ernst & Young LLP as our independent auditor for fiscal 2018. Audit Committee Report and Audit Matters Audit Committee Report The Audit Committee is responsible for monitoring the integrity of Cardinal Health’s Back to Contents ANNEX A: USE OF NON-GAAP FINANCIAL MEASURES This proxy statement contains financialstatements; the independent auditor’s qualifications, independence and performance; Cardinal Health’s internal audit function; Cardinal Health’s ethics and compliance program and its compliance with legal and regulatory requirements; and Cardinal Health’s processes for assessing and managing risk. As of the date of the report, the Audit Committee consisted of three members of the Board of Directors. Mr. Anderson was subsequently re-appointed to the Audit Committee on September 14, 2017. The Board of Directors has determined that each current Committee member is an “audit committee financial expert” for purposes of the SEC rules and is independent. The Audit Committee’s activities are governed by a written charter, most recently revised by the Board of Directors in November 2016. The charter is available on Cardinal Health’s website at www.cardinalhealth.com under “About Us—Corporate—Investor Relations—Corporate Governance—Board Committees and Charters." Management has primary responsibility for the financial statements and for establishing and maintaining the system of internal control over financial reporting. Management also is responsible for reporting on the effectiveness of Cardinal Health’s internal control over financial reporting. Cardinal Health’s independent auditor, Ernst & Young LLP, is responsible for performing an independent audit of Cardinal Health’s consolidated financial statements and for issuing a report on the financial statements and a report on the effectiveness of Cardinal Health’s internal control over financial reporting based on its audit. The Audit Committee reviewed and discussed the audited financial statements for the fiscal year ended June 30, 2017 with management and with Ernst & Young LLP. The Audit Committee also reviewed and discussed with management and Ernst & Young LLP the effectiveness of Cardinal Health’s internal control over financial reporting as well as management's report and Ernst & Young LLP's report on the subject. The Audit Committee discussed with Ernst & Young LLP the matters related to the conduct of its audit measures that are required to be communicated by auditors to audit committees under applicable requirements of the Public Company Cardinal Health | 2017 Proxy Statement 17 Table of Contents Audit Committee Report and Audit Matters Accounting Oversight Board (the "PCAOB") and matters related to Cardinal Health’s financial statements, including critical accounting estimates and judgments. The Audit Committee received from Ernst & Young LLP the written disclosures and letter regarding Ernst & Young LLP’s independence from Cardinal Health required by applicable PCAOB requirements and discussed Ernst & Young LLP’s independence. The Audit Committee meets regularlynot calculated in accordance with Ernst & Young LLP, with and without management present, to review the overall scope and plans for Ernst & Young LLP’s audit work and to discuss the results of its examinations, the evaluation of Cardinal Health’s internal control over financial reporting and the overall quality of Cardinal Health’s accounting and financial reporting.GAAP. In addition the Audit Committee annually considers the performance of Ernst & Young LLP. In reliance on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements for the fiscal year ended June 30, 2017 be included in Cardinal Health’s Annual Report on Form 10-K for filing with the SEC. Submitted by the Audit Committee of the Board of Directors on August 8, 2017. Clayton M. Jones, Chairman Bruce L. Downey Patricia A. Hemingway Hall Fees Paid to Independent Accountants The following table sets forth the fees billed to us by Ernst & Young LLP for services in fiscal 2017 and 2016.   Fiscal Year  Ended June 30, 2017 ($) Fiscal Year  Ended June 30, 2016 ($) Audit fees (1) 9,546,537   9,722,883   Audit-related fees (2) 2,722,451   3,780,485   Tax fees (3) 841,082   980,523   All other fees —   —   Total fees 13,110,070   14,483,891   (1) Audit fees include fees paid to Ernst & Young LLP related to the annual audit of our consolidated financial statements, the annual audit of the effectiveness ofanalyzing our internal control over financial reporting, the review of financial statements included in our Quarterly Reports on Form 10-Q and statutory audits of various international subsidiaries. Audit fees also include fees for services performed by Ernst & Young LLP that are closely related to the audit and in many cases could only be provided by our independent accountant, such as comfort letters and consents related to SEC registration statements. (2) Audit-related fees include fees for services related to acquisitions and divestitures, audit-related research and assistance, internal control reviews, service auditor’s examination reports and employee benefit plan audits. (3) Tax fees include fees for tax compliance and other tax-related services. The aggregate fees billed to us by Ernst & Young LLP for tax compliance and other tax-related services for fiscal 2017 were $797,514 and $43,568, respectively, and for fiscal 2016 were $546,722 and $433,801, respectively. Audit Committee Audit and Non-Audit Services Pre-Approval Policy The Audit Committee must pre-approve the audit and permissible non-audit services performed by our independent accountants in order to help ensure that the accountants remain independent from Cardinal Health. The Audit Committee has adopted a policy governing this pre-approval process. Under the policy, the Audit Committee annually pre-approves certain services and assigns specific dollar thresholds for these types of services. If a proposed service is not included in the annual pre-approval, the Audit Committee must separately pre-approve the service before the engagement begins. The Audit Committee has delegated pre-approval authority to the Chairman of the Audit Committee for proposed services up to $500,000. Proposed services exceeding $500,000 require full Audit Committee approval. All audit and non-audit services provided for us by Ernst & Young LLP for fiscal 2017 and 2016 were pre-approved by the Audit Committee. 18 Cardinal Health | 2017 Proxy Statement Table of Contents Proposal 3—Advisory Vote to Approve the Compensation of Our Named Executive Officers In accordance with Section 14A of the Exchange Act, we are asking our shareholders to approve, on a non-binding advisory basis, the compensation of our named executive officers, as disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in this proxy statement. We urge shareholders to read the Compensation Discussion and Analysis beginning on page 22 of this proxy statement, which describes in more detail how our executive compensation program operates and is designed to achieve our compensation objectives, as well as the Summary Compensation Table and related compensation tables, notes and narrative appearing on pages 30 through 41, which provide detailed information on the compensation of our named executive officers. The Compensation Committee and the Board believe that the executive compensation program described in the Compensation Discussion and Analysis is designed to support our long-term growth, with accountability for key annual results. We tie most of executive pay to performancebusiness based on financial operational and individual performance, and we believe that our compensation programs are competitive in the marketplace. While we took important actions to strengthen our market position, increase our scale, add new, long-term drivers of growth and improve the overall balance of our integrated portfolio in fiscal 2017, we did not achieve the earnings goal under our annual incentive plan, largely as a result of a challenging generic pharmaceutical pricing environment. Our named executives other than Mr. Barrett received payouts at 25% of their respective targets. Mr. Barrett declined to be considered for an annual incentive payout, and the Compensation Committee did not award him a payout. The payouts demonstrate strong alignment between our pay and our performance. Although this advisory vote is not binding on the Board, the Board and the Compensation Committee will review and consider the voting results when evaluating our executive compensation program. The Board has adopted a policy providing for annual say-on-pay advisory votes. Accordingly, subject to the outcome of Proposal 4 and the decision of the Board, the next say-on-pay advisory vote will be held at our 2018 Annual Meeting of Shareholders. The Board recommends that you vote FOR the approval, on a non-binding advisory basis, of the compensation of our named executive officers, as disclosed in the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables, notes and narrative in this proxy statement. Proposal 4—Advisory Vote on Frequency of Future Advisory Votes to Approve Executive Compensation In accordance with Section 14A of the Exchange Act, we are asking shareholders to vote on whether future advisory votes on executive compensation (like Proposal 3 above) should occur once every one, two or three years. This vote is not binding on the Board. Based on input from shareholders, the Board has determined that holding an advisory vote on executive compensation every year is most appropriate for us at this time, and recommends that shareholders vote to hold such votes every year. Holding an annual advisory vote provides us with more direct and immediate insight into our shareholders’ views on our executive compensation program. Although this advisory vote is not binding on the Board, we will carefully review the voting results on this proposal. Notwithstanding the Board’s recommendation and the outcome of the shareholder vote, the Board may in the future decide to vary its practice on the frequency of advisory votes on executive compensation based on factors such as discussions with shareholders. You may specify one of four choices for this proposal on the proxy card: one year, two years, three years or abstain. You are not voting to approve or disapprove the Board’s recommendation. The Board recommends that you vote to conduct future advisory votes to approve executive compensation every ONE YEAR. Cardinal Health | 2017 Proxy Statement 19 Table of Contents Share Ownership Information Beneficial Ownership The table below sets forth certain information regarding the beneficial ownership of our common shares by and the percentage of our outstanding common shares represented by such ownership for: each person known by us to own beneficially more than 5% of our outstanding common shares; our directors; our executive officers named in the Summary Compensation Table on page 30; and all executive officers and directors as a group. A person has beneficial ownership of shares if the person has voting or investment power over the shares or the right to acquire such power in 60 days. Investment power means the power to direct the sale or other disposition of the shares. Except as otherwise described in the notes below, information on the number of shares beneficially owned is as of September 11, 2017, and the listed beneficial owners have sole voting and investment power. Name of Beneficial Owner Common Shares Additional Restricted and Performance Share Units (11) Number Beneficially Owned Percent of Class Wellington Management Group LLP (1) 40,120,566   12.7   —   BlackRock, Inc. (2) 23,919,543   7.6   —   The Vanguard Group (3) 22,358,098   7.1   —   Barrow, Hanley, Mewhinney & Strauss, LLC (4) 21,364,753   6.8   —   State Street Corporation (5) 16,617,021   5.3   —   David J. Anderson (6)(7) 7,785   *   —   Colleen F. Arnold (7) 7,511   *   19,569   George S. Barrett (8) 1,752,605   *   86,199   Donald M. Casey Jr. (8) 313,002   *   99,090   Carrie S. Cox (7) 6,758   *   16,306   Calvin Darden (7) 12,972   *   19,608   Bruce L. Downey (7) 16,975   *   18,387   Jon L. Giacomin (8) 148,271   *   24,684   Patricia A. Hemingway Hall (7) 6,323   *   2,612   Clayton M. Jones (7) 6,323   *   6,018   Michael C. Kaufmann (8)(9) 486,626   *   47,990   Gregory B. Kenny (7) 12,492   *   19,584   Nancy Killefer (7) 4,295   *   —   David P. King (7) 8,975   *   9,446   Craig S. Morford (8) 142,510   *   108,768   All Executive Officers and Directors as a Group (18 Persons)(10) 3,071,048   *   521,343   * Indicates beneficial ownership of less than 1% of the outstanding shares. (1) Based on information obtained from a Schedule 13G/A filed with the SEC on February 9, 2017 by Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors Holdings LLP and Wellington Management Company LLP. The address of these entities is 280 Congress Street, Boston, Massachusetts 02210. These entities reported that, as of December 30, 2016, Wellington Management Group LLP had shared voting power with respect to 9,616,602 shares and shared 20 Cardinal Health | 2017 Proxy Statement Table of Contents Share Ownership Information dispositive power with respect to all shares shown in the table, Wellington Group Holdings LLP had shared voting power with respect to 9,616,602 shares and shared dispositive power with respect to all shares shown in the table, Wellington Investment Advisors Holdings LLP had shared voting power with respect to 9,616,602 shares and shared dispositive power with respect to all shares shown in the table and Wellington Management Company LLP had shared voting power with respect to 9,301,550 shares and shared dispositive power with respect to 39,350,365 shares. The number and percentage of shares held by these entities may have changed since the filing of the Schedule 13G/A. (2) Based on information obtained from a Schedule 13G/A filed with the SEC on January 23, 2017 by BlackRock, Inc. ("BlackRock"). The address of BlackRock is 55 East 52nd Street, New York, New York 10055. BlackRock reported that, as of December 31, 2016, it had sole voting power with respect to 19,458,612 shares and sole dispositive power with respect to all shares shown in the table. The number and percentage of shares held by BlackRock may have changed since the filing of the Schedule 13G/A. (3) Based on information obtained from a Schedule 13G/A filed with the SEC on February 10, 2017 by The Vanguard Group ("Vanguard"). The address of Vanguard is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. Vanguard reported that, as of December 31, 2016, it had sole voting power with respect to 500,349 shares, shared voting power with respect to 62,268 shares, sole dispositive power with respect to 21,797,227 shares and shared dispositive power with respect to 560,871 shares. The number and percentage of shares held by Vanguard may have changed since the filing of the Schedule 13G/A. (4) Based on information obtained from a Schedule 13G filed with the SEC on February 10, 2017 by Barrow, Hanley, Mewhinney & Strauss, LLC ("Barrow Hanley"). The address of Barrow Hanley is 2200 Ross Avenue, 31st Floor, Dallas, TX 75201-2761. Barrow Hanley reported that, as of December 31, 2016, it had sole voting power with respect to 5,459,797 shares, shared voting power with respect to 15,904,956 shares, and sole dispositive power with respect to all shares shown in the table. The number and percentage of shares held by Barrow Hanley may have changed since the filing of the Schedule 13G. (5) Based on information obtained from a Schedule 13G filed with the SEC on February 10, 2017 by State Street Corporation ("State Street"). The address of State Street is State Street Financial Center, One Lincoln Street, Boston, MA 02111. State Street reported that, as of December 31, 2016, it had sole voting power with respect to 90,515 shares, shared voting power with respect to 16,526,506 shares, and shared dispositive power with respect to all shares shown in the table. The number and percentage of shares held by State Street may have changed since the filing of the Schedule 13G. (6) Includes 400 common shares held by Mr. Anderson's spouse. (7) Common shares listed as being beneficially owned by our non-management directors include (a) outstanding restricted share units ("RSUs") that may be settled within 60 days, as follows: Mr. Anderson—6,323 shares; Ms. Arnold—6,323 shares; Ms. Cox—6,323 shares; Mr. Darden—6,323 shares; Mr. Downey—6,323 shares; Ms. Hemingway Hall—4,475 shares; Mr. Jones—6,323 shares; Mr. Kenny—7,113 shares; Ms. Killefer—4,295 shares; and Mr. King—6,323 shares; and (b) phantom stock over which the participants have sole voting rights under our DCP, as follows: Mr. Anderson—62 shares; Ms. Arnold—1,188 shares; Mr. Darden—5,514 shares; and Mr. Kenny—5,379 shares. (8) Common shares listed as being beneficially owned by our named executives include (a) outstanding stock options that are currently exercisable or will be exercisable within 60 days, as follows: Mr. Barrett—1,320,419 shares; Mr. Casey—260,841 shares; Mr. Giacomin—123,751 shares; Mr. Kaufmann—346,477 shares; and Mr. Morford—141,120 shares; and (b) outstanding RSUs that will be settled within 60 days, as follows: Mr. Casey—10,006 shares; Mr. Giacomin—1,779 shares; and Mr. Kaufmann —13,341 shares. (9) Includes 10 common shares held by Mr. Kaufmann's spouse. (10) Common shares listed as being beneficially owned by all executive officers and directors as a group include (a) outstanding stock options for an aggregate of 2,281,968 shares that are currently exercisable or will be exercisable within 60 days; (b) an aggregate of 85,270 RSUs that may or will be settled in common shares within 60 days; and (c) an aggregate of 12,143 shares of phantom stock over which the participants have sole voting rights under our DCP. (11) "Additional Restricted and Performance Share Units" include vested and unvested RSUs and vested performance share units ("PSUs") that will not be settled in common shares within 60 days. RSUs and PSUs do not confer voting rights and generally are not considered "beneficially owned" shares under the SEC rules. Compliance with Section 16(a) of the Exchange Act Based solely upon a review of Forms 3, 4 and 5 furnished to us and written representations from our officers and directors, we believe that all of our officers and directors and all beneficial owners of 10% or more of any class of our registered equity securities timely filed all reports required under Section 16(a) of the Exchange Act during fiscal 2017. Cardinal Health | 2017 Proxy Statement 21 Table of Contents Compensation Discussion and Analysis Executive Summary This Compensation Discussion and Analysis focuses on the compensation of the following executive officers (the "named executives") for fiscal 2017 and describes the executive compensation program and the decisions of the Compensation Committee under the program. Name Title George S. Barrett Chairman and Chief Executive Officer Michael C. Kaufmann Chief Financial Officer Donald M. Casey Jr. Chief Executive Officer—Medical Segment Jon L. Giacomin Chief Executive Officer—Pharmaceutical Segment Craig S. Morford Chief Legal and Compliance Officer Fiscal 2017 Performance In fiscal 2017, we took important actions to strengthen our market position, increase our scale, add new, long-term drivers of growth and improve the overall balance of our integrated portfolio. In July 2017, we acquired the Patient Recovery Business from Medtronic plc for $6.1 billion. These well-established, industry-leading product lines are complementary to our medical product business, fit naturally into our customer offering and expand our global reach. The new portfolio will help us further expand our scope in the operating room, in long-term care facilities and in home healthcare, reaching customers across the entire continuum of care. In our Pharmaceutical segment, our Specialty Solutions business had outstanding growth, expanding its therapeutic reach and growing its hospital and physician customer base, and we saw excellent performance from our Red Oak Sourcing generic sourcing venture with CVS Health Corporation. In our Medical segment, our medical products distribution business had its strongest growth in recent years, and we continued to expand our Cardinal Health branded product portfolio with nearly 12,000 product SKUs in 850 categories, more than double from five years ago. We also saw excellent growth from our naviHealth business. On the financial side: Revenue increased 7% to a record $130.0 billion. • GAAP diluted EPS decreased 7% to $4.03, while non-GAAP diluted EPS‡ increased 3% to $5.40, reflecting a challenging generic pharmaceutical pricing environment. Our Pharmaceutical segment grew revenue 7%, while segment profit decreased 12% largely driven by the generic pharmaceutical pricing environment, partially offset by the benefits from Red Oak Sourcing. Our Medical segment grew revenue 9% and segment profit 25%, with profit growth being driven by contributions from the naviHealth business, Cardinal Health branded products and distribution services. We returned $1.2 billion to shareholders, including $1.80 per share in dividends and $600 million in share repurchases. Fiscal 2017 Key Compensation Decisions For fiscal 2017, the Compensation Committee set the adjusted non-GAAP operating earnings goal for a 100% payout under our annual incentive plan higher than the prior fiscal year goal, and set the threshold for a 40% payout at 92% of that goal. While we achieved 89% of the goal, we did not achieve the threshold, largely as a result of the challenging generic pharmaceutical pricing environment. In recognition of our strategic and operational accomplishments during fiscal 2017, however, the Compensation Committee awarded payouts to our named executives other than Mr. Barrett at 25% of their respective targets under our annual incentive plan. Mr. Barrett declined to be considered for an annual incentive payout, and the Compensation Committee did not award him a payout. Cash compensation (salary plus annual incentive payout) for each of our named executives was down between 38% to 64% compared to the prior fiscal year. ___________ ‡ We provide the reasons we use non-GAAP financial measures and the reconciliations to their most directly comparable GAAP financial measures on pages 18 through 20 of the Fiscal 2017 Form 10-K. 22 Cardinal Health | 2017 Proxy Statement Table of Contents Compensation Discussion and Analysis Results of 2016 Advisory Vote to Approve Executive Compensation and Shareholder Engagement At the 2016 Annual Meeting of Shareholders, our say-on-pay advisory vote received 93% support. The Compensation Committee considered this vote—as well as shareholder feedback from our engagement efforts discussed below—as demonstrating strong support for our executive compensation program and determined to maintain the current structure of our executive compensation program when making compensation decisions for fiscal 2017. We hold regular discussions with our largest shareholders and solicit feedback from our top 50 investors on corporate governance topics, including executive compensation. During fiscal 2017, we contacted governance professionals from our shareholders representing more than 50% of our outstanding shares. (See pages 13 and 14 for further detail about shareholder engagement.) Compensation Philosophy and Practices Our compensation program is designed to support our long-term growth, with accountability for key annual results. It has the following key objectives: Reward performance. We tie most of executive pay to performance based on financial, operational and individual performance. Drive stock ownership. Long-term incentive grants combined with stock ownership guidelines provide executives with meaningful ownership stakes and align their interests with shareholders. Emphasize long-term incentive compensation. We emphasize performance and retention through the use of long-term incentive compensation, which supports sustainable long-term shareholder return. Attract, retain and reward the best talent to achieve superior results for shareholders. We need to attract and retain top talent to drive superior results for our shareholders. We have structured our compensation programs to be competitive in the marketplace, with a focus on pay and performance alignment. Executive Compensation Governance Features WHAT WE HAVE WHAT WE DON'T HAVE ü Significant portion of executive pay "at risk" û No dividend equivalents on unvested PSUs or RSUs ü Different metrics for annual incentives and PSUs û No repricing of underwater options without shareholder approval ü Caps on annual cash incentive and PSU payouts û No hedging or pledging of company stock ü Minimum vesting period for long-term incentive awards û No executive pensions or supplemental retirement plans ü Stock ownership guidelines for directors and executive officers û No "single trigger" change of control arrangements ü Compensation recoupment ("clawback") provisions û No excise tax gross-ups upon change of control ü Long-standing, proactive shareholder engagement program Cardinal Health | 2017 Proxy Statement 23 Table of Contents Compensation Discussion and Analysis Elements of Fiscal 2017 Compensation for Executive Officers We have three elements of total direct compensation: base salary, annual incentives and long-term incentives. Long-term incentives consist of an equally-weighted mix of PSUs, stock options and RSUs. A significant portion of executive compensation is performance-based and at-risk (annual incentives, PSUs and stock options). At the beginning of the fiscal year, the Compensation Committee reviews targets for the named executives’ incentives and sets the performance goals under our annual incentive plan and PSUs. Following the end of the performance period, the Compensation Committee evaluates actual performance against the performance goals and determines payouts. Pay Element Description and Purpose Links to Business and Talent Strategies Base salary • Fixed cash compensation; reviewed annually and adjusted when appropriate • Set based on historic salary levels, market data, individual performance, experience and skills, and internal pay equity • Competitive base salaries support our ability to attract and retain executive talent Annual incentives • Variable cash compensation based on achieving annual financial goals and operational and individual performance • Target as a percentage of base salary based on market data and internal pay equity • Primary financial measure reflects our focus on operating earnings, with tangible capital modifier promoting efficient use of capital Long-term incentives • Equally weighted between PSUs, stock options and RSUs • PSUs vest based on achieving the performance goal over a three-year period; stock options and RSUs vest ratably over three years • Target annual grant value based on market data and internal pay equity • Supports sustainable long-term shareholder return and closely aligns management's interests with shareholders' • PSU measures (non-GAAP diluted EPS growth and dividend yield) influence shareholder returns over the long term • Stock options and RSUs retain executive talent and promote focus on stock price appreciation Base Salary The Compensation Committee did not change Mr. Barrett's base salary during fiscal 2017. At the beginning of fiscal 2017, the Compensation Committee increased base salaries for Messrs. Kaufmann, Casey, Giacomin and Morford between 3% and 5% based on individual performance, an assessment of market data for their roles and internal pay equity. 24 Cardinal Health | 2017 Proxy Statement Table of Contents Compensation Discussion and Analysis Annual Incentive Compensation While we achieved 89% of our earnings goal, we did not achieve the threshold for a 40% payout under our annual incentive plan, largely as a result of the challenging generic pharmaceutical pricing environment. In recognition of our strategic and operational accomplishments during fiscal 2017, however, the Compensation Committee awarded payouts to our named executives other than Mr. Barrett at 25% of their respective targets under our annual incentive plan, and approved a 33% enterprise funding percentage for the remainder of the organization. Mr. Barrett declined to be considered for an annual incentive payout, and the Compensation Committee did not award him a payout. Cash compensation (salary plus annual incentive payout) for each of our named executives was down between 38% to 64% compared to the prior fiscal year. At the beginning of fiscal 2017, the Compensation Committee set the goal of $3,089 million of adjusted non-GAAP operating earnings, which, if achieved, would fund a 100% payout. This goal represented 5% growth compared to the prior fiscal year. In order to fund a 40% payout, we had to achieve a threshold of $2,853 million (or 92% of the goal). Our actual performance of $2,734 million (or 89% of the goal) fell short of that threshold. (We describe how we calculate adjusted non-GAAP operating earnings under “Annual Cash Incentive and PSU Performance Measure Calculations” on page 34.) (in millions) Actual Threshold Goal Maximum Comments Adjusted non-GAAP operating earnings $2,734 $2,853 $3,089 $3,749 Achieved 89% of the goal Enterprise funding percentage (1) 33% 40% 100% 200%   (1) Had we achieved threshold performance, the enterprise funding percentage would have been subject to adjustment up or down by up to 10 percentage points based on tangible capital performance. In exercising its discretion to award annual incentive payouts, the Compensation Committee considered the following strategic and operational accomplishments during fiscal 2017: strategy, deal execution and financing efforts for the Patient Recovery Business acquisition; outstanding growth in our Specialty Solutions and Nuclear Pharmacy Services businesses and excellent performance from Red Oak Sourcing; significant and timely progress on the Pharmaceutical segment's project to replace certain finance and operating information systems and the pharmaceutical distribution business's SG&A expense control; and strong performance of the naviHealth business and the Medical segment's distribution services. Name Target (Percent of Base Salary) Target Amount ($) Actual Amount ($) Actual (Percent of Target) Barrett 150   1,980,000   0   0   Kaufmann 100   746,438   186,609   25   Casey 100   705,014   176,253   25   Giacomin 100   567,151   141,788   25   Morford 85   469,328   117,332   25   Long-Term Incentive Compensation At the beginning of fiscal 2017, the Compensation Committee awarded Mr. Barrett long-term incentive compensation with a total value of $9.5 million, consistent with the target value in his employment agreement. The Compensation Committee increased Mr. Kaufmann's, Casey's and Giacomin's targets to $2.85 million, in each case based on market data and internal pay equity considerations. The Committee increased Mr. Morford's target to $1.55 million based on the additional responsibilities he assumed following the Cordis acquisition, leadership transitions within the Legal and Compliance organization and market data. Cardinal Health | 2017 Proxy Statement 25 Table of Contents Compensation Discussion and Analysis We equally weight our long-term incentive grants between PSUs, stock options and RSUs and may adjust annual grants from target to reflect individual performance, retention or succession planning. Fiscal 2017 Long-Term Incentive Grants Name Annual Grant Target ($) Actual Grants Stock Options ($) RSUs ($) Target PSUs ($) Total ($) Barrett 9,500,000 3,166,667   3,166,667   3,166,667   9,500,001 Kaufmann 2,850,000 997,500   997,500   950,000   2,945,000 Casey 2,850,000 997,500   997,500   950,000   2,945,000 Giacomin 2,850,000 950,000   950,000   950,000   2,850,000 Morford 1,550,000 516,667   516,667   516,667   1,550,001 Fiscal 2017-2019 PSU Grants For the PSUs granted at the beginning of fiscal 2017 (the "Fiscal 17-19 PSUs"), the Compensation Committee set the three-year performance goal based on the sum of non-GAAP diluted EPS compound annual growth rate ("CAGR") and average annual dividend yield, which are the same performance measures we used for PSU grants made in prior years. These measures influence total shareholder return over the long term and align management's interests with shareholders'. These measures reflect operating performance as well as capital deployment through acquisitions, dividends and share repurchases. We describe how we calculate these measures under “Annual Cash Incentive and PSU Performance Measure Calculations” on page 34. While we stated the performance goal in absolute terms, as in years past, we established the goal factoring in relative market data. We considered historical data for diluted EPS growth rate and dividend yield of the Standard & Poor's ("S&P") 500 Index, the S&P 500 Healthcare Index and our Comparator Group, which is discussed on page 28. We also took into account our company-specific long-term outlook, as well as analysts' estimates of future performance of Comparator Group companies. The table below shows the funding percentages set for the three-year period for varying levels of performance.   Performance (%) Funding Percentage Threshold 7.0   50   Goal 12.0   100   Maximum 17.0   200   Fiscal 2015-2017 PSU Payouts In August 2017, the Compensation Committee certified the payout of the PSUs granted at the beginning of fiscal 2015 (the "Fiscal 15-17 PSUs") based on performance against the non-GAAP diluted EPS CAGR and average annual dividend yield goal. The table below shows the funding percentages at varying levels of performance over the three-year period and the actual funding percentage.   Performance (%) Funding Percentage Threshold 7.0   50   Goal 12.0   100   Maximum 17.0   200   Actual 14.1 (1) 133   (1) Non-GAAP diluted EPS CAGR was 11.9% and average annual dividend yield was 2.2% over the performance period. As permitted by the terms of the PSU agreements, the Compensation Committee excluded the respective $0.02 and $0.04 per share net positive effect of certain discrete tax items from fiscal 2014 and 2017 non-GAAP diluted EPS. The following table shows the target and earned Fiscal 15-17 PSUs for our named executives.   Name Target Number of Shares (#) Number of Shares Earned (#)     Barrett 37,333   49,653     Kaufmann 9,800   13,034     Casey 9,800   13,034     Giacomin 8,253   10,976     Morford 5,600   7,448   26 Cardinal Health | 2017 Proxy Statement Table of Contents Compensation Discussion and Analysis Other Elements of Compensation Deferred Compensation and 401(k) Savings Plans We maintain a DCP and 401(k) Savings Plan to allow the vast majority of our employees based in the United States and Puerto Rico to accumulate value on a tax-deferred basis and to be competitive in recruiting and retaining talent. Our DCP permits certain management employees, including the named executives, to defer payment and taxation of a portion of their salary and annual incentive compensation into a variety of different investment alternatives. We may make matching contributions to the deferred balances of participants, subject to limits discussed under “Deferred Compensation” on page 36. We also may make non-matching contributions to the 401(k) Savings Plan and DCP based on pre-established performance goals on the same basis for all employees. We did not exceed the pre-established performance goal for fiscal 2017 and accordingly did not make any non-matching contributions for fiscal 2017. Named executives also may elect to defer payment and taxation of PSUs and RSUs. Other Benefits and Perquisites Mr. Barrett's employment agreement provides that he may use our corporate aircraft for personal travel. He does not receive tax reimbursement for any imputed income associated with personal travel. The Compensation Committee encourages Mr. Barrett to use corporate aircraft for personal travel as it increases his time available for business purposes and enhances his safety and security. During fiscal 2017, the Compensation Committee set Mr. Barrett's personal travel allowance at $150,000. Consistent with Mr. Barrett's employment agreement, any personal travel that would cause the amount reported in our annual proxy statement to exceed $150,000 requires advance approval from the Compensation Committee. Under an aircraft time sharing agreement with Mr. Barrett, he may reimburse us for incremental costs when he uses the aircraft for personal travel; reimbursed travel does not count against the $150,000 allowance. Severance and Change of Control Benefits Mr. Barrett's employment agreement provides for benefits payable upon specified employment termination events. Mr. Barrett will receive cash severance equal to two times the sum of his annual base salary and his target bonus payable in 24 equal monthly installments if we terminate his employment without "cause,” or if he terminates employment for “good reason.” He also will receive a prorated bonus for the year of termination based on actual achievement of performance goals and his vested stock options will remain exercisable for two years. Mr. Barrett's employment agreement does not provide for special treatment of any unvested equity awards. We discuss our limited severance payments and benefits in detail under “Potential Payments on Termination of Employment or Change of Control” beginning on page 38. We do not have any agreements to provide change-of-control excise tax gross-ups. Our Board has a policy requiring us to obtain shareholder approval of severance agreements with our executives that provide cash severance benefits that exceed 2.99 times the sum of base salary and bonus. Our Policies, Guidelines and Practices Related to Executive Compensation Role of Compensation Committee’s Compensation Consultant The Compensation Committee has retained Frederic W. Cook & Co., Inc. ("Cook") as its independent executive compensation consultant since 2011. The nature and scope of Cook's engagement consist primarily of: participating in meetings of the Compensation Committee; providing compensation data on the Comparator Group; and providing support, advice and recommendations related to compensation for our Chief Executive Officer and other executive officers, the design of our executive compensation program (including the plan design for annual and long-term incentives), the composition of our Comparator Group and director compensation. The Compensation Committee has made an assessment under factors set forth in NYSE rules and concluded that Cook is independent and that the firm's work for the Compensation Committee did not raise any conflicts of interest. Role of Executive Officers Our Chief Executive Officer and Chief Human Resources Officer participate in Compensation Committee meetings to make recommendations as to design and compensation amounts, to present performance assessments of the named executives (other than our Chief Executive Officer) and, together with our Chief Financial Officer, to discuss our financial and operational performance. Our Chief Executive Officer reviewed fiscal 2017 performance objectives with the Compensation Committee at the beginning of the fiscal year, including financial objectives and non-financial objectives for customer, strategic and talent priorities. The Cardinal Health | 2017 Proxy Statement 27 Table of Contents Compensation Discussion and Analysis Compensation Committee reviews and discusses the performance and compensation of our Chief Executive Officer in executive session and with the Lead Director. The Chief Executive Officer does not participate in decisions regarding his own compensation. Comparator Group The Compensation Committee establishes target compensation levels based on a variety of factors, including data from a "Comparator Group" of similarly situated public companies, which helps the Committee to assess whether our executive pay remains reasonable and competitive in the marketplace. Developed with the assistance of Cook, our Comparator Group reflects the industry in which we primarily compete for executive talent and includes direct competitors and other companies in the healthcare field. Our Comparator Group also includes air/freight and logistics companies because of those companies' similar business models. The following companies comprised the Comparator Group for fiscal 2017 executive pay decisions: Aetna Express Scripts Quest Diagnostics AmerisourceBergen FedEx Sysco Anthem Henry Schein Thermo Fisher Scientific Baxter International Humana United Parcel Service Becton, Dickinson Kimberly-Clark* UnitedHealth Group Boston Scientific LabCorp Walgreens Boots Alliance CIGNA McKesson CVS Health Owens & Minor * Removed for fiscal 2018 executive pay decisions. The Committee, working with its compensation consultant, periodically reviews the group's composition to ensure that the companies remain relevant for comparison purposes. The Committee used the following screening criteria when it last reviewed the Comparator Group's composition: revenue ranging from 0.2 to 2 times our annual revenue; market capitalization ranging from 0.2 to 5 times our market capitalization; inclusion in the peer group of 5 or more of the other companies in our Comparator Group; and inclusion in our Global Industry Classification Standard (GICS) sub-industry group, Health Care Equipment and Services. Our revenue has been in the top quintile of the Comparator Group, while our market capitalization has been in the third quintile. Our Compensation Committee compares total direct compensation (base salary plus annual and long-term incentives) against the 50th percentile of the Comparator Group as a reference point in setting target compensation levels. In addition to competitive market data, the Committee also considers internal pay equity and an executive’s experience and scope of responsibility, individual performance, potential and unique or hard-to-replace skills, as well as retention concerns. Risk Assessment of Compensation Programs Management has assessed our compensation programs and concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on Cardinal Health. This risk assessment included reviewing the design and operation of our compensation programs, identifying and evaluating situations or compensation elements that could raise more significant risks and evaluating other controls and processes designed to identify and manage risk. The Compensation Committee reviewed and discussed the risk assessment and Cook reviewed the risk assessment and concurred with management's conclusion. Stock Ownership Guidelines We have stock ownership guidelines to align the interests of executive officers and directors with the interests of our shareholders. The guidelines specify a dollar value (expressed as a multiple of salary or cash retainer) of shares that executive officers and directors must accumulate and hold while serving in these positions. All named executives exceed the required ownership level. Multiple of Base Salary/ Annual Cash Retainer Chairman and Chief Executive Officer 6x Chief Financial Officer and Segment CEOs 4x Other executive officers 3x Non-management directors 5x We count common shares, RSUs and phantom shares held through the DCP under the stock ownership guidelines. Executive officers and directors must retain 100% of the net after-tax shares received under any equity awards until they satisfy the required ownership levels. Potential Impact on Compensation from Executive Misconduct ("Clawbacks") Our incentive plans and agreements provide that we may require repayment of cash incentives and gains realized under equity awards and cancel outstanding equity awards in specified instances of executive misconduct. In addition, in August 2017, we amended our incentive plan to provide that any cash award paid to an executive officer will be subject to repayment if the executive officer commits a material violation of law or of our Standards of Business Conduct that causes material financial harm to us. 28 Cardinal Health | 2017 Proxy Statement Table of Contents Compensation Discussion and Analysis We will disclose publicly the incentive compensation forfeitures or repayments from our executive officers if required by law or if we have already disclosed publicly the underlying event triggering the forfeiture or repayment and the disclosure would not violate any individual’s privacy rights, is not likely to result in or exacerbate any existing or threatened employee, shareholder or other litigation, arbitration, investigation or proceeding against us and is not otherwise prohibited. We discuss these provisions in more detail under “Potential Impact on Compensation from Executive Misconduct ("Clawbacks")” on page 34. Hedging and Pledging Shares Our Board has adopted a policy prohibiting all employees and directors from engaging in short sales, publicly traded options, puts and calls, forward sale contracts and other swap, hedging and derivative transactions relating to our securities. The Board also has adopted a policy prohibiting our executive officers and directors from holding our securities in margin accounts or pledging our securities as collateral for a loan. Equity Grant Practices The Compensation Committee typically approves the annual equity grant in August of each year and sets August 15 as the grant date. The Compensation Committee expects the annual grant date to follow the release of earnings for the prior fiscal year in early August, without regard to whether we are aware of material nonpublic information. Equity Dilution Practices Our fiscal 2017 annual equity run rate was 0.8%. We calculate our equity run rate as the total number of shares subject to equity awards granted in the fiscal year divided by the weighted average number of our common shares outstanding during the fiscal year. Minimum Vesting of Equity Grants We recently added one-year minimum vesting provisions to our 2011 Long-Term Incentive Plan (the "2011 LTIP"). We discuss these provisions in more detail under “2011 Long-Term Incentive Plan” on page 33. Tax Matters Section 162(m) of the Internal Revenue Code ("Code") precludes us from taking a tax deduction for non-performance-based compensation in excess of $1 million paid in any fiscal year to our Chief Executive Officer and three other most highly compensated executive officers (other than the Chief Financial Officer). While we intend annual cash incentive, PSU and stock option awards to qualify as performance-based compensation within the meaning of Section 162(m) and, as such, to be fully deductible, due to the complexity of Section 162(m), amounts intended to qualify as "performance-based compensation" may not satisfy applicable requirements. In addition, we maintain flexibility to operate our compensation programs in a manner designed to promote varying company goals. For purposes of qualifying payments as performance-based compensation under Section 162(m), the Compensation Committee established the performance criteria of $900 million in non-GAAP operating earnings for fiscal 2017 annual cash incentive awards and $1.00 of non-GAAP diluted EPS in fiscal 2017 for the Fiscal 15-17 PSUs, both of which we exceeded. Executive Compensation Human Resources and Compensation Committee Report We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on that review and discussion, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and in Cardinal Health’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017. Submitted by the Human Resources and Compensation Committee of the Board. David P. King, Chairman Carrie S. Cox Calvin Darden Nancy Killefer Cardinal Health | 2017 Proxy Statement 29 Table of Contents Executive Compensation Executive Compensation Tables The table below summarizes fiscal 2017 compensation for our Chief Executive Officer, our Chief Financial Officer and each of our three other most highly compensated executive officers at June 30, 2017, the end of our fiscal 2017. Summary Compensation Table Name and Principal Position Year Salary ($) Bonus ($)(1) Stock Awards ($)(2) Option Awards ($)(3) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($)(4) Total ($) George S. Barrett Chairman and Chief Executive Officer 2017 1,320,000   —   6,333,255   3,166,434   —   — 165,488   10,985,177 2016 1,320,000   —   6,491,739   3,330,665   2,386,755   — 131,928   13,661,087 2015 1,320,000   —   5,983,334   3,320,657   2,510,508   — 135,232   13,269,731 Michael C. Kaufmann Chief Financial Officer 2017 746,438   186,609   1,947,561   997,432   —   — 14,979   3,893,019 2016 721,311   —   1,575,006   826,402   880,723   — 27,251   4,030,693 2015 688,630   —   4,540,005   841,018   1,053,260   — 36,338   7,159,251 Donald M. Casey Jr. Chief Executive Officer—Medical Segment 2017 705,014   176,253   1,947,561   997,432   —   — 10,800   3,837,060 2016 671,311   —   1,505,062   806,369   894,188   — 22,830   3,899,760 2015 650,000   —   3,005,055   805,967   618,118   — 31,653   5,110,793 Jon L. Giacomin Chief Executive Officer—Pharmaceutical Segment 2017 567,151   141,788   1,900,060   949,930   —   — 14,966   3,573,895 2016 542,623   —   1,400,062   701,196   602,314   — 27,770   3,273,965 2015 480,685   —   1,237,482   629,304   679,692   — 37,170   3,064,333 Craig S. Morford Chief Legal and Compliance Officer 2017 552,151   117,332   1,033,386   516,631   —   — 14,967   2,234,467 2016 531,311   —   1,620,055   420,707   576,487   — 37,579   3,186,139 2015 510,000   —   800,016   400,477   559,598   — 35,453   2,305,544 (1) As discussed in Compensation Discussion and Analysis above, while we did not achieve the performance threshold for a 40% payout under our annual incentive plan, the Compensation Committee, in its discretion, awarded payouts to our named executives other than Mr. Barrett at 25% of their respective targets under under the Management Incentive Plan (the "MIP"). Mr. Barrett declined to be considered for an annual incentive payout, and the Compensation Committee did not award him a payout. (2) The amounts reported represent the aggregate grant date fair value of PSUs (at target) and RSUs granted during each fiscal year. The amounts reported in each fiscal year do not represent amounts paid to or realized by the named executives. See the Grants of Plan-Based Awards for Fiscal 2017 table on page 32 and the accompanying footnotes for information on the grant date fair value of each award granted in fiscal 2017. The value of the Fiscal 17-19 PSUs granted during fiscal 2017 assuming achievement of the maximum 200% funding would be: Mr. Barrett—$6,333,255; Mr. Kaufmann—$1,900,060; Mr. Casey—$1,900,060; Mr. Giacomin—$1,900,060; and Mr. Morford—$1,033,386. The named executives may never realize any value from the PSUs. (3) The amounts reported represent the grant date fair value of nonqualified stock options granted during each fiscal year and do not represent amounts paid to or realized by the named executives. See the Grants of Plan-Based Awards for Fiscal 2017 table on page 32 and the accompanying footnotes for information on the grant date fair value of stock options granted during fiscal 2017 and the assumptions used in determining the grant date fair value. The named executives may never realize any value from these stock options, and to the extent they do, the amounts realized may be more or less than the amounts reported above. (4) The elements of compensation included in the “All Other Compensation” column for fiscal 2017 are set forth in the table below. 30 Cardinal Health | 2017 Proxy Statement Table of Contents Executive Compensation The amounts shown for “All Other Compensation” for fiscal 2017 include (a) company matching contributions to the named executive’s account under our 401(k) plan; (b) company matching contributions to the named executive’s account under our DCP; and (c) perquisites, in the following amounts: Name Company 401(k) Savings Plan Contributions ($) Company Deferred Compensation Plan Contributions ($) Perquisites ($)(a) Total ($) Barrett 10,800 4,000   150,688   165,488   Kaufmann 10,800 4,179   —   14,979   Casey 10,800 0   —   10,800   Giacomin 10,800 4,166   —   14,966   Morford 10,800 4,167   —   14,967   (a) The amounts shown include the value of perquisites and other personal benefits if the aggregate value exceeded $10,000. Where we report perquisites and other personal benefits, we quantify each perquisite or personal benefit if it exceeds $25,000. The amount reported for Mr. Barrett for fiscal 2017 included the incremental cost to us of his personal use of corporate aircraft ($149,731) and home security system monitoring fees. We own corporate aircraft and lease other aircraft. We calculate the incremental cost of personal use of corporate aircraft based on the average cost of fuel, average trip-related maintenance costs, crew travel expenses, per flight landing fees, hangar and parking costs and smaller variable costs, offset by any timeshare payments by the executive. Since we use our aircraft primarily for business travel, we do not include fixed costs, such as depreciation, pilot salaries and certain maintenance costs. Mr. Barrett receives up to $150,000 in personal use of corporate aircraft without advance approval of the Compensation Committee. He does not receive tax reimbursement for any imputed income associated with personal travel. We have an aircraft time sharing agreement with Mr. Barrett under which he is permitted to reimburse us for the incremental costs of his personal use of corporate aircraft consistent with Federal Aviation Administration regulations; reimbursed travel does not count against the $150,000 authorization. CEO Employment Agreement Mr. Barrett is the only executive officer with an employment agreement. In August 2015, we entered into an amendment with Mr. Barrett to his employment agreement to provide that he will continue to serve as Chairman and Chief Executive Officer until the earlier of the date of our Annual Meeting of Shareholders following June 30, 2018 or December 31, 2018, subject to earlier terminationprepared in accordance with its terms. As amended, the employment agreement provides, among other things, for Mr. Barrett: to receive an annual base salary of at least $1,320,000; to participate in our annual cash incentive award program with a target annual award of at least 150% of his annual base salary, payable based on performance objectives that our Compensation Committee determines in consultation with him; and to receive an annual long-term incentive award grant comprised of PSUs, stock options, RSUs and other incentives as determined by the Committee with a target value of $9,500,000, with each annual award subject to the Board's discretion based on both company and individual performance. The agreement also provides that Mr. Barrett receives personal use of corporate aircraft, which currently is a maximum of $150,000. Cardinal Health | 2017 Proxy Statement 31 Table of Contents Executive Compensation Grants of Plan-Based Awards for Fiscal 2017 The table below supplements our Summary Compensation Table by providing additional information about our plan-based compensation for fiscal 2017. Name/ Award Type Grant Date Approval Date Estimated Potential Payouts Under Non-Equity Incentive Plan Awards (1) Estimated Potential Payouts Under Equity Incentive Plan Awards (2) All Other Stock Awards: Number of Shares of Stock or Units (#)(3) All Other Option Awards: Number of Securities Underlying Options (#)(4) Exercise or Base Price of Option Awards ($/Sh)(5) Grant Date Fair Value of Stock and Option Awards ($)(6) Threshold ($) Target ($) Maximum ($) Threshold (#) Target (#) Maximum (#) Barrett                         Annual Incentive   8/4/2016 792,000 1,980,000 3,960,000               PSUs 8/15/2016 8/4/2016       19,033 38,065 76,130       3,166,627 Option 8/15/2016 8/4/2016               189,380 83.19 3,166,434 RSUs 8/15/2016 8/4/2016             38,065     3,166,627 Kaufmann                         Annual Incentive   8/4/2016 298,575 746,438 1,492,876               PSUs 8/15/2016 8/4/2016       5,710 11,420 22,840       950,030 Option 8/15/2016 8/4/2016               59,655 83.19 997,432 RSUs 8/15/2016 8/4/2016             11,991     997,531 Casey                         Annual Incentive   8/4/2016 282,005 705,014 1,410,028               PSUs 8/15/2016 8/4/2016       5,710 11,420 22,840       950,030 Option 8/15/2016 8/4/2016               59,655 83.19 997,432 RSUs 8/15/2016 8/4/2016             11,991     997,531 Giacomin                         Annual Incentive   8/4/2016 226,860 567,151 1,134,302               PSUs 8/15/2016 8/4/2016       5,710 11,420 22,840       950,030 Option 8/15/2016 8/4/2016               56,814 83.19 949,930 RSUs 8/15/2016 8/4/2016             11,420     950,030 Morford                         Annual Incentive   8/4/2016 187,731 469,328 938,656               PSUs 8/15/2016 8/4/2016       3,106 6,211 12,422       516,693 Option 8/15/2016 8/4/2016               30,899 83.19 516,631 RSUs 8/15/2016 8/4/2016             6,211     516,693 (1) This information relates to annual cash incentive award opportunities with respect to fiscal 2017 performance. (2) "Equity Incentive Plan Awards" are PSUs granted during the fiscal year under our 2011 LTIP that are eligible to vest after a three-year performance period based on the sum of (i) non-GAAP diluted EPS CAGR and (ii) average annual dividend yield. We accrue cash dividend equivalents that are payable when, and only to the extent that, the PSUs vest. (3) "All Other Stock Awards" are RSUs granted during the fiscal year under our 2011 LTIP that vest ratably over three years and accrue cash dividend equivalents that are payable when, and only to the extent that, the RSUs vest. (4) "All Other Option Awards" are nonqualified stock options granted during the fiscal year under our 2011 LTIP that vest ratably over three years and have a term of 10 years. (5) The stock options have an exercise price equal to the closing price of our common shares on the NYSE on the grant date. (6) We valued the PSUs and RSUs by multiplying the closing price of our common shares on the NYSE on the grant date ($83.19) by the number of PSUs (at target) and RSUs awarded. We valued the stock options granted utilizing a lattice model with the following assumptions: expected stock option life: 7.05 years; dividend yield: 2.16%; risk-free interest rate: 1.42%; and expected volatility: 23.86%. The amounts reported represent the grant date fair value and do not represent amounts paid to or realized by the named executives. The named executives may never realize any value from the PSUs or stock options. To the extent they realize value from stock options, the amounts realized may be more or less than the amounts reported above. 32 Cardinal Health | 2017 Proxy Statement Table of Contents Executive Compensation Management Incentive Plan Our key executive employees, including our named executives, were eligible to receive fiscal 2017 annual cash incentive awards under our MIP. The Compensation Committee establishes "performance criteria" during the first three months of each fiscal year and may establish "performance goals" (which criteria and goals may vary from year to year). For fiscal 2017, the Compensation Committee established the performance criterion of $900 million in non-GAAP operating earnings. This performance criterion was intended to allow payments under the MIP to qualify as performance-based compensation under Section 162(m) of the Code and to be fully tax deductible by us. The named executives would not receive any payout under the MIP unless we achieved this threshold. As discussed in the Compensation Discussion and Analysis, the Compensation Committee also set a performance goal of adjusted non-GAAP operating earnings, and established a matrix of potential funding percentages based upon achievement of varying levels of earnings, subject to adjustment based on tangible capital performance. The funding percentage determines the total pool for annual incentive awards under the MIP. Adjusted non-GAAP operating earnings is based on the non-GAAP operating earnings measure thatGAAP, we use in our presentations with shareholders, which is one of our primary measures of operating performance, but is adjusted to exclude certain variable, performance-based compensation expenses. Tangible capital focuses on the efficient use of capital. We describe how we calculate these measures under "Annual Cash Incentive and PSU Performance Measure Calculations” on page 34. The MIP allows the Compensation Committee, in its discretion, to make annual incentive awards to named executives if we do not achieve the threshold level for the performance goal, but we achieve the performance criterion. As discussed in the Compensation Disclosure and Analysis, our actual fiscal 2017 adjusted non-GAAP operating earnings fell below the threshold level for the performance goal, but we exceeded the performance criterion of $900 million in non-GAAP operating earnings. For our named executives other than Mr. Barrett, the Committee recognized our fiscal 2017 strategic and operational accomplishments and, in its discretion, awarded payouts at 25% of their respective targets. Mr. Barrett declined to be considered for an annual incentive payout, and the Compensation Committee did not award him a payout. As we previously disclosed, beginning in fiscal 2018, we administer our annual cash incentive program under our 2011 LTIP in order to have a single plan for all of our executive incentive compensation. 2011 Long-Term Incentive Plan Under our 2011 LTIP, we may grant stock options, stock appreciation rights, stock awards, other stock-based awards and cash awards to employees. During fiscal 2017, we granted PSUs, nonqualified stock options and RSUs to our named executives, as shown in the Grants of Plan-Based Awards for Fiscal 2017 table on page 32, under the 2011 LTIP. The plan provides for “double-trigger” accelerated vesting in connection with a change of control, under which the vesting of awards will accelerate only if there is a qualifying termination within two years after the change of control or if the surviving entity does not provide qualifying replacement awards. We recently added one-year minimum vesting provisions to our 2011 LTIP. Under these provisions, stock options and stock awards are subject to a one-year vesting condition, except upon a change of control, upon the death or disability of the grantee or for up to an aggregate not to exceed 5% of the total number of shares provided for in the 2011 LTIP. PSUs granted under the 2011 LTIP settle following the end of a performance period by the issuance of a number of our common shares, which may be a fraction or multiple of the target number of PSUs subject to an award. Issuance of the shares is subject to both continued employment and the achievement of performance criteria and goals established by the Compensation Committee (which may vary from award to award). The Compensation Committee establishes PSU performance criteria and goals during the first three months of each performance period. For the PSUs granted during fiscal 2017, the Compensation Committee established the performance criterion of non-GAAP diluted EPS for our fiscal year ending June 30, 2019 equal to or greater than $1.00 per share. This performance criterion is intended to allow the PSUs to be performance-based compensation under Section 162(m) of the Code and to be fully tax deductible by us. As discussed in the Compensation Discussion and Analysis, the Compensation Committee also established a three-year performance goal under the PSUs granted during fiscal 2017 based upon the achievement of the sum of non-GAAP diluted EPS CAGR and average annual dividend yield over the performance period. A participant can receive 50% of target PSUs if we attain threshold performance and can receive up to 200% of target PSUs for above-target performance. A participant will receive no shares under the PSUs if we do not attain threshold performance. We describe how we calculate these measures under "Annual Cash Incentive and PSU Performance Measure Calculations” on page 34. Cardinal Health | 2017 Proxy Statement 33 Table of Contents Executive Compensation Annual Cash Incentive and PSU Performance Measure Calculations Award Performance Measure Calculation Annual Cash Incentive Adjusted non-GAAP operating earnings(1) Non-GAAP operating earnings(2) adjusted to exclude annual cash incentive expense to the extent below or above target performance, contributions to the DCP and 401(k) Savings Plan when we exceed pre-established performance goals and income or expense related to the performance of our DCP assets that is included within distribution, selling, general and administrative expenses in our consolidated statement of earnings. Tangible capital(1) 12-month average of total assets, lesstotal liabilities (other than interest-bearing long-term obligations), goodwill and other intangibles, net, and cash and equivalents. PSUs Sum of non-GAAP diluted EPS CAGR and average annual dividend yield Non-GAAP diluted EPS CAGR is non-GAAP diluted EPS(3) for the last fiscal year of the performance period divided by non-GAAP diluted EPS for the last fiscal year preceding the performance period; the quotient is then raised to the power of one divided by the number of years in the performance period. Average annual dividend yield is the sum of all cash dividends paid per share during a performance period divided by the number of years in the performance period; the quotient is then divided by our closing share price on the grant date. (1) We generally exclude the results of acquired or divested businesses from the adjusted non-GAAP operating earnings and tangible capital calculations if they are not included in our Board-approved annual budget. Accordingly, we excluded a few small acquisitions for fiscal 2017. The Compensation Committee also may make other adjustments to adjusted non-GAAP operating earnings and tangible capital for purposes of determining whether we achieved our performance goals, although none were made for fiscal 2017. (2) Non-GAAP operating earnings is operating earnings, excluding LIFO inventory credits and charges, restructuring and employee severance costs, amortization and other acquisition-related costs, impairments and gains and losses on disposal of assets and net litigation recoveries and charges. (3) Non-GAAP diluted EPS is non-GAAP net earnings from continuing operations attributable to Cardinal Health, Inc. divided by the diluted weighted average shares outstanding. Non-GAAP net earnings from continuing operations attributable to Cardinal Health, Inc. is net earnings attributable to Cardinal Health, Inc., adjusted to exclude earnings and losses from discontinued operations, LIFO inventory credits and charges, restructuring and employee severance costs, amortization and other acquisition-related costs, impairments and gains and losses on disposal of assets, net litigation recoveries and charges, loss on extinguishment of debt and tax benefits and expenses associated with each of the items mentioned above. For purposes of the PSUs, the Compensation Committee may approve adjustments to how we calculate non-GAAP net earnings attributable to Cardinal Health, Inc. to reflect a change by us to the definition of that measure as presented to investors, exceptional acquisitions or divestitures, changes in accounting principles or other exceptional items that are not reflective of our operating performance. In addition to determining incentive compensation, we use the non-GAAP financial measures referenced above internally to evaluate our performance, evaluate the balance sheet, and engage in financial and operational planning, and determine incentive compensation because we believe that these measures provide additional perspective on and, in some circumstances are more closely correlated to, the performance of our underlying, ongoing business. We provide these non-GAAP financial measures to investors as supplemental metrics to assist readers in assessing the effects of items and events on our financial and operating results on a year-over-year basis and in comparing our performance to that of our competitors. Potential Impact on Compensation However, the non-GAAP financial measures that we use may be calculated differently from, Executive Misconduct ("Clawbacks") and therefore may not be comparable to, similarly titled measures used by other companies. The MIPnon-GAAP financial measures disclosed by us should not be considered a substitute for, or superior to, financial measures calculated in accordance with GAAP, and 2011 LTIP both authorize usthe financial results calculated in accordance with GAAP and reconciliations to seek repayment of incentive awards from a participant if that participant engages in misconduct that causes or contributes to the need to restate previously filedthose financial statements set forth below should be carefully evaluated. Exclusions from Non-GAAP Financial Measures Management believes it is useful to exclude the following items from the non-GAAP financial measures presented in this proxy statement for its own and the payment was based on financial results that we subsequently restate. In addition, incentive awards granted under these plans may be subject to repayment if a participant commits misconduct, including a breach of our Standards of Business Conduct or violation of an applicable non-competition or confidentiality agreement. Under our stock option, PSU and RSU agreements, unexercised stock options, unvested PSUs and RSUs and certain vested PSUs and RSUs are forfeited if the holder breaches our Standards of Business Conduct, discloses confidential information, commits fraud, gross negligence or willful misconduct, solicits business or our employees, disparages us or engages in competitive actions while employed by Cardinal Health or during a set time period after termination of employment. We also may require the holder to repay the gross gain realized from any stock option exercises or the valuefor investors’ assessment of the PSUs and RSUs settled within a set time period prior to such conduct. Mr. Barrett’s employment agreement gives Cardinal Healthbusiness for the right to repayment of any bonus or other compensation paid to him if he engaged in misconduct that caused or materially contributed to the need to restate financial statements and, if based on the financial statements as restated, he otherwise would not have received such compensation. This right of repayment applies to compensation granted or vesting within three years of the date on which we originally filed the subject financial statements with the SEC. reasons identified below: • State opioid assessments related to prior fiscal years is the portion of state assessments for prescription opioid medications that were sold or distributed in periods prior to the period in which the expense is incurred. This portion is excluded from non-GAAP financial measures because it is retrospectively applied to sales in prior fiscal years and inclusion would obscure analysis of the current fiscal year results of our underlying, ongoing business. Additionally, while states’ laws may require us to make payments on an ongoing basis, the portion of the assessment related to sales in prior periods are contemplated to be one-time, nonrecurring items. Income from state opioid assessments related to prior fiscal years represents reversals of accruals due to changes in estimates or when the underlying assessments were invalidated by a court or reimbursed by manufacturers. • Shareholder cooperation agreement costs includes costs such as legal, consulting, and other expenses incurred in relation to the Cooperation Agreement, including costs incurred to negotiate and finalize the Cooperation Agreement and costs incurred by the Board’s Business Review Committee, which was formed under the Cooperation Agreement. We have excluded these costs from our non-GAAP financial measures because they do not occur in or reflect the ordinary course of our ongoing business operations and may obscure analysis of trends and financial performance. 34 • Cardinal Health | 2017 Proxy Statement Restructuring and employee severance costs are excluded because they are not part of the ongoing operations of our underlying business. • Amortization and other acquisition-related costs, which include transaction costs, integration costs, and changes in the fair value of contingent consideration obligations, are excluded because they are not part of the ongoing operations of our underlying business and to facilitate comparison of our current financial results to our historical financial results and to our peer group companies’ financial results. Additionally, costs for amortization of acquisition-related intangible assets are non-cash amounts, which are variable in amount and frequency and are significantly impacted by the timing and size of acquisitions, so their exclusion facilitates comparison of historical, current, and forecasted financial results. We also exclude other acquisition-related costs, which are directly related to an acquisition, but do not meet the criteria to be recognized on the acquired entity’s initial balance sheet as part of the purchase price allocation. These costs are also significantly impacted by the timing, complexity, and size of acquisitions. • Impairments and gain or loss on disposal of assets, net are excluded because they do not occur in, or reflect the ordinary course of, our ongoing business operations and are inherently unpredictable in timing and amount, and in the case of impairments, are non-cash amounts, so their exclusion facilitates comparison of historical, current, and forecasted financial results. • Litigation recoveries or charges, net, which include loss contingencies for certain litigation and regulatory matters and income from the favorable resolution of litigation, are excluded because they often relate to events that may have occurred in prior or multiple periods, do not occur in or reflect the ordinary course of our business, and are inherently unpredictable in timing and amount.  Table of Contents Executive Compensation Outstanding Equity Awards at Fiscal Year-End for Fiscal 2017 The table below shows the number of shares underlying exercisable and unexercisable stock options and unvested PSUs and RSUs held by our named executives on June 30, 2017. Name Option Awards Stock Awards Option Grant Date Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable (1) Option Exercise Price ($/Sh) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($)(2) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2)(3) Barrett 8/15/2011 308,302   —   41.60 8/15/2021               8/15/2012 330,738   —   39.81 8/15/2022               8/15/2013 279,770   —   51.49 8/15/2023               8/15/2014 141,346   70,674   71.43 8/15/2024               8/15/2015 63,231   126,464   84.27 8/15/2025               8/15/2016 —   189,380   83.19 8/15/2026                             79,848 (4) 6,221,756 106,264 (5) 8,280,091 Kaufmann 8/15/2011 76,909   —   41.60 8/15/2021               8/15/2012 96,291   —   39.81 8/15/2022               8/15/2013 68,316   —   51.49 8/15/2023               8/15/2014 35,798   17,900   71.43 8/15/2024               8/15/2015 15,689   31,378   84.27 8/15/2025               8/15/2016 —   59,655   83.19 8/15/2026                             35,779 (6) 2,787,900 27,644 (7) 2,154,020 Casey 8/15/2012 83,731   —   39.81 8/15/2022               8/15/2013 75,148   —   51.49 8/15/2023               8/15/2014 34,306   17,154   71.43 8/15/2024               8/15/2015 15,308   30,618   84.27 8/15/2025               8/15/2016 —   59,655   83.19 8/15/2026                             32,123 (8) 2,503,024 27,051 (9) 2,107,814 Giacomin 8/15/2012 26,166   —   39.81 8/15/2022               8/15/2013 21,349   —   51.49 8/15/2023               8/15/2014 9,766   4,884   71.43 8/15/2024               9/15/2014 16,024   8,013   74.96 9/15/2024               8/15/2015 13,312   26,624   84.27 8/15/2025               8/15/2016 —   56,814   83.19 8/15/2026                             19,807 (10) 1,543,361 24,993 (11) 1,947,455 Morford 8/15/2011 12,795   —   41.60 8/15/2021               8/15/2012 37,444   —   39.81 8/15/2022               8/15/2013 39,038   —   51.49 8/15/2023               8/15/2014 17,046   8,524   71.43 8/15/2024               8/15/2015 7,987   15,974   84.27 8/15/2025               8/15/2016 —   30,899   83.19 8/15/2026                             20,758 (12) 1,617,463 15,301 (13) 1,192,254 (1) These stock options vest 33% on the first, second and third anniversaries of the grant date. (2) The market value is the product of $77.92, the closing price of our common shares on the NYSE on June 30, 2017, and the number of unvested stock awards. (3) Fiscal 15-17 PSUs are actual amounts that vested upon our achieving the performance goal over the performance period. Based on current performance in accordance with the SEC rules, PSUs for the fiscal 2016-2018 ("Fiscal 16-18 PSUs") assume payout at target and Fiscal 17-19 PSUs assume payout at threshold. (4) Reflects RSUs that vest as follows: 41,318 shares on August 15, 2017; 25,841 shares on August 15, 2018; and 12,689 shares on August 15, 2019. Cardinal Health | 2017 Proxy Statement 35 Table of Contents Executive Compensation (5) Reflects 49,653 Fiscal 15-17 PSUs, 37,578 Fiscal 16-18 PSUs and 19,033 Fiscal 17-19 PSUs. (6) Reflects RSUs that vest as follows: 11,180 shares on August 15, 2017; 13,341 shares on September 15, 2017; 7,261 shares on August 15, 2018; and 3,997 shares on August 15, 2019. (7) Reflects 13,034 Fiscal 15-17 PSUs, 8,900 Fiscal 16-18 PSUs and 5,710 Fiscal 17-19 PSUs. (8) Reflects RSUs that vest as follows: 10,938 shares on August 15, 2017; 10,006 shares on September 15, 2017; 7,182 shares on August 15, 2018; and 3,997 shares on August 15, 2019. (9) Reflects 13,034 Fiscal 15-17 PSUs, 8,307 Fiscal 16-18 PSUs and 5,710 Fiscal 17-19 PSUs. (10) Reflects RSUs that vest as follows: 7,645 shares on August 15, 2017; 1,779 shares on September 15, 2017; 6,576 shares on August 15, 2018; 3,807 shares on August 15, 2019. (11) Reflects 10,976 Fiscal 15-17 PSUs, 8,307 Fiscal 16-18 PSUs and 5,710 Fiscal 17-19 PSUs. (12) Reflects RSUs that vest as follows: 5,598 shares on August 15, 2017; 4,678 shares on November 15, 2017; 3,732 shares on August 15, 2018; 4,679 shares on November 15, 2018; and 2,071 on August 15, 2019. (13) Reflects 7,448 Fiscal 15-17 PSUs, 4,747 Fiscal 16-18 PSUs and 3,106 Fiscal 17-19 PSUs. Option Exercises and Stock Vested for Fiscal 2017 The table below shows stock options that were exercised, and PSUs and RSUs that vested, during fiscal 2017 for each of our named executives. Name Option Awards   Stock Awards   Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) Number  of Shares Acquired on Vesting (#)(1) Value Realized on Vesting ($) Barrett 685,989 (2) 32,061,337 (2) 135,230   11,305,228   Kaufmann —   —   48,167   3,915,506   Casey 59,180   2,545,598   45,043   3,682,153   Giacomin 62,951   2,892,986   13,911   1,148,123   Morford —   —   19,324   1,615,486   (1) This column represents the vesting during fiscal 2017 of PSUs granted during fiscal 2014 for the fiscal 2014-2016 performance period and RSUs granted during fiscal 2014, 2015 and 2016. The number of shares acquired on vesting includes the following PSUs and RSUs deferred at the election of the named executive, net of required withholdings: Mr. Casey—2,939 RSUs; and Mr. Morford—12,401 PSUs and 5,741 RSUs. See “Deferred Compensation” below for a discussion of deferral terms. (2) During fiscal 2017, Mr. Barrett exercised an option granted in August 2010, which had an expiration date of August 2017. Deferred Compensation Our DCP permits certain management employees, including the named executives, to defer between 1% and 50% of base salary and between 1% and 80% of incentive compensation. In addition, we may make additional matching and non-matching contributions to the deferred balances of participants. We make matching contributions on amounts deferred under the DCP from compensation in excess of $270,000 but not in excess of $370,000 at the same rate as contributions are matched under the 401(k) Savings Plan. We also may credit participants’ accounts with additional, non-matching company contributions in the same amount as company contributions made to the 401(k) Savings Plan based on a percentage of fiscal year compensation in excess of $270,000 but not in excess of $370,000. Company non-matching contributions are made only when we exceed pre-established performance goals. The Compensation Committee selected adjusted non-GAAP operating earnings as the performance measure for fiscal 2017 for company non-matching contributions. We did not exceed the pre-established adjusted non-GAAP operating earnings goal and accordingly did not make any performance-based, non-matching contributions for fiscal 2017. Each participant may direct the investment of his or her DCP account by selecting notional investment options that generally track publicly available mutual funds and investments and by periodically changing investment elections as the participant deems appropriate. We pay participants’ deferred balances in cash upon retirement, termination from employment, death or total disability. The plan does not qualify under Section 401(a) of the Code and is exempt from many of the provisions of the Employee Retirement Income Security Act of 1974 as a “top hat” plan for a select group of management or highly compensated employees. 36 Cardinal Health | 2017 Proxy Statement Table of Contents Executive Compensation Apart from the DCP, a named executive also may defer receipt of shares that otherwise would be issued on the date that PSUs and RSUs vest until after the named executive is no longer employed by Cardinal Health or until a fixed future date. Nonqualified Deferred Compensation in Fiscal 2017 The table below provides information regarding the named executives’ accounts under our DCP and deferred share arrangements. References to deferred shares in the table below include both PSUs and RSUs. Name/Award Type Executive Contributions in Last FY ($)(1)(2) Cardinal Health Contributions in Last FY ($)(2) Aggregate Earnings in Last FY ($)(3) Aggregate Withdrawals/ Distributions ($) Aggregate Balance at Last FYE ($)(4) Barrett                   DCP 126,923   8,000   284,198   — 2,388,404   Deferred shares —   —   —   — —   Kaufmann                   DCP 130,128   7,146   351,567   — 3,250,142   Deferred shares —   —   (2,019 )   — 1,747,824   Casey                   DCP 104,504   4,000   4,688   — 434,240   Deferred shares 244,495   —   (21,242 )   — 5,210,355   Giacomin                   DCP 279,406   7,600   232,420   — 1,782,876   Deferred shares —   —   —   — —   Morford                   DCP 489,941   7,900   206,622   — 1,436,213   Deferred shares 1,509,233   —   (100,668 )   — 5,793,897   (1) The DCP amounts shown include salary and fiscal 2016 cash incentive awards deferred during fiscal 2017. DCP amounts do not include the following amounts deferred from the fiscal 2017 cash incentive awards that were paid in fiscal 2018: Mr. Kaufmann—$18,661; Mr. Giacomin—$14,179. (2) DCP amounts included as contributions in the table and also reported as fiscal 2017 compensation in the Summary Compensation Table of this proxy statement are as follows: Mr. Barrett—$130,923; Mr. Kaufmann—$42,473; Mr. Casey—$0; Mr. Giacomin—$72,196; and Mr. Morford—$17,621. (3) We calculate the aggregate DCP earnings based upon the change in value of the investment options selected by the named executive during the year. Aggregate deferred shares earnings are calculated based upon the change in their total value from the first day of the fiscal year (or the vesting date, if later) to the last day of the fiscal year. (4) DCP amounts included in the aggregate balance at June 30, 2017 in the table and also reported as fiscal 2016 and 2015 compensation in the Summary Compensation Table of this proxy statement are as follows: Mr. Barrett—$277,077; Mr. Kaufmann—$117,810; Mr. Casey—$0; Mr. Giacomin—$253,706; and Mr. Morford—$51,241. Cardinal Health | 2017 Proxy Statement 37 Table of Contents Executive Compensation Potential Payments on Termination of Employment or Change of Control In many cases, our named executives are eligible to receive benefits after a termination of employment or change of control under the MIP and the 2011 LTIP. The various payments and benefits that would be provided to the named executives under the MIP and 2011 LTIP are discussed in the table below. Annual Incentives (MIP) Long-Term Incentive Plan Awards Termination for Cause (1) None. We may cancel unexercised stock options and unvested stock awards and require repayment of proceeds realized from vested awards for a specified period of time. Involuntary Termination without Cause If involuntarily terminated without cause after the beginning of the fourth quarter, the executive receives a prorated incentive payment based upon the length of employment during that fiscal year; if terminated earlier, there is no right to an incentive payment. If involuntarily terminated without cause after the end of a performance period, the executive receives his PSUs as if he had remained employed through the settlement date; otherwise unvested equity awards are forfeited and the executive must exercise vested stock options within 90 days. Termination Due to Retirement (2) Prorated incentive payment based upon the length of employment during that fiscal year. • Stock options and RSUs held for at least six months vest, prorated based upon the length of employment during the vesting period, on an accelerated basis and outstanding stock options remain exercisable until the expiration of option term. • PSUs held for at least six months vest on the original vesting date, subject to achievement of the performance goals, but the amount is prorated based upon the length of employment during the performance period. Termination Due to Death or Disability (3) Prorated incentive payment based upon the length of employment during that fiscal year. • Stock options and RSUs held for at least six months vest on an accelerated basis and stock options remain exercisable until expiration of option term. • PSUs held for at least six months vest on the original vesting date, subject to achievement of the performance goals. Change of Control (4) Notax effect on amount or timing of any payments. • Awards vest on an accelerated basis only if (a) a qualifying termination occurs within two years after a change of control (including a "good reason" termination by the executive or an involuntary termination without cause) or (b) the surviving entity does not provide qualifying replacement awards. • In general, if employment terminates within two years after change of control, stock options remain exercisable until the earlier of three years from termination or expiration of option term. • The number of PSUs received is based on the actual performance before the change of control and expected performance for the remainder of the performance period. (1) A “termination for cause” under the MIP and 2011 LTIP generally means termination of employment for fraud or intentional misrepresentation, embezzlement, misappropriation, conversion of assets or the intentional violation of our written policies or procedures. Mr. Barrett's employment agreement also defines “termination for cause," which is discussed below under “Tables for Named Executives." (2) “Retirement” means termination of employment (other than by death or disability or a termination for cause) after attaining either age 55 and at least 10 years of continuous service or, for awards granted after July 1, 2017, age 60 and at least five years of continuous service. None of the named executives currently qualify for retirement 38 Cardinal Health | 2017 Proxy Statement Table of Contents Executive Compensation benefits, but Messrs. Barrett, Kaufmann and Morford will each qualify for retirement benefits later in fiscal 2018. We recently amended the 2011 LTIP to provide that for awards granted after July 1, 2017, plan participants will qualify for retirement after they (i) attain either age 53 and at least eight years of continuous service or age 59 and at least four years of continuous service, (ii) are terminated by us without cause and (iii) enter into a separate agreement with us. (3) “Disability” exists under the MIP and 2011 LTIP when an executive who is under the regular care of a physician is continuously unable to substantially perform his job or to be employed in any occupation for which the executive is qualified by education, training or experience. Mr. Barrett's employment agreement also defines “disability," which is discussed below under "Tables for Named Executives." (4) Under the 2011 LTIP, a “change of control” generally occurs when: a person or group acquires 30% or more of Cardinal Health’s outstanding common shares or voting securities, subject to limited exceptions; during any two-year period, individuals who as of the beginning of such two-year period constituted the Board cease for any reason to constitute at least a majority of the Board, unless the replacement directors are approved as described in the 2011 LTIP; there is a consummation of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of Cardinal Health's assets or another business combination unless (i) after the transaction all or substantially all of the owners of Cardinal Health's outstanding common shares or voting securities prior to the transaction own more than 50% of such securities after the transaction in substantially the same proportions; (ii) no person, subject to certain exclusions, owns 30% or more of the outstanding common shares or voting securities of the resulting entity (unless such ownership level existed before the transaction); and (iii) a majority of the directors of the resulting entity were members of Cardinal Health's Board (including applicable replacements as described above) when the transaction was approved or the transaction agreement was executed; or our shareholders approve a complete liquidation or dissolution of Cardinal Health. Generally, a termination is for “good reason” if: (a) we materially reduce the employee's total compensation; (b) we materially reduce the employee's annual or long-term incentive opportunities; (c) we materially reduce the employee's duties, responsibilities or authority; or (d) we require the employee to relocate more than 50 miles from his or her office or location. Mr. Barrett’s employment agreement, and Messrs. Kaufmann, Casey and Giacomin’s confidentiality and business protection agreements, contain non-competition and non-solicitation provisions that, among other things, prohibit these executives from being employed by certain entities that compete with us for a period of two years after termination of employment (the “Restricted Period”). During the Restricted Period, these executives also are prohibited from soliciting on behalf of a competitor the business of any customer or any known potential customer of Cardinal Health. These agreements also prohibit disclosure of confidential information, disparagement and recruitment of our employees. See also “Potential Impact on Compensation from Executive Misconduct ("Clawbacks”)" at page 34 for a discussion of restrictive covenants under the 2011 LTIP and MIP applicable to each of the named executives. Tables for Named Executives The tables below present, for each of the named executives, the potential payments and benefits in the event of termination of employment or a change of control. These potential amounts have been calculated as if the named executive’s employment had terminated or a change of control had occurred as of June 30, 2017, the last day of fiscal 2017, anditems listed above is determined using the closing market pricetax rate and other tax attributes applicable to the item and the jurisdiction(s) in which the item is recorded. The gross, tax, and net impact of our common shares on June 30, 2017 ($77.92). The tables do not include benefits thateach item are available to all of our salaried employees upon retirement, death or disability, including 401(k) Savings Plan distributions, group and supplemental life insurance benefits and short-term and long-term disability benefits. The amounts reported in the tables below are hypothetical amounts. Actual payments will depend on the circumstances and timing of any termination of employment or change of control. In addition, in connection with any actual termination or change of control transaction, we may determine to enter into agreements or establish arrangements that provide additional benefits or amounts or alter the terms of benefits described below. Cardinal Health | 2017 Proxy Statement 39 Table of Contents Executive Compensation The table below describes the potential payments and benefits upon termination of employment or a change of control as of June 30, 2017 for Mr. Barrett. Executive Benefits and Payments Upon Termination of Employment or Change of Control (1) Involuntary Termination Without Cause or Termination by the Executive for Good Reason ($)(2) Termination Due to Death or Disability ($)(3) Involuntary Termination Without Cause or Termination by the Executive for Good Reason Within Two Years of Change of Control ($)(2) Cash severance 6,600,000   —   6,600,000   Annual cash incentive 1,980,000   1,980,000   1,980,000   Long-term incentive awards (accelerated vesting) (4) —   15,483,520   15,483,520   Medical and dental benefits (5) 25,771   25,771   25,771   Interest on deferred payments 50,890   11,744   50,890   Total 8,656,661   17,501,035   24,140,181   (1) Assumes Mr. Barrett’s compensation to be a base salary of $1,320,000 and that his fiscal 2017 cash incentive payout was at target, or $1,980,000 (actual payout was $0). (2) The actual payments made under Mr. Barrett's employment agreement will be reduced to the extent necessary to eliminate any "golden parachute" excise tax under the Code provided that the value of the adjusted payments and benefits is not less than the amount Mr. Barrett otherwise would have received on an after-tax basis. For purposes of Mr. Barrett’s employment agreement, “cause” means: (a) he willfully fails to perform his duties (other than due to physical or mental illness) for a continuous period; (b) he willfully engages in illegal conduct or gross misconduct that materially harms Cardinal Health; (c) he is convicted of a felony or any crime involving dishonesty or moral turpitude, or makes a guilty or nolo contendere plea; or (d) he materially breaches the covenants in his employment agreement. A termination by Mr. Barrett is for “good reason” in the following events: (a) the assignment to him of any duties materially inconsistent with his position or duties, or any other action by us that results in a material diminution in his position or duties; (b) any failure by us to comply with any of the compensation provisions contained in his employment agreement; (c) we require him to be based more than 35 miles from Dublin, Ohio and more than 35 miles further from his principal residence at the time than the residence is from Dublin, Ohio; (d) any purported termination by us of his employment other than as expressly permitted by his employment agreement; and (e) any failure by us to complypresented with our obligationGAAP to require any successor entity to assume our employment agreement with him. Under Mr. Barrett’s employment agreement, if we terminate his employment without cause or he terminates his employment for good reason, then he will receive: (a) earned but unpaid salary and unpaid annual bonus from the prior fiscal year, if any (payable in a lump sum within 60 days); (b) a prorated portion of his annual bonus for the fiscal year of the termination (payable at the time annual bonuses are paid to other executives); (c) two times the sum of his annual base salary and target bonus for the fiscal year of the termination (payable in equal monthly installments over 24 months); (d) the ability to exercise all vested stock options for two years following termination (or, if shorter, the end of their stated term), or such longer period as provided in the award agreement; and (e) medical and dental benefits for him and his dependents for two years. If Mr. Barrett terminates his employment without good reason or if we terminate his employment for cause, then he will receive earned but unpaid salary and unpaid annual bonus from the prior fiscal year, if any (payable within 30 days). (3) Under Mr. Barrett’s employment agreement, “disability” means he is absent from his duties on a full-time basis for at least 120 consecutive days, or an aggregate period of at least 180 days, as a result of incapacity due to mental or physical illness that is determined by a physician to be total and permanent. If Mr. Barrett’s employment is terminated due to death or disability, he will receive under his employment agreement: (a) earned but unpaid salary and unpaid annual bonus from the prior fiscal year, if any (payable in a lump sum within 30 days); (b) a prorated portion of his annual bonus for the fiscal year of the termination (payable at the time annual bonuses are paid to our other executives); and (c) medical and dental benefits for him (in the event of disability) and his dependents for two years. For purposes of the table above, in the event of termination of employment due to death, the medical and dental benefits would be reduced to $16,139. (4) Assumes the accelerated vesting of 112,976 PSUs at target, 386,518 stock options and 79,848 RSUs in the event of (a) a change of control with involuntary termination without cause or a termination by Mr. Barrett for "good reason" within two years after the change of control or if the surviving entity does not provide qualifying replacement awards or (b) a termination due to death or disability. We valued the accelerated vesting of stock awards by multiplying the closing price of our common shares on June 30, 2017 by the number of stock awards. We valued the accelerated vesting of stock options as the difference between the closing price of our common shares on June 30, 2017 and the exercise price for each stock option. (5) Under Mr. Barrett’s employment agreement, we are required to continue to provide him and his eligible dependents with the same medical and dental benefits coverage he would have been entitled to receive if he had remained an active employee for two years. The amounts reported are based on estimates determined by independent consultants. non-GAAP reconciliations. CARDINALHEALTH   2023 Proxy Statement  |82 40 Cardinal Health | 2017 Proxy Statement Table of Contents Executive Compensation The table below describes the potential payments and benefits upon termination of employment or a change of control as of June 30, 2017 for Messrs. Kaufmann, Casey, Giacomin and Morford. Executive Benefits and Payments Upon Termination of Employment or Change of Control Involuntary Termination Without Cause ($) Termination Due to Death or Disability ($) Involuntary Termination Without  Cause or Termination by the Executive for Good Reason Within Two Years of Change of Control ($) Kaufmann             Cash severance —   —   —   Annual cash incentive (1) 746,438   746,438   746,438   Long-term incentive awards (accelerated vesting) (2) —   5,251,021   5,251,021   Total 746,438   5,997,459   5,997,459   Casey             Cash severance —   —   —   Annual cash incentive (1) 705,014   705,014   705,014   Long-term incentive awards (accelerated vesting) (2) —   4,915,097   4,915,097   Total 705,014   5,620,111   5,620,111   Giacomin             Cash severance —   —   —   Annual cash incentive (1) 567,151   567,151   567,151   Long-term incentive awards (accelerated vesting) (2) —   3,778,979   3,778,979   Total 567,151   4,346,130   4,346,130   Morford             Cash severance —   —   —   Annual cash incentive (1) 469,328   469,328   469,328   Long-term incentive awards (accelerated vesting) (2) —   2,962,983   2,962,983   Total 469,328   3,432,311   3,432,311   (1) Assumes that the annual cash incentive payouts were at the following fiscal 2017 target amounts: Mr. Kaufmann—$746,438(actual payout was $186,609); Mr. Casey—$705,014 (actual payout was $176,253); Mr. Giacomin—$567,151(actual payout was $141,788); and Mr. Morford—$469,328 (actual payout was $117,332). (2) Assumes the accelerated vesting of long-term incentive awards in the event of (a) a change of control with involuntary termination without cause or a termination by the executive for "good reason" within two years after the change of control or if the surviving entity does not provide qualifying replacement awards or (b) a termination due to death or disability, as follows: Mr. Kaufmann—30,120 PSUs at target, 108,933 stock options and 35,779 RSUs; Mr. Casey—29,527 PSUs at target, 107,427 stock options and 32,123 RSUs; Mr. Giacomin—27,980 PSUs at target, 96,335 stock options and 19,807 RSUs; and Mr. Morford—16,558 PSUs at target, 55,397 stock options and 20,758 RSUs. We valued the accelerated vesting of stock awards by multiplying the closing price of our common shares on June 30, 2016 by the number of stock awards. We valued the accelerated vesting of stock options as the difference between the closing price of our common shares on June 30, 2017 and the exercise price for each stock option. Cardinal Health | 2017 Proxy Statement 41 Table of Contents Director Compensation Overview Decisions regarding our non-management director compensation program are approved by our Board of Directors based on recommendations of our Compensation Committee. Back to Contents Fiscal 2023 GAAP to Non-GAAP Reconciliations (in millions, except for per share amounts)     Operating Earnings ($)     Operating Earnings Growth Rate (%)     Earnings Before Income Taxes ($)     Provision For Income Taxes ($)     Net Earnings Attributable to Cardinal Health, Inc. ($)     Diluted Earnings Per Share Attributable to Cardinal Health, Inc. ($)     Diluted Earnings Per Share Attributable to Cardinal Health, Inc. Growth Rate (%) GAAP   727   N.M.   638   376   261   1.00   N.M. State opioid assessment related to prior fiscal years   (6)       (6)   (2)   (4)   (0.02)     Shareholder cooperation agreement costs   8       8   2   6   0.02     Restructuring and employee severance   95       95   21   74   0.28     Amortization and other acquisition-related costs   285       285   74   211   0.80     Impairments and (gain)/loss on disposal of assets, net(1)   1,250       1,250   86   1,164   4.44     Litigation (recoveries)/charges, net(2)   (302)       (302)   (109)   (193)   (0.73)     NON-GAAP   2,057   3   1,968   448   1,519   5.79   14 (1) Impairments and (gain)/loss on disposals of assets, net includes pre-tax goodwill impairment charges of $1.2 billion ($1.1 billion after tax or $4.38 per share) related to the Medical segment.  (2) Litigation (recoveries)/charges, net includes $13 million ($0.04 per share) in net charges related to opioid litigation. Historically, we have excluded litigation recoveries and charges from our non-GAAP earnings measures, which is common in our industry. This practice ensures that executives have incentives to efficiently resolve litigation when it is in the best interest of the company, helps focus our incentives on underlying business performance, and aligns our incentives with performance during the performance period. We did not adjust our non-GAAP financial measures to exclude ordinary, recurring opioid-related litigation defense costs, which adversely impacted our fiscal 2023 non-GAAP operating earnings by approximately $55 million. We also did not adjust for opioid-related compliance costs. The Compensation Committee receives comparative market data and recommendations from its compensation consultant with regard to the structure and amounts of our non-management director compensation. Total non-management director compensation is targeted at the mediansum of the Comparator Group total director compensation. Compensation Arrangements components and certain computations may reflect rounding adjustments. Definitions Non-GAAP operating earnings is operating earnings excluding state opioid assessment related to prior fiscal years, shareholder cooperation agreement costs, restructuring and employee severance, amortization and other acquisition-related costs, impairments and (gain)/loss on disposal of assets, net, and litigation (recoveries)/charges, net. Non-GAAP earnings before income taxes is earnings before income taxes excluding state opioid assessment related to prior fiscal years, shareholder cooperation agreement costs, restructuring and employee severance, amortization and other acquisition-related costs, impairments and (gain)/loss on disposal of assets, net, and litigation (recoveries)/charges, net. Non-GAAP net earnings attributable to Cardinal Health, Inc. is net earnings attributable to Cardinal Health, Inc. excluding state opioid assessment related to prior fiscal years, shareholder cooperation agreement costs, restructuring and employee severance, amortization and other acquisition-related costs, impairments and (gain)/loss on disposal of assets, net, and litigation (recoveries)/charges, net, each net of tax. Non-GAAP diluted earnings per share attributable to Cardinal Health, Inc. is non-GAAP net earnings attributable to Cardinal Health, Inc. divided by diluted weighted average shares outstanding. CARDINALHEALTH   2023 Proxy Statement  |83 The table below shows the elements and amount of compensation that we paid to our non-management directors for fiscal 2017. Our current director compensation arrangements have been in effect since November 2015. Back to Contents Compensation Element Amount ($) Retainer (1) 100,000 RSUs (2) 160,000 Committee chair annual retainers (1): Audit Committee 20,000 Compensation Committee 15,000 Nominating and Governance Committee 10,000 Lead Director: Annual retainer (1) 20,000 Annual RSUs 20,000 (1) Retainer amounts are paid in cash in quarterly installments. (2) Each non-management director receives an annual RSU grant on the date of our Annual Meeting of Shareholders. We value the RSUs based on the closing share price on the grant date. RSUs vest one year from the grant date (or on the date of the next Annual Meeting of Shareholders, if earlier) and settle in common shares. We accrue cash dividend equivalents that are payable upon vesting of the RSUs. Directors may receive additional compensation for performing duties assigned by the Board or its committees that are considered beyond the scope of the ordinary responsibilities of directors or committee members. We granted RSU awards to directors during fiscal 2017 under the 2007 Nonemployee Directors Equity Incentive Plan (the "Director EIP"). All unvested RSUs become fully vested upon a “change of control” (as defined under “Potential Payments on Termination of Employment and Change of Control” on page 39) unless the director is asked to continue to serve on the board of directors of the surviving entity or its affiliate and receives a qualifying replacement award. Following shareholder approval of amendments to the 2011 LTIP at the 2016 Annual Meeting of Shareholders, we will grant future RSU awards to directors under the 2011 LTIP. The 2011 LTIP includes a $600,000 limit on non-management director equity awards and cash compensation for any fiscal year, with an exception for a non-executive chair of the Board. Directors may elect to defer payment of their cash retainers into our DCP. For directors, deferred balances under the DCP are paid in cash upon termination from Board service, death or disability. A director also may defer receipt of common shares that otherwise would be issued on the date that RSUs vest until termination from Board service. Our directors may participate in our matching gift program. Under this program and subject to certain restrictions, the Cardinal Health Foundation (our philanthropic affiliate) will match contributions for eligible non-profit organizations. 42 Cardinal Health | 2017 Proxy Statement Table of Contents Director Compensation Director Compensation for Fiscal 2017 The non-management directors received the following compensation during fiscal 2017: Name Fees Earned  or Paid in Cash ($) Stock Awards ($)(1) All Other Compensation ($) Total ($) David J. Anderson 100,000 160,000     260,000 Colleen F. Arnold 100,000 160,000     260,000 Carrie S. Cox 100,000 160,000 3,500 (2) 263,500 Calvin Darden 100,000 160,000     260,000 Bruce L. Downey 100,000 160,000 3,000 (2) 263,000 Patricia A. Hemingway Hall 100,000 160,000     260,000 Clayton M. Jones 120,000 160,000     280,000 Gregory B. Kenny 130,000 180,000 6,500 (2) 316,500 Nancy Killefer 100,000 160,000     260,000 David P. King 115,000 160,000     275,000 Back to Contents (1) These awards are RSUs granted under the Directors EIP. We valued the RSUs by multiplying the closing price of our common shares on the NYSE on the grant date ($65.38) by the number of RSUs awarded. As of June 30, 2017, the aggregate number of shares underlying unvested RSU awards held by each director serving on that date was 2,447 shares, except for Mr. Kenny which was 2,753 shares. (2) Represents a company match attributable to a charitable contribution under our matching gift program. Cardinal Health | 2017 Proxy Statement 43 Table of Contents Proposal 5—Shareholder Proposal to Urge the Board of Directors to Adopt a Policy that the Chairman of the Board be an Independent Director We received notice that The International Brotherhood of Teamsters General Fund, 25 Louisiana Avenue, NW, Washington, DC 20001, a shareholder owning 75 of our common shares as of April 28, 2017, and Kenneth Steiner, 14 Stoner Ave., Apt 2m, Great Neck, NY 11021, a shareholder owning no less than 500 of our common shares as of April 28, 2017, intend to jointly present the following proposal at the Annual Meeting. The proposed resolution and its supporting statement, for which neither we nor the Board accepts responsibility, are set forth below. The shareholder proposal and supporting statement read as follows: Resolved, that shareholders of Cardinal Health Inc. (“the Company” or “Cardinal”), urge the Board of Directors (the “Board”) to take the steps necessary to adopt a policy, with amendments to governing documents as needed, so that, to the extent feasible, the Chairman of the Board shall be an independent director who has not previously served as an executive officer of the Company. The policy should be implemented so as not to violate any contractual obligations and should specify the process for selecting a new independent chairman if the chairman ceases to be independent between annual meetings of shareholders or if no independent director is available and willing to serve as chairman. SUPPORTING STATEMENT: The Board’s role, led by its chairman, is to provide rigorous oversight of management to protect the interests of the Company and shareholders. This oversight may be weakened if the chairman is also the chief executive officer--as at Cardinal--or is otherwise not independent from management. Even with robust responsibilities, the lead independent director’s position is inadequate to this task because ultimate responsibility for board leadership remains with the chairman/CEO.An independent chairman can best facilitate effective deliberation of strategy, risk oversight and management accountability. These considerations are especially critical at Cardinal given the potential reputational, legal and regulatory risks Cardinal faces over its role in the nation’s opioid epidemic, including its history of compliance challenges concerning the distribution of controlled substances. According to the Centers for Disease Control, prescription opioids claim 62 lives a day in this country. In December 2016, Cardinal agreed to pay $44 million to resolve allegations it violated the federal Controlled Substances Act regarding the distribution of opioids. This settlement with the Department of Justice follows a $34 million penalty in 2008 for similar violations. In January 2017, Cardinal agreed to pay $20 million to settle a lawsuit from the State of West Virginia, alleging Cardinal violated the law in failing to investigate, report and cease fulfilling suspicious prescriptions in the state. As of April 2017, lawsuits had been filed by a number of West Virginia counties and municipalities alleging similar actions. According to a Pulitzer-prize winning review of the Drug Enforcement Administration, drug shipping sales by The Charleston Gazette-Mail, Cardinal supplied over 182 million hydrocodone and oxycodone pills between 2007 and 2012 to West Virginian pharmacies, enough for approximately 100 pills for every adult and child in the state. In April 2017, The Washington Post reported Cardinal was one of the pharmaceutical industry companies being sued by the Cherokee Nation in tribal court for failing to prevent the diversion of pain pills. The lawsuit states in 2015, enough prescription opioids were distributed in the Cherokee Nation for 955 5mg dose pills per adult and child. In the midst of such scrutiny, an independent chairman is invaluable in providing robust oversight of management and ensuring good communications and credibility with stakeholders. The Board of Directors' Statement in Opposition to Proposal 5 The Board recommends a vote AGAINST Proposal 5. Our Board believes that this proposal takes two distinct topics—our Board leadership structure and the nation’s opioid epidemic—and seeks to meld them together to support an unwarranted one-size-fits-all board leadership structure. We believe that it is a crucial responsibility of the Board to thoughtfully consider its leadership structure based upon the circumstances, as opposed to adopting the mandated separation advocated by the proponent. Our current Board leadership structure, comprised of a unified Chairman and Chief Executive Officer and a highly-engaged independent Lead Director with robust responsibilities, has been effective as shown by our strong performance over the past several years and allows us to focus on creating long-term shareholder 44 Cardinal Health | 2017 Proxy Statement Table of Contents Proposal 5—Shareholder Proposal value in the constantly-evolving healthcare industry. Through this structure, our Board has also actively and appropriately engaged in overseeing our compliance and opioid anti-diversion programs. Board oversight of opioid anti-diversion program. Our Board, our Chairman and Chief Executive Officer, and the entire Cardinal Health team care deeply about the devastation opioid abuse is inflicting on our families and communities and we are committed to helping solve this complex national public health crisis. We, like so many others across this nation, have family members, friends and colleagues who have been impacted by the devastating consequences of prescription drug overuse and abuse. We also have family members, friends and colleagues who rely on these medications to address suffering associated with terminal illnesses, painful neurological conditions, severe injuries and recovery from surgeries. We understand and take seriously our responsibility to ensure these medications are available for patients who need them, while maintaining rigorous control processes to prevent their diversion. We are industry leaders in implementing state-of-the-art controls to combat the diversion of pain medications from legitimate uses. The opioid epidemic is a serious, multi-faceted problem that involves prescribing physicians, regulators, manufacturers, pharmacists and patients. We believe all participants must be active in combating this epidemic. Working together with our dedicated team of 85 anti-diversion specialists, our Board and management have been and remain actively engaged on this issue. We have had a leading role for nearly a decade in pioneering and supporting an impactful prevention and education program to combat opioid abuse and diversion under the umbrella of the Generation Rx program, which we developed in partnership with the Ohio State University School of Pharmacy. Moreover, our opioid anti-diversion program includes state-of-the-art, constantly adaptive, rigorous systems supported by our program specialists, including former Drug Enforcement Administration officials and state diversion regulators, who monitor and investigate suspicious orders using advanced analytics and other tools. Our Board has been active in its oversight and review of the effectiveness of our opioid anti-diversion program, which includes regular briefings by management. In 2014, in response to a shareholder demand, an independent committee of the Board completed a review of our opioid anti-diversion program utilizing independent counsel. The committee found, among other things, that we had implemented and maintained a robust system of controls to detect and report suspicious orders and that the Board was well informed of those controls. Since that review, the Board has continued to actively focus on the effectiveness of our opioid anti-diversion program and support its continued enhancements through regular oversight reviews with management. Board leadership structure. The Board, comprised of all independent directors other than Mr. Barrett, is responsible for the selection of the Chairman of the Board. The Board believes that Mr. Barrett is best suited to serve as Chairman because of his unique knowledge of our business, the healthcare industry and our shareholders. The Board ensures strong independent leadership through an active, empowered independent Lead Director and strong engagement from our independent directors. Our independent Lead Director is highly engaged and works closely with Mr. Barrett in developing Board meeting agendas, discussing our strategy and long-term capital deployment, and reviewing materials and other information prepared for the Board. In addition, he chairs regular executive sessions of the independent directors and provides feedback from these meetings to Mr. Barrett and other members of management. He also participates in outreach calls and in-person meetings with investors, and provides their feedback to the Board. Under our current Board leadership structure and Mr. Barrett’s effective leadership, we have delivered strong performance and are executing a well-developed strategy focused on long-term shareholder value creation in the swiftly-changing healthcare environment. Mr. Barrett understands our long-term investment priorities and has led our company to strong performance since the August 2009 spin-off of CareFusion Corporation, when he became Chairman and Chief Executive Officer. In that time, our compound annual non-GAAP diluted earnings per share growth rate has been 13.4% and our total shareholder return (TSR) has been 272%§, as compared to 180% for the S&P 500 Index. Mr. Barrett possesses a sound customer- and investor-driven perspective and keen knowledge of our business, operations and the regulatory environment, allowing us to respond to rapid market and healthcare changes with a continued focus on our reputation, growth and long-term success. Moreover, as Chairman and Chief Executive Officer, Mr. Barrett sets a powerful “tone from the top” which cascades throughout the organization. In light of our Board’s active, effective, independent oversight of management, our success navigating through a difficult and rapidly evolving industry environment, and our strong controls and ongoing commitment to work with others to address the opioid crisis, our Board believes the current leadership structure operates effectively. The Board should retain responsibility to select the leadership structure that will best fit our circumstances and serve the best interests of our company and shareholders. The Board recommends a vote AGAINST this shareholder proposal. ___________ § Total shareholder return over the period from August 31, 2009, when Mr. Barrett became Chairman and Chief Executive Officer, through June 30, 2017 expressed as a percentage, calculated based on changes in stock price assuming reinvestment of dividends. Cardinal Health | 2017 Proxy Statement 45 Table of Contents Proposal 6—Shareholder Proposal to Request that the Board of Directors Adopt a Bylaw Provision Restricting Management's Access to Vote Tallies Prior to the Annual Meeting with respect to Certain Executive Pay Matters We received notice that a shareholder intends to present the following proposal at the Annual Meeting. The proposed resolution and its supporting statement, for which neither we nor the Board accepts responsibility, are set forth below. John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, a shareholder owning no fewer than 100 shares of our common shares as of May 11, 2017, submitted this proposal. The shareholder proposal and supporting statement read as follows: PROPOSAL 6 – EXECUTIVE PAY CONFIDENTIAL VOTING Shareholders request our Board of Directors to take the steps necessary to adopt a bylaw that prior to the Annual Meeting, the outcome of votes cast by proxy on certain executive pay matters, including a running tally of votes for and against, shall not be available to management or the Board and shall not be used to solicit votes. Certain maters [sic] include the topic of say on pay and management sponsored or board sponsored resolutions seeking approval of executive pay plans. This proposal would not prohibit management access to shareholder comments submitted along with shareholder meeting ballots. This proposal is limited to executive pay items. Shareholders could still waive the confidentiality of their ballots on executive pay items – for instance by checking a box on the ballot. Our management can now monitor incoming votes and then use shareholder money to blast shareholders with costly solicitations on matters where they have a direct self-interest such as such as [sic] the ratification of lucrative stock options and to obtain artificially high votes for their lucrative executive pay. Our management can now do an end run on the effectiveness of say on pay votes. Instead of improving executive pay practices in response to disapproving shareholder votes, our management can efficiently manipulate the say on pay vote to a higher percentage. Without executive pay confidential voting our management can simply blast shareholders by using multiple professional proxy solicitor firms at shareholder expense (no timely disclosure of the cost) with one-way communication by mail and electronic mail (right up to the deadline) to artificially boost the vote for their self-interested executive pay ballot items. It is important for shareholders that the company get executive pay right in order to give management the best-focused incentive for long-term shareholder value. Executive pay is not ordinary business. Please vote to enhance shareholder value: Executive Pay Confidential Voting - Proposal 6 The Board of Directors' Statement in Opposition to Proposal 6 The Board recommends a vote AGAINST Proposal 6 because it would undermine our ability to engage in constructive outreach and dialogue with our shareholders, it restricts our management’s and Board’s access to routine information regarding our ordinary course processes relating to monitoring of voting results and the conduct of our annual meeting of shareholders, and it is vague as to which executive compensation matters it would cover. We actively and regularly engage in ongoing, transparent dialogue with shareholders regarding executive compensation and governance matters to best understand shareholder views and concerns. The period leading up to the annual meeting of shareholders is an important time for shareholders to express their concerns and provide feedback to management and the Board on executive compensation. We and our shareholders mutually benefit from this feedback, and this proposal would impair our ability to understand shareholder views on our executive compensation. While our executive compensation has received shareholder support greater than 93% in each of the past five years, our Compensation Committee regularly considers shareholder feedback in its review and assessment of our executive compensation. The proposal would prevent our management and Board from monitoring voting results and restrict access to routine information regarding our annual meeting processes. This is particularly worrisome during a period when passive investing is on the rise, and public companies are increasingly at a disadvantage in identifying their shareholder base. Preliminary voting information assists us in conducting an informed and productive meeting, including ascertaining which shareholders have not voted. This information would enable us to communicate with those 46 Cardinal Health | 2017 Proxy Statement Table of Contents Proposal 5—Shareholder Proposal shareholders, encourage voting, and assist the Board in determining how to best respond to any concerns. The proposal is vague and confusing to shareholders because it fails to explain when the requested bylaw would or would not apply. For example, it is unclear from the proposal whether the requested bylaw would apply to a shareholder proposal on an executive compensation matter or to an advisory vote on the frequency of “say-on-pay” executive compensation votes. Shareholders voting on this proposal have no reasonable certainty as to the actions or measures upon which they are voting, and there would be no clarity as to how it would be implemented. The Board recommends a vote AGAINST this shareholder proposal. Other Matters Communicating with the Board Shareholders and other interested parties may communicate with the Board, any committee of the Board, any individual director or the independent directors as a group, by writing to the Office of the Corporate Secretary, Cardinal Health, Inc., 7000 Cardinal Place, Dublin, Ohio 43017 or sending an e-mail to bod@cardinalhealth.com. Communications from shareholders will be distributed to the entire Board unless addressed to a particular committee, director or group of directors. The Corporate Secretary will not distribute communications that are unrelated to the duties of the Board, such as spam, junk mail, mass mailings, business solicitations and advertisements. Shareholder Recommendations for Director Nominees Back to Contents The Nominating and Governance Committee will consider candidates recommended by shareholders for election as director. Shareholder recommendations will be evaluated against the same criteria used to evaluate other director nominees, which criteria are discussed under “Director Qualification Standards” on pages 12 and 13. Shareholders who wish to recommend a candidate may do so by writing to the Nominating and Governance Committee in care of the Office of the Corporate Secretary, Cardinal Health, Inc., 7000 Cardinal Place, Dublin, Ohio 43017. To be considered by the Nominating and Governance Committee for consideration at the 2018 Annual Meeting of Shareholders, a shareholder recommendation must be received no later than April 1, 2018. Recommendations must include, at a minimum, the following information: the name and address of the shareholder making the recommendation; the name and address of the person recommended for nomination; if the shareholder is not a shareholder of record, a representation and satisfactory proof of share ownership; a statement in support of the shareholder’s recommendation, including sufficient information to permit the Nominating and Governance Committee to evaluate the candidate’s qualifications, skills and experience; a description of all direct or indirect arrangements or understandings between the shareholder and the candidate recommended by the shareholder; information regarding the candidate as would be required to be included in a proxy statement filed in accordance with SEC rules; and the candidate’s written, signed consent to serve if elected. Shareholders who wish to nominate directors directly for election at an Annual Meeting of Shareholders in accordance with the procedures in our Code of Regulations, including under our proxy access provision, should follow the instructions under “Submitting Proxy Proposals and Director Nominations for the Next Annual Meeting of Shareholders" on page 48 and the details contained in our Code of Regulations. Cardinal Health | 2017 Proxy Statement 47 Table of Contents Other Matters Submitting Proxy Proposals and Director Nominations for the Next Annual Meeting of Shareholders If you intend to present a proposal to be included in the proxy statement and form of proxy relating to our 2018 Annual Meeting of Shareholders under Exchange Act Rule 14a-8, we must receive the proposal at our principal executive office not later than the close of business (5:00 p.m. Eastern Time) on May 24, 2018. The proposal should be addressed to our Corporate Secretary at Cardinal Health, Inc., 7000 Cardinal Place, Dublin, Ohio 43017. We will not be required to include in our proxy statement or form of proxy a shareholder proposal that we receive after that date or that otherwise fails to meet the requirements for shareholder proposals established by SEC regulations. If you intend to present a proposal for other business, or a nomination for election to the Board of Directors, at our 2017 Annual Meeting of Shareholders (other than any such proposal included in our proxy statement and form of proxy under Exchange Act Rule 14a-8), you must comply with the notice requirements set forth in our Code of Regulations and such business must be a proper matter for shareholder action. Among other requirements, you must deliver proper written notice to our Corporate Secretary at our principal executive office no earlier than July 11, 2018 and no later than the close of business on August 10, 2018. If the date of the 2018 Annual Meeting of Shareholders is more than 30 days before, or more than 60 days after, November 8, 2018, written notice must be delivered after the close of business on the 120th day prior to the meeting, but before the close of business on the later of the 90th day prior to the meeting or the 10th day after we first publicly announce the date of the meeting. Our Code of Regulations includes a proxy access provision, under which a shareholder, or a group of up to 20 shareholders, owning at least three percent of our outstanding common shares continuously for at least three years, may nominate and include in our proxy materials director nominees constituting up to the greater of two nominees or 20% of the Board, if the shareholders and the nominees satisfy the requirements specified in our Code of Regulations. If you intend to request that director nominees be included in our proxy materials under our new proxy access provision, you must comply with the notice and other requirements set forth in our Code of Regulations. Among other requirements, you must deliver proper written notice to our Corporate Secretary at our principal executive office no earlier than April 24, 2018 and not later than the close of business on May 24, 2018. If the date of the 2018 Annual Meeting of Shareholders is more than 30 days before, or more than 60 days after, November 8, 2018, written notice must be delivered after the close of business on the 150th day prior to the meeting, but before the close of business on the later of the 120th day prior to the meeting or the 10th day after we first publicly announce the date of the meeting. Transfer Agent Shareholders of record should direct communications regarding change of address, transfer of share ownership, lost share certificates and other matters regarding their share ownership to Computershare Trust Company, N.A., P.O. Box 505000, Louisville, KY 40233. Our transfer agent may also be contacted via the Internet at www.computershare.com/investor or by telephone at (877) 498-8861 or (781) 575-2879. Other Information This solicitation of proxies is made by and on behalf of the Board of Directors. The cost of the solicitation will be borne by Cardinal Health. In addition to solicitation by mail, proxies may be solicited by our directors, officers and employees in person or by telephone or other means of communication. These individuals will receive no additional compensation for soliciting proxies but may be reimbursed for reasonable out-of-pocket expenses in connection with such solicitation. We have retained Alliance Advisors at an estimated cost of $16,500, plus reimbursement of expenses, to assist in our solicitation of proxies from brokers, nominees, institutions and individuals. We also will make arrangements with custodians, nominees and fiduciaries to forward proxy solicitation materials to beneficial owners of shares held of record by such custodians, nominees and fiduciaries, and we will reimburse these persons for reasonable expenses they may incur. If you and other residents at your mailing address own common shares in street name, your broker or bank may have sent you a notice that your household will receive only one set of proxy materials unless you instruct otherwise. This practice is known as “householding,” and is designed to reduce our printing and postage costs. However, if you wish to receive, now or in the future, a separate annual report and proxy statement, you may write to our 48 Cardinal Health | 2017 Proxy Statement Table of Contents Other Matters Investor Relations department at 7000 Cardinal Place, Dublin, Ohio 43017, or call the Investor Relations Line at (614) 757-4757. We will promptly deliver a separate copy (free of charge) upon request. If you and other residents at your mailing address are currently receiving multiple copies of annual reports and proxy statements and wish to receive only a single copy, you should contact your broker or bank directly. By Order of the Board of Directors. JESSICA L. MAYER Executive Vice President, Deputy General Counsel and Corporate Secretary September 21, 2017 Cardinal Health | 2017 Proxy Statement 49 Table of Contents Table of Contents