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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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PROXY STATEMENT
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2022 Annual Meeting of Shareholders TABLE OF CONTENTS
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ELECTION OF DIRECTORS
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| | Criteria for Board Membership | | | |
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| | Director Succession Planning and Identification of Board Candidates | | | |
2018 Director Nominees
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CORPORATE GOVERNANCE AND BOARD MATTERS
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Board Leadership Structure
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Board'sBoard’s Role in Strategic Planning and Risk Oversight
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| | Risk Assessment of Compensation Policies and Practices | | | |
Annual Evaluation Process
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Meetings of our Board
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Annual Meeting of Shareholders | | | |
Committees of our Board
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Codes of Conduct | | | |
| | Related Party Transactions | | | |
| | Disclosure Regarding Political Activities | | | |
| | Global Corporate CitizenshipEnvironmental, Social, Governance & Sustainability
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Communications with our Board of Directors
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EXECUTIVE COMPENSATION
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| | Compensation Discussion and Analysis | | | |
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| | Grants of Plan-Based Awards | | | |
| | Outstanding Equity Awards at Fiscal Year-End | | | |
| | Option Exercises and Stock Vesting | | | |
| | Present Value of Accumulated Pension Benefits | | | |
| | Non-Qualified Deferred Compensation Plan | | | |
| | Post-Termination Benefits | | | |
| | Termination of Employment Obligations (Excluding Vested Benefits) | | | |
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ITEMS TO BE VOTED UPON
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| | Item 2—Advisory Vote to Approve the Compensation of our Named Executive Officers | | | |
| | Equity Compensation Plan Information | | | |
| | Item 3—Ratification of the Appointment of Independent Registered Public Accounting Firm | | | |
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| | Pre-Approval Policy for Services Provided by our Independent Registered Public Accounting Firm | | | |
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| | Item 4—Shareholder Proposal on Annual Report Disclosing How Risks Related to Public Concern Over Drug Pricing Strategies are Incorporated into Incentive Compensation Plans | | 71 |
Item 5—Shareholder Proposal to Lower the Share Ownership Threshold to Callfor Special Shareholder Meetings
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VOTING SECURITIES AND PRINCIPAL HOLDERS
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Section 16(a) Beneficial Ownership Reporting Compliance
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Advance Notice Procedures | | | |
| | 20192023 Shareholder Proposals
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| | Compensation Committee Interlocks and Insider Participation | | | |
| | Availability of Corporate Governance Documents | | | |
FREQUENTLY ASKED QUESTIONS
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EXHIBIT B—Directions to our Lawrence Township Office
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Table | | | 430 E. 29th Street, 14th Floor
New York, New York 10016 |
Notice of
ContentsAnnual Meeting of Shareholders
345 Park Avenue
New York, New York 10154-0037
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
Notice is hereby given that the
20182022 Annual Meeting of Shareholders
(the “Annual Meeting”) will be held
at Bristol-Myers Squibb Company, 3401 Princeton Pike, Lawrence Township, New Jersey,virtually on
Tuesday, May
1, 2018,3, 2022, at 10:00 a.m.
Eastern Time for the following purposes as set forth in the accompanying Proxy Statement:
to elect to the Board of Directors the 1210 persons nominated by the Board, each for a term of one year;
•to conduct an advisory vote to approve the compensation of our Named Executive Officers;
•to ratify the appointment of Deloitte & Touche LLP as the company'scompany’s independent registered public accounting firm for 2018;
•2022;to consider two shareholder proposals, if presented at the meeting; and
•to transact such other business as may properly come before the meeting or any adjournments thereof.
Holders of record of our common and preferred stock at the close of business on March 14,
20182022 will be entitled to vote at the meeting.
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| | By Order of the Board of Directors
Katherine R. Kelly
Vice President, Associate General Counsel
and Corporate Secretary |
Dated: March 22, 2018
YOUR VOTE IS IMPORTANT
Regardless ofDue to the number of shares you own, your vote is important. If you do not attendongoing health and safety concerns related to the COVID-19 pandemic, this year’s Annual Meeting to vote in person, your vote will not be counted unless a proxy representing your shares is presented at the meeting. To ensure that your shares will be voted at theheld in a virtual-only meeting please vote in one of these ways:
(1)GO TO WWW.PROXYVOTE.COM and vote via the Internet;
(2)CALL THE TOLL-FREE TELEPHONE NUMBER (800) 690-6903 (this call is toll-free in the United States); or
(3)MARK, SIGN, DATE AND PROMPTLY RETURN the enclosed proxy card in the postage-paid envelope.
If you do attendformat. To be admitted to the Annual Meeting, you may revokewill need to visit www.virtualshareholdermeeting.com/BMY2022 and enter the 16-digit control number included on your Important Notice Regarding the Availability of Proxy Materials, on your proxy and vote by ballot.
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Dear fellow shareholders:
You are cordially invited to attendcard, or on the instructions that accompanied your proxy materials. Guests may join the Annual Meeting in a listen-only mode, but they will not have the option to vote shares or ask questions during the virtual meeting. Once admitted, you may submit questions, vote or view our list of Shareholders of Bristol-Myers Squibb Company on Tuesday, May 1, 2018, at 10:00 a.m. at our offices located in Lawrence Township, New Jersey. I hopeshareholders during the Annual Meeting by following the instructions that you will be able to attend.
Duringavailable on the meeting website. You may log into the meeting platform beginning at 9:50 a.m. Eastern Time on May 3, 2022. To submit a question before the meeting, visit www.proxyvote.com with your 16-digit control number and select the “Submit a Question for Management” option. To submit a question during the meeting, visit www.virtualshareholdermeeting.com/BMY2022, enter your 16-digit control number and type your question into the “Ask a Question” field and click “Submit.” The company will provide direct and specific information to shareholder proponents on how they can present their shareholder proposals during the meeting.
By Order of the Board of Directors
Kimberly M. Jablonski
Vice President and Corporate Secretary
Dated: March 24, 2022
| | Regardless of the number of shares you own, your vote is important. If you do not attend the Annual Meeting to vote on the virtual meeting platform, your vote will not be counted unless a proxy representing your shares is presented at the meeting. To ensure that your shares will be voted at the meeting, please vote in one of these ways: | |
| | (1) Go to www.proxyvote.com and vote via the Internet;
(2) Call the toll-free telephone number (800) 690-6903 (this call is toll-free in the U.S.); or
(3) Mark, sign, date and promptly return the enclosed proxy card in the postage-paid envelope. | |
| | If you do attend the Annual Meeting, you may revoke your proxy and vote your shares on the virtual meeting platform during the meeting. | |
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Dear BMS shareholders,
2021 was a pivotal year for Bristol Myers Squibb. We advanced our strategy and renewed our portfolio to drive sustained, long-term growth, achieved significant milestones across our core therapeutic areas, and made important progress in delivering on our commitments to diversity, inclusion and health equity.
Amid the ongoing COVID-19 pandemic, this work is particularly notable and was enabled by our dedicated global workforce who never stopped working for our patients. Throughout the pandemic, we
will cover a number of business items, includinghave prioritized the
election of directors, advisory vote to approve the compensationhealth and safety of our
Named Executive Officers, ratification ofglobal workforce and communities, supported research and relief efforts around the
appointment of an independent registered public accounting firm,world, and
consideration of two shareholder proposals.We will also use the meeting as an opportunityremained united in carrying out our mission to look back on the past year, highlighting everything from our strong financial and operational company performance to our regulatory and clinical advances to our progress against our Sustainability 2020 goals and the important work of the BMS Foundation. And, of course, we will talk about our unwavering focus on our patients and their families—the people at the center of everything we do.
Lastly, I would like to take this opportunity to thank Dr. Laurie Glimcher for her many years of dedicated service to the Bristol-Myers Squibb Board of Directors and our shareholders. We are extremely grateful to Dr. Glimcher for her contributions. Dr. Glimcher retired from the Board on July 21, 2017. I would also like to welcome Dr. Karen Vousden and Dr. José Baselga to the Board. Drs. Vousden and Baselga were elected to serve as members of our Board of Directors effective January 1, 2018 and March 1, 2018, respectively. Each brings to our company important experience and skills that will further strengthen and complement our Board.
Last year, over 87% of the outstanding shares were represented at the Annual Meeting. Whether or not you attend in person, I hope that your shares will be represented at the meeting. Your vote is very important.
I look forward to welcoming many of you to our 2018 Annual Meeting.
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Giovanni Caforio, M.D.
Chairman of the Board and Chief Executive Officer |
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To my fellow shareholders:
At Bristol-Myers Squibb, our Mission is "to discover, develop and deliver innovative medicines that help patients prevail over serious diseases." My fellow Directorstransformational medicines.
Last year, we achieved:
9% increase in total revenues, driven by strong business performance across our oncology, hematology, cardiovascular and I believeimmunology therapeutic areas;
Diluted earnings per share (“EPS”) of $3.12, with a 17% increase in this Mission,non-GAAP diluted EPS of $7.51;
Important regulatory approvals, including Breyanzi for lymphoma and we striveAbecma for myeloma, making BMS the first company with two approved cell therapy treatments with two distinct targets;
A strengthened innovation engine, doubling our pipeline, deepening our use of digital technology to ensure fromaccelerate drug discovery and development, and broadening our external collaborations;
Continued strong progress with the boardroom that the company isintegration of Celgene and MyoKardia, leading to approximatively $2.7 billion in synergies to date; and
| • | A quarterly dividend increase of 10.2%, marking an increase for the 13th year in a row. |
We have a strong business today, and are well positioned to be successfuldeliver sustained growth through the decade. We are executing our plan to drive sustained growth through the launch of 9 new medicines which, combined with a rapidly advancing mid- and late-stage pipeline, have the potential to offset upcoming losses of exclusivity for certain key brands. During 2021, we progressed six new product launches, and achieved significant regulatory milestones for next generation therapies, including regulatory filings for the relatlimab and nivolumab fixed dose combination for metastatic melanoma (U.S.), mavacamten for obstructive hypertrophic cardiomyopathy (U.S.) and deucravacitinib for moderate to severe plaque psoriasis (U.S., EU, Japan), all of which we are preparing to launch in 2022. In addition, we have a strong mid- to late-stage pipeline, strong cash flow and a balanced capital allocation strategy to provide the Company with the flexibility to deliver value and build for the future.
We are taking bold, intentional action to do our part to ensure that healthcare works for everyone. I am proud of our progress in building a truly inclusive culture. Our diverse workforce reflects our communities and our global patient population and is enabling our company to deliver innovation and more equitable care. Last year, we issued our first Diversity and Inclusion Report, highlighting our goals and progress. At the same time, we are doing our part to address inequities in our healthcare system. We are integrating a commitment to health equity throughout our business, which we believe will lead to better science and patient outcomes, and we are delivering on our responsibility to the communities we serve. To this end, the Company and the BMS Foundation made important progress towards the commitments announced in 2020 to each donate $150 million to cover five bold areas: addressing health disparities, increasing clinical trial diversity, expanding our supplier diversity, enhancing our employee giving, and increasing our workforce diversity. Our work in 2021 included: partnering with Historically Black Colleges and Universities to build a sustainable bridge for diverse talent to the biopharma industry, donating to 56 non-profits serving medically underserved populations in the U.S., and progressing our plans to locate 25 percent of our U.S. clinical research sites in highly diverse communities beginning in 2022. Separately, the BMS Foundation selected 52 physicians to begin training in its Diversity in Clinical Trials Career Development Program in partnership with the National Medical Fellowships. For further discussion on these commitments and the progress we are making, please see discussion under “Commitment to Diversity & Inclusion” beginning on page 37. As we look forward to 2022 and beyond, I am confident in our ability to grow as a company while delivering transformational science, grounded in our patient-centric culture and powered by a diverse team of over 30,000 global employees.
We ask that you review this report and offer your support for our directors and other items we have put forth in this important undertaking. Collectively, with the Board's oversight and appropriate guidance, in 2017 our management team worked to execute our strategy, focusing on commercial execution, advancing the pipeline, and managing expenses, while also increasing investmentProxy Statement. We welcome your feedback, participation in our R&D pipeline. As a company, we are well-positionedannual meeting and your future investment.
Thank you for your continued support of our mission. We hope you and your loved ones continue to capitalize on multiple potential growth opportunities that supportstay safe and healthy.
Sincerely,
Giovanni Caforio, M.D.
Board Chair and Chief Executive Officer
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Dear Fellow shareholders and stakeholders,
In the
creation of sustainable long-term value for our shareholders.Since last year's Annual Meeting, Laurie H. Glimcher, M.D. has retiredletter from our Board.Board Chair and CEO Giovanni Caforio, you read about how this has been a pivotal year for the Company. In 2021, the health and safety of our workforce and the continued supply of our medicines to patients were our highest priorities. We successfully delivered strong operational performance and put in place the right foundational elements to advance our pipeline, renew our therapeutic portfolio and position BMS for sustained, long-term growth.
As BMS’s new Lead Independent Director, one of my key priorities is to maintain our strong commitment to sound corporate governance. In 2021, we focused on several core areas:
Oversight of the Company’s Strategy. The Board is extremely grateful to Dr. Glimcher for her contributions and many years of dedicated service to the Board and our shareholders. We also welcomed Karen H. Vousden, Ph.D. and José Baselga, M.D., Ph.D. to the Board on January 1, 2018 and March 1, 2018, respectively. Drs. Vousden and Baselga both bring to the Board extensive oncology expertise, each having more than 30 years of experience in oncology research and drug discovery and development.Your Board remains committed to soundoversight of the company’s strategy, including management’s execution of our strategy to create long-term shareholder value. In 2021, our proactive partnership with and independent oversight of management was a top priority. The Board met 9 times during 2021 to discuss, among other things, the strategic direction of the company, our key enterprise risks and our progress against significant milestones, which enables us to deliver on our promise to renew our product pipeline with new life-changing medicines. In addition, we recognize that our environmental, social and governance (“ESG”) strategy must remain fully aligned to our corporate strategy so we can focus on our critical risks and opportunities. In 2021, we published our first ESG Report. For further discussion on our ESG strategy, please see “Environmental, Social, Governance & Sustainability” beginning on page
18. Enhanced Board Effectiveness and Composition. As we move into another important chapter for Bristol Myers Squibb, we understand clearly how important it is to have a high functioning board with highly qualified members with diverse backgrounds and the right skill sets to advance the company’s mission. To that end, I am delighted to report that 6 out of 10 of our directors are diverse by gender, race, or ethnicity (three of whom are diverse by race/ethnicity and four by gender). We are committed to balanced refreshment of our Board and over the last two years have added three new directors, expanding the depth of experience in the areas of finance, strategic leadership, science and industry knowledge. We are excited about our newest director, Manuel Hidalgo Medina, M.D., Ph.D. who brings significant scientific expertise to the Board, with a particular emphasis on translational and clinical research in cancer drug development. Together our Board possesses the diverse skills and experiences most relevant to our future. In addition, as Lead Independent Director, I will continue to promote a Board culture of respect and open dialogue, where all directors add input and decisions are thoroughly discussed, debated and evaluated prior to any Board action. For further discussion on board composition, see “2022 Director Nominees,” beginning on page 4. Effective Engagement with our Shareholders. Constructive engagement with our shareholders is among our highest priorities. Input from our shareholders has shaped some of our governance practices. For example, in response to feedback, at the 2021 Annual Meeting, we included a proposal to reduce the ownership threshold for shareholders to call a special meeting from 25% to 15%. This proposal received strong vote support from shareholders and resulted in our adoption of this change. We acknowledge, however, that some shareholders have expressed differing views about our Board leadership structure and we respect those opinions. The Board considers this topic each year and I can assure you that our Board adheres to good governance practices that ensuresupport our independent oversight of management. As Lead Independent Director, I have well-defined responsibilities and am empowered to provide strong leadership of the independent directors, including as it relates to maintaining our strong board culture, reviewing and approving meeting agendas, and regularly meeting with the independent directors in executive session without the Board is comprised of skilled, diverse and engaged members that effectively support the execution of the company's strategy,Chair as well as openness toduring one-on-one discussions throughout the year. On balance, we believe shareholder feedback. As evidence of this commitment, three key areas of focus in 2017interests are worth highlighting:•Focus on Board evaluations, effectiveness and composition. We were pleased to discuss our robust Board evaluation process with shareholders, which has recently been enhanced as discussed on page 20. We believe that a robust board assessment process, which reviews and evaluatesbest served when the performance and contributions of directors, improves the overall effectiveness of the Board. We are also very focused on Board composition and refreshment to ensure that your Board has the best mix of skill sets, proficiencies and perspectivesflexibility to deal withdetermine the ever-changing business dynamicsmost appropriate leadership structure based on an assessment of the company’s needs and circumstances at any given time.
I encourage you to read the following pages to inform your vote and ask for your support for the items our company and external environment. The electionhas put forth in this Proxy Statement. On behalf of five new independent directors over the past 13 months demonstrates our commitment to refreshment, balanced with the experience and company-specific knowledge of tenured directors. The Board is also committed to increasing diversity and inclusion, both at the Board, level and across the company. In particular, thewe thank you for your continued support.
Theodore R. Samuels
Lead Independent Director
Chair, Committee on Directors and Corporate Governance
revised its committee charter to formalize the Board's commitment to identifying and evaluating highly qualified women and under-represented ethnic group candidates as well as candidates with other diverse backgrounds, industry experience and other unique characteristics.
•Board's role in execution of company strategy. My fellow Directors and I believe that we are able to effectively serve the governance needs of our organization only when there is strong strategic partnership between management and the Board—where the Board is informed, active and constructively engages management, without disruption to the day-to-day business operations of the company. Our Board meets regularly to discuss the strategic direction, enterprise risks and the issues and opportunities facing our company. As a group, we provide a diverse and valuable mix of experience and insights in key areas, including, among others, expertise in the healthcare industry, fields of medicine, science and technology, clinical research, executive and boardroom leadership, strategy and team effectiveness, international markets, investment management, and financial, capital markets and operating experience. Our Board will continue to provide critical insights to our company that will (i) focus on maximizing shareholder value and (ii) support the pursuit of our Mission "to discover, develop and deliver innovative medicines that help patients prevail over serious diseases."
•Ongoing shareholder dialogue. Shareholder engagement remains a top priority. During 2017, we expanded our shareholder outreach, reaching out to over 50 of our top shareholders representing nearly 50% of our shares outstanding. We continued to engage with shareholders on a number of different topics, including board composition, tenure, board assessment, sustainability and risk oversight as well as executive compensation. We remain committed to this continued engagement with our shareholders because of the valuable insights we gain. Their input has enabled the Board to more thoroughly evaluate and improve our governance practices and disclosures in a variety of areas over the last few years, including for example, our board evaluation process, board composition and refreshment, and our executive compensation program.As we look ahead, I can report that the Board will continue to advance its commitment to excellence in serving you, our shareholders. On behalf of the Board of Directors, I thank you for your continued support.
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Vicki L. Sato, Ph.D.
Lead Independent Director
Chair, Committee on Directors and Corporate Governance | | |
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PROXY STATEMENT SUMMARY
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| | 2018 Annual Meeting of Shareholders | | |
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| | Date: | | Tuesday, May 1, 2018 | | |
| | Time: | | 10:00 a.m. | | |
| | Place: | | 3401 Princeton Pike, Lawrence Township, New Jersey | | |
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| | | | For additional information about the Annual Meeting, see "Frequently Asked Questions" beginning on page 78. | | |
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| | | 1 | | Election of Directors | | FOR ALL | | Majority of votes cast | | 9 | | |
| | | 2 | | Advisory vote to approve the compensation of our Named Executive Officers | | FOR | | Majority of shares voted | | 67 | | |
| | | 3 | | Ratification of the appointment of an independent registered public accounting firm | | FOR | | Majority of shares voted | | 68 | | |
| | | 4 | | Shareholder proposal on annual report disclosing how risks related to public concern over drug pricing strategies are incorporated into incentive compensation plans | | AGAINST | | Majority of shares voted | | 71 | | |
| | | 5 | | Shareholder proposal to lower the share ownership threshold to call special shareholder meetings | | AGAINST | | Majority of shares voted | | 73 | | |
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2017 Performance Highlights and Long-term Business Strategy
We are a diversified specialty biopharmaceutical company, with a strategy uniquely designed to combine the resources, scale and capability of a pharmaceutical company with the speed and focus on innovation of the biotech industry. Our four strategic priorities are to drive business performance, continue to build a leading franchise in immuno-oncology, maintain a diversified portfolio both in immuno-oncology and other core therapeutic areas, and continue our disciplined approach to capital allocation, including establishing partnerships, collaborations and in-licensing or acquiring investigational compounds and innovative delivery systems as an essential component of successfully delivering transformational medicines to patients. Our commercial model has been evolving and revenues from our marketed product portfolio continue to grow which demonstrates strong execution of our strategy. In 2017, we met or exceeded our financial and operational goals in key areas. Looking ahead, we will continue to implement our biopharma strategy by driving the growth of key brands, executing product launches, investing in our diverse and innovative pipeline, aided by strategic business development, focusing on prioritized markets, increasing investments in our biologics manufacturing capabilities and maintaining a culture of continuous improvement with high integrity and ethics.
Key Financial and Operational Highlights for 2017
2017 was a great year in which we built on the substantial growth and strong foundation put in place over the last few years. Management's continued execution of our strategic priorities in 2017 resulted in strong execution across the company, with increased revenues of 7%. Our GAAP earnings per share decreased by 77% primarily due to the impact of tax reform and our non-GAAP earnings per share increased by 6%. Our 2017 operating results were primarily driven by strong performance of prioritized brands, additional clinical and regulatory achievements, particularly in immuno-oncology, important business development activities that supplement our innovative pipeline, the evolution of our operating model, a disciplined approach to expense management, and a strong balance sheet.
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| | Total Revenues | | $20,776 | | $19,427 | | 7% | | |
| | GAAP Diluted EPS (1) | | 0.61 | | 2.65 | | (77)% | | |
| | Non-GAAP Diluted EPS (2) | | 3.01 | | 2.83 | | 6% | | |
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(1) | | The decrease in GAAP EPS in 2017 was primarily due to an approximately $3B charge related to tax reform. After excluding the impact of tax reform and other specified items due to their significant and/or unusual nature, the increase in non-GAAP EPS in 2017 was primarily due to higher revenues. The exclusion of such specified items for 2017 is consistent with the company's current policies and procedures, as well as our past practices. |
(2) | | Our non-GAAP financial measures, including non-GAAP earnings and related EPS information, are adjusted to exclude specified items which represent certain costs, expenses, gains and losses and other items impacting the comparability of financial results. For a detailed listing of all specified items and further information, including reconciliations of non-GAAP financial measures, please refer to "—Non-GAAP Financial Measures" in our Annual Report on Form 10-K for the year ended December 31, 2017. |
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Total Revenues of Prioritized Brands (Dollars in Millions)
Our vision is to transform patients’ lives through science. | | | | |
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We are a biopharma leader.
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Execution of our Strategy Continues to Create Sustainable Long-Term Value for Shareholders
Our overall philosophy to create sustainable shareholder value is primarily focused on strong year-to-year financial and operational performance and on the development and advancement of our pipeline over the long-term. Our strong performance in 2017 continued to deliver on our strategy and positions us well for potential growth opportunities that will create sustainable long-term shareholder value, as evidenced by our 115% five-year total shareholder return (TSR). We also increased our dividend for the ninth year in a row.
Cumulative Indexed Total Shareholder Return
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Director Nominees
Our Committee on Directors and Corporate Governance maintains an active and engaged Board, whose diverse skill sets benefit from both the industry and company-specific knowledge of our longer-tenured directors, as well as the fresh perspectives brought by our newer directors. We continually review our Board's composition with a focus on refreshing necessary skill sets as our business strategy and industry dynamics evolve.
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| |  | | Giovanni Caforio, M.D.
ChairmanWe combine the agility of a biotech with the reach and resources of an established pharmaceutical company to create a global leading biopharma company. In oncology, hematology, immunology and cardiovascular disease – and with one of the Boardmost diverse and promising pipelines in the industry – we focus on innovations that drive meaningful change. We bring a human touch to every treatment we pioneer. With great pride, we celebrate each time our patients take back their lives.
We are committed to quality, integrity, and ethics in everything we do.
Above all else, we operate with effective governance, integrity and the highest ethical standards. We seek transparency and dialogue with our stakeholders to improve our understanding of their needs. We take our commitment to economic, social and environmental sustainability seriously, and extend this expectation to our partners and suppliers.
Age: 53
Director Since: 2014
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| ChairmanWe seek to actively improve the health of the Boardcommunities where we live, work and Chief Executive Officer | | No | | | | 0 | | |
| |  | | Vicki L. Sato, Ph.D.serve. Around the globe, we promote health equity and seek to improve the health outcomes of populations disproportionately affected by serious disease. We believe our diverse workforce and inclusive culture support better outcomes for all patients and we seek diversity in all aspects of our business.
We value diversity and inclusion.
Lead Independent Director
Age: 69
Director Since: 2006
| | Non-Executive ChairmanWe embrace a diverse workforce and promote an inclusive culture. We believe that the diverse experiences and perspectives of Denali Therapeutics, Inc.; retired Professorall our employees help to bring out our best ideas, drive innovation and achieve transformative business results. The health, safety, professional development, well-being, and equitable and respectful treatment of Management Practiceour workforce are among our highest priorities.
We put patients at the Harvard Business School | | Yes | | CDCG (c);center of everything we do.
S&T | | 3 | | |
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Peter J. ArduiniWe have a history of scientific excellence, transforming patient outcomes in major diseases such as cancer, cardiovascular disease, HIV and HCV. Through
Age: 53
Director Since: 2016Revlimid
|
| President and Pomalyst, we transformed the treatment of multiple myeloma. And we have achieved a similar transformation in the treatment of metastatic melanoma with the Opdivo plus Yervoy regimen. Advances like these have transformed the treatment of certain cancers and Chief Executive Officerchanged survival expectations for patients. We are now moving to the next generation of Integra LifeSciences Holdings Corporation | | Yes | | Audit;
CMDC |
| 1 | | |
| |  | | José Baselga, M.D., Ph.D.
Age: 58
Director Since: 2018** | | Physician-in-Chief at Memorial Sloan-Kettering Cancer Centertreatment options, such as cell therapy and Professor of Medicine at Weill Cornell Medical College | | Yes | | S&T | | 1 | | |
| |  | | Robert J. Bertolini
Age: 56
Director Since: 2017 |
| Former PresidentCELMoDs. We are pursuing medicines with transformational potential in diseases such as cancer, hematology, heart failure and Chief Financial Officer of Bausch & Lomb Incorporated | | Yes | | Audit (c);
CDCG |
| 2 | | |
| |  | | Matthew W. Emmens
Age: 66
Director Since: 2017 | | Former Chairman, Chief Executive Officer of Shire PLC; former Chairman, President and Chief Executive Officer of Vertex Pharmaceuticals Incorporated | | Yes | | CMDC;
S&T | | 0 | | |
| |  | | Michael Grobstein
Age: 75
Director Since: 2007 |
| Former Vice Chairman of Ernst & Young LLP | | Yes | | Audit;
CMDC (c) |
| 0 | | |
| |  | | Alan J. Lacy
Age: 64
Director Since: 2008 | | Former Non-Executive Chairman of Dave & Buster's Entertainment, Inc.; former Vice Chairman and CEO of Sears Holdings Corporation | | Yes | | Audit;
CDCG | | 0 | | |
| |  | | Dinesh C. Paliwal
Age: 60
Director Since: 2013 |
| President and Chief Executive Officer of Harman International, a wholly-owned subsidiary of Samsung Electronics Co., Ltd | | Yes | | CMDC;
CDCG |
| 1 | | |
| |  | | Theodore R. Samuels
Age: 63
Director Since: 2017 | | Former President of the Capital Guardian Trust Company | | Yes | | Audit;
CDCG | | 2 | | |
| |  | | Gerald L. Storch
Age: 61
Director Since: 2012 |
| Chief Executive Officer of Storch Advisors; former Non-Executive Chairman of Supervalu Inc. | | Yes | | Audit;
CMDC |
| 0 | | |
| |  | | Karen H. Vousden, Ph.D.
Age: 60
Director Since: 2018** | | Senior Group Leader at The Francis Crick Institute; Chief Scientist at Cancer Research UK | | Yes | | S&T (c) | | 0 | | |
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| | * | | Committee memberships listed as of the date of this Annual | | Audit: | | Audit Committee | | |
| | | | Meeting | | CDCG: | | Committee on Directors and Corporate Governance | | |
| | ** | | Dr. Vousden and Dr. Baselga were each elected to serve as a | | CMDC: | | Compensation and Management Development Committee | | |
| | | | member of the Board of Directors effective January 1, 2018 | | S&T: | | Science and Technology Committee | | |
| | | | and March 1, 2018, respectively | | (c): | | Committee Chair | | |
| | | | | | | | | We Advanced our Strategy and Laid a Strong Foundation for Long-term Growth.
2021 was another pivotal year for Bristol Myers Squibb. We made significant progress, advanced our pipeline and built a strong foundation for sustained growth. We continued to launch additional new medicines in the midst of a global pandemic and made durable progress against our commitment to accelerate health equity, diversity and inclusion. Specifically, we:
• Continued to strengthen our diversified portfolio with leading positions in Oncology, Hematology, Cardiovascular and Immunology;
• Strengthened the Company’s innovation engine through business development, including transactions with Agenus, Eisai, Century Therapeutics, among others;
• Launched new medicines with potential for multiple additional indications and advanced our pipeline with significant data and regulatory milestones;
• Advanced multiple near-term pipeline opportunities to launch new therapies, including mavacamten and deucravacitnib;
• Successfully captured synergies from Celgene integration ahead of expectations; and
• Together, with the Bristol Myers Squibb Foundation, progressed our D&I Commitments: the Company donated to 56 non-profits serving medically underserved populations in the U.S.; and the BMS Foundation enrolled the first group of 52 physicians selected for the Diversity in Clinical Trials Career Development Program.
In 2021, among other achievements, we launched our two new, innovative cell therapies, Breyanzi® (lisocabtagene maraleucel) and Abecma® (azacitidine tablets idecabtagene vicleucel). We submitted regulatory filings for relatimab for melanoma, mavacamten for obstructive hypertrophic cardiomyopathy (oHCM) and deucravacitinib for psoriasis. We also delivered positive top line results from the Phase 3 TRANSFORM trial evaluating Breyanzi in patients with relapsed or refractory large B-cell lymphoma and the Phase 2 AXIOMATIC-TKR study with Janssen for milvexian, an antithrombotic that reduced post-operative risk in patients undergoing total knee replacement surgery.
Financially, it was also a strong year. We delivered strong business results across the portfolio. We strengthened our balance sheet, paid down our debt, raised our dividend for the thirteenth year in a row and increased our share repurchase program.
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Board's Role in Strategic Planning
The Board and Board Committees regularly meet to discuss the strategic direction and the issues and opportunities facing our company. Our Board frequently provides guidance to management on strategy and has been instrumental in determining our next steps as we have emerged as a diversified specialty biopharmaceutical company. As part of its ongoing review and focus on strategy, the Board annually holds an in-depth meeting with senior management dedicated to discussing and reviewing our long-term operating plans and overall corporate strategy, which also includes a discussion of key risks and opportunities as well as risk mitigation plans and activities.
Board Refreshment and Leadership Transition
The Board continually reviews its composition with a focus on refreshing necessary skill sets as our business strategy and industry dynamics evolve. Five new independent directors have been added to the Board over the past 13 months, including Drs. Karen Vousden and José Baselga, our two newest directors who joined the Board in January 2018 and March 2018, respectively. These new independent directors bring fresh perspectives and important skills and experience that further strengthen and complement the Board.
Following the 2017 Annual Meeting, Dr. Giovanni Caforio became Chairman of the Board, replacing Lamberto Andreotti. The Board determined that Dr. Caforio's deep institutional knowledge and industry experience uniquely position him to serve as Chairman. The Board recognizes the importance of a Lead Independent Director, and Dr. Sato was elected to serve in this position. The Lead Independent Director responsibilities can be found on page 18.
Corporate Governance Highlights
We are committed to strong governance practices that protect the long-term interests of our shareholders and establish strong Board and management accountability. The "Corporate Governance and Board Matters" section beginning on page 17 describes our governance framework, which includes the following key governance best practices that we have adopted:
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| | Annual election of Directors | | ü
| | Proxy access shareholder right | | |
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| | Majority voting standard for election of Directors | | ü
| | Limit on number of public company directorships Board members may hold (4) | | |
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| | Shareholder right to call a special meeting (25%) | | ü
| | Emphasis on board refreshment and effectiveness | | |
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| | No supermajority voting provisions for common shareholders | | ü
| | Clawback and recoupment policies | | |
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| | Proactive shareholder engagement | | ü
| | Share ownership and retention policy | | |
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| | Robust related party transaction policies and procedures | | ü
| | Prohibition of speculative and hedging transactions by all employees and directors | | |
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| | Semi-annual disclosure of political contributions | | ü
| | No shareholder rights plan | | |
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TableTABLE OF CONTENTS
2022 Director
Nominees
Our Board of
Contents Shareholder Engagement
We continued to place a high priority on engagement with our shareholders in 2017, reaching out to over 50 of our top shareholders representing nearly 50% of our shares outstanding. As in previous years, we continued to engage with our investors on general corporate governance and related matters such as board composition, tenure, board assessment, sustainability and risk oversight as well as executive compensation. The feedback received was generally positive and was shared with the entire Board and members of senior management.
We encourage our registered shareholders to use the space provided on the proxy card to let us know your thoughts about BMS or to bring a particular matter to our attention. If you hold your shares through an intermediary or received the proxy materials electronically, please feel free to write directly to us.
2017 Compensation Plan Structure
Our compensation program design reflects our compensation philosophy and aligns well with our strategy, market practice and our shareholders' interests.
Directors
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Executive Compensation
The Compensation and Management Development Committee firmly believes in pay-for-performance and has structured the executive compensation program to align our executives' interests with those of our shareholders.
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| In line with our commitment to a highly performance-based compensation structure, approximately 90% of Dr. Caforio's target total compensation (and approximately 83% of the target total compensation for our other Named Executive Officers) is variable and at risk, based on the financial, operational, strategic and share price performance of the company.
Additional detail on our executive compensation program is provided in the "Compensation Discussion and Analysis" beginning on page 31.
| | 2017 Target Total CEO Compensation
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ITEM 1—ELECTION OF DIRECTORS
Our Board of Directors (the “Board”) has nominated 1210 current directors, Peter J. Arduini, José Baselga,Giovanni Caforio, M.D., Julia A. Haller, M.D., Manuel Hidalgo Medina, M.D., Ph.D., Robert J. Bertolini, Giovanni Caforio, M.D., MatthewPaula A. Price, Derica W. Emmens, Michael Grobstein, Alan J. Lacy, Dinesh C. Paliwal,Rice, Theodore R. Samuels, Vicki L. Sato, Ph.D., Gerald L. Storch, and Karen H. Vousden, Ph.D., and Phyllis R. Yale, to serve as directors of Bristol-MyersBristol Myers Squibb. The directors will hold office from election until the 20192023 Annual Meeting.
Meeting or until their successors are duly elected. We believe that tone is set at the top, so we begin this section on our Board by introducing you to who we are. We follow that with sections on how we are selected and elected, how we govern and are governed, how we are organized, how you can communicate with us and how we are paid. We ask in Item 1 for your voting support so we can continue our important work and build on our significant successes in 2022.
All Director Nominees Possess:
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Item 1—Election of the Board of Directors The following biographies of our director nominees reflect their Board Committee membership and Chair positions as of the date of this year’s Annual Meeting. Each of our board members has experience and skills in the enumerated categories included in our skills matrix chart above, however, we have designated in the biographies only the top three to five skills to indicate that a director has particular strength in those areas.
 Giovanni Caforio, M.D.Board Chair and Chief Executive Officer of the Company
Director Since: 2014
Age: 57
Other Public Company Board
• Stryker Corporation | | | Experience
• Bristol Myers Squibb Chief Executive Officer (May 2015-present); Board Chair (2017-present); Chief Operating Officer (2014-2015); Executive Vice President and Chief Commercial Officer (2013-2014); President, U.S. (2011-2013); Senior Vice President, Global Commercialization and Immunology (2010-2011); Senior Vice President, Oncology, U.S. and Global Commercialization (2009-2010); Senior Vice President, U.S. Oncology (2007-2009); Senior Vice President, European Marketing and Brand Commercialization (2004-2007)
Key Skills and Experience
• Public Company CEO / CFO
• Healthcare
• Sales & Marketing
• Financial
• Risk Management
Other
• Member, Business Roundtable
• Member, CEO Roundtable on Cancer
• Board of Directors of Pharmaceutical Research and Manufacturers of America |
 Theodore R. SamuelsLead Independent DirectorDirector Since: 2017Age: 67Board Committees• Committee on Directors and
Corporate Governance (Chair)
• Audit Committee
Other Public Company Boards
• Centene Corporation
• Perrigo Company plc
Former Public Company Board
• Stamps.com | | | Experience
• President of the Capital Guardian Trust Company (2010-2016); Capital Group Representative for Focusing Capital on the Long Term (2014-2015); Board member, Capital Group (2005-2009); Capital Group Audit Committee; Capital Group Finance Committee (2013-2016); Chair of Capital International (North America) Proxy Committee; Capital Guardian Trust Company (North American) Management Committee member; Portfolio Manager (1990-2016 and analyst 1981-1990)
Key Skills and Experience
• Financial
• Sales & Marketing
• Risk Management
• International
Other
• Director of BJC HealthCare
• Trustee of Children’s Hospital Los Angeles Foundation; served as Director of Children’s Hospital Los Angeles 2004–2019 (co-chair 2012–2015)
• Director of the Edward Mallinckrodt, Jr. Foundation
• Director of Research Corporation Technologies, Inc.
• Trustee of the John Burroughs School, St. Louis
• Co-Chair of Tuft’s President Council |
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 Peter J. ArduiniDirector Since: 2016Age: 57Board Committees• Compensation and Management Development Committee
• Science & Technology Committee
Former Public Company Board
• Integra LifeSciences Holding Corporation | | | Experience
• President and Chief Executive Officer at GE Healthcare, a medical technology and digital solutions innovator (2022-present)
• President and Chief Executive Officer at Integra LifeSciences Holdings Corporation, (2012-2021); President and Chief Operating Officer (2010-2012)
• Corporate Vice President and President of Medication Delivery, Baxter Healthcare (2005-2010)
• Spent 15 years at General Electric Healthcare in a variety of management roles for domestic and global businesses, culminating in leading the global functional imaging business
Key Skills and Experience
• Public Company CEO / CFO
• Healthcare
• Sales & Marketing
• Financial
Other
• Board of Directors of ADVAMED (the Advanced Medical Technology Association)
• Board of Directors of the National Italian American Foundation
• Board of Trustees of Susquehanna University |
 Julia A. Haller, M.D.Director Since: 2019Age: 67Board Committees• Committee on Directors and Corporate Governance
• Science & Technology Committee
Other Public Company Boards
• Opthea Limited
• Eyenovia, Inc.
Former Public Company Board
• Celgene Corporation | | | Experience
• Ophthalmologist-in-Chief of Wills Eye Hospital in Philadelphia, PA, where she holds the William Tasman, M.D. Endowed Chair (2007-present)
• Professor and Chair of the Department of Ophthalmology at Sidney Kimmel Medical College at Thomas Jefferson University and Thomas Jefferson University Hospitals (present)
• Member of the Johns Hopkins faculty, where she held the Katharine Graham Chair in Ophthalmology (until 2007)
• Trained at the Wilmer Eye Institute at Johns Hopkins, where she served as the first female Chief Resident
Key Skills and Experience
• Academia / Non-Profit
• Healthcare
• Science / Technology / Innovation
Other
• Director (former President), Association of University Professors of Ophthalmology
• Member, National Academy of Medicine
• Vice Chair of Board of Trustees, The College of Physicians of Philadelphia
• Board of Trustees, Society of HEED Fellows |
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 Manuel Hidalgo Medina, M.D., Ph.D.Director Since: 2021Age: 54Board Committees• Committee on Directors and Corporate Governance
• Science & Technology Committee | | | Experience
• Professor of Medicine and Chief of Division of Hematology and Medical Oncology at Weill Cornell Medical College (2019-present)
• Attending Physician at New York-Presbyterian Hospital (2019-present)
• Associate Director, Clinical Services of Mayer Cancer Center, Weill Cornell Medical College (2019-present)
• Deputy Associate Director, Clinical Sciences at Dana Farber/Harvard Cancer Center (2015-2019)
• Chief of Division of Hematology, Oncology and Director at Rosenberg Clinical Cancer Center of Beth Israel Deaconess Medical Center (2015-2019)
• Professor of Medicine at Harvard University (2015-2019)
Key Skills and Experience
• Science / Technology / Innovation
• Healthcare
• Academia / Non-Profit
• International
Other
• Director of Methods of Special Conference Clinical Cancer Research Course of American Association for Cancer Research (2018-present)
• Steering Committee of Pancreatic Cancer Action Network (2016-present) |
 Paula A. PriceDirector Since: 2020Age: 60Board Committees• Audit Committee
• Committee on Directors and Corporate Governance
Other Public Company Boards
• Accenture plc
• DaVita, Inc.
• Western Digital Corporation
Former Public Company Board
• Dollar General Corporation | | | Experience
• Executive Vice President and Chief Financial Officer at Macy’s, Inc. (2018-2020)
• Senior Lecturer at Harvard Business School in the Accounting and Management Unit (2014-2018)
• Executive Vice President and Chief Financial Officer of Ahold USA (2009-2014)
• Senior Vice President, Controller and Chief Accounting Officer at CVS Caremark (2006-2009)
Key Skills and Experience
• Public Company CEO / CFO
• Financial
• Risk Management
• Academia / Non-Profit
Other
• Director of Blue Cross Blue Shield of Massachusetts
• Member of Advisory Board of Columbia University Mailman School of Public Health
• Director of Financial Guaranty Insurance Company
• Director of Mutual of America
• Director of Reddit |
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 Derica W. RiceDirector Since: 2020Age: 57Board Committees• Audit Committee (Chair)
• Compensation and Management Development Committee
Other Public Company Boards
• Target Corporation
• The Walt Disney Company
• The Carlyle Group | | | Experience
• Executive Vice President of CVS Health and President, Pharmacy Benefits Business of CVS Caremark (2018-2020)
• Executive Vice President of Global Services (2010-2017) and Chief Financial Officer (2006-2017) of Eli Lilly and Company
• Vice President and Controller (2003-2006) and various executive positions at Eli Lilly and Company (1990-2005)
Key Skills and Experience
• Public Company CEO / CFO
• Financial
• Healthcare
• Risk Management
Other
• Director of Center for Leadership Development |
 Gerald L. StorchDirector Since: 2012Age: 65Board Committees• Compensation and Management Development Committee (Chair)
• Committee on Directors and Corporate Governance
Former Public Company Board
• Supervalu Inc. | | | Experience
• Chief Executive Officer of Storch Advisors (2017-present) and (2013-2015)
• Chief Executive Officer of Hudson’s Bay Company, a leading owner and operator of department stores, including Saks Fifth Avenue, Lord & Taylor, Hudson’s Bay Department Stores, Home Outfitters, Saks OFF 5th, Kaufhof, Inno and the e-commerce business Gilt (2015–2017)
• Toys “R” Us, Inc., Chairman (2006-2013), Chief Executive Officer (2006-2013)
• Target Corporation (1993-2006); joined as Senior Vice President of Strategy and served in roles of increasing seniority until Vice Chairman
• Partner at McKinsey & Company
Key Skills and Experience
• Public Company CEO / CFO
• International
• Financial
• Sales & Marketing
Other
• Director of Fanatics, Inc. |
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 Karen H. Vousden, Ph.D.Director Since: 2018Age: 64Board Committees• Science & Technology Committee (Chair)
• Compensation and Management Development Committee | | | Experience
• Senior Group Leader at the Francis Crick Institute in London
(2017-present)
• Chief Scientist of Cancer Research UK (2016-present)
• Director of the Cancer Research UK (CRUK) Beatson Institute in Glasgow (2002-2016)
• Held leadership roles at the National Cancer Institute in Maryland (1995-2002)
Key Skills and Experience
• Academia / Non-Profit
• Healthcare
• Science / Technology / Innovation
• International
Other
• Founder and Consultant of Faeth Therapeutics, Inc.
• Member of the Science Advisory Boards of Kovina Therapeutics, the University Cancer Center Frankfurt, Ludwig Institute for Cancer Research, PMV Pharma, Raze Therapeutics, Swiss Institute for Experimental Cancer Research and Volastra Therapeutics
• Member, Management Committee of The Gurdon Institute
• President of the British Association of Cancer Research
• Fellow of the Royal Society and a Foreign Member of the National Academy of Sciences |
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 Phyllis R. YaleDirector Since: 2019Age: 64Board Committees• Audit Committee
• Committee on Directors and Corporate Governance
Other Public Company Board
• DaVita, Inc. | | | Experience
• Bain & Company (1982-present); Advisory Partner
• Has served in a number of leadership roles and has been a leader in building Bain’s healthcare practice
Key Skills and Experience
• Financial
• Risk Management
• Healthcare
• Academia / Non-Profit
Other
• Director of Aledale, Inc.
• Director of Blue Cross Blue Shield of Massachusetts
• Member of the advisory board of Harvard Business School Healthcare Initiative
• Member of the advisory board of the Health Policy and Management Department at the Harvard Chan School of Public Health
• Member of the board of The Trustees of Reservations, a conservation and preservation organization |
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Selected and
Elected
Our executives and employees put a great deal of thought into talent recruitment and retention, and we at the Board level are similarly committed to identifying and attracting the best directors for our company. In the subsections that follow we describe our standards, policies and processes to achieving this goal.
Majority Vote Standard and Mandatory Resignation Policy
A majority of the votes cast is required to elect directors. Any current director who does not receive a majority of votes cast must tender
his or hertheir resignation as a director within 10 business days after the certification of the shareholder vote. The Committee on Directors and Corporate Governance, without participation by any director tendering
his or hertheir resignation, will consider the resignation offer and recommend to the Board whether to accept it. The Board, without participation by any director tendering
his or hertheir resignation, will act on the
Committee'sCommittee’s recommendation at its next regularly scheduled meeting to be held within 60 days after the certification of the shareholder vote. We will promptly disclose the
Board'sBoard’s decision and the reasons for that decision in a broadly disseminated press release that will also be furnished to the U.S. Securities and Exchange Commission (SEC) on Form 8-K. If any nominee is unable to serve, proxies will be voted in favor of the remainder of those nominated and may be voted for substitute nominees, unless our Board of Directors provides for a lesser number of directors.
Criteria for Board Membership
As specified in our Corporate Governance Guidelines, members of our Board should be persons with broad experience in areas important to the operation and long-term success of our company. These include areas such as business, science, medicine, finance/accounting, law, business strategy, crisis management, corporate governance, education or government. Board members should possess qualities reflecting integrity, independence, leadership, good business judgment, wisdom, an inquiring mind, vision, a proven record of accomplishment and an ability to work well with others. The Corporate Governance Guidelines also express the
Board'sBoard’s belief that its membership should continue to reflect a diversity of gender, race, ethnicity, age, sexual orientation and gender identity.
All Director Nominees Possess:
Director Orientation and Continuing Education
Director education is an ongoing, year-round process, which begins when a director joins our Board. Upon joining our Board, new directors are provided with a comprehensive orientation to our company, including our business, strategy and governance. New directors participate in an orientation program with senior business and functional leaders from all areas of the company, during which there is discussion on strategic priorities and key risks and opportunities, and participate in site visits to one or more of our locations. On an ongoing basis, directors receive presentations on a variety of topics related to their work on the Board and within the biopharmaceutical industry, both from senior management and from experts outside of the company. We also encourage Directors to enroll in continuing education programs sponsored by third parties at our expense.
TABLE OF CONTENTSDirector Independence
11 of our 12 director nominees are currently independentDirector Independence| | 9 of our 10 director nominees are currently independent | |
Our Corporate Governance Guidelines provide that a substantial majority of Board members be independent from management, and the Board has adopted independence standards that meet the listing standards of the New York Stock Exchange. Our Board has determined that,
except for Giovanni Caforio, M.D., who is our Chief Executive Officer, each of our directors and each director nominee for election at this Annual Meeting is independent of
Bristol-MyersBristol Myers Squibb and its
management in that none currently have a direct or indirect material relationship with our company, except for Giovanni Caforio, M.D. Dr. Caforio is not an independent director because he is currently our Chief Executive Officer.
management.
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Process for Determining Independence
In accordance with our Corporate Governance Guidelines, our Board undertakes an annual review of director independence. In February
2018 and March 2018,2022, the Board considered all commercial and charitable relationships of our independent directors and director nominees, including the following
relationships,relationship, which
werewas deemed immaterial under our categorical standards (see Exhibit A):
Mr. Arduini
Bertolini, Grobstein, Lacywas appointed President and
Samuels are directorsChief Executive Officer of
companiesGE Healthcare in January 2022. Bristol-Myers Squibb has a prior business relationship with GE Healthcare, pursuant to which we made ordinary course of business payments to GE Healthcare in 2021, including related to some early development and license agreements. All of the business dealings were entered into on terms no more favorable to GE Healthcare than terms that
received payment fromwould be available to unaffiliated third parties under similar circumstances and the
company for property or services in an aggregate amount thatpayments made by Bristol-Myers Squibb did not exceed the greater of $1 million or 2% of
such other company'sGE Healthcare’s consolidated gross revenues.
For each transaction, the Board determined that the director did not initiate or negotiate the transaction and that the transaction was entered into in the ordinary course of business.
•Drs. Baselga, Sato and Vousden, Messrs. Arduini, Grobstein and Lacy, or one of their immediate family members, are employed by, or serve as directors of, businesses or educational or medical institutions with which we engage in ordinary course business transactions. The directors did not initiate or negotiate any transaction with such institutions and the payments made did not exceed the greater of $1 million or 2% of such institutions' respective consolidated gross revenues.
•Dr. Sato, Messrs. Grobstein and Samuels are directors of charitable or non-profit organizations to which the Bristol-Myers Squibb Foundation made charitable contributions, which, in the aggregate, did not exceed the greater of $1 million or 2% of such organizations' respective consolidated gross revenues. The Board determined that none of
theseour independent directors had any relationships
that would impair
thetheir independence
of these directors under the New York Stock
Exchange'sExchange’s independence standards or otherwise.
Director Succession Planning and Identification of Board Candidates
Regular Assessment of
ourOur Board Composition
The Committee on Directors and Corporate Governance regularly assesses the appropriate size and composition of our Board. This assessment incorporates the results of the
Board'sBoard’s annual evaluation process, which
was recently enhanced in 2017 asare described more fully under
"Annual“Annual Evaluation
Process"Process” beginning on page
20.13. The Committee also considers succession planning for its directors.
Identification and Selection of Director Nominees | | |
Identification and Selection of Director Nominees | | Director Tenure |
In connection with the Board'sBoard’s ongoing director identification process, the Committee on Directors and Corporate Governance, in consultation with the Chairman,Board Chair, conducts an initial evaluation of prospective nominees against the established Board membership criteria discussed above. The Committee also reviews the skills of the current directors and compares them to the particular skills of potential candidates, keeping in mind the Board'sBoard’s commitment to maintain members of diverse experience and background. In particular, the Board is committed to identifying and evaluating highly qualified women and under-representedunderrepresented ethnic group candidates as well as candidates with other diverse backgrounds, industry experience and other unique characteristics. Candidates may come to the attention of the Committee on Directors and Corporate Governance through current Board members, third party
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Candidates may come to the attention of the Committee on Directors and Corporate Governance through current Board members, third-party search firms, management, shareholders or others. Search firms together with management and directors develop a candidate profile that includes the relevant skills and experiences being sought at that time and incorporates the Board membership criteria. Prospective candidates are identified based on the profile. Additional information relevant to the qualifications of prospective nominees may be requested from third-party search firms, management, shareholders or others. Search firms together with management and Directors develop a candidate profile that includes the relevant skills and experiences being sought at that time and incorporates the Board membership criteria. Prospective candidates are identified based on the profile. Additional information relevant to the qualifications of prospective nominees may be requested from third party search firms, other directors, management or other sources. After this initial evaluation, prospective nominees may be interviewed by telephone or in person by the members of the Committee on Directors and Corporate Governance, the Chairman, the Lead Independent Director and other directors, management or other sources. After this initial evaluation, prospective nominees may be interviewed by telephone or in person by the members of the Committee on Directors and Corporate Governance, the Board Chair, the Lead Independent Director and other | | | |
directors, as applicable. After completing this evaluation and interview process, the Committee on Directors and Corporate Governance makes a recommendation to the full Board as to the persons who should be nominated by our Board, and the full Board determines the nominees after considering the recommendation and any additional information it may deem appropriate. Following a robust process that began in 2020, Dr. Vousden, whoHidalgo Medina was elected to serve onjoin the Board, effective JanuaryJune 1, 2018,2021. He was identified as a potential candidate for election to our Board by one of our directors and vetted by a third partythird-party search firm retained by the Committee on Directors and Corporate Governance. Dr. Baselga, whoGovernance and was elected to serve onsubsequently interviewed by members of the Board, effective March 1, 2018, was identified by one of our directors and vetted by a third party search firm retained by the Committee on Directors and Corporate Governance.Board.
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Shareholder Nominations for Director
The Committee on Directors and Corporate Governance considers and evaluates shareholder recommendations of nominees for election to our Board of Directors in the same manner as other director nominees. Shareholder recommendations must be accompanied by disclosure, including written information about the recommended
nominee'snominee’s business experience and background with consent in writing signed by the recommended nominee that he or she is willing to be considered as a nominee and, if nominated and elected, he or she will serve as a director. Shareholders should send their written recommendations of nominees accompanied by the required documents to: Bristol-Myers Squibb Company,
345 Park Avenue, New York, New York 10154, Attention: Corporate Secretary, until July 1, 2018, after which, please address to Bristol-Myers Squibb Company, 430 East
29th29th Street—14
th Floor, New York, New York 10016, Attention: Corporate Secretary.
Board Evolution
The Board is very focused on Board composition and refreshment to ensure that your Board has the best mix of skill sets, proficiencies and perspectives to deal with the ever-changing business dynamics of the company and external environment. The Board is also committed to increasing diversity and inclusion, both at the Board level and across the company. In particular, the Board is committed to identifying and evaluating highly qualified women and under-represented ethnic group candidates as well as candidates with other diverse backgrounds, industry experience and other unique characteristics. Finally, the Board will continue to rely on our robust board assessment process to review and evaluate the performance and contributions of directors, which improves the overall effectiveness of the Board.
Proxy Access Shareholder Right
Following extensive engagement with our shareholders, our Board determined to adopt proxy access in 2016, permitting a shareholder or group of up to 20 shareholders holding at least 3% of our outstanding shares of common stock for at least three years to nominate a number of directors constituting the greater of two directors or 20% of the number of directors on our Board, as set forth in detail in our Bylaws. If you wish to propose any action pursuant to our proxy access bylaw provision, you must deliver a notice to BMS containing certain information set forth in our Bylaws, not less than 120 but not more than 150 days before the anniversary of the prior year'syear’s filing of the proxy materials. For our 20192023 Annual Meeting, we must receive this notice between October 23, 201825, 2022 and November 22, 2018.24, 2022. Shareholders should send their notices to: Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154, Attention: Corporate Secretary, until July 1, 2018, after which please address to Bristol-Myers Squibb Company, 430 East 29th Street—14th Floor, New York, New York 10016, Attention: Corporate Secretary.
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Annual Evaluation ProcessImportance of Balancing
Our Board
Refreshment with Continuity; Limited Waiver of Mandatory Retirement for Mr. Grobstein Therecognizes the critical role Board believes it is important to balance refreshment withand Committee evaluations play in ensuring the need to retain directors who have developed, over a period of time, significant insight into the company and its operations and who continue to make valuable contributions to the company that benefit our shareholders. Over the last 13 months, five new independent directors joined the company's Board, representing refreshment of approximately 40% of the Board. Another director, Mr. Grobstein, turned 75 this year. We have a general mandatory retirement age policy for non-employee directors at the annual meeting following their 75th birthday, unless the Board makes an exception for a specific director for special circumstances. After extensive consideration and discussion of these specific facts and special circumstances, following input from severaleffective functioning of our top shareholders,Board. It also believes in the importance of continuously improving the functioning of our Board and uponcommittees. Under the recommendationleadership and guidance of our Lead Independent Director, the Committee on Directors and Corporate Governance ourcontinuously assesses the Board determined that it is inevaluation process. For the best interest oflast few years, the companyBoard has included a written questionnaire to enhance its evaluation. In 2020, the Committees added written questionnaires for their assessments. In addition to the Board and its shareholders to waive the mandatory retirement age for Mr. Michael Grobstein for up to two years to maintain Board continuity during this period of transition. In reaching this determination,Committee questionnaires, the Board also carefully considered Mr. Grobstein's extensive knowledgeformalized the existing process for individual director assessment by including a written list of questions the Board Chair and Lead Independent Director can use as part of their one-on-one discussions with each director. The Lead Independent Director conveys directors’ feedback on an ongoing basis to our Board Chair and has regular one-on-one discussions with the other members of the companyBoard. The formal 2021 Board and industry; his leadershipCommittee evaluation processes were as Compensationfollows:
Board: Directors completed an electronic questionnaire on an unattributed basis responding to questions about the Board and Management Development Committee Chairman; his key rolestructure and responsibilities, Board culture and dynamics, adequacy of information to the Board, Board skills and effectiveness, and Committee effectiveness. In addition, the Board Chair and Lead Independent Director completed one-on-one individual director assessments using a written list of questions. The robust feedback and comments from the directors were anonymously compiled and then were presented by the Board Chair and the Lead Independent Director to the full Board for discussion and action. The 2021 Board evaluation was completed in February 2022.
Committees: Committee members completed an electronic questionnaire, which included questions approved by each Committee chair with topics covering each Committee’s composition, culture, and functioning as a memberwell as each Committee’s responsibilities and former Chaireffectiveness. The results from the questionnaire were compiled and Committee chairs led discussions in executive sessions of their respective committees. Committee chairs then reported to the full Board the results of their respective committee’s evaluation and any follow-up actions. The 2021 Committee evaluations were completed in the beginning of 2022 and reported to the Board in February 2022.
In response to feedback received from the 2019 annual evaluation process, the Board formalized the existing process for individual director assessment as noted above, added new directors with necessary skills that enhance the composition of our
Audit Committee; his desireBoard and
abilityupdated the Board’s review and approval processes for capital projects and business development transactions. In response to
continue to guide and servefeedback received during the
company in executing its mission and strategy; the low average tenure of2020 annual evaluation process, the Board
(4.5 years comparedupdated the way in which executive sessions are conducted and added a new director to
8.2 for the
S&P 500) and the recently enhanced, robust Board,
evaluation process, among other things.
Dr. Hidalgo Medina, effective June 1, 2021.
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2018 Director Nominees
The following biographies of our director nominees reflect their Board Committee membership and Chair positions as of the date of this year's Annual Meeting.
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Director since 2014
Chairman and Chief Executive Officer of the Company
| | GIOVANNI CAFORIO, M.D.Dr. Caforio, age 53, has been our Chief Executive Officer since May 2015 and our Chairman since May 2017. He was our Chief Operating Officer from June 2014 to May 2015, and he served as Executive Vice President and Chief Commercial Officer from November 2013 to June 2014. From October 2011 to November 2013, he served as President, U.S. Dr. Caforio held the position of Senior Vice President, Global Commercialization and Immunology from May 2010 to October 2011. Prior to that, he served as Senior Vice President, Oncology, U.S. and Global Commercialization from March 2009 to May 2010. From January 2007 to March 2009 he served as Senior Vice President, U.S. Oncology and from May 2004 to January 2007, he served as Senior Vice President, European Marketing and Brand Commercialization. Dr. Caforio is a member of the Board of Trustees of Hun School of Princeton, Business Roundtable, CEO Roundtable on Cancer and the Pharmaceutical Research and Manufacturers of America.
Key Skills and Experience: With over 26 years of pharmaceutical industry experience, including more than 16 years at the company, Dr. Caforio has overseen the creation of a fully integrated worldwide commercial organization as part of our evolution into a diversified specialty biopharmaceutical company. A physician by training, Dr. Caforio has worked across many businesses within the company, in Europe and the U.S., and has a proven record of developing talented leaders with the diverse experiences and competencies needed for the continued success of the company.
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Director since 2006
Lead Independent Director
BMS Committees:
•
Committee on Directors
and Corporate
Governance (Chair)
•
Science & Technology
Committee
Other Directorships:
Current:
•
Denali Therapeutics, Inc.
•
BorgWarner, Inc.
•
Syros Pharmaceuticals
Past 5 Years:
•
PerkinElmer Corporation
| | VICKI L. SATO, PH.D.Dr. Sato, age 69, serves as Chairman of the Board of Directors of Denali Therapeutics, Inc. She previously served as a professor of management practice at the Harvard Business School from July 2005 to June 2017. From July 2005 to October 2014 she served as professor of the practice of molecular and cell biology at Harvard University. In 2005, Dr. Sato retired as President of Vertex Pharmaceuticals Incorporated, a global biotechnology company, where she was responsible for research and development, business and corporate development, commercial operations, legal and finance. Dr. Sato also served as Chief Scientific Officer, Senior Vice President of Research and Development and Chair of the Scientific Advisory Board at Vertex before being named President in 2000. She serves as Chairman of VIR Biotechnology, Inc. and on the Board of Directors of the Peer Health Exchange, Inc. She serves as Co-Chair on the Task Force on Science and Engineering at Harvard University and Co-Chair on the Advisory Council of LifeSci NYC.
Key Skills and Experience: Dr. Sato's extensive and distinctive experience in business, academia and science over more than 31 years brings to the Board a valuable perspective on the biotech industry. Dr. Sato has a strong background in research and development positioning her well to serve as a member of our Science and Technology Committee. Her experience serving on the Boards of other healthcare companies and her knowledge and keen understanding of the issues facing public companies, and in particular, healthcare companies position her well to serve as our Lead Independent Director.
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Director since 2016
BMS Committees:
•
Audit Committee
•
Compensation and
Management Development
Committee
Other Directorships:
Current:
•
Integra LifeSciences
Holdings Corporation
| | PETER J. ARDUINI Mr. Arduini, age 53, has been President and Chief Executive Officer of Integra LifeSciences Holdings Corporation, a global medical technology company, since January 2012 and currently serves as a member of Integra's Board of Directors. He served as President and Chief Operating Officer of Integra from November 2010 to January 2012. Before joining Integra, Mr. Arduini was Corporate Vice President and President of Medication Delivery, Baxter Healthcare, from 2005 to 2010. Prior to joining Baxter, he worked for General Electric Healthcare, where he spent much of his 15 years in a variety of management roles for domestic and global businesses, culminating in leading the global functional imaging business. Mr. Arduini also serves on the Board of Directors of ADVAMED (the Advanced Medical Technology Association), the Board of Directors of MDIC (the Medical Device Innovation Consortium), and the Board of Directors of the National Italian American Foundation.
Mr. Arduini also serves on the Board of Trustees of Susquehanna University.
Key Skills and Experience: With over 25 years in the healthcare industry, Mr. Arduini brings to the Board extensive leadership, business and operational experience, particularly with respect to manufacturing and sales of medical technology and devices. In addition, his experience serving as a public company chief executive officer and former chief operational officer positions him well to serve as a member of our Audit Committee and our Compensation and Management Development Committee.
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Director since 2018
BMS Committees:
•
Science & Technology
Committee
Other Directorships:
Current:
•
Varian Medical Systems
Past 5 Years:
•
Infinity Pharmaceuticals, Inc.
| | JOSÉ BASELGA, M.D., PH.D. Dr. Baselga, age 58, has served as Physician-in-Chief of Memorial Sloan-Kettering Cancer Center ("MSKCC") since January 2013. He has also served as Professor of Medicine at Weill Cornell Medical College and as Attending Physician, Department of Medicine and member, Human Oncology and Pathogenesis Program at MSKCC since January 2013. Previously, Dr. Baselga served as Chief of Division of Hematology & Oncology and Associate Director of the Massachusetts General Hospital Cancer Center and Professor of Medicine at Harvard Medical School from January 2010 to December 2012; and President of the American Association for Cancer Research from 2016 to 2017. He also served in various roles at Vall d'Hebron University Hospital in Barcelona, Spain, including as Founding Director, Vall d'Hebron Institute of Oncology from 2007 to 2012 and Director, Division of Medical Oncology, Hematology & Radiation Oncology and Founding Director and Chairman, Medical Oncology Service from 1996 to 2010.
Dr. Baselga also serves on the Board of Foghorn Therapeutics and Breast International Group. He is a co-founder of Tango Therapeutics. He previously served as a Director of Aura Biosciences, Inc. Dr. Baselga was a Director on the Board of Grail, Inc. until March 2018 and continues to serve as Chairman of its Scientific Advisory Board. Dr. Baselga also sits on the Advisory Boards of Aura Biosciences, Inc., Northern Biologics, Inc. (formerly, Mosaic Biomedicals), Robert H. Lurie Comprehensive Cancer Center at Northwestern University and Siteman Cancer Center, Washington University at St. Louis. He previously served on the Advisory Board of Juno Therapeutics Inc. until 2018.
Key Skills and Experience: Dr. Baselga is an internationally recognized physician scientist who brings over 30 years of oncology experience to the Board. His experience serving as Physician-in-Chief of a leading cancer hospital, as well as his comprehensive expertise as a physician and clinical researcher in the area of oncology drug discovery and development, position him well to serve as a member of our Science and Technology Committee.
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Govern and
Are Governed
Director Orientation and Continuing Education | | | | |
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Director since 2017
BMS Committees:
•
Audit Committee (Chair)
•
Committee on Directors
and Corporate Governance
Other Directorships:
Current:
•
Charles River Laboratories
International, Inc.
•
Idorsia Ltd.
| | ROBERT J. BERTOLINIMr. Bertolini, age 56, served as President and Chief Financial Officer of Bausch & Lomb Incorporated from February 2013 until August 2013 (until its acquisition by Valeant Pharmaceuticals). Previously, Mr. Bertolini served as Executive Vice President and Chief Financial Officer at Schering-Plough Corp. from November 2003 until November 2009 (through its merger with Merck & Co.) with responsibility for tax, accounting and financial asset management. Prior to joining Schering-Plough, Mr. Bertolini spent 20 years at PricewaterhouseCoopers LLP, ultimately leading its global pharmaceutical industry practice.
Key Skills and Experience: Mr. Bertolini brings to the Board extensive expertise in our industry, particularly in building world-class finance and information technology functions and in leading business development and strategy. In addition, as a former chief financial officer who also has over 20��years' experience at a major auditing firm, Mr. Bertolini has extensive knowledge and background related to accounting and financial reporting rules and regulations as well as the evaluation of financial results, internal controls and business processes and this positions him well to serve as Chair of our Audit Committee and a member of our Committee on Directors and Corporate Governance.
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Director since 2017
BMS Committees:
•
Compensation and
Management Development
Committee
•
Science & Technology
Committee
Other Directorships:
Past 5 Years:
•
Vertex Pharmaceuticals
Incorporated
•
Shire PLC
| | MATTHEW W. EMMENSMr. Emmens, age 66, served as Chief Executive Officer of Shire PLC from 2003 to 2008 and Chairman of the Board from 2008 to 2014. He also served as a Director of Vertex Pharmaceuticals Incorporated from 2004 to 2009, Chairman, President and Chief Executive Officer from 2009 to 2012 and Director from 2012 to 2013. Mr. Emmens served as President, Worldwide Pharmaceuticals of Merck KGaA from 1999 to 2003, as Chief Executive Officer, Commercial Operations of Astra Merck Inc. from 1992 to 1999 and in Sales, Marketing and Administration positions for Merck & Co, Inc. from 1974 to 1991.
Key Skills and Experience: With over 40 years in the biopharmaceutical industry, Mr. Emmens brings to the Board significant expertise in management, business development, business and operations, particularly with respect to strategy and team effectiveness. Mr. Emmens' strong leadership qualities and industry knowledge position him well to provide valuable insights to both management and his fellow Board members on issues facing our company and to serve as a member of our Compensation and Management Development Committee and a member of our Science and Technology Committee.
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TableDirector education is an ongoing, year-round process, which begins when a director joins our Board. Upon joining our Board, new directors are provided with a comprehensive orientation program of Contents
our company, including our business, strategy and governance. New directors participate in an orientation program with senior business and functional leaders from all areas of the company, where strategic priorities and key risks and opportunities are discussed. All of our directors attend site visits to one or more of our locations. On an ongoing basis, our directors receive presentations on a variety of topics related to their work on the Board and within the biopharmaceutical industry, both from senior management and from experts outside of the company. We also encourage all of our directors to enroll in continuing education programs sponsored by third parties at our expense.
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Director since 2007
BMS Committees:
•
Audit Committee
•
Compensation and
Management Development
Committee (Chair)
Other Directorships:
Past 5 Years:
•
Given Imaging
•
Mead Johnson Nutrition
Company
| | MICHAEL GROBSTEINMr. Grobstein, age 75, is a retired Vice Chairman of Ernst & Young LLP, an independent registered public accounting firm. He worked with Ernst & Young from 1964 to 1998, and was admitted as a partner in 1975. Mr. Grobstein served as a Vice Chairman-International Operations from 1993 to 1998, as Vice Chairman-Planning, Marketing and Industry Services from 1987 to 1993, and Vice Chairman-Accounting and Auditing Services from 1984 to 1987. He serves on the Board of Trustees and Executive Committee and is the Treasurer of the Central Park Conservancy. He also serves on the Board of Directors of the Peer Health Exchange, Inc.
Key Skills and Experience: With over 30 years of experience at a major auditing firm, and 20 years as a director of public companies with global operations, Mr. Grobstein has extensive knowledge and background relating to accounting and financial reporting rules and regulations as well as the evaluation of financial results, internal controls and business processes. Mr. Grobstein's depth and breadth of financial expertise and his experience handling complex financial issues position him well to serve as Chair of our Compensation and Management Development Committee and a member of our Audit Committee.
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Director since 2008
BMS Committees:
•
Audit Committee
•
Committee on Directors
and Corporate Governance
Other Directorships:
Past 5 Years:
•
Dave & Buster's
Entertainment, Inc.
(Non-Executive Chairman)
•
The Hillman Companies
| | ALAN J. LACYMr. Lacy, age 64, served as the Non-Executive Chairman of Dave & Buster's Entertainment Inc. from 2014 to 2017. He served as the Chairman and Chief Executive Officer of Sears, Roebuck and Co. and the Vice Chairman and Chief Executive Officer of its successor, Sears Holdings Corporation, from 2000 to 2005. Mr. Lacy also served as Vice Chairman of Sears Holdings Corporation from 2005 to 2006. More recently, Mr. Lacy served as Senior Advisor to Oak Hill Capital Partners, L.P., a private equity investment firm, from 2007 to 2014. He is a Trustee of Fidelity Funds and the California Chapter of The Nature Conservancy. Mr. Lacy is a Director of the Center for Advanced Study in the Behavioral Sciences at Stanford University.
Key Skills and Experience: Mr. Lacy is a highly respected business leader with a proven record of accomplishment. He brings to the Board extensive business understanding and demonstrated management expertise having served in key leadership positions at Sears Holdings Corporation, including Chief Executive Officer. In addition, his experience as a senior financial officer of three large public companies provides him with a comprehensive understanding of the complex financial, legal and corporate governance issues facing large companies and positions him well to serve as a member of our Audit Committee and our Committee on Directors and Corporate Governance.
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Director since 2013
BMS Committees:
•
Committee on Directors
and Corporate Governance
•
Compensation and
Management Development
Committee
Other Directorships:
Current:
•
Raytheon Company
Past 5 Years:
•
Harman International
Industries, Inc.
•
ADT Corporation
•
Tyco International, Ltd.
| | DINESH C. PALIWALMr. Paliwal, age 60, has served as President and Chief Executive Officer of Harman International, the connected technologies company for automotive, consumer and enterprise markets, since 2007. Mr. Paliwal also served as Chairman of the Harman Board of Directors from July 2008 to March 2017 until its acquisition by Samsung Electronics Co., Ltd. Today Harman operates as a wholly-owned subsidiary of Samsung. Prior to joining Harman, Mr. Paliwal served as a member of the Group Executive Committee of ABB Ltd., a provider of industrial automation, power transmission systems and services, from January 2001 until June 2007. He also served as President of Global Markets and Technology of ABB Ltd. from January 2006 until June 2007, as Chairman and Chief Executive Officer of ABB North America from January 2004 until June 2007, and as President and Chief Executive Officer of ABB Automation Technologies Division from October 2002 to December 2005. Mr. Paliwal is a member of the CEO Business Roundtable.
He also serves on the Boards of Directors of the Business Advisory Council of Farmer School of Business, Miami University of Ohio and the U.S. India Business Council.
Key Skills and Experience: Mr. Paliwal brings to the Board extensive leadership, business and governance experience having served as a public company chief executive officer and a senior executive officer of various divisions of a multi-national corporation. His engineering and financial background, together with his worldwide experience, particularly in emerging markets, provide him with a heightened understanding of the complex issues which arise in the global marketplace. In addition, Mr. Paliwal's experience and his prior service on Boards of other public companies position him well to serve as a member of our Committee on Directors and Corporate Governance and our Compensation and Management Development Committee.
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Director since 2017
BMS Committees:
•
Audit Committee
•
Committee on Directors
and Corporate Governance
Other Directorships:
Current:
•
Perrigo Company, PLC
•
Stamps.com
| | THEODORE R. SAMUELS Mr. Samuels, age 63, served with Capital Group Companies from 1981 to 2016. He was President of the Capital Guardian Trust Company from 2010 to 2016 and was the Capital Group representative for Focusing Capital on the Long Term from 2014 to 2015. Mr. Samuels was a portfolio manager from 1990 to 2016, and while at Capital Group served on numerous management and investment committees. He also served as a board member of Capital Group Foundation and as Chair of Capital Group Foundation Investment Committee and the Capital International (North America) Proxy Committee. Mr. Samuels served on the Capital Group Finance Committee from 2013-2016 and previously served on the Capital Group Board and the Capital Group Audit Committee. He also serves as Co-chair of Tuft's President's Council and the Harvard West Cost Council. Mr. Samuels is a Director of Children's Hospital Los Angeles, where he served as Co-chair of the Board of Trustees from 2012 to 2015 and is also a trustee of the Pasadena City College Foundation.
Key Skills and Experience: With over 35 years in the financial industry, Mr. Samuels brings to the Board extensive business and operational experience, particularly with respect to economics and investment decision-making. His experience and the investor perspective he brings to the Board position him well to serve as a member of our Audit Committee and our Committee on Directors and Corporate Governance.
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Director since 2012
BMS Committees:
•
Audit Committee
•
Compensation and
Management Development
Committee
Other Directorships:
Past 5 Years:
•
Hudson's Bay Company
•
Supervalu, Inc.
(Non-Executive Chairman)
| | GERALD L. STORCHMr. Storch, age 61, has served as Chief Executive Officer of Storch Advisors since November 2017, a position he had also held from November 2013 to January 2015. He served as Chief Executive Officer of Hudson's Bay Company from January 2015 to November 2017, a leading owner and operator of department stores, including Saks Fifth Avenue, Lord & Taylor, Hudson's Bay Department Stores, Home Outfitters, Saks OFF 5th, Kaufhof, Inno and the e-commerce business Gilt. He also served as Chairman of Toys"R"Us, Inc. from February 2006 to November 2013 and Chief Executive Officer of Toys"R"Us from February 2006 to May 2013. Prior to joining Toys"R"Us, Mr. Storch served as Vice Chairman of Target Corporation. He joined Target in 1993 as Senior Vice President of Strategy and served in roles of increasing seniority over the next 12 years. Prior to joining Target, Mr. Storch was a partner at McKinsey & Company. He is a director of Fanatics, Inc.
Key Skills and Experience: A retail veteran with more than 20 years of experience, Mr. Storch provides the Board with valuable business, leadership and management insight, including expertise leading an organization with global operations, giving him a keen understanding of the issues facing a multi-national business. These qualities make him a valued member of our Audit Committee. Additionally, his prior service on the compensation committee of another public company positions him well to serve as a member of our Compensation and Management Development Committee.
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Director since 2018
BMS Committees:
•
Science & Technology
Committee (Chair)
| | KAREN H. VOUSDEN, Ph.D.Dr. Vousden, age 60, has been a Senior Group Leader at the Francis Crick Institute in London since February 2017 and Chief Scientist of Cancer Research UK since July 2016. From 2002 to 2016 she served as the Director of the Cancer Research-UK (CRUK) Beatson Institute in Glasgow, prior to which she held leadership roles at the National Cancer Institute in Maryland from 1995 to 2002. She serves as a member of the Science Advisory Boards of Centro Nacional de Investigaciones Oncologicas, Grail, Inc., Ludwig Institute for Cancer Research, PMV Pharma, Raze Therapeutics and Swiss Institute for Experimental Cancer Research. Dr. Vousden is a Council member of the European Molecular Biology Organization. She is also a Fellow of the Royal Society.
Key Skills and Experience: With over 30 years of experience leading ground-breaking cancer research, Dr. Vousden brings to the Board important perspective and knowledge on a variety of healthcare related issues, including the inherent challenges facing our R&D organization in discovering and developing new medicines. Her strong background in research and development, expertise in oncology, experience with international healthcare systems and extensive experience in the medical field position her well to serve as Chair of our Science and Technology Committee.
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CORPORATE GOVERNANCE AND BOARD MATTERS
Active Board Oversight of Our Governance
Our business is managed under the direction of our Board of Directors pursuant to the Delaware General Corporation Law and our Bylaws. The Board has responsibility for establishing broad corporate policies and for the overall performance of our company. The Board keeps itself informed of company business through regular written reports and analyses from management, and regular discussions with the Chief Executive Officer and other officers of Bristol-Myers Squibb;company officers; by reviewing other materials provided to Board members by management and by outside advisors; and by participating in Board and Board Committee meetings.
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The Committee on Directors and Corporate Governance continually reviews corporate governance issues and is responsible for identifying and recommending the adoption of corporate governance initiatives. In addition, our Compensation and Management Development Committee regularly reviews our compensation issues and recommends adoption of policies and procedures and, when appropriate, recommends changes that strengthen our compensation practices. The "Compensation“Compensation Discussion and Analysis"Analysis” section beginning on page 3134 discusses many of these policies and procedures.
The Board of Directors has adopted Corporate Governance Guidelines that govern its operation and that of its Committees. Our Board annually reviews the Corporate Governance Guidelines and, from time to time,
our Board revises them in response to changing regulatory requirements, evolving best practices and
the concerns offeedback from our shareholders and other constituents. Our Corporate Governance Guidelines may be viewed on our website at
www.bms.com/ourcompany/governance.governance.
Board’s Role in Strategic Planning and Risk Oversight Our Board meets regularly to discuss our company’s strategic direction and the issues and opportunities facing our company in light of trends and developments in the biopharmaceutical industry and the broader business environment. Our Board has been instrumental in determining our short-term and long-term company strategy.
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The Board plays a critical role in the determination of the types and appropriate levels of risk undertaken by the company. Some of the key risks the Board is focused on relate to: (i) potential legislative or other regulatory actions impacting the pharmaceutical industry in the U.S. and internationally, including drug pricing and access; (ii) intellectual property protection and upcoming losses of exclusivity; (iii) competition; (iv) key environmental, social and governance risks, inclusive of human capital management and our commitment to diversity and inclusion; and (v) cyber security, among others.
Annual strategy deep-dive. Each year, typically during the second quarter, the Board holds an extensive meeting with senior management dedicated to discussing and reviewing our long-term operating plans and overall corporate strategy. As part of the meeting, our Chief Executive Officer leads a discussion of key risks to the plans and strategy as well as risk mitigation plans and activities.
Constant focus on strategy. Throughout the year, our Board provides guidance to management on strategy and helps to refine operating plans to implement the strategy. This was evident in 2021. The Board met 9 times and held other information sessions to discuss the company’s ongoing response to the COVID-19 pandemic, the company’s integration of the Celgene and MyoKardia businesses and execution of our strategy to renew our product pipeline with new life-changing medicines, including executing on key launches to replace revenues from upcoming losses of exclusivity, among other things.
Dedicated to oversight of risk management. Our Board is responsible for risk oversight as part of its fiduciary duty of care to monitor business operations effectively.
For further discussion on how our Board administers its strategic planning and risk oversight function as a whole and through its Board Committees, please see the discussion under the header “How We Are Organized” beginning on page 22. Risk Assessment of Compensation Policies and Practices The Compensation and Management Development Committee annually conducts a worldwide review of our material compensation policies and practices. Based on this review, the Committee concluded that our material compensation policies and practices are not reasonably likely to have a material adverse effect on the company. On a global basis, our compensation policies and practices contain many design features that mitigate the likelihood of inducing excessive or inappropriate risk-taking behavior. These features include:
| | ✔ | | | Balance of fixed and variable compensation, with variable compensation tied both to short-term objectives and the long-term value of our stock price | | | ✔ | | | Clawback and recoupment provisions and policies pertaining to annual incentive payouts and long-term incentive awards | |
| | ✔ | | | Multiple metrics in our incentive programs that balance top-line, bottom-line and pipeline performance | | | ✔ | | | Share ownership and retention guidelines applicable to our senior executives | |
| | ✔ | | | Caps in our incentive program payout formulas | | | ✔ | | | Equity award policies that limit risk by having fixed annual grant dates | |
| | ✔ | | | Reasonable goals and objectives in our incentive programs | | | ✔ | | | Prohibition of speculative and hedging transactions by all employees and directors | |
| | ✔ | | | Payouts modified based upon individual performance, inclusive of assessments against our BMS Values | | | ✔ | | | The participation by all non-sales managers and executives worldwide in the same annual bonus plan applicable to our Named Executive Officers and that has been approved by the Compensation and Management Development Committee | |
| | ✔ | | | The Compensation and Management Development Committee’s ability to exercise discretion in determining incentive program payouts | | | ✔ | | | Mandatory training on our Principles of Integrity: BMS Standards of Business Conduct and Ethics (the Principles of Integrity) and other policies that educate our employees on appropriate behaviors and the consequences of taking inappropriate actions and where to escalate concerns anonymously | |
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Meetings of Our Board & Director Engagement Our Board meets on a regularly scheduled basis during the year to review significant developments affecting Bristol Myers Squibb and to act on matters requiring Board approval. It also holds special meetings when important matters require Board action between scheduled meetings. Members of senior management regularly attend Board meetings to report on and discuss their areas of responsibility. The Board of Directors has been active during the COVID-19 pandemic, adapting like our global workforce, holding virtual and in-person board meetings as conditions permitted, and receiving regular updates from management as it navigates the many challenges presented by the pandemic. In 2021, the Board met 9 times. The average aggregate attendance of directors at Board and committee meetings was over 98%. No director attended fewer than 90% of the aggregate number of Board and committee meetings during the period he or she served. During these meetings, our independent directors met in executive sessions to discuss many topics, including the company’s integration of the Celgene and MyoKardia businesses and execution of our strategy to renew our product pipeline with new life-changing medicines, including executing on key launches to replace revenues from upcoming losses of exclusivity, among other things. The Board and Board Committees also held information sessions throughout 2021, which supplemented the regularly scheduled Board and Committee meetings. These information sessions were especially important during 2021 and allowed the Board to provide effective oversight and support to our management team during the ongoing pandemic. For 2022, the Board and Committees will continue to supplement their regular meetings with information sessions as needed.
It is the expectation of the Board that each director has sufficient time to attend, prepare for and participate during Board and Committee meetings. Our Committee on Directors and Corporate Governance periodically reviews the outside board service of our directors and has adopted internal procedures to address when a director’s outside public board service exceeds the limit included in the company’s Corporate Governance Guidelines.
Annual Meeting of Shareholders Directors are strongly encouraged, but not required, to attend the Annual Meeting of Shareholders. All of the 2021 nominees for director who were directors as of the 2021 Annual Meeting attended our virtual 2021 Annual Meeting of Shareholders.
The Principles of Integrity adopted by our Board of Directors set forth important company policies and procedures in conducting our business in a legal, ethical and responsible manner. These standards are applicable to all of our employees, including the Chief Executive Officer, the Chief Financial Officer and the Controller.
In addition, the Audit Committee has adopted the Code of Ethics for Senior Financial Officers that supplements the Principles of Integrity by providing more specific requirements and guidance on certain topics. The Code of Ethics for Senior Financial Officers applies to the Chief Executive Officer, the Chief Financial Officer, the Controller, the Treasurer and the heads of major operating units.
Our Board has also adopted the Code of Business Conduct and Ethics for Directors that applies to all directors and sets forth guidance with respect to recognizing and handling areas of ethical issues.
The Principles of Integrity, the Code of Ethics for Senior Financial Officers and the Code of Business Conduct and Ethics for Directors are available on our website at www.bms.com/ourcompany/governance. We will post any substantive amendments to, or waivers from, applicable provisions of our Principles, our Code of Ethics for Senior Financial Officers, and our Code of Business Conduct and Ethics for Directors on our website at www.bms.com/ourcompany/governance within two days following the date of such amendment or waiver.
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Employees are required to report any conduct they believe in good faith to be an actual or apparent violation of our Codes of Conduct. In addition, as required under the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by company employees of concerns regarding questionable accounting or auditing matters.
Related Party Transactions The Board has adopted a written policy and procedures for the review and approval of transactions involving the company and related parties, such as greater than 5% shareholders, directors, executive officers and their immediate family members. The policy and procedures cover any transaction or series of transactions (an “interested transaction”) in which the amount involved exceeds $120,000, the company is a participant, and a related party has a direct or indirect material interest (other than solely as a result of being a director or less than 10% beneficial owner of another entity). All interested transactions are subject to approval in accordance with the following policy and procedures:
Management will be responsible for determining whether a transaction is an interested transaction requiring review under this policy, in which case the transaction will be disclosed to the Committee on Directors and Corporate Governance (the “Governance Committee”).
The Governance Committee will review the relevant facts and circumstances, including, among other things, whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or ordinary circumstances and the related party’s interest in the transaction.
No director will participate in any discussion or approval of the interested transaction for which he or she is a related party, except that the director will provide all material information concerning the interested transaction to the Governance Committee.
If an interested transaction is ongoing, the Governance Committee may establish guidelines for management to follow in its ongoing dealings with the related party and will review and assess such ongoing relationships on at least an annual basis.
Certain types of interested transactions are deemed to be pre-approved by the Governance Committee, as applicable, even if the amount involved will exceed $120,000, including the employment of executive officers, director compensation, certain transactions with other companies or charitable contributions, transactions where all shareholders receive proportional benefits, transactions involving competitive bids, regulated transactions and certain banking-related services.
BlackRock, Inc. (BlackRock) and The Vanguard Group (Vanguard) are each considered a “Related Party” under our related party transaction policy because they each beneficially own more than 5% of our outstanding common stock. The Governance Committee approved the following related party transactions in accordance with our related party policy and procedures and Bylaws:
Certain of our retirement plans use BlackRock and its affiliates to provide investment management services. In addition, we have certain investments in BlackRock managed investment funds. In connection with these services, we paid BlackRock approximately $1.2 million in fees during 2021.
Vanguard acts as an investment manager with respect to certain investment options under our savings and thrift plans. Participants in the plans pay Vanguard’s investment management fees if they invest in investment options managed by Vanguard; neither the plans themselves nor the company pays fees directly to Vanguard. In connection with these services, Vanguard received approximately $967,347 in fees during 2021.
The Governance Committee approved the above relationships on the basis that these entities’ ownership of our stock plays no role in the business relationship between us and them, and that the engagement of each entity was on terms no more favorable to them than terms that would be available to unaffiliated third parties under the same or similar circumstances.
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On January 3, 2022, Mr. Arduini became the President and Chief Executive Officer of GE Healthcare. Bristol-Myers Squibb has made business payments to GE Healthcare, including related to some early development and license agreements. The Company paid GE Healthcare approximately $6,417,812 in 2021, which accounted for less than 2% of GE Healthcare’s consolidated gross revenues for the 2021 fiscal year.
The Governance Committee approved the above relationship on the basis that all of the business dealings were entered into in the ordinary course of business and were on terms no more favorable to GE Healthcare than terms that would be available to unaffiliated third parties under similar circumstances.
Disclosure Regarding Political Activities We provide semi-annual disclosure on our website at the link below of all political contributions to political committees, parties or candidates on both state and federal levels that are made by our employee political action committee, as well as annual disclosure of the portion of our dues or other payments made to trade associations to which we give $50,000 or more that can be attributed to lobbying expenditures. Please see the company's website at: https://www.bms.com/about-us/sustainability/economic-responsibility/political-contributions.html under “Political Contributions.”
Environmental, Social, Governance & Sustainability At Bristol Myers Squibb, our vision is to transform the lives of patients through science. As a leading biopharma company, we understand our responsibility extends well beyond the discovery, development and delivery of innovative medicines that help patients prevail over serious diseases. We believe that driving long-term business value is at the heart of living our purpose—being leaders and difference-makers for generations to come.
This belief is reflected in our strong governance profile, which includes direct oversight of environmental, social and governance (“ESG”) risks, assessment and disclosure by our Committee on Directors and Corporate Governance. Oversight by this Committee strengthens our ability to operate with the highest levels of quality, integrity and ethics, the primary element of our ESG strategy.
Our ESG strategy builds on a legacy of comprehensive and global sustainability efforts, encompassing the products we make and how we make them, our facilities, our employees and our communities. We have been setting sustainability objectives and reporting on the results since the 1990s, when we first began reporting on environmental objectives. In 2021, after successfully achieving our Sustainability 2020 Goals across the areas of patients, people, supply chain and the environment, we published our inaugural ESG Report detailing our critical risks and opportunities, as well as progress against our targets to accelerate innovation, enhance patient access to medicines, be an employer of choice and reduce our environmental footprint. Our ESG strategy seeks to mobilize our combined capabilities and resources to positively impact the communities where we live, work and serve, with four focus areas:
We are committed to quality, integrity and ethics in everything we do.
We seek to actively improve the health of the communities where we live, work and serve.
We value diversity and inclusion.
We honor our longstanding pledge to environmental sustainability.
Our ESG strategy is fully aligned with our corporate strategy and was defined based on a formal assessment of priority issues drawn from senior executives and a broad group of stakeholders with board oversight. Through active engagement with our shareholders and other key stakeholders, we completed the development of our next generation commitments. We will set approved science-based emissions reductions targets in alignment with the Science Based Target Initiative as a key step in the roadmap to delivering these environmental commitments.
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The Bristol Myers Squibb mission, values and purpose fully align with global goals. This year marks our 12th year as a signatory to the United Nations Global Compact and more than 20 years of setting global Sustainability Goals. Since 2016, we have reported progress toward achieving seven targets within UN Sustainable Development Goal (SDG) 3, Good Health and Well-Being, through the efforts of Bristol Myers Squibb Company in collaboration with the separate non-profit entities, the Bristol Myers Squibb Foundation and the Bristol Myers Squibb Patient Assistance Foundation. Utilizing the SDG Compass, we mapped our sustainability efforts across the enterprise and aligned our strategy to the realization of the SDGs. We identified 10 SDGs, defined by our primary and secondary alignment, that we are uniquely able to address, and we track our progress using the UN SDG Action Manager. Also, we are members of the Business Ambition for Climate and Health and Climate Ambition Action Platforms, as well as an ongoing sponsor for the One Young World Lead 2030 Challenge for SDG 10: Reduced Inequalities, with a focus on advancing equality within the LGBTQ community in businesses, and a member of the Inaugural UN Young SDG Innovators Program, supporting SDG 3: Good Health and Well-Being, with a focus on Mental Health and Wellness.
Our longer-term vision and approach to business growth and planning have given us a clear understanding of how important it is to provide innovative solutions to global sustainability and to incorporate sustainability into our corporate culture and daily business operations. As we work on transforming our models and systems for the future, we remain committed to the continued evolution of environmentally sound and socially responsible growth.
These commitments reflect our comprehensive approach to protecting human and natural resources, now and in the future. For us, sustainability is much more than meeting targets—it is integrated into our culture and is part of our daily thought process. This includes ensuring our clinical trials reflect real world patient populations and incorporating innovative technologies to drive our R&D and manufacturing operations. We continue to bring hope to patients with serious diseases by building capacity and strengthening community services to ensure no patient is left behind.
Through active engagement with our shareholders and other key stakeholders on our ESG performance relative to our financial results, we completed the development of our next generation commitments to environmental responsibility for the global enterprise. By 2030, we intend to purchase 100% of the electricity we use from renewable sources, and by 2040, we intend to be carbon neutral in our Scope 1 (direct) and Scope 2 (indirect) emissions and reach the targets of equitable water use, zero waste to landfill and 100% electric vehicles in our commercial fleet. In addition, by 2050, we commit to Net Zero emissions in Scope 1, 2 and 3 (value chain), as part of setting science-based emissions reduction targets in alignment with the Science Based Targets Initiative (SBTi)—a key step in the roadmap to delivering these environmental commitments. We intend to have these targets approved by the SBTi by 2024.
In 2021, as part of our enhanced focus on transparency, we expanded our reporting to include our response to the Global Reporting Initiative, an Anti-Corruption report using the Norges Bank Investment Management guidance, and a Sustainability Accounting Standards Board index. We will publish ESG updates annually that include these frameworks.
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Our Board remains actively engaged on these issues with direct oversight by our Committee on Directors and Corporate Governance. For more information and to provide feedback, please see the company’s website at https://www.bms.com/about-us/sustainability.html under “Sustainability.”
Responsible Drug Pricing Strategy & Transparency Our Commitment
We firmly believe that prescription medicines are such a vital part of human healthcare that everyone who needs them should have access to them. We have been, and remain committed to facilitating access to our medicines, and to furthering our Mission to help patients prevail over serious diseases. We price our medicines based on a number of factors, including, among others, the value of scientific innovation for patients and society in the context of overall healthcare spend; economic factors impacting the healthcare systems’ capacity to provide appropriate, rapid and sustainable access to patients; and the necessity to sustain our R&D investment in innovative, high-quality medicines that address the unmet medical needs of patients with serious diseases and improve their life needs.
At Bristol Myers Squibb, we believe in the value our medicines bring to patients and society and our role in transforming care to help patients live longer, healthier and more productive lives. We focus on medicines that meaningfully change patient outcomes and improve quality of life, and over the last 30 years, we have made significant contributions in areas such as HIV, hepatitis, cardiovascular disease and, most recently, immuno-oncology. After our acquisition of Celgene, we are now moving to the next generation of treatment options, such as CAR T. We are pursuing medicines with transformational potential in diseases such as cancer, hematology, heart failure, fibrosis, multiple sclerosis, psoriasis and neuroscience. Many of our medicines are breakthroughs in innovation, truly differentiated medicines that have changed the standard of care and help patients live longer and healthier lives. For example, in melanoma, prior to the availability of immuno-oncology treatment options, 25% of patients diagnosed with metastatic melanoma survived one year. This increased to 74% with immuno-oncology therapies. Through Revlimid and Pomalyst, we transformed the treatment of multiple myeloma. Advances like these have transformed the treatment of certain cancers and changed survival expectations for patients. Collectively, we have delivered five (5) new products in the past four (4) years, including 21 major market approvals in 2021. These breakthrough medicines are possible because of our sustained investment in research and development. We have emerged as an industry leader in R&D investment, investing approximately, $6 billion, $11 billion and $11 billion annually for 2019, 2020, and 2021, respectively or approximately 24% of our revenue in 2021. Our goal is to ensure access to our currently approved medicines while continuing to fuel the development of medicines for the future.
Governance/Transparency
We take a thoughtful approach to pricing our products and have internal processes and controls in place to ensure that pricing decisions are thoroughly and appropriately vetted with the highest levels of management prior to implementation. This process includes routine presentations to the Board on drug pricing strategies. In addition, on balance, over the last few years, our revenue growth has been primarily attributable to increased volume arising from increased demand for our products rather than price increases. We have and continue to disclose the average net selling price increase for our U.S. products in our annual report on Form 10-K and our quarterly reports on Form 10-Q. Our average net selling price increase for 2017, 2018 and 2019 for our legacy BMS products was approximately, 2%, 0% and 0%, respectively and for 2020 and 2021 for our combined company products (including Celgene) was approximately 1% and 2%, respectively. We believe we have the appropriate governance mechanisms and internal controls and processes in place to ensure that pricing decisions are made in line with our values and commitment.
Demonstrating our ongoing efforts to responsibly price our medicines while balancing investment in new innovation, we expect U.S. net prices across our portfolio to remain neutral in 2022. List price increases remain below inflation and apply to medicines with ongoing clinical research. Any patient having issues obtaining or affording a BMS medicine should visit our patient support website hub at https://www.bmsaccesssupport.bmscustomerconnect.com/patient.
In addition, the Compensation Management and Development Committee annually completes a thoughtful and rigorous evaluation of our executive compensation program to ensure that the program is aligned with our Mission and
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delivers shareholder value, while not encouraging excessive or inappropriate risk taking by our executives. When setting incentive plan targets each year, the Compensation Management and Development Committee is aware of the risks associated with drug pricing, among other things, and ensures our plans do not incentivize risky behavior in order to meet targets.
Access/Regulatory Reform
We remain committed to working with policymakers, thought leaders, patient advocates and other stakeholders to shape a comprehensive system that provides accessible and affordable health care with the goal of achieving universal coverage and quality patient care, while continuing to fuel innovation. We support efforts to make medicines more affordable, from access assistance to innovative ways to address costs more directly. Individuals who cannot afford our medicines and have no other means of coverage, public or private, may be eligible to be provided with our medicines, at no charge, through a number of programs, including product donations to various independent charitable organizations, such as the Bristol-Myers Squibb Patient Assistance Program Foundation, Inc., an independent 501(c)(3) charitable organization and other company sponsored patient support programs. We estimate that in 2021, we donated more than $1.6 billion worth of medicines to assist more than 143,000 patients in the U.S. at no cost to these patients.
We promote health equity globally and strive to increase access to life-saving medicines for populations disproportionately affected by serious diseases and conditions, giving new hope and help to some of the world’s most vulnerable people. Indeed, increasing access to patients was one of our 2020 Sustainability Goals. In addition to our patient support programs in the U.S. and outside of the U.S., we have dedicated patient support programs, rebates and co-pay assistance programs in each country. In instances of disproportionate disease impact, we support the use of tiered pricing between distinct groups of countries. For example, for over a decade, Bristol Myers Squibb has maintained a policy of tiered pricing and voluntary licensing for our HIV and HCV medicines in an attempt to reduce barriers that delay broad and accelerated access to treatment for patients around the world. In addition, as part of our commitment to helping patients prevail over serious diseases, we also drive and support a number of programs designed to build capacity, raise patient awareness, including prevention and diagnosis and access to treatment and care. Through donations to the Bristol Myers Squibb Foundation, an independent 501(c)(3) charitable organization, we support community-based programs that promote cancer awareness, screening, care and support among high-risk populations in the United States, as well as China, Brazil and sub-Saharan Africa. Examples are the Bridging Cancer Care and Delivering Hope programs.
We recognize this remains a challenging time for everyone, and we know patients may be facing additional hardships. Our existing patient support programs are available to help eligible patients in the U.S. who have been prescribed a Bristol Myers Squibb medicine and have lost employment and health insurance due to the COVID-19 pandemic. Under these programs, eligible patients are provided certain Bristol Myers Squibb medicines for free.
As a company, we have made remarkable improvements in delivering life-saving medicines to patients and offering creative solutions for access; however, we understand concerns that our healthcare system as a whole is too expensive, and we are interested in finding ways to improve our system. Therefore, we re-assert our commitment to proactively work with governments, payers, health care providers and other stakeholders around the world to develop sustainable solutions that will better assist patients in need.
In December, the company issued its 2021 Global Access Report that detailed Bristol Myers Squibb’s efforts and progress towards advancing access to healthcare and health equity globally through its own efforts and in partnership with other stakeholders. We invite you to view this report on our website at https://www.bms.com/assets/bms/us/en-us/pdf/global-access-report.pdf.
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Organized
Board Leadership Structure
The
company'scompany’s governance documents provide the Board with flexibility to select the appropriate leadership structure for the company. They establish
well-definedwell defined responsibilities with respect to the
ChairmanBoard Chair and Lead Independent Director roles, including the requirement that the Board have a Lead Independent Director if the
ChairmanBoard Chair is not an independent director. This information is set forth in more detail on our website at
www.bms.com/ourcompany/governance.
Our Board has dedicated significant consideration to our leadership structure, particularly in connection with the election of Dr. Caforio as the
Chairman of the Board
Chair at the 2017 Annual Meeting.
As disclosed last year, the Board'sThe Board evaluates our leadership structure annually. The Board’s most recent analysis of our leadership structure took into account many factors, including the specific needs of the Board and the company, the strong role of our Lead Independent Director, our Corporate Governance Guidelines (including our governance practices that provide for independent oversight of management), the
integration of Celgene businesses into our company, the challenges specific to our company, and the best interests of our shareholders. After thoughtful and rigorous consideration, the Board determined that combining the
ChairmanBoard Chair and Chief Executive Officer positions and electing Dr. Caforio as the
Chairman of the Board
wasChair continues to be in the best interest of the company and our
shareholders. The Board continues to believe thisshareholders and is the best leadership for the company and its shareholders at this time. Specifically, our Board believes
that to havehaving Dr. Caforio serve in the combined role of
ChairmanBoard Chair and Chief Executive Officer confers distinct advantages at this time, including:
having a ChairmanBoard Chair who can draw on detailed institutional knowledge of the company and industry experience from serving as Chief Executive Officer, providing the Board with focused leadership, particularly in discussions about the company'scompany’s strategy;
•a combined role ensures that the company presents its message and strategy to all stakeholders, including shareholders, employees and patients, with a unified voice; and
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The Board recognizes the importance of appointing a strong Lead Independent Director to maintain a counterbalancing structure to ensure that the Board functions in an appropriately independent manner. The Lead Independent Director is selected annually by the independent directors. The independent directors
of the Board have elected
Dr. Vicki SatoMr. Samuels to serve in that position.
The Lead Independent
Director'sDirector’s responsibilities include, among others:
| | ✓ | | | | | | | | | |
| | | | | | | | | | | |
| | ü
| | Serving as liaison between the independent directors and the ChairmanBoard Chair and Chief Executive Officer | | ü
| ✓ | | | Approving the quality, quantity and timeliness of information sent to the Board | | |
| | ✓ | ü
| | Reviewing and approving meeting agendas and sufficiency of time | | ü
| ✓ | | | Serving a key role in Board and Chief Executive Officer evaluations | | |
| | ✓ | ü
| | Calling meetings of the independent directors | | ü
| ✓ | | | Responding directly to shareholder and stakeholder questions, as appropriate | | |
| | ✓ | ü
| | Presiding at all meetings of the independent directors and any Board meeting when the ChairmanBoard Chair and the Chief Executive Officer areis not present, including executive sessions of the independent directors | | ü
| ✓ | | | Providing feedback from executive sessions of the independent directors to the Board Chair and Chief Executive Officer and other senior management and to the Chairman | | |
| | ✓ | ü
| | CommunicatingEngaging with major shareholders, as appropriate | | ü
| ✓ | | | Recommending advisors and consultants | | |
| | | | | | | | | | |
The Board’s culture is open and promotes transparent dialogue and rigorous discussion. The Board deliberates on all major decisions with and without management present and effectively utilizes executive sessions under the leadership of the Lead Independent director to drive board alignment.
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The Board believes this structure provides an effective, high-functioning Board, as well as appropriate safeguards and oversight. Our Board will continue to evaluate its leadership structure in light of changing circumstances and will evaluate the Board's leadership structuredo so on at least an annual basis and make changes at such times as it deems appropriate.
Board's Role in Strategic Planning and Risk Oversight
Our Board meets regularly to discuss the strategic direction and the issues and opportunities facing our company in light of trends and developments in the biopharmaceutical industry and general business environment. Our Board has been instrumental in determining our next steps as we have emerged as a diversified specialty biopharmaceutical company.
Furthermore, in setting our business strategy, the Board plays a critical role in the determination of the types and appropriate levels of risk undertaken by the company.
•Constant focus on strategy: Throughout the year, our Board provides guidance to management on strategy and helps to refine operating plans to implement the strategy.•Annual strategy deep-dive: Each year, typically during the second quarter, the Board holds an extensive meeting with senior management dedicated to discussing and reviewing our long-term operating plans and overall corporate strategy. A discussion of key risks to the plans and strategy as well as risk mitigation plans and activities is led by our Chief Executive Officer as part of the meeting.•Dedicated to oversight of risk management: As stated in our Corporate Governance Guidelines, our Board is responsible for risk oversight as part of its fiduciary duty of care to monitor business operations effectively.
Our Board administers its strategic planning and risk oversight function as a whole and through its Board Committees. The following are examples of how our Board Committees are involved in this process:
| | | | | | | |
Audit Committee | | | | | | |
| | Audit Committee | | Regularly reviews and discusses with management our process to assess and manage enterprise risks, including those related to market/environmental, strategic, financial, operational, legal, compliance, informationcyber security and reputation. | | |
| | | Compensation and
Management
Development
Committee | | | | |
| | Compensation and
Management
Development
Committee
| | Annually evaluates our incentive compensation programs to determine whether incentive pay encourages excessive or inappropriate risk-taking. In particular, the Committee evaluates the components of our executive compensation program that work to minimize excessive or inappropriate risk-taking, including, the use of different forms of long-term equity incentives, linking payout to each executive'sexecutive’s demonstration and role modeling of company Behaviors,our BMS Values, placing caps on our incentive award payout opportunities, following equity grant practices that limit potential for timing awards and having stock ownership and retention requirements. The Committee has oversight responsibility for the Company’s management development programs, performance assessment of our CEO and other senior executives and succession planning. | | |
| | | Committee on Directors
and Corporate
Governance | | | | |
| | Committee on Directors
and Corporate
Governance | | Regularly considers and makes recommendations to the Board concerning the appropriate size, function and needs of the Board, determines the criteria for Board membership, provides oversight of our corporate governance affairs and reviews corporate governance practices and policies. Oversees the company'scompany’s political activities and routinely considers matters relating to the company's responsibilities as a global corporate citizen pertaining to corporateenvironmental, social responsibility and corporate public policygovernance strategy and reporting and the impact on the company'scompany’s employees and shareholders. | | |
| | | Science and
Technology Committee | | | | |
| | Science and
Technology Committee | | Regularly reviews our pipeline and potential business development opportunities to evaluate our progress in achieving our near-term and long-term strategic research and development goals and objectives and assures that we make well-informed choices in the investment of our research and development resources, among other things. | | |
| | | | | | |
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Risk Assessment of Compensation Policies and Practices
The Compensation and Management Development Committee annually conducts a worldwide review of our material compensation policies and practices. Based on this review, we have concluded that our material compensation policies and practices are not reasonably likely to have a material adverse effect on the company. On a global basis, our compensation programs contain many design features that mitigate the likelihood of inducing excessive or inappropriate risk-taking behavior. These features include:
| | | | | | | | | | |
| | | | | | | | | | |
| | ü
| | Balance of fixed and variable compensation, with variable compensation tied both to short-term objectives and the long-term value of our stock price | | ü
| | Clawback and recoupment provisions and policies pertaining to annual incentive payouts and long-term incentive awards | | |
| | ü
| | Multiple metrics in our incentive programs that balance top-line, bottom-line and pipeline performance | | ü
| | Share ownership and retention guidelines applicable to our senior executives | | |
| | ü
| | Caps in our incentive program payout formulas | | ü
| | Equity award policies that limit risk by having fixed annual grant dates | | |
| | ü
| | Reasonable goals and objectives in our incentive programs | | ü
| | Prohibition of speculative and hedging transactions by all employees and directors | | |
| | ü
| | Payouts modified based upon individual performance, inclusive of assessments against our BMS BioPharma Behaviors and the BMS Commitment | | ü
| | All non-sales managers and executives worldwide participate in the same annual incentive program that pertains to our Named Executive Officers and that has been approved by the Compensation and Management Development Committee | | |
| | ü
| | The Compensation and Management Development Committee's ability to exercise downward discretion in determining incentive program payouts | | ü
| | Mandatory training on our Principles of Integrity: BMS Standards of Business Conduct and Ethics (the Principles of Integrity) and other policies that educate our employees on appropriate behaviors and the consequences of taking inappropriate actions | | |
| | | | 23
| | | | | | |
Annual Evaluation Process
Our Board recognizes the critical role Board and committee evaluations play in ensuring the effective functioning of our Board. It also believes in the importance of continuously improving the functioning of our Board and committees. Under the leadership and guidance of our Lead Independent Director, the Committee on Directors and Corporate Governance continuously assesses the Board evaluation process. In 2017, following discussions with and input from the full Board of Directors, the Committee enhanced the Board assessment process to include a written questionnaire. The formal 2017 Board and Committee evaluation processes were as follows:
•Board: Directors completed a written questionnaire on an unattributed basis responding to questions about the Board and Committee structure and responsibilities, Board culture and dynamics, adequacy of information to the Board, Board skills and effectiveness, and Committee effectiveness. The robust feedback and comments from the directors were anonymously compiled and then were presented by the Chairman and the Lead Independent Director to the full Board for discussion and action. The 2017 Board evaluation was completed in March 2018.
•Committees: Committee chairs selected a list of topics for their respective committees to evaluate and discuss, covering both substantive and process-oriented aspects of committee performance. The list of discussion topics for each committee was distributed to committee members in advance for consideration. Committee chairs led discussions in executive session of their respective committees. Committee chairs then reported to the full Board the results of their respective committee's evaluation and any follow-up actions. The 2017 Committee evaluations were completed in the beginning of 2018 and reported to the Board in March 2018.
The formal annual Board and Committee evaluations are supplemented by regular informal one-on-one discussions between the Chairman and Chief Executive Officer and each director throughout the year. The Lead Independent Director actively conveys directors' feedback on an ongoing basis to our Chairman and Chief Executive Officer and has regular one-on-one discussions with the other members of the Board.
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Meetings of our Board
Our Board meets on a regularly scheduled basis during the year to review significant developments affecting Bristol-Myers Squibb and to act on matters requiring Board approval. It also holds special meetings when important matters require Board action between scheduled meetings. Members of senior management regularly attend Board meetings to report on and discuss their areas of responsibility. In 2017, the Board met 12 times. The average aggregate attendance of directors at Board and committee meetings was over 96%. No director attended fewer than 75% of the aggregate number of Board and committee meetings during the period he or she served. In addition, our independent directors met 9 times during 2017 to discuss such topics as our independent directors determined, including the evaluation of the performance of our current Chief Executive Officer.
Annual Meeting of Shareholders
Directors are strongly encouraged, but not required, to attend the Annual Meeting of Shareholders. All of the 2017 nominees for director attended our 2017 Annual Meeting of Shareholders except Theodore R. Samuels who had a long-standing previous commitment.
Committees of
ourOur Board
Our Bylaws specifically provide for an Audit Committee, Compensation and Management Development Committee, and Committee on Directors and Corporate Governance,
all of which are composed entirely of independent directors. Our Bylaws also authorize the establishment of additional committees of the Board and, under this authorization, our Board of Directors established the Science and Technology Committee. Our Board has appointed individuals from among its members to serve on these four standing committees and each committee operates under a written charter adopted by the Board, as amended from time to time. These charters are published on our website at
http://bms.com/ourcompany/governance/Pages/board_committees_charters.aspx.board_committees_charters.aspx. Each of these Board Committees has the necessary resources and authority to discharge its responsibilities, including the authority to retain consultants or experts to advise the committee.
The table below indicates the current members of our standing Board Committees and the number of meetings held in 2017:2021:
| | Peter J. Arduini | | | | | | | | | X | | | X | |
| | Giovanni Caforio, M.D. | | | | | | | | | | | | | |
| | Julia A. Haller, M.D.(2) | | | | | | X | | | | | | X | |
| | Manuel Hidalgo Medina M.D., Ph.D.(3) | | | | | | | | | | | | X | |
| | Paula A. Price(2) | | | X | | | X | | | | | | | |
| | Derica W. Rice(2) | | | C | | | | | | X | | | | |
| | Theodore R. Samuels(2) | | | X | | | C | | | | | | | |
| | Gerald L. Storch (2) | | | | | | X | | | C | | | | |
| | Karen H. Vousden, Ph.D. | | | | | | | | | X | | | C | |
| | Phyllis R. Yale(2) | | | X | | | X | | | | | | | |
| | Number of 2021 Meetings(4) | | | 8 | | | 5 | | | 7 | | | 7 | |
“C”
| indicates Chair of the committee. |
1)
| Our Board of Directors has determined, in its judgment, that all members of the Audit Committee are financially literate and that all members of the Audit Committee meet additional, heightened independence criteria applicable to directors serving on audit committees under the New York Stock Exchange listing standards and applicable SEC rules. In addition, our Board has determined that Messrs. Rice and Samuels and Ms. Price each qualify as an “audit committee financial expert” under the applicable SEC rules. |
2)
| Effective May 4, 2021, Ms. Price and Ms. Yale became members of the Audit Committee; Mr. Rice became Chair of our Audit Committee and a member of our Compensation and Management Development Committee; Dr. Haller became a member of our Committee on Directors and Corporate Governance; Mr. Arduini rotated from our Audit Committee to our Science and Technology Committee; Mr. Samuels rotated from our Compensation and Management Development Committee to Chair our Committee on Directors and Corporate Governance and Mr. Storch rotated from our Audit Committee to our Committee on Directors and Corporate Governance. |
3)
| Dr. Hidalgo Medina joined the Board on June 1, 2021 and became a member of our Science and Technology Committee. Effective May 3, 2022, Dr. Hidalgo Medina will become a member of our Committee on Directors and Corporate Governance. |
4)
| In 2021, the Integration Committee held its final meeting in February and was dissolved effective as of the 2021 Annual Meeting. |
| | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | Director | | Audit(1) | | Committee on
Directors
and Corporate
Governance | | Compensation
and
Management
Development | | Science
and
Technology(2) | | |
| | Peter J. Arduini | | X | | | | X | | | | |
| | José Baselga, M.D., Ph.D. | | | | | | | | X | | |
| | Robert J. Bertolini(3) | | X | | X | | | | | | |
| | Giovanni Caforio, M.D. | | | | | | | | | | |
| | Matthew W. Emmens | | | | | | X | | X | | |
| | Michael Grobstein | | X | | | | C | | | | |
| | Alan J. Lacy | | C | | X | | | | | | |
| | Dinesh Paliwal | | | | X | | X | | | | |
| | Theodore R. Samuels | | X | | X | | | | | | |
| | Vicki L. Sato, Ph.D. | | | | C | | | | C | | |
| | Gerald L. Storch | | X | | | | X | | | | |
| | Karen H. Vousden, Ph.D.(4) | | | | | | | | X | | |
| | Number of 2017 Meetings | | 6 | | 4 | | 6 | | 9 | | |
| | | | | | | | | | | | | |
"C"indicates Chair of the committee.(1)Our Board of Directors has determined, in its judgment, that all members of the Audit Committee are financially literate and that all members of the Audit Committee meet additional, heightened independence criteria applicable to directors serving on audit committees under the New York Stock Exchange listing standards. In addition, our Board has determined that Messrs. Arduini, Bertolini, Grobstein, Lacy, Samuels and Storch each qualify as an "audit committee financial expert" under the applicable SEC rules.(2)Dr. Thomas J. Lynch, Jr., our Executive Vice President and Chief Scientific Officer, is a member of the Science and Technology Committee but he is not a member of our Board.(3)Robert J. Bertolini will assume the role of Chair of the Audit Committee effective May 1, 2018.(4)Dr. Karen H. Vousden will assume the role of Chair of the Science and Technology Committee effective May 1, 2018.
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The following descriptions reflect each standing Board
Committee'sCommittee’s membership and Chair effective as of May
1, 2018.3, 2022.
| |
| |
| |
|
|---|
| | Audit Committee |
| | | |
| |
Robert J. BertoliniDerica W. Rice
Additional Members:Members Peter J. Arduini
Michael Grobstein
Alan J. Lacy
Paula A. Price
Theodore R. Samuels Gerald L. Storch
Phyllis R. Yale | | | Key Responsibilities
••
Overseeing and monitoring the quality of our accounting and auditing practices, including, among others, reviewing and approving the internal audit charter, audit plan, audit budget and decisions regarding appointment and replacement of Chief Audit Officer
• Appointing, compensating and providing oversight of the performance of our independent registered public accounting firm for the purpose of preparing or issuing audit reports and related work regarding our financial statements and the effectiveness of our internal control over financial reporting
• Assisting the Board in fulfilling its responsibilities for general oversight of (i) compliance with legal and regulatory requirements, (ii) the performance of our internal audit function and (iii) enterprise risk assessment and risk management policies and guidelines
• Reviewing our disclosure controls and procedures, periodic filings with the SEC, earnings releases and earnings guidance
• Producing the required Audit Committee Report for inclusion in our Proxy Statement
• Overseeing the implementation and effectiveness of our compliance and ethics program
• Reviewing our information security and data protection program | | |
Committee on Directors and Corporate Governance
| | | | | | |
| |
| |
| |
|
|---|
| | Committee on Directors and Corporate Governance |
| |
| |
Committee Chair:ChairVicki L. Sato, Ph.D.
Additional Members:
Robert J. Bertolini
Alan J. Lacy
Dinesh C. Paliwal
Theodore R. Samuels
Additional Members
Julia A. Haller, M.D.
Manuel Hidalgo Medina, M.D., Ph.D.
Paula A. Price
Gerald L. Storch
Phyllis R. Yale | | | Key Responsibilities
••
Providing oversight of our corporate governance affairs and reviewing corporate governance practices and policies, including annually reviewing the Corporate Governance Guidelines and recommending any changes to the Board
• Identifying individuals qualified to become Board members and recommending that our Board select the director nominees for the next annual meeting of shareholders
• Reviewing and recommending annually to our Board the compensation of non-employee directors
• Considering questions of potential conflicts of interest involving directors and senior management and establishing, maintaining and overseeing related party transaction policies and procedures
• Evaluating and making recommendations to the Board concerning director independence and defining specific categorical standards for director independence
• Providing oversight of the company’s political activities • Providing oversight of the company's political activities•
Considering matters relating to the company's responsibilities as a global corporate citizen pertaining to corporateenvironmental, social, responsibilitygovernance strategy and corporate public policyreporting and the impact on the company's employeescompany’s workforce and shareholders
• Overseeing the annual evaluation process of the Board and its Committees | | |
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Compensation and Management Development Committee
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| | | | | | |
| |
| |
| |
|
|---|
| | Compensation and Management Development Committee |
| |
| |
Committee Chair:ChairMichael Grobstein
Additional Members:
Peter J. Arduini
Mathew W. Emmens
Dinesh C. Paliwal
Gerald L. Storch
Additional Members
Peter J. Arduini
Derica W. Rice
Karen H. Vousden, Ph.D. | | | Key Responsibilities
••
Reviewing, approving and reporting to our Board on our major compensation and benefits plans, policies and programs
• Reviewing corporate goals and objectives relevant to CEO compensation, evaluating the CEO'sCEO’s performance in light of those goals and objectives and recommending for approval by at least three-fourths of the independent directors of our Board the CEO'sCEO’s compensation based on this evaluation
• Reviewing and evaluating the performance of senior management; approving the compensation of executive officers and certain senior management
• Overseeing our management development programs, and performance assessment of our most senior executives and succession planning
• Reviewing and discussing with management the Compensation Discussion and Analysis and related disclosures required for inclusion in our Proxy Statement, recommending to the Board whether the Compensation Discussion and Analysis should be included in our Proxy Statement, and producing the Compensation and Management Development Committee Report required for inclusion in our Proxy Statement
• Establishing and overseeing our compensation recoupment policies
• Reviewing incentive compensation programs to determine whether incentive pay encourages inappropriate risk-taking throughout our business | | |
Science and Technology Committee
| | | | | | |
| |
| |
| |
|
|---|
| | Science and Technology Committee |
| |
| |
Additional Members:Members José Baselga,
Peter J. Arduini
Julia A. Haller, M.D.
Manuel Hidalgo Medina, M.D., Ph.D. Matthew W. Emmens
Thomas J. Lynch, Jr., M.D.
Vicki L. Sato, Ph.D.
| | | Key Responsibilities
••
Reviewing and advising our Board on the strategic direction of our research and development (R&D) programs, platforms and capabilities and our progress in achieving near-term and long-term R&D objectives
• Reviewing and advising our Board on our internal and external investments in science and technology
• Identifying and discussing significant emerging trends and issues in science and technology and considering their potential impact on our company
• Providing assistance to the Compensation and Management Development Committee in setting any pipeline performance metric under the company'scompany’s incentive compensation programs and reviewing the performance results | | |
In addition, in 2021, the Integration Committee held its final meeting in February and was dissolved effective as of the 2021 Annual Meeting.
In addition, on February 22, 2017, the Board established a Securities Issuance CommitteeTABLE OF CONTENTS
Communicate
With Us
We value input and
approve the terms and provisions of securities issued by the company. The members of the Securities Issuance Committee were Lamberto Andreotti, Giovanni Caforio and Alan J. Lacy. The Securities Issuance Committee met once during 2017.Codes of Conduct
The Principles of Integrity adopted by our Board of Directors set forth important company policies and procedures in conducting our business in a legal, ethical and responsible manner. These standards are applicable to all of our employees, including the Chief Executive Officer, the Chief Financial Officer and the Controller.
In addition, the Audit Committee has adopted the Code of Ethics for Senior Financial Officers that supplements the Principles of Integrity by providing more specific requirements and guidance on certain topics. The Code of Ethics for Senior Financial Officers applies to the Chief Executive Officer, the Chief Financial Officer, the Controller, the Treasurer and the heads of major operating units.
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Our Board has also adopted the Code of Business Conduct and Ethics for Directors that applies to all directors and sets forth guidance with respect to recognizing and handling areas of ethical issues.
The Principles of Integrity, the Code of Ethics for Senior Financial Officers and the Code of Business Conduct and Ethics for Directors are available on our website at www.bms.com/ourcompany/governance. We will post any substantive amendments to, or waivers from, applicable provisions of our Principles, our Code of Ethics for Senior Financial Officers, and our Code of Business Conduct and Ethics for Directors on our website at www.bms.com/ourcompany/governance within two days following the date of such amendment or waiver.
Employees are required to report any conduct they believe in good faith to be an actual or apparent violation of our Codes of Conduct. In addition, as required under the Sarbanes-Oxley Act of 2002, the Audit Committee has established procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls, or auditing matters and the confidential, anonymous submission by company employees of concerns regarding questionable accounting or auditing matters.
Related Party Transactions
The Board has adopted a written policy and procedures for the review and approval of transactions involving the company and related parties, such as directors, executive officers and their immediate family members. The policy covers any transaction or series of transactions (an "interested transaction") in which the amount involved exceeds $120,000, the company is a participant, and a related party has a direct or indirect material interest (other than solely as a result of being a director or less than 10% beneficial owner of another entity). All interested transactions are subject to approval or ratification in accordance with the following procedures:
•Management will be responsible for determining whether a transaction is an interested transaction requiring review under this policy, in which case the transaction will be disclosed to the Committee on Directors and Corporate Governance (the "Governance Committee").
•The Governance Committee will review the relevant facts and circumstances, including, among other things, whether the interested transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or ordinary circumstances and the related party's interest in the transaction.
•If it is impractical or undesirable to wait until a Governance Committee meeting to complete an interested transaction, the Chair of the Governance Committee, in consultation with the General Counsel, may review and approve the transaction, which approval must be ratified by the Governance Committee at its next meeting.
•In the event the company becomes aware of an interested transaction that has not been approved, the Governance Committee will evaluate all options available to the company, including ratification, revision or termination of such transaction and take such course of action as the Governance Committee deems appropriate under the circumstances.
•No director will participate in any discussion or approval of the interested transaction for which he or she is a related party, except that the director will provide all material information concerning the interested transaction to the Governance Committee.
•If an interested transaction is ongoing, the Governance Committee may establish guidelines for management to follow in its ongoing dealings with the related party and will review and assess such ongoing relationships on at least an annual basis.
•Certain types of interested transactions are deemed to be pre-approved or ratified by the Governance Committee, as applicable, even if the amount involved will exceed $120,000, including the employment of executive officers, director compensation, certain transactions with other companies or charitable contributions, transactions where all shareholders receive proportional benefits, transactions involving competitive bids, regulated transactions and certain banking-related services.
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BlackRock, Inc. (BlackRock), Wellington Management Group, LLP (Wellington) and The Vanguard Group (Vanguard) are each considered a "Related Party" under our related party transaction policy because they each beneficially own more than 5% of our outstanding common stock. The Governance Committee ratified and approved the following related party transactions in accordance with our policy and Bylaws:
•Certain of our retirement plans use BlackRock and its affiliatesoffer many means to provide investment management services. In connection with these services, we paid BlackRock approximately $1.2 million in fees during 2017.it.
•Certain of our retirement plans use Wellington and its affiliates to provide investment management services. In connection with these services, we paid Wellington approximately $1.3 million in fees during 2017.
•Vanguard acts as an investment manager with respect to certain investment options under our savings and thrift plans. Participants in the plans pay Vanguard's investment management fees if they invest in investment options managed by Vanguard; neither the plans themselves nor the company pays fees directly to Vanguard. In connection with these services, Vanguard received approximately $445,000 in fees during 2017.
The Governance Committee ratified the above relationships on the basis that these entities' ownership of our stock plays no role in the business relationship between us and them, and that the engagement of each entity was on terms no more favorable to them than terms that would be available to unaffiliated third parties under the same or similar circumstances.
Dr. Baselga was elected to the Board effective March 1, 2018. He has served as Physician-in-Chief of Memorial Sloan-Kettering Cancer Center (MSKCC) since January 2013. The company has made both business and charitable payments to MSKCC for many years, including for research studies and grants led by principal investigators affiliated with the hospital. The company paid MSKCC approximately $7.6 million in 2017, which accounted for less than 2% of MSKCC's revenues for the 2017 fiscal year.
Dr. Lynch retired from the Board on March 15, 2017 and currently serves as our Chief Scientific Officer. Before this, he served as the Chairman and Chief Executive Officer of the Massachusetts General Physicians Organization (MGPO) and a member
We, members of the Board of Directors, know that we must actively seek information from a wide variety of Massachusetts General Hospital (MGH)sources—and not just from September 2015 until March 2017. The MGPOindividuals and MGH comprise the operating structureentities that work for us—to do our jobs optimally. We therefore create multiple means to hear from shareholders, employees at all levels, patients, medical professionals, policy experts and others to inform our work.
You can communicate with us via many of
the General Hospital Corporation,these means. You can provide us comments on your proxy when you are voting. You can attend our annual meeting and ask questions. You can accept our invitations to engage or ask us for a meeting when that is of value to you. You can participate in our various Investor Relations functions which
is the largest part of the parent corporation, Partners HealthCare, a not-for-profit healthcare system. The company has madewe listen to both
businessdirectly and
charitable paymentsindirectly. You can write to
MGH for many years, including for research studies and grants led by principal investigators affiliated with the hospital. The company paid MGH approximately $305,755 in 2017, which accounted for less than 2% of Partners HealthCare's revenues for the fiscal year ended September 30, 2017. Dr. Glimcher retired from the Board on July 21, 2017. Before this, she was appointed President and CEO of Dana-Farber Cancer Institute ("Dana-Farber") on October 1, 2016. The company has made both business and charitable payments to Dana-Farber for several years and entered into multiple research collaborations with Dana-Farber as recently as February 2016. The company paid Dana-Farber approximately $9.6 million in 2017, which accounted for less than 2% of Dana-Farber's revenues for the 2017 fiscal year.
The Governance Committee ratified the above relationships on the basis that Drs. Baselga, Lynch and Glimcher did not initiateus via mail or negotiateuse any of the arrangements the company has with their affiliated organizations, all of the business dealings were entered into in the ordinary course of business prior to Drs. Baselga, Lynch or Glimcher assuming the stated roles at the respective organizations and the engagement of such companies by BMS were on terms no more favorable to them than terms that would be available to unaffiliated third parties under the same or similar circumstances.
Disclosure Regarding Political Activities
We provide semi-annual disclosure on our website of all political contributions to political committees, parties or candidates on both state and federal levels that are made by our employee political action committee, as well as
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annual disclosure of the portion of our dues or other payments made to trade associations to which we give $50,000 or more that can be attributed to lobbying expenditures.
Global Corporate Citizenship & Sustainability
Patients are at the center of everything we do, and our work is focused on the development of innovative medicines that deliver value to patients and the broader society. To do so in a sustainable manner requires continued investment in research and development that seeks to uncover transformative approaches to treating serious diseases. At the same time, we aim to broaden access to medicines by collaborating with various facets of healthcare systems globally to build capacity to care for patients, including creative approaches to address affordability. Over the past 20 years, Bristol-Myers Squibb has embraced its responsibility to grow in a manner that respects the environment, encourages social progress and contributes to long-term economic viability that supports our employees and communities. Our Sustainability 2020 goals are:
•Accelerate innovation to develop transformative medicines—By 2020, enable Speed to Patients by optimizing development timelinesreporting functions such as R&D processes, regulatory reviewso-called Whistle Blower hotlines. And, of course, we pay close attention to your voting and data packaging. The goal also focuses on improving clinical trial patient diversity and satisfaction.
•Enhance patient access to medicines—Use existing approaches suchinvestment decisions as tiered pricing, voluntary licensing, reimbursement support, patient assistance programs and our Bristol-Myers Squibb Foundation partnerships to provide greater access to our medicines in global markets. For example, all marketed products will have access plans.
•Be the employer of choice and the champion of safety—Empower and engage our people by improving safe behaviors and building a more globally diverse and inclusive workforce; being a recognized employer of choice. For example, by 2020, establish a new safety culture survey and improve results.
•Drive supply chain leadership on quality and integrity—Ensure reliable supply, engaging with our critical suppliers and assessing those in high-risk countries for conformance with labor and integrity standards. As an example, all critical manufacturing suppliers will be assessed for risk and risk mitigation performance, with results incorporated in sourcing decisions.
•Innovate to support a green, healthy planet—Continue to improve our environmental footprint with greenhouse gas and water reduction goals and integrate green design and reduce waste throughout our product portfolio. Among Bristol-Myers Squibb's Sustainability 2020 Goal targets is to reduce water use and greenhouse gas emissions by 5 percent (absolute) or more from the 2015 baseline.
We remain actively engaged with our shareholders and other key stakeholders on our environmental, social and governance performance relative to our financial results. Our Board remains actively engaged on these issues with direct oversight by our Committee on Directors and Corporate Governance. For more information and to provide feedback, please see the company's website at https://www.bms.com/about-us/sustainability.html under "Sustainability."
well.
Communications with our Board of DirectorsWritten Communication
Our Board has created a process for anyone to communicate directly with our Board, any committee of the Board, the
non-managementnon-employee directors of the Board collectively or any individual director, including our
ChairmanBoard Chair and Lead Independent Director. Any interested party wishing to contact our Board may do so in writing by sending a letter
c/o Corporate Secretary, Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154, until July 1, 2018, after which, please address to Bristol-Myers Squibb Company, 430 East 29th Street—
14th14th Floor, New York, New York 10016, Attention: Corporate Secretary.
Any matter relating to our financial statements, accounting practices or internal controls should be addressed to the Chair of the Audit Committee. All other matters should be addressed to the Chair of the Governance Committee.
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Our Corporate Secretary or her designee reviews all correspondence and forwards to the addressee all correspondence determined to be appropriate for delivery. Our Corporate Secretary periodically forwards to the Governance Committee a summary of all correspondence received. Directors may at any time review a log of the correspondence we receive that is addressed to members of the Board as well as copies of any such correspondence. Our process for handling communications to our Board has been approved by the independent directors.
Proactive Shareholder Engagement We continued to place a high priority on our proactive engagement with our shareholders in 2021, reaching out to over 50 of our top shareholders, representing approximately 49% of our shares outstanding. In 2021, management and members of the Board, including our Lead Independent Director, met with many of our shareholders and had a productive dialogue on a number of topics, including board composition and leadership, company strategy and execution, diversity and inclusion, environmental, social and governance (ESG) strategy and risk oversight, executive compensation as well as the company’s ongoing response to COVID-19.
The feedback received was generally positive and was shared with the entire Board and members of senior management. In addition, in 2022, we continued to engage with shareholders, seeking active feedback and offering additional insights on current topics of interest, such as our Board leadership structure, diversity and inclusion, our ESG strategy and the ongoing response to COVID-19, as well as executive compensation and corporate governance topics, including the shareholder proposals included in our 2021 Proxy Statement.
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We encourage our registered shareholders to use the space provided on the proxy card to let us know your thoughts about BMS or to bring a particular matter to our attention. If you hold your shares through an intermediary or received the proxy materials electronically, please feel free to write directly to us.
Responsiveness to Shareholder Feedback
Throughout the last few years, we have actively solicited feedback from shareholders on topical issues and offered additional insights on shareholder proposals that were included in our recent Proxy Statements. The results of these discussions are noted below:
| | Company Response to COVID-19 Pandemic | | | Numerous shareholders asked about the company’s response to the COVID-19 pandemic and how it has impacted our operational and financial standing and efforts to protect the health and safety of our workforce and customers. | | | Our response to the COVID-19 pandemic was, and is, primarily focused on protecting the health, well-being and safety of our workforce, ensuring the continued supply of and access to our medicines for our patients and maintaining the long-term and sustainable competitive position of the company. We are also supporting research efforts to accelerate the development, manufacturing, and delivery of diagnostics and treatments for COVID-19. Please see discussion under “Company Response to COVID-19” beginning on page 38. | |
| | Diversity & Inclusion | | | A number of our shareholders requested we adopt a policy to publicly disclose our Consolidated EEO-1 Report yearly and suggested that we also consider including pay data. | | | In 2021, we published our first Global, Diversity, Equity & Inclusion Report, highlighting our EEO-1 data and key commitments to cultivate diversity, equity & inclusion. Namely, in August 2020, BMS and the Bristol Myers Squibb Foundation announced each would separately commit $150 million as part of a series of commitments around health equity, diversity and inclusion currently focused on five key priorities. For further discussion on these commitments, please see discussion under “Commitment to Diversity & Inclusion” beginning on page 37. | |
| | Environmental, Social & Governance Strategy and Reporting | | | Several shareholders inquired about our current ESG strategy, commitments and internal governance around ESG reporting. | | | Our Committee on Directors and Corporate Governance has direct oversight of our ESG strategy and reporting and ensures our ability to operate with the highest levels of quality, integrity and ethics. Our ESG strategy is fully aligned to our corporate strategy. Through active engagement with our shareholders and other key stakeholders, we completed the development of our next generation commitments. We will set approved science-based emissions reductions targets in alignment with the Science Based Target Initiative as a key step in the roadmap to delivering these environmental commitments. We also expanded our reporting to include additional validated ESG frameworks such as SASB and TCFD and published our first ESG Report in 2021 and will update the report annually. For further discussion, please see “Environmental, Social, Governance & Sustainability” beginning on page 18. | |
| | Management Accountability & Compensation Recoupment | | | In 2020, Investors for Opioid and Pharmaceutical Accountability (IOPA) and corporate representatives from the pharmaceutical industry formed an incentive deferral working group to develop a set of principles that focus on incentive deferrals as one strategy to assist boards in recouping compensation in the event of misconduct. | | | We collaborated with the investors to include additional disclosure beginning with our 2021 Proxy Statement to highlight how the company’s existing equity plan features are aligned with the intent of the final bonus deferral principles. This was responsive to the investors’ feedback and consistent with our shared desired outcome. This disclosure is included in this Proxy Statement beginning on page 60. | |
| | Special Meeting Threshold Reduced from 25% to 15% | | | In response to valuable feedback from our shareholders regarding the vote support for recent proposals covering this item, we included a proposal at the 2021 Annual Meeting to reduce the ownership threshold for shareholders to request a special meeting. | | | The company is committed to high standards of corporate governance, including taking steps to achieve greater transparency and accountability to our shareholders. As such, at the 2021 Annual Meeting, the Board asked shareholders to approve an amendment to the Company’s charter to reduce the percentage of outstanding shares required for shareholders to call a special meeting from 25% to 15%. The Board determined to take this action following extensive engagement with our shareholders and an evaluation of our strong corporate governance policies and practices, including the many ways shareholders are able to contact the Board and senior management on important matters outside of the annual meeting cycle. This proposal was well supported by shareholders. | |
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How We
Compensation of Directors
Director Compensation Program
We aim to provide a competitive compensation program to attract and retain high quality directors. The Committee on Directors and Corporate Governance
(when used in this Compensation of Directors’ section, the “Committee”) annually reviews our
directors'directors’ compensation
practices,program, including a review of the director compensation programs at our executive compensation peer
group. Furthermore, for 2017groups. For 2021 planning, we again engaged an outside consultant, Frederic W. Cook & Co., Inc.
(FWC)(“FWC”), to review market data and competitive information on director compensation. FWC recommended,
and the Committee determined, that our executive compensation peer
groupgroups should be the primary source for determining director compensation.
Based on this
Upon reviewing FWC’s analysis
in December 2020, the Committee determined to make no changes to the director compensation program for service as a director in
2017. The Committee also determined, in light of the fact that2021. As a result, our
2021 director compensation program
has been unchanged since 2016, and was
between the 25th percentile and median ofidentical to our
peer group, among other reasons, to increase the annual equity award for service as a director for 2018 by $15,000. The Committee submitted its recommendations for director compensation to the full Board for approval. Our employee directors doprogram in 2020. Giovanni Caforio, M.D. does not receive any additional compensation for serving as
directors.a director.
The Committee believes the total compensation package for directors we offered in
20172021 was reasonable, and appropriately aligned the interests of directors with
the interests of our shareholders by ensuring directors have
a proprietaryan equity stake in our company.
The Components of
ourOur Director Compensation Program
In
2017, non-management2021, non-employee directors who served for the entirety of
20172021 received:
Component | | | | | | |
| | Component
| | Value of Award
| |
| |
|---|
| | | Annual Retainer | | | | |
| | Annual Retainer | | $100,000 | | |
| | | Annual Equity Award | | | Deferred Share Units valued at $170,000 | | |
| | Committee Chair Retainer | | $25,000 | $190,000 | |
| | Lead Independent Director Annual Retainer | | | $50,000 | |
| | Committee Chair Annual Retainer | | | $25,000 | |
| | Committee Member (not Chair) Annual Retainer – Audit, Compensation and Management Development, and Science and Technology Committees | | $15,000 | | |
| | Committee Member (not Chair) Retainer – Committee on Directors and Corporate Governance, | | $7,500 | | |
| | | Science and Technology and Integration Committees(1) | | | $15,000 | |
1)
| In 2021, the Integration Committee held its final meeting in February and was dissolved effective as of the 2021 Annual Meeting. |
On February 1, 2017,2021, all non-managementnon-employee directors serving on the Board at that time received an annual award of deferred share units valued at $170,000$190,000 under the 1987 Deferred Compensation Plan for Non-Employee Directors. These deferred share units are non-forfeitable at grant and are settleable solely in shares of companyour common stock. A new member of the Board who is eligible to participate in the Plan receives, on the date the Directordirector joins the Board, a pro-rata number of deferred share units based on the number of share units payable to participants as of the prior February 1.
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Compensation of our Lead Independent Director
Our Lead Independent Director receivesreceived an additional annual retainer of $35,000.$50,000. Our Board has determined to award this retainer in light of the increased duties and responsibilities demanded by this role, which duties and responsibilities are described in further detail on page 18.Compensation of our Former Non-Executive Chairman23 During the first few months of 2017, Lamberto Andreotti served as our Non-Executive Chairman. He had significantly greater responsibilities than other directors, including chairing the Office of the Chairman, meeting on a regular basis with the Chief Executive Officer on the most critical strategic issues and transactions, serving as a liaison between the Chief Executive Officer and the independent directors, and frequently discussing the strategy and direction of the company with senior management.
From January 1, 2017 to May 2, 2017 when he retired from the Board, in addition to the regular Board retainer and annual equity award, Mr. Andreotti received a pro-rated portion of a Non-Executive Chairman retainer of $200,000, of which 50% was paid in cash and 50% in shares of the company's common stock. Bristol-Myers Squibb also provided Mr. Andreotti with office space, supplies and administrative support for company-related work.
.
Share Retention Requirements
We significantly increased the share retention requirements for non-management directors in 2016.
All
non-managementnon-employee directors are required to acquire a minimum of shares and/or units of company stock valued at not less than five times their annual cash retainer within five years of joining the Board and to maintain this ownership level throughout their service as a
director.Director. We require that at least 25% of the annual retainer be deferred and credited to a deferred compensation account, the value of which is determined by the value of our common stock, until a non-management director has attained our share retention requirements.
A non-management director may elect to defer payment of all or part of the cash compensation received as a director under our
company'scompany’s 1987 Deferred Compensation Plan for Non-Employee Directors. The election to defer is made in the year preceding the calendar year in which the compensation is earned. Deferred funds for compensation received in connection with service as a
Directordirector in
20172021 were credited to one or more of the following funds: a
United StatesU.S. total bond index, a
short termshort-term fund, a total market index fund or a fund based on the return on our common stock. Deferred portions are payable in a lump sum or in a maximum of
ten10 annual installments. Payments under the Plan begin when a participant ceases to be a director or at a future date previously specified by the director.
Charitable Contribution Programs
Each director who joined the Board prior to December 2009 participates in our
Directors'Directors’ Charitable Contribution Program. Upon the death of a director, we will donate up to an aggregate of $500,000 to up to five qualifying charitable organizations designated by the director. Individual directors derive no financial or tax benefit from this program since the tax benefit of all charitable deductions relating to the contributions accrues solely to
us.the company. In December 2009, the Board eliminated the Charitable Contributions Program for all new directors.
In addition, each director was able to participate in our company widecompany-wide matching gift program in 2017.2021. We matched dollar for dollar a director'sdirector’s contribution to qualified charitable and educational organizations up to $30,000. This benefit was also available to all company employees. Starting in 2020, as part of our overall diversity and inclusion commitments, we committed to matching on a 2-to-1 basis through the Bristol Myers Squibb Foundation all employee and director donations to organizations that fight disparities and discrimination. In 2017, each2021, except for Dr. Hidalgo Medina, all of the following non-employeeour directors participated in our matching gift programs as indicated in the Director Compensation Table below: Dr. Sato and Messrs. Andreotti, Arduini, Bertolini, Emmens, Grobstein, Lacy and Samuels.below.
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Director Compensation Table
The following table sets forth information regarding the compensation earned by our non-employee directors in
2017.2021.
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | Name | | Fees
Earned or Paid
in Cash(1) | | Stock
Awards(2) | | Option
Awards(3) | | All Other
Compensation(4) | | Total | |
|
|---|
| | | | | | | | | | | | | | | | | | | |
| | L. Andreotti(5)(6) | | $ | 67,583 | | $ | 203,791 | | $ | 0 | | $ | 30,000 | | $ | 301,374 | | |
| | P. J. Arduini | | $ | 124,973 | | $ | 170,000 | | $ | 0 | | $ | 16,250 | | $ | 311,223 | | |
| | R. J. Bertolini | | $ | 100,792 | | $ | 160,218 | | $ | 0 | | $ | 15,500 | | $ | 276,510 | | |
| | M. W. Emmens | | $ | 105,779 | | $ | 160,218 | | $ | 0 | | $ | 30,000 | | $ | 295,997 | | |
| | L. H. Glimcher, M.D.(7) | | $ | 64,063 | | $ | 170,000 | | $ | 0 | | $ | 0 | | $ | 234,063 | | |
| | M. Grobstein | | $ | 140,000 | | $ | 170,000 | | $ | 0 | | $ | 30,000 | | $ | 340,000 | | |
| | A. J. Lacy | | $ | 132,500 | | $ | 170,000 | | $ | 0 | | $ | 30,000 | | $ | 332,500 | | |
| | T. J. Lynch, Jr., M.D.(8) | | $ | 25,181 | | $ | 170,000 | | $ | 0 | | $ | 0 | | $ | 195,181 | | |
| | D. C. Paliwal | | $ | 122,541 | | $ | 170,000 | | $ | 0 | | $ | 0 | | $ | 292,541 | | |
| | T. R. Samuels | | $ | 100,792 | | $ | 160,218 | | $ | 0 | | $ | 30,000 | | $ | 291,010 | | |
| | V. L. Sato, Ph.D. | | $ | 169,959 | | $ | 170,000 | | $ | 0 | | $ | 25,000 | | $ | 364,959 | | |
| | G. L. Storch | | $ | 130,000 | | $ | 170,000 | | $ | 0 | | $ | 0 | | $ | 300,000 | | |
| | T. D. West, Jr.(9) | | $ | 54,464 | | $ | 170,000 | | $ | 0 | | $ | 0 | | $ | 224,464 | | |
| | | | | | | | | | | | | | | | | | | | |
(1)Includes the annual retainer, committee chair retainers, committee membership retainers and Lead Independent Director retainer, as applicable. All or a portion of the cash compensation may be deferred until retirement or a date specified by the director, at the election of the director. The directors listed in the below table deferred the following amounts in 2017, which amounts are included in the figures above.
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Name | | Dollar
Amount
Deferred | | Percentage of
Deferred
Amount
Allocated
to U.S. Total
Bond Index | | Percentage of
Deferred
Amount
Allocated
to Short
Term Fund | | Percentage of
Deferred
Amount
Allocated to
Total Market
Index Fund | | Percentage of
Deferred
Amount
Allocated
to Deferred
Share Units | | Number of
Deferred
Share Units
Acquired | |
|
|---|
| | P. J. Arduini | | $ | 124,973 | | | 0 | % | | 0 | % | | 0 | % | | 100 | % | | 2,129 | | |
| | R. J. Bertolini | | $ | 100,792 | | | 0 | % | | 0 | % | | 0 | % | | 100 | % | | 1,695 | | |
| | M. W. Emmens | | $ | 105,779 | | | 0 | % | | 0 | % | | 0 | % | | 100 | % | | 1,777 | | |
| | L. H. Glimcher, M.D. | | $ | 64,063 | | | 50 | % | | 50 | % | | 0 | % | | 0 | % | | 0 | | |
| | M. Grobstein | | $ | 70,000 | | | 0 | % | | 0 | % | | 0 | % | | 100 | % | | 1,196 | | |
| | A. J. Lacy | | $ | 132,500 | | | 0 | % | | 0 | % | | 0 | % | | 100 | % | | 2,264 | | |
| | T. J. Lynch, Jr., M.D. | | $ | 6,295 | | | 0 | % | | 0 | % | | 0 | % | | 100 | % | | 116 | | |
| | D. C. Paliwal | | $ | 122,541 | | | 0 | % | | 0 | % | | 0 | % | | 100 | % | | 2,094 | | |
| | T. R. Samuels | | $ | 50,396 | | | 0 | % | | 0 | % | | 0 | % | | 100 | % | | 847 | | |
| | G. L. Storch | | $ | 130,000 | | | 0 | % | | 0 | % | | 0 | % | | 100 | % | | 2,221 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
(2)Represents aggregate grant date fair value under FASB ASC Topic 718 of deferred share unit and common stock awards granted during 2017. On February 1, 2017, each of the non-management directors then serving as a director received a grant of 3,448.975 deferred share units valued at $170,000 based on the fair market value on the day of grant of $49.29. On February 21, 2017, in connection with their appointment to the Board, Messrs. Bertolini, Emmens, and Samuels received a pro-rated grant of 2,924.754 deferred share units valued at $160,218 based on the fair market value on the day of grant of $54.78. The aggregate number of deferred share units held by each of these directors as of December 31, 2017 is set forth below. In some cases, these figures include deferred share units acquired through elective deferrals of cash compensation.
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| | P. J. Arduini | | | $135,151 | | | $190,000 | | | $0 | | | $30,000 | | | $355,151 | |
| | R. Bertolini(5) | | | $48,077 | | | $190,000 | | | $0 | | | $5,000 | | | $243,077 | |
| | M. W. Bonney(5) | | | $77,011 | | | $190,000 | | | $0 | | | $5,000 | | | $272,011 | |
| | M. W. Emmens(5) | | | $49,794 | | | $190,000 | | | $0 | | | $30,000 | | | $269,794 | |
| | J. A. Haller, M.D. | | | $130,041 | | | $190,000 | | | $0 | | | $30,000 | | | $350,041 | |
| | M. Hidalgo Medina,
M.D., Ph.D. | | | $66,978 | | | $127,535 | | | $0 | | | $0 | | | $194,513 | |
| | D. C. Paliwal(5) | | | $53,228 | | | $190,000 | | | $0 | | | $30,000 | | | $273,228 | |
| | P. A. Price | | | $124,890 | | | $190,000 | | | $0 | | | $30,000 | | | $344,890 | |
| | D. W. Rice | | | $131,484 | | | $190,000 | | | $0 | | | $30,000 | | | $351,484 | |
| | T. R. Samuels | | | $169,560 | | | $190,000 | | | $0 | | | $30,000 | | | $389,560 | |
| | V. L. Sato, Ph.D(5) | | | $65,247 | | | $190,000 | | | $0 | | | $30,000 | | | $285,247 | |
| | G. L. Storch | | | $140,000 | | | $190,000 | | | $0 | | | $10,000 | | | $340,000 | |
| | K. H. Vousden, Ph.D. | | | $145,151 | | | $190,000 | | | $0 | | | $6,500 | | | $341,651 | |
| | P. R. Yale | | | $124,890 | | | $190,000 | | | $0 | | | $30,000 | | | $344,890 | |
1)
| Includes the annual retainer, committee chair retainers, committee membership retainers and Lead Independent Director retainer, as applicable. All or a portion of the cash compensation may be deferred until retirement or a date specified by the director, at the election of the director. The directors listed in the below table deferred the following amounts in 2021, which amounts are included in the figures above. Dr. Hidalgo Medina joined the Board effective June 1, 2021. |
| | P. J. Arduini | | | $135,151 | | | 0% | | | 0% | | | 0% | | | 100% | | | 2,168 | |
| | R. Bertolini | | | $48,077 | | | 0% | | | 0% | | | 0% | | | 100% | | | 771 | |
| | M. W. Bonney | | | $54,678 | | | 0% | | | 0% | | | 0% | | | 100% | | | 877 | |
| | M. W. Emmens | | | $49,794 | | | 0% | | | 0% | | | 0% | | | 100% | | | 799 | |
| | J. A. Haller, M.D. | | | $130,041 | | | 0% | | | 0% | | | 0% | | | 100% | | | 2,086 | |
| | M. Hidalgo Medina,
M.D., Ph.D. | | | $16,745 | | | 0% | | | 0% | | | 0% | | | 100% | | | 269 | |
| | D. C. Paliwal | | | $53,228 | | | 0% | | | 0% | | | 0% | | | 100% | | | 854 | |
| | P. A. Price | | | $31,223 | | | 0% | | | 0% | | | 0% | | | 25% | | | 501 | |
| | D. W. Rice | | | $131,484 | | | 0% | | | 0% | | | 0% | | | 100% | | | 2,109 | |
| | T. R. Samuels | | | $169,560 | | | 0% | | | 0% | | | 0% | | | 100% | | | 2,719 | |
| | G. L. Storch | | | $140,000 | | | 0% | | | 0% | | | 0% | | | 100% | | | 2,245 | |
| | P. R. Yale | | | $124,890 | | | 0% | | | 0% | | | 0% | | | 100% | | | 2,003 | |
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| 2)
| | | Represents aggregate grant date fair value under FASB ASC Topic 718 of deferred share unit and common stock awards granted during 2021. On February 1, 2021, each of the non-employee directors then serving as a director received a grant of 3,054.171 deferred share units valued at $190,000 based on the fair market value of $62.21 on the grant date. On June 1, 2021, in connection with his appointment to the Board, Dr. Hidalgo Medina received a pro-rated grant of 1,959.06 deferred share units valued at $127,535 based on the fair market value of our common stock on the grant date of S65.10. The aggregate number of deferred share units held by each of these directors as of December 31, 2021, is set forth below. In some cases, these figures include deferred share units acquired through elective deferrals of cash compensation. |
|---|
| | L. Andreotti(5)
| | | 0 | | |
| | P. J. Arduini
| | | 9,407 | | |
| | R. J. Bertolini
| | | 4,693 | | |
| | M. W. Emmens
| | | 4,775 | | |
| | L. H. Glimcher, M.D.
| | | 64,019 | | |
| | M. Grobstein
| | | 69,260 | | |
| | A. J. Lacy
| | | 58,700 | | |
| | T. J. Lynch, Jr., M.D.
| | | 0 | | |
| | D. C. Paliwal
| | | 16,967 | | |
| | T. R. Samuels
| | | 3,838 | | |
| | V. L. Sato, Ph.D.
| | | 56,479 | | |
| | G. L. Storch
| | | 38,359 | | |
| | T. D. West, Jr.
| | | 51,519 | | |
| | | | | P. J. Arduini | | | 34,451 | |
| | R. Bertolini | | | 27,467 | |
| | M. W. Bonney | | | 9,488 | |
| | M. W. Emmens | | | 27,834 | |
| | J. A. Haller, M.D. | | | 11,482 | |
| | M. Hidalgo Medina, M.D., Ph.D. | | | 2,233 | |
| | D. C. Paliwal | | | 0 | |
| | P. A. Price | | | 5,145 | |
| | D. W. Rice | | | 7,235 | |
| | T. R. Samuels | | | 27,956 | |
| | V. L. Sato, Ph.D. | | | 0 | |
| | G. L. Storch | | | 66,891 | |
| | K. H. Vousden, Ph.D. | | | 18,196 | |
| | P. R. Yale | | | 11,232 | |
3)
| There have been no stock options granted to directors since 2006 and except as noted below, no non-employee Director had stock options outstanding as of December 31, 2021. On November 20, 2019 in connection with their appointment to the Board effective upon the closing of the Celgene transaction, Mr. Bonney and Dr. Haller’s stock options from Celgene were converted into BMS stock options. The aggregate number of shares of BMS common stock underlying stock options held by Mr. Bonney and Dr. Haller as of December 31, 2021 are set forth below: |
| | M. W. Bonney | | | 102,169 | |
| | J. A. Haller, M.D. | | | 83,469 | |
4)
| Amounts include company matches of charitable contributions under our matching gift program. |
5)
| Dr. Vicki Sato and Messrs. Bertolini, Emmens, and Paliwal retired from the Board effective May 4, 2021. Mr. Bonney resigned from the Board on August 3, 2021. |
(3)There have been no stock options granted
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Message from the Compensation and Management Development
Committee Chair
As we entered a new chapter at Bristol Myers Squib in 2021, the health and safety of our workforce and the continued supply of our medicines to directors since 2006patients were our highest priorities. For a second year in a row, we were met with considerable challenges as the Board, senior management and no non-employee Directorour larger workforce navigated a dynamic and evolving pandemic environment as new COVID-19 variants emerged. Despite these challenges, our workforce remained resolute. We delivered strong operational and commercial performance while ensuring our patients continued to receive life-saving medicines. I am incredibly proud of the sustained resilience, dedication and agility of our workforce that continued to prioritize and deliver on our vision to transform patients’ lives through science.
The Compensation and Management Development Committee (when used in this Compensation Discussion & Analysis (“CD&A”), the “Committee” or “CMDC”) is deeply involved in ensuring that the executive compensation programs align, support and reinforce the company’s business and people strategy. For our Named Executive Officers (or “NEOs”), our goal each year is to create an executive compensation framework that provides clear lines-of-sight into the key drivers that we believe will create long-term value for our shareholders and patients.
From an executive compensation and human capital management perspective, we had stock options outstandingfour distinct focus areas over the past year and these will continue to guide us in our work in 2022. As you read our CD&A, you will see these distinct focus areas reflected throughout. They are:
Ensuring we are focused on the safety and well-being of our workforce for both their own benefit, and to safeguard the delivery of life-saving medicines to our patients during this ongoing COVID-19 pandemic. In 2021, we provided oversight and guidance to management on the measures the Company took to protect our employees. These included measures to ensure our employees’ physical and emotional well-being, the implementation of vaccine mandates for our U.S. and Puerto Rico colleagues and other safety protocols (e.g., weekly asymptomatic testing, social distancing, deep cleaning, among others);
Refining our human capital management strategy with tangible goals and a commitment to transparent disclosure of our progress against these well-defined goals. As part of this commitment, we published our inaugural ESG Report and Global Diversity, Equity and Inclusion Report, highlighting our EEO-1 data and key commitments to cultivate diversity, equity & inclusion, including our commitment to achieve gender parity at the executive level globally and double executive representation of both Black/African American and Hispanic/Latino employees in the U.S. by the end of 2022;
Continuing to ensure our compensation programs, and particularly our incentive programs, are competitive, support our evolving strategy, align with performance and shareholder value creation, and enable us to continue to attract and retain the critical talent needed in a highly-competitive industry. During 2021, we undertook a thorough review of our incentive programs, including discussions with our full Board, management and our independent consultant, to ensure such programs continue to support our strategy and our promise to renew our product pipeline with new life-changing medicines; and
Evaluating the tenure, independence and effectiveness of our compensation consultant. After a robust request for proposal process, the Committee selected Farient Advisors LLC as the compensation consultant for 2022.
We are at an important inflection point for our Company and the upcoming decade will be critical as we look to renew our pipeline and launch new medicines to replace maturing brands. To accomplish this, the Committee understands it is important to attract key talent, ensure the full engagement of December 31, 2017
(4)Amounts includeour workforce and prepare for seamless and timely succession. To that end, our Committee also focuses on the development mandate outlined in our charter. In this regard, the Committee continued its longstanding practice of reviewing with the CEO the performance, potential and development opportunities for the senior executives who make up the leadership team, with a view toward prudent succession planning. As part of this effort, members of the Committee were involved in the interviews and onboarding of key external candidates who joined the BMS leadership team.Over the past few years, shareholder feedback has helped to shape the development and refinement of our compensation program. During 2021, we continued this constructive dialogue, engaging with a large number of our shareholders on a variety of topics, including executive compensation, the incorporation of ESG priorities in our incentive programs, and human capital management, including remote work and protecting the health and safety of our workforce during the global pandemic. All feedback was thoroughly reviewed and discussed during our Committee and Board meetings.
We will continue to engage with shareholders and give full consideration to their feedback. We welcome your input.
Gerald L. Storch, Chair
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and Analysis
2021 was another challenging year for our company matchesand employees, as we continued to navigate the challenges of charitable contributions underthe ongoing COVID-19 pandemic and other related issues, such as supply chain constraints, inflation and a tightening labor market. Despite the challenges, we prioritized the health and safety of our matching gift program.
(5)workforce and delivered strong results.Critical to our performance in 2021, and the future of our company, was our continued focus on growth and innovation: bringing truly transformational medicines to patients. Working together, we delivered strong operational and financial results, launched new products and achieved key integration milestones ahead of schedule. In addition, we achieved significant regulatory and clinical milestones that have strongly positioned the company to successfully renew our therapeutic portfolio and sustain growth over the long-term.
Our integration achievements from the Celgene transaction (which are well ahead of schedule) have established a strong foundation for Bristol Myers Squibb as a biopharma leader with a bright future ahead. Our strategy to focus on transformational innovation has demonstrated success. For example, we are launching 9 new medicines, 6 of which have already launched with 3 expected to launch during 2022. We have established leadership positions across oncology, hematology, cardiovascular, and immunology. In each of these businesses, we have leading in-line medicines, significant short-term launch opportunities and a rich pipeline, with platforms and technologies that provide significant opportunities for new approaches to the standard Board compensation thattreatment of serious diseases. Our financial strength and flexibility, along with our differentiated business development strategy, will allow us to drive long-term value.
Looking ahead, we are very excited about where we are as a company. We are well positioned for growth and we are confident in our ability to deliver long-term sustainable value. We will remain focused on our key priorities and believe we will be able to demonstrate the strength of our continuing business, despite the challenges of losses of exclusivity for some of our key medicines like Revlimid. Business development remains a top priority to complement our portfolio for long-term growth and this was evident in 2021. We entered into many promising business development transactions, including with Eisai, Agenus and Immatics, further strengthening our oncology and cell therapy franchises. Together, these transactions demonstrate our commitment to leverage creative deal-making to accelerate innovation and create value for our shareholders.
Finally, we took key steps in 2021 to advance the commitments we announced in August 2020 around health equity, diversity and inclusion. For further discussion on these commitments, please see discussion under “Commitment to Diversity & Inclusion” beginning on page 37. Following the completion of the Celgene transaction in November 2019, we started to harmonize and align our pay and benefits programs. For the 2020 performance year, the Committee took the initial step to ensure all non-management directors received, Mr. Andreotti receivedeligible employees, including our NEOs, had similar performance goals in our annual bonus program and long-term incentive awards to reflect a pro-rated portion of an annual Non-Executive Chairman retainer of $200,000 paid quarterly, of which 50% was paid in cash and 50% was paid in shares of company stock. Shares of company stock were paid out as follows based on the fair market valueholistic assessment of the company's common stock onand management's overall performance. Effective January 2021, we fully aligned enterprise-level compensation programs―namely our annual bonus and long-term incentive program―for all eligible employees, including our NEOs. For the award date:annual bonus program, this included continuation of Key Integration Metrics for our executives. We also unified the benefits and work life offerings for employees in the U.S and Puerto Rico.
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | Award Date | | Value | | Fair Market
Value | | Shares of Common
Stock Acquired | |
|
|---|
| | | 3/31/2016 | | $ | 25,000 | | $ | 54.38 | | | 459 | | |
| | | 6/30/2016 | | $ | 8,791 | | $ | 55.72 | | | 157 | | |
| | | | | | | | | | | | | | |
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Throughout 2021, the Committee oversaw the implementation of further harmonization of benefits and work life programs for employees outside of the U.S. However, this does not mark the end of the multi-year integration journey. For 2022, and in some countries into 2023, we will continue to implement unified benefits and work life programs. Over the next few years, we anticipate that you will continue to see the evolution of our executive compensation and benefits programs.
(6)Lamberto Andreotti retired from the Board of Directors effective May 2, 2017.(7)Laurie H. Glimcher, M.D. retired from the Board of Directors effective July 21, 2017.(8)Thomas J. Lynch, Jr., M.D. retired from the Board of Directors effective March 15, 2017.(9)Togo D. West, Jr. retired from the Board of Directors effective May 2, 2017.
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COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (CD&A)describes these actions taken by the Committee in more detail as applied to our Named Executive Officers. In particular, the unified compensation program was designed to provide the Committee with the tools and flexibility to appropriately incentivize, reward and retain our executives and align pay with company performance.
2021 Named Executive Officers This CD&A is intended to explain how our
executive compensation program is designed and how it operates for our Named Executive
Officers (NEOs).Officers. The
table below
table includes a list oflists our
20172021 NEOs.
| Name
| | | Principal Position
| |
|---|
| | Giovanni Caforio, M.D. | | |
| Giovanni Caforio, M.D. | | Chairman &Board Chair and Chief Executive Officer | |
| | Charles BancroftDavid V. Elkins | | Chief Financial Officer and EVP, Global Business Operations |
| | Thomas J. Lynch, Jr., M.D. | | EVP and Chief ScientificFinancial Officer | |
| | Rupert Vessey M.A, B.M., B.Ch., F.R.C.P., D.Phil. | | | EVP, Research and Early Development | |
| | Christopher Boerner, Ph.D. | | | EVP and Chief Commercialization Officer | |
| | Sandra Leung | | | EVP and General Counsel | |
2021 was a year of strong execution for the company. We made great progress against the execution of our strategy, delivering strong operational and financial performance in key areas, including continued growth across our in-line portfolio, successful execution of new launches, and achievement of significant pipeline milestones. We accomplished this while navigating the challenges of a global pandemic.
Key 2021 Financial Performance Highlights
Total revenue increase of 9%, or 8% excluding foreign exchange.
GAAP diluted EPS of $3.12.
Non-GAAP diluted EPS of $7.51, an increase of 17% compared to 2020.
| • | Murdo GordonA quarterly dividend increase of 10.2%, marking an increase for the 13th year in a row. |
Completed Key Business Development Transactions
Business development remains a core element of our strategy and we recently executed several notable transactions across different disease areas, including:
| ○ | | EVPIn June 2021, we commenced an exclusive global strategic collaboration with Eisai for the co-development and Chief Commercial Officerco-commercialization of MORAb-202, a selective folate receptor alpha antibody-drug conjugate being investigated in endometrial, ovarian, lung and breast cancers; |
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| ○ | In July 2021, we obtained a global exclusive license to Agenus’ proprietary bispecific antibody program, AGEN1777, that blocks TIGIT and an additional target; and |
| ○ | In December 2021, we entered into a global exclusive license to Immatics’ TCR bispecific IMA401 program, which is being studied in oncology. The agreement closed in the first quarter 2022. |
Delivered Strong Commercial Performance
Excellent commercial execution, particularly during an ongoing global pandemic.
Net sales of EXECUTIVE SUMMARY
A. Introduction
Overview.Revlimid Bristol-Myersof $12.8 billion, Eliquis of $10.8 billion and Opdivo of $7.5 billion.
Net sales of Orencia of $3.3 billion, Pomalyst of $3.3 billion and Yervoy of $2.0 billion.
Net sales of new launch portfolio of $1.1 billion.
Achieved Positive Clinical and Regulatory Achievements
We leveraged our leading science and clinical development capabilities to achieve significant milestones:
| ○ | We received eight FDA approvals and several other major market approvals, including: (i) first market approvals for two innovative cell therapies (A) Breyanzi for relapsed or refractory (R/R) large B-cell lymphoma in U.S. and (B) Abecma forrelapsed or refractory multiple myelomain U.S. and EU; (ii) Opdivo for first line renal cancer in U.S., EU, and Japan; (iii) Zeposia for ulcerative colitis in U.S. and EU; (iv) Opdivo for first line gastric cancer in U.S., EU, Japan, and China; (v) Opdivo for completely resected esophageal or gastroesophageal junction cancer in U.S. and EU. |
| ○ | We completed high value submissions, including: (i) Opdivo for adjuvant bladder cancer; (ii) mavacamten for obstructive hypertrophic cardiomyopathy; (iii) deucravacitinib for psoriasis, and (iv) relatlimab + nivolumab in melanoma. |
In addition to the two successful launches of our cell therapy assets this year, we have three new medicines (relatlimab; deucravacitinib; mavacamten) that have potential to launch in 2022, and most of these have important expansion opportunities beyond their initial indication.
Finally, we see continued momentum in the clinical portfolio through eight pivotal positive clinical trial readouts, including important expansion opportunities for Breyanzi (2L large B-cell lymphoma), Reblozyl (non-transfusion dependent beta-thalassemia) and Opdivo (neoadjuvant lung cancer).
Continued Strong Progress against Integration Milestones
We made strong progress with the integration of Celgene and MyoKardia, achieving approximately $2.7 billion in synergies to date ahead of our $3.1 billion target by the end of 2022.
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Commitment to Diversity & Inclusion As a company, we are building on a strong foundation in diversity and inclusion. We are accelerating the progress we have made through this journey to better serve our patients. In August 2020, the company and the Bristol Myers Squibb Foundation announced each would invest $150 million over the next five years as part of a series of commitments around health equity, diversity and inclusion currently focused on five key priorities: 1) addressing health disparities, 2) increasing clinical trial diversity, 3) expanding our supplier diversity program, 4) expanding our U.S. & Puerto Rico Employee Giving Program and 5) increasing our workforce diversity at the executive levels.
In 2021, we issued our first Diversity, Equity and Inclusion report, highlighting our transformative business model, our EEO-1 data, goals for our people and culture, including our commitment to achieve gender parity at the executive level globally and double executive representation of both Black/African American and Hispanic/Latino employees in the U.S. by the end of 2022. We made significant progress on these commitments in 2021. We entered a partnership with historically black colleges and universities to create and sustain a diverse pipeline of talent. We awarded $11.1 million in corporate giving grants to 56 non-profit organizations in the U.S. to improve access to high quality care and increase disease awareness and education for medically underserved communities. In the near-term, we will locate 25 percent of U.S. clinical research sites in highly diverse communities in 2022. Additionally, the Bristol Myers Squibb Foundation selected 52 physicians to begin training in its Diversity in Clinical Trials Career Development Program in partnership with
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the National Medical Fellowships. More than a thousand of our colleagues in the U.S. and Puerto Rico have donated to social justice organizations fighting disparities and discrimination, matched 2-1 by our employee giving program. We are proud of the journey and progress made to date, but we are conscious that we still have more to do and are committed to further transparency and sharing of our progress.
Company Response to COVID-19 Our response to the COVID-19 pandemic was, and is, primarily focused on protecting the health, well-being and safety of our workforce, ensuring the continued supply of and access to our medicines for our patients, and maintaining the long-term and sustainable competitive position of the company. This focus also accelerated the cohesion of the culture we are building for the combined company and refined our emphasis on employee engagement throughout 2021. We are also supporting research efforts to accelerate the development, manufacturing, and delivery of diagnostics and treatments for COVID-19, and contributing to relief efforts across the globe.
| | Patients | | | • Expanded patient support programs to help eligible unemployed patients in the U.S.
• Expanded access to free BMS medicines, including some of our most widely prescribed products & those prescribed via telehealth services | | | • Ensured no interruption in supplying medicines to patients | |
| | People | | | • Health & Safety remains top priority.
• As of January 5, 2022, approximately 99% of our employees in the U.S. and Puerto Rico are vaccinated against COVID-19. Vaccinations are generally required for the majority of our colleagues in these regions. Requests for medical or religious accommodations are also considered individually.
• Ex-U.S., local regulations and conditions may limit or restrict vaccine mandates; we are committed to implementing similar requirements wherever possible. | | | • As we return additional workers to our sites, we will continue to access the need to require weekly asymptomatic testing, mask wearing, and physical distancing of all colleagues onsite at our facilities in the U.S. and Puerto Rico. We also keep our workplace safe by conducting regular deep cleaning of our sites.
• Essential workers provided with testing, protective equipment and flexibility to address individual needs, with strong focus on well-being
• We empower our people with an inclusive and energizing work environment tailored to our values and focusing on well-being and resiliency. | |
| | Business | | | COVID-19 Prevention & Treatment:
• We entered into a global licensing agreement with Rockefeller University to develop an antibody combo for therapy or prevention of COVID-19. However, after the Phase 2 data showed a lack of significantly different efficacy versus placebo, we made the decision to end development of the therapy and are in the process of working with Rockefeller University to wind down the program.
• Working with several cross-industry groups & partnerships (e.g., Bill & Melinda Gates Foundation) to accelerate the development, manufacturing, and delivery of diagnostics and treatments for COVID-19.
• We have identified more than 1,000 proprietary compounds with high-quality assays and made them available to collaborators to screen for possible molecules to treat COVID-19. | | | Development & Supply of our Medicines:
• No critical supply chain impacts; all sites and distribution networks remain operational.
Clinical Trials:
• Clinical trial recruitment showing sustained recovery
• We are working with health authorities and investigators to protect our trial participants and personnel at BMS and our clinical trial sites, while ensuring regulatory compliance and the integrity of our science.
• We have provided clinical trial investigators with overarching principles and guidance regarding the conduct of BMS clinical trials worldwide in light of COVID-19, and are taking into account guidance from health authorities, where applicable. | |
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We believe that our approximately 30,000 employees represent the best and the brightest people in the industry. They are the foundation of our success and our competitive advantage. They work together to bring our Mission to life to help patients prevail over serious diseases.
Our people are the heart and soul of our globally unified culture. Our People Strategy—inspired individuals and engaged teams working together for our patients and our communities—helps us determine where and how to invest in our people.
The Committee continues to recognizebe very focused on the topic of human capital management, particularly during this unprecedented time of a global pandemic. This is a topic that is regularly discussed at our Committee and Board meetings.
Gender Parity
We are working together to build a diverse and inclusive organization. We are committed to the advancement of women in leadership positions. We have taken significant steps inside our organization toward transforming our inclusive culture — efforts that have already made measurable change across our workforce include reaching gender parity in 2015. Building on this progress, we aim to achieve gender parity at the executive level globally by year-end 2022.
Increased Representation
As highlighted in our inaugural Global Diversity, Equity and Inclusion Report, we have committed to double executive representation of both Black/African American and Hispanic/Latino employees in the U.S. by the end of 2022.
Employee Engagement
Our eight People and Business Resource Groups (PBRGs) represent a key strategy we use to support the business objectives, career advancement and development needs of our employees. Each PBRG is focused on a specific element of diversity. Our more than 15,000 PBRG members have applied their perspectives and experiences to drive our patient-focused mission within BMS and in the communities where we live and work.
Our PBRGs are sponsored by members of our leadership team and are led by a full-time dedicated leader who reports directly to a member of our leadership team. Our PBRGs include the Black Organization for Leadership and Development, the Bristol Myers Squibb Network of Women, the Cultivating Leadership and Innovation for Millennials and Beyond, the Disability Advancement Workplace Network, the PRIDE Alliance, the Organization for Latino Achievement, the Pan Asian Network and the Veterans Community Network.
We also routinely conduct confidential employee engagement surveys of our global workforce, which provide feedback on employee satisfaction and engagement and cover a variety of topics such as company culture and values, execution of our strategy, diversity and inclusion and individual development, among others. Survey results are reviewed by our executive officers and Board of Directors, who analyze areas of progress or opportunity both at a company level as well as at a function level. Individual managers use survey results to implement actions and activities intended to increase the well-being of our employees. We believe that our employee engagement initiatives, competitive pay and benefit programs and career growth and development opportunities help increase employee satisfaction and tenure and reduce voluntary turnover. The average global tenure of our employees is approximately eight years.
Employee Health
We have prioritized the health and safety of our employees during the COVID-19 pandemic, while continuing the supply of medicines to our patients and driving strong business performance. As a science-based company, we have a social responsibility to help reduce the spread of the pandemic. As noted above, vaccinations are required for generally all of our employees in the U.S. and Puerto Rico subject to any local regulation which limit or restrict vaccine mandates, and we are encouraged that as of January 5, 2022, approximately 99% of our employees in these regions are vaccinated against COVID-19. We are committed to implementing similar requirements in other markets wherever possible.
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Total Rewards
We provide highly competitive benefits, compensation and work life offerings that reflect a total rewards strategy to enable and empower the energy and talent of our workforce to deliver on our business strategy and transform patients' lives through science. Through our competitive pay and benefit program, we aim to attract, retain and incentivize diverse talented employees and executives capable of thriving and leading our business in a highly complex and competitive environment. Our benefits plans and programs (which necessarily vary by country) include in the U.S. choices for health coverage, including medical, pharmacy, dental, vision, pretax savings and spending accounts; financial protections through life insurance, supplemental health insurance and personal coverage and protections; and financial savings and well-being through a highly competitive 401(k) savings plan and financial well-being services. Similarly, our U.S. work life offerings encourage growth, well-being and recognition through tuition reimbursement, our “Living Life Better” well-being platform, our “Bravo” global recognition program (which encourages team, peer to peer and individual recognition aligned to our values), onsite fitness centers in select locations and employee assistance programs. We also provide support for welcoming and nurturing family members through paid parental leave to care for a new child, bridge back parent leave to ease transition of new parents back into work, adoption/surrogacy reimbursement, fertility/infertility benefits, support for traveling mothers and paid family care leave. We assist employees in managing life during the workday and beyond through child, elder and pet care resources, and commuter accounts and paid sick time; and provide our employees with opportunities to recharge and give back to our communities through vacation, holidays and annual paid volunteer days, paid bereavement leave, paid military leave and paid military family care leave.
In 2021, we reached out to more than 50 of our top shareholders, representing roughly 49% of our total shares outstanding. As in previous years, we engaged on many important topics related to our executive compensation and corporate governance programs, including board composition and leadership, company strategy and execution, risk oversight, and board and company-wide diversity, the inclusion of ESG priorities in our incentive programs and other
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sustainability and social responsibility topics. We also engaged on our ongoing response to the COVID-19 pandemic. The feedback we received from shareholders was generally positive and supportive of our governance practices and our compensation program. Our 2021 say-on-pay proposal was approved by 91% of our shareholders, confirming continued support for our executive compensation program.
We used the feedback from these engagement conversations as vital input into Committee discussions. The Committee remains committed to ongoing shareholder engagement and they will continue to actively consider shareholder feedback as it evaluates and adjusts our executive compensation program in the future.
Executive Compensation Program Overview Highlights of 2021 Compensation Program
Our 2021 compensation program remained focused on financial and pipeline growth, creating long-term value and the successful completion of integrating the Celgene business. The 2021 design included core financial, operational and Key Integration metrics, as well as a pipeline metric that represents the Committee’s ongoing commitment to creating a balanced approach to metrics and encouraging thoughtful, enterprise focus and long-term decision-making.
As outlined below, the annual bonus for employees at the Vice President level and above included Key Integration metrics, including human capital management and synergy realization factors, in addition to financial, operational and individual goals.
In addition to our financial metrics and Key Integration metrics, our pipeline metric continues to play a critical role in our annual incentive plan. Solidifying the direct line of sight into tangible pipeline objectives aligns our executives’ interests with our shareholders’ interests.
2021 Design Supports Successful Completion of Celgene Integration and Execution of Our Core Strategy:
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Looking Forward: 2022 Compensation Program
2022 marks a critical period as we build on the transformational Celgene transaction and focus on our long-term strategic priority of revenue renewal through the remainder of the decade. The CMDC reviewed our program in light of our strategic priorities to ensure alignment. As a result, 15% of annual incentives for 2022 are now based on achieving revenue goals for our new product portfolio, and in combination with our total revenue goals, revenue goals now account for a total of 35% of the annual incentive plan. Additionally, for the long-term incentive plan, the revenue metric will increase from 33% to 40% for performance stock units.
To demonstrate the critical role of our ESG commitments in our company strategy, and following thoughtful discussions with the CMDC, our Board, management and shareholders, we have shifted focus from Key Integration metrics to a balanced ESG Scorecard measuring achievement against sustainability and social goals, which reflects 10% of the annual incentive plan for 2022. Synergy achievement will continue to be included in individual performance assessments and was removed from the annual incentive plan as a result of our strategic shift from integration to growth.
In support of our compensation philosophy to align executive compensation to shareholder value by providing compensation that is at risk based on share price performance, the threshold and maximum payouts for market share units have been increased from 60% to 80% and 200% to 225%, respectively.
2022 Design Supports Revenue Renewal and Execution of Our Core Strategy:
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Executive Compensation Philosophy and Principles At Bristol Myers Squibb, the cornerstone of our compensation philosophy and program structure is aligning pay to the achievement of both our short-term and long-term goals, engagement of our employees, the achievement of our
missionMission and the delivery of value to our
shareholders is a cornerstone of our compensation philosophy and program structure. In 2017, we met or exceeded our financial and operational goals in key areas, including continued growth across our core prioritized brands, additional clinical and regulatory achievements, the evolution of our operating model and maintaining a disciplined approach to capital allocation, with an emphasis on business development, dividends and share repurchase.shareholders.
| | | | |
 | | Received strong shareholder support for executive compensation with 96% in favor of our 2017 "Say on Pay" vote |
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|
Maintained strong execution across the company in 2017 |
| | § | | We achieved significant growth across our prioritized brands, led by our two largest brands,Opdivo andEliquis, which had sales growth of 31% and 46%, respectively |
| | § | | Eliquis became the number one novel oral anticoagulant in total prescriptions in the U.S. and in several countries around the world |
| | § | | Continued delivery of transformational medicines, with two trials stopped early for overall survival and label expansion in three new indications forOpdivo |
| | § | | Maintained a disciplined approach to expense management throughout 2017 |
| | § | | Advanced early pipeline across immuno-oncology, fibrosis, and immunoscience |
|
|
Continued to advance our long-term business strategy, focusing on key priorities |
| | § | | Strong foundation for growth in 2018 and beyond |
| | § | | Eliquispoised for significant growth |
| | § | | Multiple $1B+ potential growth opportunities forOpdivo, including in lung, renal, hepatocellular and gastric cancers |
| | § | | Innovative diversified portfolio both in immuno-oncology and other core therapeutic areas |
| | § | | Disciplined approach to capital allocation—returning capital to shareholders in dividends, which increased for the ninth year in a row, and share repurchases; with business development core to our strategy |
| | § | | We continued executing on our operating model evolution; focusing commercial and R&D resources on prioritized brands |
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|
Key 2017 performance highlights |
| | § | | Total revenues increased by 7% |
| | § | | GAAP EPS decreased by 77% primarily due to an approximately $3B charge related to tax reform; and non-GAAP EPS increased by 6% |
| | § | | Our commitment to strong commercial and operational execution as well as continued investment in R&D supports the right framework for delivering value to shareholders over the long-term, as indicated by our 115% five-year TSR, which out-performed both our peer group and the S&P's 500 Index |
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Our Compensation & Management Development Committee's (the "Committee") ongoing review of our business strategy and our extensive shareholder engagement efforts have allowed our executive compensation program to maintain close alignment with our strategic focus and the perspectives of our shareholders. This executive summary includes an overview of the key components of our executive compensation program and recent changes that continue to support our company's evolution to a diversified specialty biopharmaceutical company.
B. Expanded Shareholder Engagement
In 2017, we expanded our shareholder outreach, reaching out to over 50 of our top shareholders, representing nearly 50% of our shares outstanding. We continued to engage with our investors on our executive compensation program, including disclosure trends and feedback on the structural changes to the compensation program that became effective in 2016, as well as other corporate governance topics covering, among other things, board composition, tenure, board assessment, sustainability and risk oversight.
The feedback received from shareholders was generally positive and was brought to the Committee and Board for discussion. We are committed to ongoing shareholder engagement and consideration of feedback as we continually evaluate our executive compensation program.
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C. 2017 Executive Compensation Program at a Glance
Our compensation program design reflects our compensation philosophy and aligns well with our strategy, market practice and our shareholders' interests.
D. Our Company Performance in 2017 and Advancement of our Long-term Business Strategy
As a diversified specialty biopharmaceutical company, our strategy is to combine the resources, scale and capability of a pharmaceutical company with the speed and focus on innovation of the biotech industry. Our four strategic priorities are to drive business performance, continue to build a leading franchise in immuno-oncology, maintain a diversified portfolio both in immuno-oncology and other core therapeutic areas, and continue our disciplined approach to capital allocation, including establishing partnerships, collaborations and in-licensing or acquiring investigational compounds and innovative delivery systems as an essential component of successfully delivering transformational medicines to patients.
Building on this strategic foundation, our management's execution of our strategic priorities resulted in continued profitable growth in 2017 driven by strong performance of our prioritized brands as shown below, a disciplined approach to capital allocation and expense management, additional clinical and regulatory achievements, particularly in immuno-oncology, important business development activities that supplement our innovative pipeline, the continued evolution of our operating model, and a strong balance sheet. Looking ahead, we will continue to implement our biopharma strategy by driving the growth of key brands, executing product launches, investing in our diverse and innovative pipeline, aided by strategic business development, focusing on prioritized markets, increasing investments in our biologics manufacturing capabilities and maintaining a culture of continuous improvement with high integrity and ethics. For a discussion of our Board's involvement in the strategic planning process, please see "Board's Role in Strategic Planning and Risk Oversight" beginning on page 19.
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Total Revenues of Prioritized Brands (Dollars in Millions)
§ Management's execution of our strategic priorities in 2017 resulted in increased revenues of 7%.
§ We achieved strong execution across marketed portfolio demonstrated by total sales growth of prioritized brands of 27%.
§ We continued to build off our success withOpdivo, receiving additional approvals and other regulatory milestones and strong commercial execution in 2017, continuing to hold strong market share and reaching$4.9B in annualized sales in 2017, having only been on the market for three years.
§ Outside of immuno-oncology, our cardiovascular productEliquisgrew by 46% to reach approximately$4.9B in global net sales, and became the number one novel oral anticoagulant in total prescriptions in the U.S. and in several countries around the world.
§ In addition,OrenciaandSprycelreached approximately$2.5B and$2.0B in net sales, respectively.
§ We continued to advance a diversified pipeline of innovative medicines, including next-generation immuno-oncology assets as well as assets in fibrosis, heart failure and immunoscience, which have the potential to be first-in-class or best-in-class.
§ We executed important business development transactions both divesting non-core assets and supplementing our innovative pipeline, in particular our acquisition of IFM Therapeutics and licensing of Ono's EP4 programs, which broadens the company's immuno-oncology pipeline, and over 45 collaboration and license agreements, including with companies such as Halozyme, which provides the potential for new delivery mechanisms of our immuno-oncology medicines to patients, and Foundational Medicines and Qiagen, which enhance our capabilities in translational medicine.
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E. 2017 Pay Decisions Align with Company Performance and Ongoing Evolution
Key Considerations
Each year, when evaluating company and senior management performance and making its compensationpay decisions, the Committee considers our compensation philosophy and program structure, which underscores competitive compensation and pay for performance, with the goal of striking the appropriate balance betweenamong (i) directly aligning executives'executives’ compensation with the fulfillment of our Mission and the delivery of shareholder value, (ii) making a substantial portion of our executives'executives’ compensation variable and at risk based on operational, financial, strategic and share price performance, and (iii) attracting, retaining and engaging executives who are capable of leading our business in a highly competitive, complex, and dynamic business environment.
For 2017, after
After reviewing
all details of our financial and operational performance, our share price performance, and the individual performance of our executives,
ourthe Committee determined that the compensation of our executives under the program design continues to be appropriate.
The Committee looked at how all the elements of our compensation program design work together, noting the balance inherent in the 2016 re-design between short-term and long-term compensation and performance; top-line and bottom-line results; absolute and relative factors; and internal and market-based performance metrics. In evaluating 2017 performance, the Committee determined that the compensation of our executives appropriately reflects:
➢ourfinancial and operational performance,➢theadvancement of the pipeline in 2017,➢evolution of our operating model, and➢the Committee's holistic assessment of theindividual performance of our executives.
We believe that our core strategy will continue to create sustainable long-term value for shareholders, as evidenced by our 115% five-year total shareholder return that exceeds our peer group TSR over the same time period.
Other Key Factors Considered
As noted, our compensation program is guided by our compensation philosophy and principles and this is illustrated through the following elements of our program:
•Balance of incentives created by the 2016 compensation re-design, which places greater emphasis on long-term performance.
•Long-term equity incentive program significantly aligns executive compensation with shareholder value over the relevant period:
oLong-term compensation emphasized in our overall executive pay mix (i.e., over 60% for our NEOs);
o34% of the 2017 PSU grant is tied to 3-year TSR vs. our peer group; and
oMSUs are also highly leveraged relative to changes in our share price.
•Robust share ownership and retention guidelines further the alignment of management and shareholders.
F. 2017 Annual Incentive Program Results & Incentive Plan Target Setting Considerations
Annual Incentive Program Results
Annual awards are determined based on a Company Performance Factor, which is calculated based on pre-defined financial and pipeline goals, and an Individual Performance Factor, which is calculated based on individual achievements against pre-defined strategic and operational goals. When determining the individual component of our annual incentive awards, the Committee considers each executive's contributions to the company's strategic achievements and financial and operational performance. In addition, the Committee considers how each executive demonstrates the Company's Behaviors, including among others, accountability, and his or her contributions to our company's culture of innovation, business integrity, ethics and compliance.
Target Setting Considerations
At the beginning of each year, the Committee undertakes an incentive target setting process to establish targets that it believes will motivate our executives appropriately to deliver the performance that drives shareholder value creation in both the short and longer term.
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Taking into consideration, among other things, budget, operational priorities, long-term strategic plans, historical performance, product pipeline and other external factors, as well as the evolution of our business and product portfolio in the context of our transition to a diversified specialty biopharmaceutical company, the Committee set 2017 incentive targets in consideration of anticipated performance, in line with guidance provided to the market in early 2017 and in line with pipeline expectations. Later in the year, after the Committee set the targets, we met, or exceeded financial and operational goals in certain key areas, including growth of both revenues and non-GAAP earnings, earlier-than-expected regulatory approvals, important business development activities, and disciplined expense management, resulting in a revision of guidance to the market for the year.
Further detail on annual target setting considerations for each of our NEOs is included beginning on page 41, under "Financial and Pipeline Metric Target Setting Considerations".
Year over Year Comparison of Financial and Pipeline Achievements for Company Performance Factor
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 2016 | | | | | 2017 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Performance Measure | | | | | Target | | | | | Actual | | | |
| % of
Target
|
| | | | Target | | | | | Actual | | | |
| % of
Target
|
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Non-GAAP Diluted Earnings Per Share, Net of Share Repurchase(1)(2) | | | |
$ |
2.35 | | | |
$ |
2.83 | | | |
|
120.4 |
% | | |
$ |
2.76 | | | |
$ |
2.94 | | | |
|
106.5 |
% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total Revenues, Net of Foreign Exchange ($=MM)(2) | | | |
$ |
17,596 | | | |
$ |
19,494 | | | |
|
110.8 |
% | | |
$ |
19,991 | | | |
$ |
20,683 | | | |
|
103.5 |
% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Pipeline Score | | | |
|
3 | | | |
|
2 | | | |
|
66.7 |
% | | |
|
3 | | | |
|
3.5 | | | |
|
116.7 |
% | |
(1)Consistent with the company's current policies and procedures, and shareholder feedback, the impact of share repurchases has been excluded from both target and achieved results.(2)Consistent with the company's past practice, non-GAAP diluted earnings per share, net of share repurchases and total revenues, net of foreign exchange, were each adjusted $0.03 and $65 million, respectively, due to an unanticipated favorable budget variance forSprycel performance in Europe. The Committee determined that it was appropriate to exclude the impact of the unanticipated favorable budget variance because this event favorably impacted performance in an amount that was not determinable when the target was set in the first quarter of 2017.
The Individual Performance Factors applied to our NEOs for 2017 ranged between 115% and 135%. Disclosure of our NEOs individual performance goals and achievements are detailed below beginning on page 42, under "2017 Individual Performance Assessment". Further detail on annual incentive awards for each of our NEOs is included on page 44, under "2017 Annual Incentive Awards".
Our Compensation Governance Reflects Market Best Practices
We maintain a number of compensation governance best practices which support our overarching compensation philosophy and are fully aligned with our compensation principles, as discussed in the following section. Our compensation practices also align with input we have received from shareholders.
| | | | | | | | | | | | |
| | | In 2021, the Committee reviewed how all the elements of our compensation program design worked together, focusing on the balance between short-term and long-term compensation and performance, top-line and bottom-line results, absolute and relative factors, and internal and market-based performance metrics. In evaluating 2021 performance, the Committee determined that the compensation of our executives appropriately reflects:
• our financial and operational results;
• the execution and advancement of the company’s long-term strategy in 2021 despite the ongoing COVID-19 pandemic;
• the Committee’s holistic assessment of the individual performance of our executives; and
• the execution of key regulatory milestones to renew our portfolio.
We believe that the execution of our strategy will continue to create sustainable long-term value for shareholders. | | |
Our Executive Compensation Philosophy Focuses on Two Core Elements:
| | | | | | | | |
| | What We Do: | | | | What We Don't Do: | | |
| | | | | | Competitive
Compensation | | | | • We operate in a highly complex and competitive business environment that requires that we attract, retain and engage executives capable of leading our business.
• By providing compensation that is competitive with our peer companies, we reduce the risk that our competitors can successfully recruit our executives. We are also able to maintain the highest ongoing levels of engagement of these talented executives to facilitate and sustain high performance. | | |
| | ü
| | 100% performance-based annual and long-term incentives | | | |  | | Generally no perquisites to our Named Executive Officers | | |
| | | | Pay for
Performance | | | | | | | • We structure our compensation program to closely align the interests of our executives with those of our shareholders.
• We believe that an executive’s compensation should be directly tied to helping us achieve our mission and deliver value to our shareholders. Therefore, a substantial portion of our executives’ compensation is variable and at risk based on operational, financial, strategic and share price performance. | |
| | ü
| | Caps on the payouts under our annual and long-term incentive award programs | | | | | | Prohibition on speculative and hedging transactions | | |
| | | | | | | | | | | | |
| | ü
| | Robust share ownership and share retention guidelines | | | | | | No employment contracts with our Named Executive Officers | | |
| | | | | | | | | | | | |
| | ü
| | Robust recoupment and clawback policies | | | | | | Prohibition on re-pricing or backdating of equity awards | | |
| | | | | | | | | | | | |
| | ü
| | Proactive shareholder engagement | | | | | | No guaranteed incentives with our Named Executive Officers | | |
| | | | | | | | | | | | |
| | ü
| | "Double-trigger" change-in-control agreements | | | | | | No tax gross-ups | | |
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Executive Compensation Philosophy and Principles
Our executive compensation philosophy focuses on two core elements:
Based on this philosophy, our compensation program is designed with the following principles in mind:
üto pay our employees equitably based on the work they do, the capabilities and experience they possess, and the performance and behaviors they demonstrate (including passion, innovation, speed and accountability);
üto promote a non-discriminatory and inclusive work environment that enables us to benefit from and to use as a competitive advantage the diversity of thought that comes with a diverse and inclusive workforce;
üto motivate our executives and all our employees to deliver high performance with the highest integrity; and
üto implement best practices in compensation governance, including risk management and promotion of effective corporate policies.
✔ | | | to pay our employees equitably based on the work they do, the capabilities and experience they possess, and the performance and values they demonstrate (including, for 2021, integrity, passion, innovation, accountability, urgency and inclusion); |
✔ | | | to promote a diverse and inclusive work environment that enables us to benefit from and to use as a competitive advantage the diversity of thought that comes with a diverse and inclusive workforce; |
✔ | | | to motivate our executives and all our employees to deliver high performance with the highest integrity; and |
✔ | | | to implement best practices in compensation governance, including risk management and promotion of effective corporate policies. |
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Benchmarking Analysis and
Compensation Peer
GroupGroups
In general, our executive compensation program seeks to provide total direct compensation at the median of our primary peer group (as defined below) when targeted levels of performance are achieved. In any given year, however,
we may target total direct compensation for a particular executive
may be above or below the median of our primary peer group due to multiple
factors. These factors
including competencies,include qualifications, experience, responsibilities, contribution, individual performance, role criticality and/or
potential. We may also target total direct compensation above the median of our primary peer group to attractpotential as well as attracting and
retainretaining talent within the
highly competitive biopharmaceutical
industry marketplace.industry. We define total direct compensation as base salary plus target annual incentive award plus the
grant date fair value of annual long-term equity incentive
awards on the date of grant. Paying atawards.
Providing competitive
levelspay when targeted levels of performance are achieved allows us to attract and retain the talent we need to continue driving performance, while enabling us to maintain a competitive cost base with respect to compensation expense.
The Committee's independent compensation consultant annually conducts and shares with the Committee a review of the compensation for our Named Executive Officers, including compensation information compiled from publicly filed disclosures of our primary and extended peer groups. Pay levels of our peers, among other factors, are used as a reference point among other factors, when determining individual pay decisions (i.e., base salary levels, the size of salary adjustments, if any, target annual incentive levels and long-term equity incentive award size). For 2021, the independent compensation consultant was Compensation Advisory Partners, LLC (“CAP”).
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20172021 Peer Groups
We regularly monitor the composition of our peer groups and make changes when appropriate.
The Committee, with the help of CAP, reviewed our peer groups for 2021 and determined that all of the peer companies continued to be appropriate and that we would not make any changes to the peer groups. Our peer groups in
2017 remained unchanged and2021 consisted of the following companies:
| | | | Primary Peer Group | | | | |
| | PrimaryExtended Peer Group
| | Extended Peer Group(1)
| |
|
|---|
| | AbbVie Inc. | | Gilead Sciences Inc. | | AstraZeneca PLC | | |
| | Amgen Inc. | | Johnson & Johnson | | GlaxoSmithKline PLC | | |
| | Biogen Inc. | | Merck & Co. | | Roche Holding AG | | |
| | Celgene Corporation | | Pfizer, Inc. | | Novartis AG | | |
| | Eli Lilly and Company | | | | Sanofi | (1) | |
| | | | AbbVie Inc. | | | Johnson & Johnson | | | AstraZeneca PLC | |
| | Amgen Inc. | | | Merck & Co. | | | GlaxoSmithKline PLC | |
| | Biogen Inc. | | | Pfizer, Inc. | | | Roche Holding AG | |
| | Eli Lilly and Company | | | | | | Novartis AG | |
| | Gilead Sciences Inc. | | | | | | Sanofi | |
1)
| Our extended peer group includes the primary peer group plus these five companies based outside the U.S. |
(1) Our extended peer group includes the primary peer group plus these five companies based outside the U.S.
Primary Peer Group: The Committee believes the companies included in our 20172021 primary peer group are appropriate given the unique nature of the biopharmaceutical industry. These companies represent our primary competitors for executive talent and operate in a similarly complex regulatory and research drivenresearch-driven environment.
In determining our primary peer group, we believe emphasis should be placed on whether a company competes directly with us for the specialized talent necessary to further drive our success
as a diversified specialtyin creating the leading global biopharmaceutical company. We also consider company size in determining our peer group.
In particular, BMS’ revenue approximates the median 2020 revenue of our primary peer group. The
companies inmedian revenue of our primary peer group
all had annual revenues of at least $9 billion. BMS was
slightly below the 25th percentile$33.7 billion in
revenue and between the 25th percentile and the median in market capitalization amongst our primary peer group.2020.
Extended Peer Group: We also review an extended peer group, which is comprised ofcomprises the nineeight companies in our primary peer group plus five companies based outside the U.S. This extended peer group serves as an additional reference point for compensation practices, including an understanding of the competitive pay environment as it relates to the global nature of both our business and the competition for talent. Our extended peer group is also used to determine the relative Total Shareholder Return (“TSR”) component of our performance share unit awards.
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20172021 Compensation Program – Named Executive Officers
2021 Target Compensation Benchmarks
Target
2021 was Dr. Caforio’s 6th year as our CEO. His 2021 target compensation
for Dr. Caforio was
at approximatelybetween the median
and the 75th percentile of Chief Executive Officers within our
current proxyprimary peer group. The Committee believes Dr. Caforio's compensation package positions him appropriately among his peers when
takingconsidering multiple
factors into consideration.factors. On average, our other Named Executive Officers were
also at approximatelybetween the median
and the 75th percentile of our
current proxyprimary peer group, with
some variation by position.
Components of Our 2017 Compensation Program
Core components of our 2017 executive compensation program:
§Base Salary
§Annual Incentive Award
§Long-Term Equity Incentives, comprised of:–Performance Share Units–Market Share Units
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The Committee believes this structure aligns with a continued commitment to emphasizing variable, or "at risk," compensation for our Named Executive Officers. The following charts provide an overview of the 20172021 executive compensation components for the CEO and other NEOs, as originally granted, and highlights the percentage of target compensation that is variable and at risk.
| | This target pay mix supports the core elements of our executive compensation philosophy by emphasizing long-term, stock-based incentives while providing competitive annual cash components, thus aligning our executive compensation program with our business strategy.
The following sections discuss the primary components of our executive compensation program and provide detail on how specific pay decisions were made for each NEO in 2021. | |
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Components of
our executive compensation philosophy by emphasizing long-term, stock based incentives while providing competitive annual cash components, aligning our executive compensation program with our business strategy. The following sections discuss the primary components of our executive compensation program and provide detail on how specific pay decisions were made for each NEO in 2017. See "Compensation of our New Chief Scientific Officer" beginning on page 48 for a discussion on Dr. Thomas Lynch, Jr.'s compensation.
Our 2021 Compensation Program
| | Components: | | | Purpose: | |
| | Base Salary | | | Fixed component of pay that is reflective of the qualifications, experience and role impact; is aligned with comparable positions within our peer group | |
| | Annual Incentive Plan | | | Rewards annual company performance on key financial and strategic priorities, individual contributions and demonstration of our Values | |
| | Long-Term Incentive Program, comprising:
– Performance Share Units
– Market Share Units | | | Aligns executives’ interest with those of our shareholders and focuses executives on the execution of our long-term strategy; awards are 100% performance-based | |
Base salaries are used to help us attract talent in a highly competitive labor market. The salaries of our executives are primarily
establishedbased on the
basissalary levels of
comparable positions within our primary peer group as well as the specialized qualifications, experience and criticality of the individual executive and/or his or her
role and the pay levels of comparable positions within our primary peer group.role. Salary increases for our executives are
additionally determined based on both the performance of an individual and the size of our annual
salary increase budget in a given
year, which is based in part on an assessment of market movement related to salary budgets for our peer companies and broader general industry trends. Therefore, we typically set our annual salary increase budgets based on the median of such forecasts.year. There may be adjustments to salary from time to time to recognize, among other things, when an executive assumes significant increases in responsibility and/or is promoted, and to reflect competitive pay based on market data for individual executive roles.
In
2017,2021, in accordance with our
company widecompany-wide merit review process, employees, including the Named Executive Officers, were eligible for a merit increase provided
that their performance fully met or exceeded expectations on both Results and
Behaviors.Values (as defined below). Employees
ratedwho are determined to be below the
fully-performingfully performing level typically receive either a reduced merit increase or no salary increase depending on the extent to which they
were ratedare below the
fully-performingfully performing level.
In addition, the position of total compensation relative to market is also considered in determining whether to provide a base salary increase to each executive. Effective April 1,
2017,2021, all NEOs except for Dr. Caforio received
an increase of 3.2%, Mr. Bancroft received an increase of 3%; and Ms. Leung received ana base salary increase of 3%.
Mr. GordonDr. Caforio’s base salary was aligned to market and as a result, the Committee determined that no increase would be provided for 2021. Dr. Boerner received a
5%3.9% base salary increase effective
April 1, 2017January 15, 2021 in recognition of the consolidation of the commercial business under his leadership, which now covers hematology and
a subsequent 5% salary increase effective April 20, 2017, to bring him closer to the median target pay comparedcell therapy in addition to his
peersexisting responsibility for the oncology, immunology and
reflective of his role expansion and increased responsibilities.cardiovascular therapeutic areas.
Annual Incentive
ProgramPlan
Our annual incentive
programplan is designed to reward performance that supports our business strategy
as a diversified specialtyof creating the leading biopharmaceutical company and our Mission to help patients prevail over serious diseases. The annual plan aligns with our business strategy and Mission by sharpening
management'smanagement’s focus on key financial and pipeline goals, as well as by rewarding individual performance (both Results and
Behaviors)Values), consistent with our pay-for-performance
philosophy.philosophy and our focus on not only the Results achieved but whether those results were achieved while demonstrating our BMS Values. Our executives are not only expected to demonstrate our BMS Values but they are also expected to be role models of those values for the broader organization.
Each NEO'sNEO’s target annual incentive is expressed as a percentage of base salary.salary, which is set at a level to ensure competitive total direct compensation. Annual incentive awards for each NEO are determined by evaluating both company performance (as measured by the Company Performance Factor) and individual performance (as measured by the Individual Performance Factor)Factor (“IPF”)). The maximum incentive opportunity for each NEO is 200% of target.
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The Company Performance Factor can range from 0% to 152%, based on financial achievements, Key Integration and pipeline results, and the Individual Performance FactorIPF can range from 0% to 165%160%, based on individual performance (both Results and Behaviors)Values), subject to a 200% of target maximum payout. The graphic below illustrates the calculation used to determine annual incentive plan awards.
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Annual Incentive Award Calculation for Named Executive Officers
| | Target Annual Bonus
(As percentage of NEO base salary) | | | X | | | Company Performance Factor
(Based on achievement of financial, Key Integration and pipeline metrics) | | | X | | | Individual Performance Factor
(Based on achievement of pre-defined objectives that align with strategic goals) | | | = | | | Annual Bonus | |
The target annual incentive for each NEO is expressed as a percentage of the executive’s base salary. If mid-year salary adjustments are made, the target annual incentive award will include the pro-rated impact of the adjustments.
Performance Metrics Underlying the Company Performance Factor
Our
20172021 annual incentive plan design has the following corporate-wide measures, which apply to all employees
eligible to participate inat the
annual incentive plan,level of Vice President and above, including our Named Executive
Officers:Officers.
| | | | 2021 Metric and Weighting | | | | |
| | 2017 Metric and Weighting
| | What It Is
| | | | | Why It'sIt’s Important
| |
| |
|---|
|
|
Earnings Per Share (EPS)
(50% (30%) |
|
| Non-GAAP Diluted EPS
(Net Income excluding specified items divided by outstanding shares of common stock)stock based on the budgeted weighted average share count) |
|
| A criticalmeasure of annual profitability aligning our employees'employees’ interests with those of our shareholders |
|
|
|
|
Total Revenues
(25%) |
|
| Total Revenues, netNet of foreign exchange
Foreign Exchange(Total (Total revenues minus reserves for returns, discounts, rebates and other adjustments) |
|
| A measure of topline growth that creates a foundation of long-term sustainable growth and competitive superiority |
|
|
| Pipeline
(25%) |
Pipeline
(25%) |
|
• Near-Term Value
(Submissions and approvals)
• Long-Term Growth Potential |
|
| Increases BMS-wide focus on delivery of our late-stage pipeline and continued development of a robust pipelinethrough both internal efforts and business development |
|
|
| | | | | Key Integration Metrics
(20%) | | | • Human Capital Management (50%)
(Retain and engage critical talent to support our strategy and deliver integration priorities)
• Synergies (50%)
(Reflects commitment to deliver cumulative transaction synergies associated with Celgene integration) | | | Used to encourage and reward our executives’ ongoing commitment to continue to successfully integrate the Celgene business and execute on our core strategy | |
Our pipeline metric highlights the importance of pipeline delivery to the near-term and long-term success of the company. This metric measures the sustainability and output of our R&D pipeline portfolio and is comprised of goals in two categories, Near-Term Value and Long-Term Growth Potential with a Qualitative
Overlay:Overlay on the entire metric:
Metric | | | What It Is | | | Why It’s Important | |
| | Near-Term Value
(50%) | | | | |
| | Metric
| | What It Is
| | Why It's Important
| |
|
|---|
|
|
Near-Term Value (50%) |
|
Regulatory submissions and approvals for new medicines and new indications and formulations of key marketed products in the U.S., EU, China and Japan |
|
| Recognizes delivery of the late-stage pipeline, which drives near-term value |
|
|
|
|
Long-Term Growth Potential (50%) |
|
| • Development CandidatesInvestigational new drug/clinical trial application approvals
• First in HumanEarly to late-stage development transition decisions
• Registrational Study Startsstudy patient enrollment and accruals for priority studies |
|
| Recognizes the progression, execution and successes of the R&D pipelineat various stages of clinical development, including internally and externally-sourcedexternally sourced compounds |
|
|
|
|
Qualitative Overlay |
|
| Reflects management's,management’s, the Science & Technology Committee's (S&T)Committee’s (“S&T Committee”) and the Committee'sCMDC’s holistic evaluation of our pipeline performance, including such considerations as the performance of high value assets and the integration of acquired assets, among other factors. |
|
|
In particular, this considers actions taken toward successful integration planning and execution. | | | | | | | | |
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Financial and Pipeline Metric Target Setting Considerations
At the beginning of each year, the Committee undertakes an incentive target setting process to establish targets that it believes will motivate our executives appropriately to deliver the high performance that drives shareholder value creation in both the
shortshort- and
longer term.long-term.
Financial and strategic performance targets are:
Predefined;
•Stretch goals that are aligned with earnings guidance;
•Tied to the key financial objectives of the company; and
•Aligned with industry benchmarks on speed of commercial launch and expected market adoption.
Pipeline performance targets are:
Set in collaboration with the Science and Technology Committee (the "SS&T Committee");
•Committee;Aligned with the company'scompany’s strategic plan and key value drivers;
•Aligned with industry benchmarks on typical clinical study duration and regulatory approval timelines;
•Separated into two performance categories, "Near-Term Value"“Near-Term Value” and "Long-Term“Long-Term Growth Potential"Potential”, subject to a qualitative overlay; and
•Reflective of annual milestones that link short-term outcomes to long-term strategic R&D priorities (milestones for
higher valuehigher-value assets are emphasized in goal setting to provide a framework that assesses not only quantity, but also quality and impact of milestones).
The S&T Committee also identifies those
highest valuehighest-value assets and the integration of acquired assets, among other factors, the importance of which will inform the application of a qualitative overlay.
In establishing targets and goals each year, the Committee considers budget, operational priorities, long-term strategic plans, historical performance, product pipeline and external factors, including external expectations, competitive developments, and the regulatory environment, among other things.
Threshold, target, and maximum performance goals are evaluated independently and are set to provide appropriate awards across a wide but reasonable set of performance outcomes.
The Committee set 2017 incentive targets in the first quarter of 2021 in consideration of anticipated performance, in line with guidance provided to the market in early 20172021 and in line with commercial and pipeline expectations. Later in the year, after the Committee set the targets, we met or exceeded financial and operational goals in certain key areas, including growth of both revenues and non-GAAP earnings, earlier-than-expectedpositive regulatory approvals,and development milestones, important business development activities, and disciplined expense management, resulting in a revision of guidance to the market for the year.
When establishing our financial targets and our revenue target in particular, we take into account expected product price increases. For a discussion on how we price our medicines, please see “Responsible Drug Pricing Strategy & Transparency” beginning on page 20. Key Integration Metrics
For the 2021 annual bonus plan, for our employees at the level of Vice President and above, including our NEOs, 20% of the company performance factor was based on Celgene-related Key Integration metrics similar to the structure used for 2020. These metrics were included to incentivize our executives to timely achieve important integration milestones. Similar to 2020, for 2021, these metrics were synergy capture and effective management of human capital.
For synergies, we set a 2021 target with reference to our most recently disclosed cumulative goal to achieve $3B total savings by the end of 2022. For human capital, in 2021, the Committee continued to focus on two attributes, retention and engagement. Our company engagement survey in December of 2019, shortly after closing the Celgene transaction, created a base line of employee engagement. Our retention performance was also assessed against observed company attrition levels.
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2017Annual Incentive Plan Program OutcomesThe payouts for the 2021 annual incentive plan were based on an executive’s target bonus amount, the Company Performance Factor,
Achievementsand the Individual Performance Factor for each executive.
Company performance results for the year led to a Company Performance Factor of 107.22% for 2021. The table below showscalculation was based on the following performance and resulting payout percentage of the performance measures used for our 2017 annual incentive plan:against goals:
| | Non-GAAP Diluted EPS(1) | | | $7.47 | | | $7.48 | | | 100.1% | | | 100.97% | |
| | Total Revenues, Net of Foreign Exchange ($=MM) | | | $45,776 | | | $46,171 | | | 100.9% | | | 104.50% | |
| | Pipeline Score | | | 3.0 | | | 3.5 | | | 116.7% | | | 113.04% | |
| | Key Integration Metric – Synergy | | | $2,250 | | | $2,607 | | | 115.9% | | | 152.17% | |
| | Key Integration Metric – Human Capital | | | 3.0 | | | 2.5 | | | 83.3% | | | 73.26% | |
| | Total | | | — | | | — | | | 104.3% | | | 107.22% | |
1)
| Consistent with the company’s current policies and procedures, non-GAAP diluted earnings per share is based on a constant share count and there were no adjustments made to our non-GAAP diluted EPS for 2021. |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | Performance Measure
| | Target
| | Actual
| | % of
Target
| | Resulting
Payout
Percentage
| |
|
|---|
| | Non-GAAP Diluted Earnings Per Share, Net of Share Repurchase(1)(2) | | $ | 2.76 | | $ | 2.94 | | 106.5% | | 119.00% | | |
| | Total Revenues, Net of Foreign Exchange ($=MM)(2) | | $ | 19,991 | | $ | 20,683 | | 103.5% | | 134.11% | | |
| | Pipeline Score | | | 3 | | | 3.5 | | 116.7% | | 113.04% | | |
| | Total | | | — | | | — | | 108.3% | | 121.29% | | |
| | | | | | | | | | | | | | | |
(1)Consistent with the company's current policies and procedures, and shareholder feedback, the impact of share repurchases has been excluded from both target and achieved results.(2)Consistent with the company's past practice, non-GAAP diluted earnings per share, net of share repurchases and total revenues, net of foreign exchange, were each adjusted $0.03 and $65 million, respectively, due to an unanticipated favorable budget variance forSprycel performance in Europe. The Committee determined that it was appropriate to exclude the impact of the unanticipated favorable budget variance because this event favorably impacted performance in an amount that was not determinable when the target was set in the first quarter of 2017.
For the pipeline metric, after the performance period is complete, the S&T Committee annually reviews our performance in the near-term value and long-term growth potential categories identified above, includingand holistically assesses the quality of the results to determine a qualitative assessment of results, and determines a
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performance score using a scale of one to five, with three being target. For 2017,2021, we significantly exceeded our target goal range for submissions and approvals under near-term value, and met the target goal range for long-term growth potential. We advanced the new launch portfolio through first approvals for our cell therapies (Breyanzi and Abecma) and achieved multiple high value milestones while still managing the business through the ongoing COVID-19 pandemic. The S&T Committee recommended,considered the specific milestones that were achieved and the Committee approved,those that were not achieved and determined, based on a holistic review, to recommend a pipeline score of 3.5, basedwhich the Committee approved. In making its recommendation, the S&T Committee took into account: (i) the degree of difficulty of achievement, (ii) the substantial overachievement on submissions and approvals, (iii) the circumstances, including the COVID-19 pandemic, and (iv) the impact the achievement of those goals has on the long- and short-term sustainability of our pipeline for our shareholders and our patients.
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The following
results:
results were among the inputs considered in determining the pipeline score of 3.5.
| | | | | • 48 regulatory submissions and approvals (target range 33-37).
• Achieved first-market approvals for two new molecular entities (NMEs) (Breyanzi, Abecma) and filed first indications for three additional NMEs (mavacamten, relatlimab and deucravacitinib) expecting 2022 approval.
• Expanded established portfolio through approvals for Opdivo (metastatic renal cell carcinoma (RCC) and gastric cancer (GC); adjuvant gastroesophageal junction cancer (GEJ) and bladder cancer); Zeposia (ulcerative colitis (UC)); and Orencia (Acute graft versus host disease (aGvHD)). | |
| | Long-Term Growth Potential | | | • 32 goals achieved (target range 26-33).
• Exceed Investigational New Drug/Clinical Trial Application (IND/CTA) approvals and met Go/No-Go Decision goals; progressed assets into the clinic across all therapeutic areas; and accessed external innovation through business development transactions in research (Molecular Templates, Exscientia 2.0, Schrodinger Degraders) and early development (Agenus TIGIT bispecific).
• Achieved priority study execution goal, managing continuing effects of the COVID-19 pandemic. | |
For the human capital metric, the Committee reviewed, among other items, our voluntary attrition management, employee engagement and experience, our retention of critical talent and management’s actions in holistically managing these items. For engagement, in 2021 we conducted quarterly confidential employee engagement surveys of our global workforce, which provide feedback on employee satisfaction and engagement and cover a variety of topics such as company culture and values, execution of our strategy, diversity and inclusion, and individual development, among others. Survey results are reviewed by our executive officers and Board, who analyze areas of progress or opportunities both at a company/business unit level as well as at a function level. Individual managers use survey results to implement actions designed to improve retention, engagement and well-being of our employees. We believe that our employee engagement initiatives, competitive pay and benefit programs and career growth and development opportunities help increase employee satisfaction and tenure and reduce voluntary turnover. The average global tenure of our employees is approximately eight years.
The Committee set meaningful 2021 goals for voluntary attrition and engagement survey results. Performance against these aspirational goals is measured quantitatively and qualitatively, and for 2021, the quantitative goals performed below the targets. Although the quantitative goals performed below target, the Committee considered that both were at or above relevant industry benchmarks. In the context of achievement against goals for 2021, the Committee considered both the qualitative and quantitative outcomes and determined a holistic score of 2.5 out of 5 was appropriate.
Individual Performance Factor
Our executive compensation program is designed to reward executives for financial, operational, strategic, share price and individual performance while demonstrating high integrity and ethical standards. We believe this structure appropriately incentivizes our executives to focus on our long-term business strategy, to achieve our Mission to help patients prevail over serious diseases, and to attain sustained long-term value creation for our shareholders.
| | 2021 BMS Values
✔ Accountability
✔ Inclusion
✔ Innovation
✔ Integrity
✔ Passion
✔ Urgency | | | When determining individual award levels, the Committee considers (i) individual performance against strategic, financial and operational objectives that support our long-term business strategy and shareholder value creation (“Results”) and (ii) an executive’s demonstration and role modeling of the values defined as BMS Values (“BMS Values”), identified in the box to the left. | |
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The Role of Risk Assessment in Our Incentive Program
When determining
Also embedded in the determination of individual award levels the Committee considers (i) individual performance against strategic, financial and operational objectives that support our long-term business strategy and shareholder value creation ("Results") and (ii) an executive's demonstration of the behaviors defined in the Bristol-Myers Squibb Commitment and our BMS Behaviors ("Behaviors") identified in the box to the right. Also embedded in this determination is the ongoing assessment of enterprise risk, including reputational risk stemming from the dynamic external environment. In particular, we evaluate how each of our executives demonstrate our Company BehaviorsBMS Values in the execution of their day-to-day decisions. This evaluation is one input into the determination of payouts under both the annual incentive and long-term equity incentive programs. Therefore, given the direct link between BehaviorsBMS Values that impact payout and our executive compensation program'sprogram’s emphasis on sustainable long-term value, we attempt to minimize and appropriately reduce the possibility that our executive officers will make excessively or inappropriately risky decisions that could maximize short-term results at the expense of sustainable long-term value creation for our shareholders.
20172021 Individual
Executive Performance Assessment
When determining the individual component of the annual incentive awards, the Committee considered each executive'sexecutive’s contributions to our company'scompany’s strategic achievements and financial and operational performance, including factors related to achievement of our key integration milestones related to the Celgene transaction, as well as his or her demonstration and role modeling of Company Behaviors.our BMS Values. The Committee evaluated our NEO'sNEOs’ performance against clear and pre-defined objectives established at the beginning of the year and tied to the company'scompany’s key strategic objectives.
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For the CEO, the Committee evaluated the following in determining his
individual performance modifier:
2017IPF:
2021 CEO
PERFORMANCE EVALUATIONPerformance Evaluation
Strategic Objective | | | Evaluation | |
STRATEGIC OBJECTIVE
| | EVALUATION
|
|---|
| | Drive performance of the business:enterprise performance: Achieve budgeted financial targets established at the beginning of the year, including revenues, non-GAAP EPS gross margin and operating margin, and increase competitiveness as a diversified Specialty BioPharma company, including ensuring supply chain reliability, achievingachieve predefined customer service metrics for all products and accelerating strategic plan deliverables. ensure supply chain reliability.
Execute on-time completion of 20172021 deliverables against company transformation plan.integration and synergy plans.
Demonstrate ethics, integrity and quality in everything we do, including setting a firm “tone at the top” on a culture of respect, business integrity, quality, compliance and uncompromising ethics.
Accelerate company evolution, including submission of a comprehensive strategic plan to Board and use of new technologies to enhance business performance. | | | • •Exceeded targetMet or exceeded targets for revenues, operating margin and non-GAAP EPS as a result of strong commercial execution; narrowly missed gross margin target due to product mix.execution and balanced expense management.
• Met or exceeded Exceeded all customer service metrics with 99% customer service satisfaction for all products.
•
Met target forand supply chain reliability targets.
• Significantly exceeded synergy targets through disciplined execution and manufacturing capacityprogram acceleration; all integration initiatives tracking ahead of expectations despite setbackspandemic.
• Continued firm “tone at manufacturing sites impactedthe top” with consistent, strong companywide message emphasizing the importance of operating with the highest ethics and integrity as evidenced by hurricanes in Puerto Rico.employee engagement survey results. Advanced enterprise quality management system.
• Significant progress on transformation deliverables, exceeding savings goal with significant re-allocation Performance accelerated through the use of resourcesnew technologies and the execution of our digital strategy, including experimentation and advancing ongoing digital innovation capabilities across all enterprise focus areas. Enabled digital capabilities to support new launches, including cell therapy digital platform.
• Provided comprehensive strategic plan update to the Board, including related to our R&D and portfolio strategy.
• Exhibited extraordinary leadership during the ongoing COVID-19 pandemic resulting in 2018; plan remains on track.strong business performance and no disruption to the flow of medicines to our patients despite the challenges of the global pandemic. | |
Enhance
| Maximize the valuereach and potential of the marketed portfolio and diversify forensure the long-term growth:sustainability of the pipeline: Maximize portfolio value of brands/assets, accelerate key inline growth drivers and maximize near-term value and long-term growth potential goals, including achievingAchieve budgeted revenuesrevenue targets for core marketed products, advance key product regulatory approvals, regulatory submissions, regulatorypriority study starts,execution goals, and other key pipeline milestones.goals. | | | • •ExceededMet or exceeded revenue targets for key medicines, including OpdivoEliquis,Yervoy, Eliquis Opdivo, Breyanzi, Orencia, Revlimid and Sprycel and achieved double-digit sales growthSprycel.
• Achieved 25 approvals, including (i) first market approvals for prioritized brands compared to 2016.•
Exceeded or met U.S. new patient share objectives, includingour cell therapy franchise OpdivoBreyanzi in second-line lung cancer.
•
Additional indications approved forrelapsed or refractory (R/R) large B-cell lymphoma and Opdivo, including in Japan for second-line head & neck cancer and gastric cancer; in the U.S. for adjuvant melanoma (due to early stoppage of Checkmate 238 due to relapse free survival advantage ofOpdivoAbecma compared toin relapsed or refractory multiple myeloma, (ii) Yervoy), metastatic colorectal cancer and second-line liver and bladder cancers (bringing total U.S. indications to a record 14 in under three years); and for Europe, including second line bladder and head & neck cancer.
•
OrenciaOpdivo approved for psoriatic arthritis in the U.S. and EU; and for juvenile idiopathic arthritis in the U.S.
•
Early stoppage of Checkmate 214 forfirst-line renal cell carcinoma, due to overall survival advantage ofand (iii) OpdivoZeposia compared toin ulcerative colitis. Achieved eight pivotal positive clinical trial results, including from CheckMate-816, CheckMate-648, RELATIVITY-047 and POETY2-PSO2, among others.
• Overall pipeline performance and key milestones are described in more detail on page Sunitinib50.•
15 registrational studies initiated and other high value pipeline milestones met or exceeded.
•
Key business development transactions executed, including over 45 strategic partnerships and collaborations that supplement our innovative pipeline.
| |
Evolve
| Embed our patient-centric culture and executedrive our People Strategy: Embed ourDeepen manager, leadership and team effectiveness, boldly cultivate a diverse and inclusive global community, develop and implement an effective strategy in support of return to engage, empowerworkplace, and enrich employees (the "People Strategy")attract, develop and accelerateretain the evolution of our culture, including continuing to deepen employee engagementbest people. Conduct on-going talent and cultivate great managers, delivering measureable improvements in key areas of focus, including, among others, diversity and inclusion, and continuing to set a firm "tone atsuccession discussions with the top" on a culture of business integrity, ethics and compliance, among others.Board. | | | • •LaunchedContinued comprehensive approach to build leadership capability for managers and deepen engagement & diversity of global leadership team and cultivate great managers.team.
• Enhanced the Company culture as demonstrated by employee survey results; externally recognized by MIT/Sloan as one of 21 culture champion organizations. Continued to reinforce integrity and ethics across all keyfocus on employee communications.engagement regarding company strategy.
• Progress Continued progress made on diversity and inclusion initiatives with(D&I) and health equity commitments described in more detail on page 37, which cover achieving gender parity at the executive levels globally, doubling representation of women globally and underrepresented ethnic groups at the executive levels in the U.S.; inclusion index scores remain high for annual employee engagement survey.
•
Robust management development plans in place and being executed in supportincreasing supplier and clinical trial diversity. Updated composition of our leadership team, which now includes approximately 60% female and 45% under-represented ethnic groups, which underscores the importance of D&I to the company’s success.
• Launched our refreshed people strategy and published our inaugural Global Diversity & Inclusion Report and ESG Report.
• Completed periodic discussions with the Board on succession planning for company critical positions.roles.
• Demonstrated extraordinary leadership during the COVID-19 pandemic, safely returning the majority of the U.S. and Puerto Rico vaccinated workforce back to the office. | |
Individual Performance Modifier Based on CMDC Evaluation: 125%
Individual Performance Modifier Based on CMDC Evaluation: 135% | | | 52
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In addition, the Committee noted the following with respect to each of our other NEOs:
For Mr. Bancroft,Elkins, the Committee considered:considered his: (i) his significantleadership and contribution toward the company’s strong financial performance; (ii) further refinement of our capital allocation strategy; (iii) role in the ongoing integration of Celgene, including early achievement of synergy capture; (iv) leadership in forecasting key drivers of performance to maximize strategic allocation of resources; and (v) leadership of an integrated and effective Finance organization, strengthening and simplifying key financial processes and controls.
For Dr. Vessey, the
Committee considered his leadership of Research & Early Development in particular through his: (i) achievement of
key objectives and advancement of our research strategy and our portfolio despite the ongoing challenges of the COVID-19 global pandemic; (ii) significant contributions across all elements of the company’s strategy, including strong
operational results: Total Revenues increased by 7% and non-GAAP EPS increased by 6%—partnership with the
77% decreasebusiness development, Global Drug Development and Commercialization organizations to advance our pipeline; (iii) role in
GAAP EPS primarily due to an approximately $3B charge related to tax reform; and maintaining a strong balance sheet; (ii) his continuedsupporting rapid advancement across critical areas, including translational medicine; (iv) leadership in
driving the evolution of our operating model while ensuring a balanced approach to capital allocation, returning capital to shareholders in dividendsbroadening and
share repurchases; and (iii) his oversight and
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leadership in executing business development transactions, with a focus on supplementing our innovative pipeline, as well as divesting non-core assets. This enabled the company to enter into over 45 collaboration and license agreements, with notable transactions such as our acquisition of IFM Therapeutics and the agreement with Halozyme, which provides the potential for new delivery mechanisms of our immuno-oncology medicines to patients.
For Dr. Lynch, the Committee considered: (i) the immediate positive impact Dr. Lynch has had onprioritizing the R&D organization with his appointment as Chief Scientific Officerportfolio, effectively supporting late-stage assets and advancing digital capabilities; and (v) role in March 2017; (ii) the significant advancementbuilding an integrated R&D function supporting engagement and retention of the pipeline, including both clinical and regulatory achievements (including high value milestones that were not expected until 2018), notably 31 regulatory submissions and approvals, 36 pipeline projects meeting transition milestones, and the achievement of FDA approvals forOpdivo for the treatment of Bladder Cancer, MSI-High Colorectal Cancer, Liver Cancer, Gastric Cancer, and Adjuvant Melanoma; (iii) his leadershipcritical talent in driving the evolution of our operating model within the R&D organization, including the recruitment of diversea highly competitive talent to key R&D Leadership roles; and (iv) his strong partnership with our commercial and global manufacturing organizations, which has resulted in increasingly seamless transitions and faster development for our products.
market.
For Ms. Leung, the Committee considered:considered her: (i) hercritical role in providing consistently sound legalstrategic support and advice to seniorour Board and management, including related to the continued evolution of our Board composition, which includes highly qualified members with diverse backgrounds and the Board of Directors;skill sets; (ii) her successfulleadership in protecting and defending our intellectual property position and proactive management of multiple, significant legal issues, across all teams and functions, including among others, successful execution of robust commercial defense, intellectual property and patent strategies;highlighted by a positive trial outcome for Eliquis protecting existing exclusivity until 2028; (iii) her role in supporting multiplekey business development transactions,activities to supplement our innovative pipeline; (iv) leadership in developing and advancing our cohesive ESG strategy, including innovative partnershipspublication of our inaugural ESG Report; and worldwide licensing agreements; (iv) her(v) contributions and performance as a trusted and respected senior leader who provides valuable strategic advice and whose impact spans across all teams and functions; and (v) her strong advocacy and sponsorship of diversity and inclusion both internally and externally.functions.
For Mr. Gordon,Dr. Boerner, the Committee considered: (i)considered his leadership roleof the Commercialization organization in ourparticular through his: (i) unwavering emphasis on strong commercial execution specificallydemonstrated by the successful launch of new products and indications, including two innovative cell therapies (A) OpdivoBreyanzi reaching $4.9B in annualized sales in 2017,for relapsed or refractory (R/R) large B-cell lymphoma and (B) EliquisAbecma ' strong performance growing by 46% to reach approximately $4.9B in global net sales—achievingfor relapsed or refractory multiple myeloma despite the status as the number one novel oral anticoagulant in total prescriptions in the U.S. and in several countries around the world, as well as significant growth across other prioritized brands, includingOrencia andSprycel, reaching approximately $2.5B and $2.0B in net sales, respectively; (ii) his leadership in strong international launches of prioritized brands; (iii) his leadership in the transformationchallenges of the ongoing COVID-19 global pandemic; (ii) significant leadership further strengthening the capabilities of key areas across Commercialization, Medical and Global Product Development & Supply to position our core therapeutic areas for success, including hematology and cell therapy; and (iii) focus on talent development to build a strong, inclusive, diverse and ethical commercial function, including building new capabilities in market access; and (iv) his direct sponsorship of one of our innovative people and business resource groups, specifically focused on the development and advancement of women.organization. 20172021 Annual Incentive AwardsAward PaymentsThe actual annual incentive awards paid to our Named Executive Officers are shown in the table below and can also be found in the Summary Compensation Table under the Non-Equity Incentive Plan Compensation column:
| | Giovanni Caforio, M.D. | | | $2,550,000 | | | $2,734,110 | | | $3,410,625 | |
| | David V. Elkins | | | $1,043,158 | | | $1,118,474 | | | $1,342,169 | |
| | Rupert Vessey M.A, B.M., B.Ch., F.R.C.P., D.Phil. | | | $1,053,281 | | | $1,129,328 | | | $1,355,194 | |
| | Christopher Boerner, Ph.D. | | | $1,021,152 | | | $1,094,879 | | | $1,313,855 | |
| | Sandra Leung | | | $1,100,678 | | | $1,180,147 | | | $1,298,162 | |
1)
| Adjusted to reflect Company Performance Factor (financial, pipeline and Key Integration metrics performance) earned at 107.22%. |
2)
| Adjusted to reflect Individual Performance Factors. |
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Performance
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Payout(2)
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| | Giovanni Caforio, M.D. | | $ | 2,381,250 | | $ | 2,888,218 | | $ | 3,899,094 | | |
| | Charles Bancroft | | $ | 1,196,753 | | $ | 1,451,542 | | $ | 1,887,005 | | |
| | Thomas J. Lynch, Jr., M.D. | | $ | 999,960 | | $ | 1,212,851 | | $ | 1,576,706 | | |
| | Sandra Leung | | $ | 947,437 | | $ | 1,149,146 | | $ | 1,493,890 | | |
| | Murdo Gordon | | $ | 847,024 | | $ | 1,027,355 | | $ | 1,181,458 | | |
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(1)Adjusted to reflect Company Performance Factor (financial and pipeline performance) earned at 121.29%.(2)Adjusted to reflect individual performance.
As set forth in the table above, the Company Performance Factor of 121.29%107.22% was applied to each Named Executive Officer'sOfficer’s target incentive award. Then, an individual performance payout factorIndividual Performance Factor was applied to determine the actual payout. The Committee can approve an Individual Performance Factor up to 165%160% of the adjusted incentive, subject to a maximum payout of 200% of target maximum payout.target. Based on the performance highlightedof each NEO described above, the Committee approved Individual Performance Factors ranging between 115%110% and 135%125% for our Named Executive Officers.
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Long-Term Incentive Program
Our long-term incentive program employs only performance-based equity, and is designed to promote creation of sustainable long-term value for shareholders by focusing on strong year-to-year financial and operational performance, and on the development and advancement of our pipeline over the long-term.
The Committee’s Annual Process for Granting Annual Long-Term Incentive Awards
Long-term incentive awards are typically approved each year on the date the Committee and full Board meet during the first week of March with a grant effective date of March 10. We believe that consistent timing of equity award grants is good corporate governance and reduces the risk of selecting a grant date with a preferential stock price.
Each year the Committee establishes annual equity award guidelines for all of our executives, including our Named Executive Officers, other than the CEO, as a percentage of base salary. The CEO’s long-term equity incentive award level is assessed by the Committee annually. Based upon individual performance, an executive other than the CEO may receive a long-term equity incentive award ranging from 0% to 150% of the target award. Once the grant value is established for each executive, 60% of the value is awarded as Performance Share Units (or “PSUs”) and 40% is awarded as Market Share Units (or “MSUs”).
In determining the size of the individual long-term equity incentive awards granted to our Named Executive Officers in March 2021, the Committee considered the prior year’s performance (both Results and BMS Values) of each executive as well as ways to motivate our Named Executive Officers to focus on the company’s long-term performance. Given each year’s awards have an overlapping performance period from the prior year, we believe these awards provide the right balance between short-term and long-term focus. Each Named Executive Officer, other than the CEO, had a target value for his or her long-term equity incentive award granted in March 2021. The Committee approved individual awards ranging between 120% and 135% of that target value for these Named Executive Officers. The CEO’s long-term equity incentive award is not based on a target value and is determined annually by the Committee based on competitive benchmarks and individual performance and contributions. Dr. Caforio’s award took into account his strong performance as CEO during 2020 and a long-term equity incentive opportunity that was commensurate with his role as CEO and the competitive market pay for that position.
2021 Long-Term Incentive Program Grants Like our annual incentive plan, our long-term equity incentive program is designed to reward performance that supports our strategic objectives and creates value for our shareholders. A significant percentage of our Named
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Executive Officers'Officers’ compensation is in the form of equity that vests over several years, which is designed to closely tie the interests of our Named Executives Officers'Officers’ to the interests of our shareholders. Our long-term equity incentive program also is designed to promote retention through multi-year vesting.
In
2017,2021, we continued to offer two long-term award vehicles, each of which served a different purpose:
Performance Share Unit Awards: rewards the achievement of key financial goals and the value created for shareholders as measured by relative TSR over a three-year period ending in the first quarter of the applicable payout year.
•Market Share Unit Awards: rewards the creation of incremental shareholder value over a long-term period. We believe our long-term equity incentive program serves the best interests of our shareholders by focusing the efforts of our executives on key drivers of both
shortshort- and long-term success and on shareholder value. Key aspects of the long-term equity incentive program
include:100% of executives'executives’ long-term equity incentive awards are performance-based;
•The design of our long-term equity incentive program applies to all our executives, not just our most senior, thus promoting organizational alignment with our recruitment and business strategy; and
•Our long-term equity incentive program serves as a retention lever, through vesting and payout over several years.
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2021 Equity Incentive Program Summary
| | Proportion of Annual Grant | | | 60% | | | 40% | |
| | Metrics & Weighting | | | Non-GAAP Operating Margin: 33%
Total Revenues (ex-fx): 33% 3-Year Relative TSR: 34%
| | | Number of shares earned, based on increase or decrease in our common stock share price from the grant date* | |
| | Min / Max Payout
(% of Target Units) | | | 0% / 200% | | | 0% / 200%* | |
| | Vesting | | | 3-year, cliff vesting | | | 4-year, ratable vesting | |
*
| The number of shares earned from MSUs can increase or decrease, in proportion to the change in our share price over the one-, two-, three- and four-year performance periods. The minimum share price achievement required to earn any shares from MSUs is 60% of the grant date stock price. Accordingly, if this 60% threshold is not achieved, zero MSUs will vest. |
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| | | | | Performance Share Units | | Market Share Units | | |
| | | Proportion of Annual Grant | | 60% | | 40% | | |
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| | | Metrics & Weighting | | Non-GAAP Operating Margin: 33%
Total Revenues (ex-fx): 33%
3-Year Relative TSR: 34% | | Share Price Performance | | |
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| | | Min / Max Payout
(% of Target Units) | | 0% / 200% | | 0% / 200%* | | |
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| | | Vesting | | 3-year, cliff vesting | | 4-year, ratable vesting | | |
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* The number of shares earned from Market Share Units (MSUs) can increase or decrease, in proportion to the change in our share price over the one-, two-, three and four-year performance periods. The minimum share price achievement required to earn any shares from MSUs is 60% of the grant date stock price. Accordingly, if 60% is not achieved, zero shares will vest. Both vehicles are designed to be performance-based within the meaning of the applicable Section 162(m) provision of the Internal Revenue Code.
Our Long-term Incentive Program Design Promotes the Creation of Sustainable Long-term Value for Shareholders
Our overall philosophy to create sustainable shareholder value is primarily focused on strong year-to-year financial and operational performance and on the development and advancement of our pipeline over the long-term. Additionally, as noted, our long-term equity incentive program is tied directly to our stock price performance to closely align the interest of our executives with the interests of our shareholders. Namely, 100% of our executives' long-term equity incentive awards are performance based, which results in a significant portion of their total compensation being tied to our stock price performance and the creation of value for our shareholders.
Cumulative Indexed Total Shareholder Return
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20172021 Performance Share Unit Awards
Following extensive engagement with shareholders
The Performance Share Unit (PSU) Awards made in 2021 are focused on motivating executives to deliver long-term top-line growth and an in-depth reviewimproved margins, while also focusing on delivering shareholder value at a rate faster than our industry peers. For the 2021 PSU awards, the following metrics and goals were applied.
2021-2023 PSU Payout Schedule
| | | | | Achievement | | | Payout | | | Achievement | | | Payout | | | TSR Percentile | | | Payout | |
| | Maximum | | | 107% | | | 200% | | | 110% | | | 200% | | | 80%ile | | | 200% | |
| | Target | | | 100% | | | 100% | | | 100% | | | 100% | | | 50%ile | | | 100% | |
| | Threshold | | | 92% | | | 50% | | | 90% | | | 50% | | | 35%ile | | | 50% | |
| | Below Threshold | | | <92% | | | 0% | | | <90% | | | 0% | | | <35%ile | | | 0% | |
For the Operating Margin and Revenue awards, the targets were set using the board-approved three-year business plan. Our Board assessed the rigor of
the targets and found that they were appropriate. In addition, our
compensation program inBoard assessed the
contextmaximum and threshold achievement levels for each of
our strategic goalsthese metrics and
current product portfolio, the Committee made a number of changesfound that they were appropriate relative to the
PSU program that became effective in 2016, with the first three-year performance cycle under the new design scheduled to be paid, if earned, in 2019. These changes include:intended motivational effect of PSUs.
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Lengthening of the performance period of financial measures from one year to three years;
•
Incorporating the three-year relative TSR as a core performance measure rather than a modifier; and
•
Introducing a new mix of financial performance measures that create stronger alignment with our strategic goals and reduce the overlap of performance metrics in our annual and long-term incentive programs. Specifically, the performance measures for PSU awards are cumulative total revenues (ex-fx), cumulative non-GAAP operating margin, and relative TSR expressed as a percentile rank relative to our peer group. TSR performance must be at median for target shares to be earned.
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The structure of our 2017 financial metrics and three-year relative TSR modifier in our PSU program are detailed below.
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| | 2017-2019 PSU Payout Schedule |
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Operating Margin (33%) | |
2017-2019 Cumulative
Total Revenues (ex-fx) (33%) | | 3-Year
Relative TSR (34%) | | |
| | | | Achievement | | Payout | | Achievement | | Payout | | TSR Percentile | | Payout | | |
| | Maximum | | 115% | | 200% | | 110% | | 200% | | 80%ile | | 200% | | |
| | Target | | 100% | | 100% | | 100% | | 100% | | 50%ile | | 100% | | |
| | Threshold | | 85% | | 50% | | 90% | | 50% | | 35%ile | | 50% | | |
| | Below Threshold | | <85% | | 0% | | <90% | | 0% | | <35%ile | | 0% | | |
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2021 Market Share Unit Awards
MSUs
comprisemake up 40% of our
executives'executives’ target long-term equity incentives. Each grant of MSUs vests 25% on each of the first four anniversaries of the grant date, and the number of shares received by an executive upon payout
is increasedincreases or
decreaseddecreases depending on the performance of our stock price during the one-, two-, three- and four-year performance periods.
Upon vesting, a payout factor is applied to the target number of MSUs vesting on a given date to determine the total number of units paid out. If our stock price increases during the performance period, both the number of units and value of shares that vest increases. If our stock price declines during the performance period, both the number of units and value of shares that are eligible to vest will be reduced. The payout factor is a ratio of the ten-day10-day average closing price on the measurement date divided by the ten-day10-day average closing price on the grant date. Beginning with our 2013 annual MSU award grant, theThe measurement date is the
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February 28 immediately preceding the vesting date. The minimum payout performance factor that must be achieved to earn any payout is 60% and the maximum payout factor is 200%. If our stock price performance is below 60%, then the portion of the award scheduled to vest will be
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forfeited. The following chart shows the performance periods for the MSU awards granted to our executives in March 2017:2021:
Outcomes of the 2018 PSUs
The 2018 PSUs, granted on March 10, 2018 and having a three-year performance cycle were evaluated and certified in March 2021. The below table summarizes the outcome for each of the metrics included in the 2018 PSUs and the associated payout level in terms of percentage of target shares.
| | 2018-2019 Legacy BMS Total Revenues, Net of Foreign Exchange ($=MM)(1) | | | $44,185 | | | $47,536 | | | 107.6% | | | 167.22% | |
| | Cumulative 3-Year Operating Margin(3) | | | 24.50% | | | 29.35% | | | 119.8% | | | 200.00% | |
| | 3-Year Relative TSR (TSR Percentile Rank)(3) | | | 50.00% | | | 11.00% | | | n.a | | | 0.00% | |
| | 2020 Combined Company Revenues, Net of Foreign Exchange ($=MM)(3) | | | $41,864 | | | $42,689 | | | 102.0% | | | 128.07% | |
| | Key Integration Metric – 2020 Synergy ($=MM)(3) | | | $833 | | | $1,427 | | | 171.3% | | | 200.00% | |
| | Key Integration Metric – 2020 Human Capital(3) | | | 3.0 | | | 4.0 | | | 133.3% | | | 149.98% | |
| | Total | | | | | | | | | | | | 114.13% | |
1)
| Actual 2018-2019 Total Revenues for the two years are restated to our 2018 Budget Rate. |
2)
| Includes net adjustments for (i) Sprycel performance in Europe consistent with the 2019 and 2020 bonus plan adjustments, and (ii) changes in the timing of UPSA divestiture. |
3)
| The Committee modified the 2018-2020 PSUs in 2019 in connection with the Celgene transaction. Approved post-close measurement methodology prescribed (i) a continuation of the relative TSR metric, (ii) replacing legacy BMS Total Revenues with the Combined Company Revenues, (iii) for the Operating Margin metric, reducing the weight to 22% & locking it in at close (September 30, 2019), and (iv) re-allocating the remaining weighting of 11% to the new Key Integration Metrics. Celgene was removed from the relative TSR peer group as a result of its acquisition. |
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The following table summarizes the payout factors relating to the tranches that vested in the first half of 20172021 for MSU awardsMSUs outstanding at that time:
| | March 10, 2017 | | | March 10, 2021 | | | 4 | | | 106.65% | |
| | March 10, 2018 | | | March 10, 2021 | | | 3 | | | 91.27% | |
| | March 10, 2019 | | | March 10, 2021 | | | 2 | | | 117.33% | |
| | March 10, 2020 | | | March 10, 2021 | | | 1 | | | 101.87% | |
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Vesting Date | | # of Years in
Performance
Period | |
Payout Factor | | |
| | | March 10, 2013 | | March 10, 2017 | | 4 | | 149.03% | | |
| | | March 10, 2014 | | March 10, 2017 | | 3 | | 100.77% | | |
| | | March 10, 2015 | | March 10, 2017 | | 2 | | 86.90% | | |
| | | May 5, 2015* | | May 5, 2017 | | 2 | | 82.78% | | |
| | | March 10, 2016 | | March 10, 2017 | | 1 | | 85.61% | | |
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*Reflects CEO grant on promotion to CEO.
Restricted Stock Units and Stock Options
Restricted stock units may be granted selectively to executives at other times of the year generally, as inducement grants as part of an offer in attracting candidates to BMS, for retaining employees, or for providing special recognition, such as when an employee assumes significant increases in responsibility. During
2017,2021, no special restricted stock unit awards were granted to any of our Named Executive
Officers, otherOfficers. Other than
an inducement grantconversion of outstanding Celgene compensatory equity awards in November 2019, as
parta result of
a total offer package to attract Dr. Thomas Lynch, Jr. to the
position of Chief Scientific Officer in March 2017. WeCelgene transaction, we have not granted any stock options to our executives
or employees since 2009.
Process for Annual Equity Award Grants
Annual equity awards are typically approved on the date the Committee and full Board meet during the first week of March with a grant effective date of March 10. We believe that consistent timing of equity award grants is a good corporate governance practice that reduces the risk of selecting a grant date with a preferential stock price.
Beginning with the equity awards granted in March 2014, the Committee established annual equity award guidelines for all executives at the company, including our Named Executive Officers other than the CEO, as a percentage of salary rather than a fixed dollar amount. The CEO's long-term equity incentive award level is assessed by the Committee annually. In addition, in 2014 we eliminated dividend equivalents under all of our annual equity awards, including our PSUs and MSUs.
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Based upon individual performance, an executive other than the CEO may receive a long-term equity incentive award ranging from 0% to 150% of the target award. Once the grant value is established for each executive, 60% of the value is converted into PSUs and 40% into MSUs.
In determining the size of the individual long-term equity incentive awards granted to our Named Executive Officers in March 2017, the Committee considered the prior year's performance (both Results and Behaviors) of each executive as well as ways to motivate our Named Executive Officers to focus on the company's long-term performance over the next three years and beyond. Each Named Executive Officer, other than the CEO, had a target value for their long-term equity incentive award granted in March 2017. The Committee approved individual awards ranging between 130% and 140% of the target value for these Named Executive Officers. The CEO's long-term equity incentive award is not based on a target value and is determined annually by the Committee based on competitive benchmarks and individual performance and contributions. Dr. Caforio's award took into account his strong performance as CEO during 2016 and a long-term equity incentive opportunity that was commensurate with his role as CEO and the competitive market pay for that position.
Compensation of our New Chief Scientific Officer
As noted, effective March 16, 2017, we successfully recruited Dr. Thomas J. Lynch, Jr. to join the company as Executive Vice President and Chief Scientific Officer. In connection with that recruitment, Dr. Lynch was provided a competitive compensation package with the following key items:
•His annual base salary was set at $1,000,000 with a target bonus opportunity of 120% of base salary, resulting in a total target cash compensation opportunity of $2,200,000.
•He also received the following awards upon hire: a cash payment of $1,400,000 and 25,184 restricted stock units that will vest at the rate of 25% on each of the first, second, third and fourth anniversaries of the grant date.
•Additionally, he received long-term equity incentive awards totaling 36,427 performance shares units and 24,285 market share units, on terms and conditions set forth in the company's standard form of award agreements under the company's 2012 Stock Award and Incentive Plan.
•Change-in-control and severance benefits in the event of involuntary termination without cause in the same form as provided to our current Named Executive Officers.
Other Elements of 20172021 Compensation
In addition to the components set forth above, our senior executives, including all of our Named Executive Officers,NEOs, were entitled to participate in the following plans or arrangements in 2017:2021:
| | Post-Employment Benefits
•Change-in-Control Arrangements
• Severance Plan
• Nonqualified-Pension Plan (applicable only to Ms. Leung. The qualified Pension Plan was terminated on February 1, 2019)
• Qualified and Nonqualified Savings Plans
Other Compensation | |
Other Elements of 2017 NEO Compensation
§- Post-Employment Benefits
–Change-in-Control-Arrangements–Severance Plan–Qualified and Non-Qualified-Pension Plans (Frozen; applicable only to
Messrs. Gordon and Bancroft and Ms. Leung)–Qualified and Non-Qualified Savings Plans–Annual Incentive Deferral Plan
§Other Compensation
Post-Employment Benefits
We offer certain plans which provide compensation and benefits to employees who have terminated their employment. These plans are periodically reviewed by the Committee to ensure that they are consistent with competitive practice. The plans offered are common within our primary peer group andintended to enhance our ability to attract and retain key talent.
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Change-in-Control Arrangements
We have entered into change-in-control agreements with certain executives including the CEO and other
Named Executive Officers.NEOs. These agreements enable management to evaluate and support potential transactions that might be beneficial to shareholders even though the result would be a change-in-control of BMS. Additionally, the agreements provide for continuity of management in the event of a change-in-control.
OurIt is our policy that our agreements require a
"double-trigger"“double-trigger” before any payments are made to an executive. This means that payments are only made in the event of a change-in-control and subsequent involuntary termination or termination for good reason
ofby the employee within either 36 months or 24 months after a change-in-control.
We do not gross up compensation on excess parachute payments for any of our executives, including allour Named Executive Officers and it will continue to be our policy on a go-forward basis not to enter into any gross-up arrangements with any of our Named Executive Officers.
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If a change-in-control occurs during the term of the agreement, the agreement will continue in effect for either 36 months or 24 months beyond the month in which such change-in-control occurred,occurs, as applicable. The value of this benefit for our Named Executive Officers is provided in the "Post-Termination Benefits" section.“Post-Termination Benefits” section beginning on page
73. The Bristol-MyersBristol Myers Squibb Senior Executive Severance Plan providesis intended to provide a competitive level of severance protection for certain senior executives (including theour Named Executive Officers) to help us attract and retain key talent necessary to run our company. The value of this benefit for our Named Executive Officers is shown in the "Post-Termination Benefits"“Post-Termination Benefits” section beginning on page 61.Defined 73. Benefit
Pension Plans Our frozen defined benefit pension plans provide retirement income for U.S. employees who joined the company and were U.S. employees prior to December 31, 2009 following their retirement. Equalization Plan—Retirement Plan
The Benefit Equalization Plan—Retirement Income Plan (BEP—Retirement Plan) is a tax-qualifiednonqualified plan as definedthat provides income for employees after retirement in excess of the benefits that were payable under IRS regulations, and the Benefit Equalization Plan relating to theBristol-Myers Squibb Company U.S. Retirement Income Plan is(Retirement Plan or US-RIP), a non-qualifiedtax-qualified defined benefit plan that provides pension benefits above those allowed under the contribution limits for tax-qualified plans. The Summary Compensation Table reflects the annual increase in the actuarial valuewas terminated effective February 1, 2019 with roughly $3.8 billion of these benefits. Current accrued benefits for eachPlan obligations transferred to Athene Holding, Ltd. By way of the participating Named Executive Officers are provided in the Pension Benefit Table. Asbackground, as of December 31, 2009, weBMS discontinued service accruals under our qualifiedthe Retirement Plan and nonqualified pension plansthe BEP—Retirement Plan in the U.S. and Puerto RicoU.S for active plan participants including all of our Named Executive Officers, and closed the plansplan to new participants. For activeentrants. Active plan participants of the Retirement Plan at year-endyear end 2009 we allowedwere provided five additional years of pay growth in ourthe pension plans.plan. Accordingly, 2014 was the last year of pay growth under ourall of the BMS U.S. pension plans. These actions were taken to align our retirement program with our new biopharmaceutical business strategy and culture, to mitigate volatility risk toplans, including the company, to respond toRetirement Plan. Ms. Leung is the competitiveness ofonly 2021 NEO participant in the company's defined benefit pension plans, including the Retirement Plan. For a changing industry, and meet the mobility and career expectations of an evolving workforce.further discussion, please see “Benefit Equalization Plan—Retirement Plan” beginning on page
70. Our savings plans allow U.S. employees to defer a portion of their total eligible cash compensation and to receive matching contributions from BMS to supplement their savings and retirement income. The Savings and Investment Program is a tax-qualified 401(k) plan, as defined under IRS regulations, and the Benefit Equalization Plan for the Plan—Savings and Investment Program is a nonqualified deferred compensation plan that allows a select group of management and highly compensated employees to defer a portion of their total eligible cash compensation and to receive matching contributionscontribution credits from BMS in excess of the contributions allowed under the Savings and Investment Program.
The savings plans are designed to allow employees to accumulate savings for retirement on a tax-advantaged basis. The company matching contribution credit under our savings plans equals 100% of the employee'semployee’s contribution on the first 6% of eligible compensation (base salary and annual incentive) that an employee elects to contribute. Employees are eligible for an additional automatic company contribution credit that is based on a point system of an employee'semployee’s age plus service as follows: below 40 points, the automatic contribution credit is an additional 3% of total cash;eligible cash compensation; between 40 and 59 points, the contribution credit is 4.5%; and at 60 points and above, the contribution credit is 6%. For those employees with 60 or more points who had 10 or more years of service at year-end 2009, we provided an additional automatic contribution of 2% for a five-year period. Accordingly, 2014 was the last year for this additional 2% automatic contribution for this group.
As of
December 31, 2009, each Named Executive Officer other than Drs. Caforio and Lynch had earned over 60 points and had more than ten yearsJanuary 1, 2021, with the merger of
service. Allthe Celgene 401(k) plan, all U.S. employees are eligible to participate in the
Savings Plan.savings plans, including our legacy Celgene NEOs. As of December 31, 2021, Dr. Caforio, Dr. Vessey and Ms. Leung had accrued a 6% contribution. Dr. Boerner and Mr. Elkins had accrued a 4.5% contribution. The Summary
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Compensation Table reflects company contributionscontribution credits to these plans during 20172021 in the "All“All Other Compensation"Compensation” column. The Non-QualifiedNonqualified Deferred Compensation Table provides more detail on the Benefit Equalization Plan for the Plan—Savings and Investment Program.
Other Compensation
Annual Incentive Deferral PlanWe maintain a non-qualified deferred compensation plan for our executives, includingprovide very limited perquisites to our Named Executive Officers. Until we discontinued new deferrals underFor business purposes, the plan, effective January 1, 2010, the plan permitted executives to defer up to 100% of their annual cash incentive awards into a choice ofcompany owns fractional interests in two funds: a Bristol-Myers Squibb common stock unit fund and a U.S. Treasury Bill fund. Although we no longer permit new deferrals under the plan, we maintain the plan for executives who made deferrals prior to 2010. We do not pay above-market interest rates on these investments. Upon retirement or termination, plan participants are eligible to receive their deferred amounts based on a previously selected payout schedule. The Non-Qualified Deferred Compensation Table provides more detail on this plan for those Named Executive Officers who made deferrals prior to January 1, 2010.
Other Compensation
private aircraft arrangements. We generally do not provide perquisites or otherallow personal benefitsaircraft use. On very limited occasions, and subject to seat availability, family members may accompany our Named Executive Officers that areon an aircraft. The accompaniment of a family member does not otherwise available to all salaried employees. However, in 2017, our Named Executive Officers were provided benefits intended for business purposes that were in additionincur any incremental cost to the benefits offered to all salaried employees.company. In certain exigent circumstances, these benefits may be usedgeneral, incremental costs for personal use which would then be considered partconsist of the variable costs incurred by the company to operate the aircraft for such use. We did not reimburse any Named Executive Officer's total compensation and would be treated as taxable income under the applicable tax laws. We do not reimburse the Named Executive OfficersOfficer for any taxes paid on the taxable income for such income.personal use. Please see "All“All Other Compensation"Compensation” in the “Summary Compensation Table” beginning on page 65 for a further discussion on theof all perquisites amounts requiredand other personal benefits provided to be disclosed under SEC rules.
our Named Executive Officers.
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OurBMS Compensation Program Design Process
Compensation and Management Development Committee
The Committee is responsible for providing oversight of our executive compensation program for the Named Executive Officers as well as other members of senior management. The Committee is responsible for setting the compensation of the Chief Executive Officer and approving the compensation of all of the other Named Executive Officers and certain other members of senior management.
The Committee annually reviews and evaluates the executive compensation program with the intent to ensure that the program is aligned with our compensation philosophy and with our performance. See page 2326 for a discussion of the duties and responsibilities of the Committee in more detail.
Role of the Independent Compensation Consultant
The
For 2021, the Committee
has retained
Compensation Advisory Partners, LLC (CAP) on an annual basisCAP as its independent compensation consultant to provide executive compensation services to the Committee. CAP
reportsreported directly to the Committee, and the Committee directly
overseesoversaw the fees paid for services provided by CAP. The Committee
instructsinstructed CAP to give advice to the Committee independent of management and to provide such advice for the benefit of our company and shareholders. CAP
doesdid not provide any consulting services to BMS beyond its role as consultant to the Committee.
In
2017,2021, CAP provided the following services:
reviewed and advised on the composition of the peer group used for competitive benchmarking;
•participated in the design and developmentreview of our executive compensation program;
•provided an assessment of BMS senior executive pay levels and practices relative to peers and other competitive market data;
•provided an annual analysis of industry trends among the peers and best practices related to pay program design and other program elements;
•consulted on incentive plan design and compensation packages for senior executives;
reviewed and advised on all materials provided to the Committee for discussion and approval; and
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•- attended all of the
Committee's regularly-scheduledCommittee’s regularly scheduled and special meetings in 20172021 at the request of the Committee.
Committee, and also met with the Committee chairman without management present.
In 2021, the Committee conducted a request for proposal to review potential compensation consultants as part of its routine evaluation process. After a thorough proposal review and interview process, the Committee retained Farient Advisors LLC as its independent compensation consultant for 2022.
The Committee reviews the independence of
CAPits compensation consultant annually in accordance with its charter, applicable SEC rules and NYSE listing requirements. After review and consultation with CAP, the Committee
has determined that CAP
iswas independent, and there
iswas no conflict of interest resulting from retaining CAP
currently or during the year ended December 31,
2017.2021.
Role of Company Management
The CEO makes recommendations to the Committee concerning the compensation of Named Executive Officers other than the CEO, as well as other members of senior management. In addition, the CEO, CFO and, in the case of our pipeline performance metric,
both the
EVP and President, Research and Early Development and EVP, Chief
ScientificMedical Officer,
Global Drug Development are involved in recommending for the
Committee'sCommittee’s approval the performance goals for the annual and long-term incentive plans, as applicable. The Chief Human Resources Officer works closely with the Committee, its independent compensation consultant and management to (i) ensure that the Committee is provided with the appropriate information to make its decisions, (ii) propose recommendations for Committee consideration, and (iii) communicate those decisions to management for implementation.
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Executive Compensation Governance Practices Best Practice Compensation Governance
We maintain a number of compensation governance best practices, which support our overarching compensation philosophy and are fully aligned with our compensation principles, as discussed in the following section. Our compensation practices also align with input we have received from shareholders.
| | 100% performance-based annual and long-term incentives | | | No guaranteed incentives with our Named Executive Officers | |
| | Caps on the payouts under our annual and long-term incentive award programs | | | Prohibition on speculative and hedging transactions | |
| | Robust share ownership and share retention guidelines | | | Prohibition on pledging shares and holding them in a margin account | |
| | Neutralize share buyback impact on share-denominated compensation metrics | | | Proactively eliminate windfall gain potential | |
| | Robust recoupment and clawback policies | | | No employment contracts with our Named Executive Officers | |
| | Proactive shareholder engagement | | | Prohibition on re-pricing or backdating of equity awards | |
| | “Double-trigger” change-in-control agreements | | | Minimal perquisites to our Named Executive Officers | |
Management Accountability & Compensation Recoupment Bristol Myers Squibb employs a number of long-standing compensation best practices, which are designed to align pay to the achievement of both our short-term and long-term goals, engagement of our employees, the achievement of our Mission, delivery of value to our shareholders and reinforcement of BMS Values.
In 2020, the company participated in an incentive deferral working group with members of Investors for Opioid and Pharmaceutical Accountability (IOPA). The participants included shareholders and corporate representatives from the pharmaceutical industry who worked to develop a set of principles that focus on incentive deferrals as one strategy to assist boards in recouping compensation in the event of misconduct.
We welcomed the opportunity to participate in the incentive deferral working group with other members of IOPA and provide greater insight into our existing compensation principles on this matter. The elements of our compensation plan that we discussed included our recoupment and clawback policy, share retention guidelines, long-term equity award performance periods and executive pre-clearance process for transactions involving company securities. We believe the many components of our plan provide the company with the ability to hold our executives accountable and recoup compensation in the event of misconduct. We are pleased that our long-standing practices meet the objectives outlined by shareholders within the working group.
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The below disclosures highlight the levers the Committee could potentially use to hold executives accountable in the event they engage in any misconduct. This reflects and was responsive to the investors’ feedback and consistent with our shared desired outcome of greater transparency and disclosure.
Share Ownership and Retention Policy
In order to preserve the link between the interests of our Named Executive Officers and those of shareholders, executives are expected to use the shares acquired upon the vesting of (i) restricted stock unitPerformance Share Unit awards, (ii) Market Share Unit awards and (iii) Restricted Stock Unit awards, if any, (ii) market share unit awards and (iii) performance share unit awards, after satisfying the applicable taxes, to establish and maintain a significant level of direct ownership. This same expectation applies to shares acquired upon the exercise of theirany previously granted stock options. We continue to maintain long-standing share ownership expectations for our senior executives. Our current Named Executive Officers mustall comply with the followingtheir ownership and retention requirements:requirements, as detailed in the following table:
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | Stock Ownership | | | Share Retention Policy—applied to
all
shares acquired, net of taxes | | 2017 Compliance | | |
| | Executive
| | Guideline as a
Multiple of Salary | | | Prior to
Achieving Guideline | | | After
Achieving Guideline | | with Share Ownership
and Retention Policy | | |
| | Giovanni Caforio, M.D.
| | 6 x | | | 100% | | | 75% for 1 year | | Yes | | |
| | Charles Bancroft
| | 3 x | | | 100% | | | 75% for 1 year | | Yes | | |
| | Thomas J. Lynch, Jr., M.D.
| | 3 x | | | 100% | | | 75% for 1 year | | Yes | | |
| | Sandra Leung
| | 3 x | | | 100% | | | 75% for 1 year | | Yes | | |
| | Murdo Gordon
| | 3 x | | | 100% | | | 75% for 1 year | | Yes | | |
| | Giovanni Caforio, M.D. | | | 6 x | | | 100% | | | 75% for 1 year | | | Yes | |
| | David V. Elkins | | | 3 x | | | 100% | | | 75% for 1 year | | | Yes | |
| | Rupert Vessey M.A, B.M., B.Ch., F.R.C.P., D.Phil. | | | 3 x | | | 100% | | | 75% for 1 year | | | Yes | |
| | Christopher Boerner, Ph.D. | | | 3 x | | | 100% | | | 75% for 1 year | | | Yes | |
| | Sandra Leung | | | 3 x | | | 100% | | | 75% for 1 year | | | Yes | |
1)
| Our share retention policy requires executives to hold 75% of all newly acquired shares for 1 year after vesting even if they have met their share retention requirement. If they have not met their share retention requirement, they must hold 100% of the vested shares. |
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Recoupment of Compensation
We maintain clawback provisions relating to our short-term and long-term annual incentive programs, including related to stock options, restricted stock units, performance share units and market share units. UnderThe below table provides further details on these clawback provisions,provisions.
| | If an executive or other employee: | | | Result of executive/employee conduct | | | The Company Can Seek Reimbursement/Recoupment of: | |
| | Short-Term Annual Incentive | | | Long-Term Equity | |
| | Current/ Relevant Period bonus(1) | | | Future bonus | | | Current/ Outstanding award | | | Future award | |
| | • Engaged in misconduct | | | Caused or partially caused restatement of financial results | | | ✔ | | | | | | | | | | |
| | • Engaged in misconduct or failed to appropriately supervise an employee who engaged in misconduct | | | Material violation of a company policy relating to the research, development, manufacturing, sales or marketing of pharmaceutical products, which resulted in a significant negative impact on our results of operations or market capitalization | | | ✔ | | | ✔ | | | ✔ | | | ✔ | |
| | • Engaged in other misconduct | | | Violation of non-competition or non-solicitation agreements or act in manner detrimental to company interest | | | | | | | | | ✔(2) | | | | |
1)
| Plus reasonable interest, where applicable. |
2)
| Must return gains realized in 12-months before violation. |
In addition, the policy provides that, if legally permissible, the company will publicly disclose whenever a decision has been made to use the clawback policy, so long as the underlying event has already been publicly disclosed with the SEC.
The full clawback policy may be viewed on our website at www.bms.com.
Pre-clearance for Section 16 Officers
All members of the Board and all other Section 16 Officers, including our Named Executive Officers, must obtain pre-clearance from the Corporate Secretary’s office prior to making any sale, purchase, stock option exercise, gift, or other transaction in company securities. We work with our plan administrator to permanently restrict the account of all Section 16 Officers, effectively restricting any activity in their brokerage accounts related to our company securities. This permanent restriction and requirement for pre-clearance are mechanisms the company use to administer our insider trading policy, the share ownership requirements for executives and our clawback policy. Together, these help to ensure that violate noncompetition or non-solicitation agreements, or otherwiseexecutives act in the best interest of BMS and our shareholders.
Forfeiture Upon Retirement or Termination
In general, in the event of retirement or a mannerqualifying involuntary termination, upon signing a general release, employees are eligible to vest in a pro-rata portion of unvested RSUs, PSUs, and MSUs held at least one year from the grant date, subject to meeting applicable performance goals. However, executives who are found to have engaged in severe misconduct or in an activity, which may include a failure to take action, deemed detrimental to ourthe interests of the company including, but not limited to acts involving dishonesty, violation of company policies, violation of safety rules, disorderly conduct, discriminatory harassment, unauthorized disclosure of confidential information, or the entry of a plea of nolo contendere to, or the conviction of, a crime, will be terminated and will forfeit any outstanding awards, and any accrued and unpaid dividend equivalents underlying these awards, as of the date such violation is discovered and have to return any gains realized in the twelve months prior to the violation. TheseAs noted, these provisions servehelp to protect our intellectual property and human capital, and help ensure that executives act in the long-term best interest of BMS and our shareholders.
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In 2005,
For further discussion on forfeiture provisions related to retirement, termination or death, please see the Board adopted a policy whereindiscussion under the Board will seek reimbursement of annual incentive awards paid to an executive if such executive engaged in misconduct that caused or partially caused a restatement of financial results. In such an event, we will seek to claw back the executive's entire annual incentive for the relevant period, plus a reasonable rate of interest. This policy may be viewedheader “Post-Termination Benefits” beginning on our website at www.bms.com.
page
Table of Contents73 In December 2012, the Board adopted a policy that BMS will seek recoupment of any incentive and/or other compensation paid to executives and certain other employees after December 4, 2012 where:
•the executive or other employee engaged in misconduct, or failed to appropriately supervise an employee who engaged in misconduct, that resulted in a material violation of a BMS policy relating to the research, development, manufacturing, sales or marketing of pharmaceutical products; and.
•the Committee determines that this material violation of a BMS policy resulted in a significant negative impact on our results of operations or market capitalization.
In any instance where the employee misconduct occurred in a prior year, the Committee may elect to reduce a current or future incentive and/or other compensation award in lieu of requiring reimbursement of past compensation previously paid to such executive or other employee. This policy may be viewed on our website at www.bms.com.
The
Committee'sCommittee’s policy covering equity grants for
theour Named Executive Officers is as follows:
Awards granted to the CEO must be approved by the Committee and recommended by the Committee to, and approved by at least 75% of, the independent directors of theour Board.
•The Committee
must approveapproves awards to all
other Named Executive Officers.
Our regularly scheduled annual equity awards are approved on the date the Committee and full Board meet during the first week of March, with a grant effective date of March 10.
For awards granted to current employees at any other time during the year, the grant effective date is the first business day of the month following the approval date, except that if the approval date falls on the first business day of a given month, the grant effective date is the approval date.
•For awards granted to new hires, the grant effective date is the first business day of the month following the
employee'semployee’s hire date, except that if the
employee'semployee’s hire date falls on the first business day of a given month, the grant effective date is the
employee'semployee’s hire date.
In no
case whatsoeverevent will the grant effective date precede the approval date of a given award.
The grant price of awards is a
ten-day10-day average closing price (i.e., an average of the closing price on the grant date plus the
nine9 prior trading days). For stock options that may be granted under special circumstances (none have been granted since 2009), the grant price will be the closing price on the date of grant.
Policy AgainstProhibiting Hedging and Pledging
We consider it improper and inappropriate for our directors, officers, and other employees to engage in any transactions that hedge or offset, or are designed to hedge or offset, any decrease in the value of our securities. As such, our insider trading policy prohibits all employees, including directors and executive officers, from engaging in any speculative or hedging transactions or any other transactions that are designed to offset any decrease in the value of our securities. Our insider trading policy also prohibits all employees, including directors and executive officers, from holding our securities in a margin account or pledging our securities as collateral for a loan except in certain limited circumstances pre-approved by our Corporate Secretary when a person wishes to pledge our securities as collateral for a loan and clearly demonstrates the ability to repay the loan without selling such securities. None of our directors or executive officers has pledged shares of our stock as collateral for a loan or holds shares of our stock in a margin account.
Policy Prohibiting the Repricing of Stock Options
Without Shareholder Consent
We have always maintained a consistent policy against the repricing of stock options. We believe this is a critical element in maintaining the integrity of the equity compensation program and ensuring alignment of senior executives'executives’ interests with the interests of shareholders. TheOur Board of Directors has adopted a formal policy prohibiting the repricing of stock options. This policy may be viewed on our website at www.bms.com. As noted, we have not granted any stock options to our executives since 2009.www.bms.com.
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Policy Regarding Shareholder Approval of Severance
The
Our Board has approved a policy that requires shareholder approval of any future agreements that provide for cash severance payments in excess of 2.99 times the sum of an executive'sexecutive’s base salary plus annual incentive award. "Cash“Cash severance payments"payments” exclude accrued incentive payments, the value of equity acceleration, benefits continuation or the increase in retirement benefits triggered by severance provisions or tax gross-up payments. This policy may be viewed on our website at www.bms.com.www.bms.com.
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Risk Assessment of Executive Compensation
The Committee annually reviews the compensation programs from a risk perspective. Based on that review of ourthe executive compensation arrangements for our executives as detailed beginning on page 20,41, the Committee believes that our compensation program does not encourage executives to take excessive or inappropriate risks that could maximize short-term results at the expense of sustainable long-term value creation that may harm shareholder value. The Committee’s ongoing review of our business strategy and our extensive shareholder engagement efforts have allowed our executive compensation program to maintain close alignment with our strategic focus and the perspectives of our shareholders.
Our compensation program achievesis intended to achieve this by striking an appropriate balance between short-term and long-term incentives, using a diversity of metrics to assess performance and payout under our incentive programs, placing caps on our incentive award payout opportunities, following equity grant practices that limit potential for timing awards and having stock ownership and retention requirements. For example, our current long-term equity incentive program (60% performance share units (PSUs)Performance Share Units and 40% market share units (MSUs))Market Share Units) incorporates the company'scompany’s stock price into its performance measures and generally magnifies the impact of changes in our stock price as well as relative total shareholder return (TSR) performance over the midmid- and longer-term.
Also embedded in the
Committee'sCommittee’s annual review is the ongoing assessment of enterprise risk, including reputational risks stemming from the dynamic external environment. In addition, we evaluate the performance of each of our executives based on a number of factors, including how they demonstrate our
Company BehaviorsBMS Values in the execution of their day-to-day decisions. Those
behaviorsBMS Values include, among others, accountability. This evaluation is one input into the determination of payouts under both the annual incentive and long-term equity incentive programs. Therefore, given the direct link between payout and our executive compensation
program'sprogram’s emphasis on sustainable long-term value, we
attempt to minimize and appropriately reduce the possibility that our executive officers will make excessively or inappropriately risky decisions that could maximize short-term results at the expense of sustainable long-term value creation for our shareholders.
Tax Implications of Executive Compensation Program
Section 162(m) of the Internal Revenue Code includes potential limitations on the deductibility of compensation in excess of $1 million paid to certain Named Executive Officers. A significant portion of the compensation paid or awarded in 2017 to our Named Executive Officers was intended to qualify as "performance-based compensation" for purposes of Section 162(m). Based on changes to Section 162(m) adopted in late 2017, we cannot be certain of how much of this "performance-based compensation" will in fact be deductible under Section 162(m). We view preserving tax deductibility as an important objective, but not the sole objective, in establishing executive compensation. Accordingly, we may authorize compensation arrangements that are not tax deductible. To the extent that compensation paid or awarded in 2017 to certain Named Executive Officers, such as salary and distributions pursuant to the vesting of restricted stock units awarded without performance-based vesting conditions, does not qualify for an exception under Section 162(m) and exceeds $1 million in the aggregate, we will not be able to deduct such excess for federal income tax purposes.
Compensation and Management Development Committee Report The Compensation and Management Development Committee of Bristol-MyersBristol Myers Squibb Company has reviewed and discussed with management the "Compensation“Compensation Discussion and Analysis"Analysis” on pages 3134 to 5380 of this Proxy Statement as required under Item 402(b) of Regulation SK.S-K. Based on its review and discussions with management, the Committee recommended to the full Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Compensation and Management Development Committee
Peter J. Arduini
Mathew
Derica W. Emmens
Dinesh C. Paliwal
Gerald L. StorchRice
Karen H. Vousden, Ph.D.
When setting executive compensation, we consider many factors, such as attracting and retaining executives and providing appropriate performance incentives. We also consider the after-tax cost to the company in establishing executive compensation programs, both individually and in the aggregate, but tax deductibility is not our sole consideration. Section 162(m) of the Internal Revenue Code generally disallows a federal income tax deduction to public companies for annual compensation over $1 million (per individual) paid to their chief executive officer, chief financial officer and the next three most highly compensated executive officers (as well as certain other officers who were covered employees in years after 2016). The 2017 Tax Act eliminated most of the exceptions from the $1 million deduction limit, except for certain arrangements in place as of November 2, 2017. As a result, most of the compensation payable to our Named Executive Officers in excess of $1 million per person in a year will not be fully deductible.
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Summary Compensation Table The following tables and notes present the compensation provided to Giovanni Caforio, M.D.,
Chairman of the Board
Chair and Chief Executive Officer,
Charles A. Bancroft,David V. Elkins, EVP and Chief Financial Officer
and Executive Vice President, Head of Global Business Operations and the three other most highly compensated Executive Officers.
Summary Compensation Table
For
Fiscal Years Ended December 31,
2017, 20162021, 2020, and
20152019
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Name and Principal Position
|
| Year
(1) |
| Salary
(2) |
| Bonus
(3) |
| Stock Awards
(4) |
| Non-Equity
Incentive Plan
Compensation
(5) |
| Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings
(6) |
| All Other
Compensation
(7) |
| Total |
| |
| | Giovanni Caforio, M.D. | | | 2017 | | $ | 1,587,500 | | $ | 0 | | $ | 12,650,528 | | $ | 3,899,094 | | $ | 0 | | $ | 550,001 | | $ | 18,687,123 | | |
| | Chairman and Chief Executive | | | 2016 | | $ | 1,513,077 | | $ | 0 | | $ | 11,823,808 | | $ | 2,995,839 | | $ | 0 | | $ | 601,134 | | $ | 16,933,858 | | |
| | Officer | | | 2015 | | $ | 1,290,323 | | $ | 0 | | $ | 10,443,900 | | $ | 3,496,370 | | $ | 0 | | $ | 409,844 | | $ | 15,640,437 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Charles Bancroft | | | 2017 | | $ | 997,294 | | $ | 0 | | $ | 4,321,014 | | $ | 1,887,005 | | $ | 1,307,641 | | $ | 303,354 | | $ | 8,816,308 | | |
| | Chief Financial Officer and EVP, | | | 2016 | | $ | 966,115 | | $ | 0 | | $ | 4,013,210 | | $ | 1,530,654 | | $ | 110,329 | | $ | 351,385 | | $ | 6,971,693 | | |
| | Head of Global Business Operations | | | 2015 | | $ | 966,342 | | $ | 0 | | $ | 4,714,600 | | $ | 1,962,093 | | $ | 763,316 | | $ | 303,893 | | $ | 8,710,244 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Thomas J. Lynch, Jr., M.D.(8) | | | 2017 | | $ | 796,154 | | $ | 1,400,000 | | $ | 4,425,587 | | $ | 1,576,706 | | $ | 0 | | $ | 113,522 | | $ | 8,311,969 | | |
| | EVP and Chief Scientific Officer | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Sandra Leung | | | 2017 | | $ | 947,436 | | $ | 0 | | $ | 3,047,660 | | $ | 1,493,890 | | $ | 794,983 | | $ | 259,448 | | $ | 6,543,417 | | |
| | EVP and General Counsel | | | 2016 | | $ | 919,945 | | $ | 0 | | $ | 2,883,253 | | $ | 1,214,632 | | $ | 103,886 | | $ | 320,085 | | $ | 5,441,801 | | |
| | | | | 2015 | | $ | 925,146 | | $ | 0 | | $ | 3,596,111 | | $ | 1,747,429 | | $ | 396,080 | | $ | 265,992 | | $ | 6,930,758 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Murdo Gordon | | | 2017 | | $ | 844,960 | | $ | 0 | | $ | 2,785,886 | | $ | 1,181,458 | | $ | 376,288 | | $ | 201,788 | | $ | 5,390,380 | | |
| | EVP and Chief Commercial Officer | | | 2016 | | $ | 737,225 | | $ | 0 | | $ | 1,998,249 | | $ | 903,363 | | $ | 147,030 | | $ | 204,480 | | $ | 3,990,347 | | |
| | | | | 2015 | | $ | 669,519 | | $ | 0 | | $ | 1,816,126 | | $ | 1,019,881 | | $ | 0 | | $ | 148,677 | | $ | 3,654,203 | | |
(1) For Dr. Lynch, compensation is not shown for fiscal years 2015 and 2016 because Dr. Lynch was not a Named Executive Officer in those years.
(2) Reflects actual salary earned. Dr. Lynch's 2017 salary was paid from March 16, 2017, the date he was hired as Executive Vice President and Chief Scientific Officer, through year-end.
(3) For 2017, represents Dr. Lynch's sign on bonus in connection with his recruitment to join the company.
(4) | | Giovanni Caforio, M.D.
Board Chair and Chief Executive Officer | | | 2021 | | | $1,700,000 | | | $0 | | | $13,965,989 | | | $3,410,625 | | | $0 | | | $708,192 | | | $19,784,806 | |
| | 2020 | | | $1,687,115 | | | $0 | | | $13,457,248 | | | $4,201,602 | | | $0 | | | $804,937 | | | $20,150,902 | |
| | 2019 | | | $1,650,000 | | | $0 | | | $12,545,754 | | | $3,885,540 | | | $0 | | | $685,959 | | | $18,767,253 | |
| | David V. Elkins EVP and Chief Financial
Officer | | | 2021 | | | $1,027,005 | | | $525,000 | | | $4,716,137 | | | $1,342,169 | | | $0 | | | $284,749 | | | $7,895,060 | |
| | 2020 | | | $1,015,075 | | | $525,000 | | | $4,409,796 | | | $1,684,892 | | | $0 | | | $17,100 | | | $7,651,863 | |
| | 2019 | | | $116,667 | | | $1,050,000 | | | $1,865,662 | | | $1,323,722 | | | $0 | | | $15,500 | | | $4,371,551 | |
| | Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil. EVP, Research and Early Development | | | 2021 | | | $1,036,972 | | | $500,000 | | | $4,588,306 | | | $1,355,194 | | | $0 | | | $321,639 | | | $7,802,111 | |
| | 2020 | | | $1,022,500 | | | $500,000 | | | $4,079,065 | | | $1,697,239 | | | $0 | | | $17,100 | | | $7,315,904 | |
| | 2019 | | | $116,667 | | | $1,000,000 | | | $1,865,662 | | | $1,241,604 | | | $0 | | | $11,550 | | | $4,235,483 | |
| | Christopher Boerner, Ph.D. EVP and Chief Commercialization Officer | | | 2021 | | | $1,020,118 | | | $0 | | | $4,095,864 | | | $1,313,855 | | | $0 | | | $273,192 | | | $6,703,029 | |
| | 2020 | | | $952,603 | | | $0 | | | $3,210,894 | | | $1,581,713 | | | $0 | | | $247,023 | | | $5,992,233 | |
| | 2019 | | | $891,259 | | | $0 | | | $3,250,793 | | | $1,399,997 | | | $0 | | | $199,601 | | | $5,741,650 | |
| | Sandra Leung EVP and General Counsel | | | 2021 | | | $1,100,196 | | | $0 | | | $3,434,134 | | | $1,298,162 | | | $0 | | | $329,092 | | | $6,161,584 | |
| | 2020 | | | $1,068,271 | | | $0 | | | $3,330,729 | | | $1,642,236 | | | $884,139 | | | $318,570 | | | $7,243,945 | |
| | 2019 | | | $1,008,635 | | | $0 | | | $3,172,998 | | | $1,586,482 | | | $1,425,687 | | | $322,655 | | | $7,516,457 | |
1)
| Reflects actual salary earned. Mr. Elkins' and Dr. Vessey's 2019 salaries were earned from November 20, 2019, the closing of the acquisition of Celgene Corporation in November of 2019 (the “Closing”), through the end of the year. |
2)
| For all three years, for Mr. Elkins and Dr. Vessey, represents 50%, 25% and 25% portions, respectively, of their cash inducement awards, which were granted in connection with inducing them to remain with the company following the Celgene transaction (the “Inducement Awards”). In each case, the awards were payable as soon as practicable after the Closing and on the one-year and two-year anniversaries of the Closing. |
3)
| Represents aggregate grant date fair value under FASB ASC Topic 718 of restricted stock unit (“RSU”), market share unit (“MSU”) and performance share unit (“PSU”) awards granted during a specified year. See Note 17, "Employee Stock Benefit Plans," in the Company's Consolidated Financial Statements, as set forth in the Company's Form 10-K for the year ended December 31, 2017 for the assumptions made in determining these values. Further information regarding these awards, including the assumptions made in determining their values, is disclosed in the Grants of Plan-Based Awards Table in the Proxy Statements for the specified years. For PSU awards, the following represents the aggregate value based on the maximum number of shares that can be earned for the awards granted in the specified years. |
| | Giovanni Caforio, M.D. | | | $12,090,213 | | | $12,702,323 | | | $13,646,789 | |
| | David V. Elkins | | | n.a. | | | $4,355,031 | | | $4,608,360 | |
| | Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil. | | | n.a. | | | $4,028,439 | | | $4,483,451 | |
| | Christopher Boerner, Ph.D. | | | $2,593,384 | | | $3,115,775 | | | $4,002,246 | |
| | Sandra Leung | | | $3,057,786 | | | $3,140,738 | | | $3,355,641 | |
TABLE OF CONTENTS
4)
| Represents incentive award earned under our Company's annual incentive plan. For 2021 the payments were made on March 4, 2022. For 2020, the payments were made on March 5, 2021. For 2019, the payments were made on March 13, 2020 for Mr. Elkins and Dr. Vessey, and on March 6, 2020 for the other NEOs. |
5)
| Includes increase in estimated value of accrued pension benefits under the U.S BEP-Retirement Income Plan (“RIP”) during the year. The Company does not pay above-market interest rates on deferred compensation. In 2021, the present value of the accrued pension benefits for Ms. Leung, the only 2021 NEO participant in the Company's defined benefit pension plans, decreased by $719,674 over the previous year because of an increase in discount rates, partially offset by updated lump sum mortality projection scales. |
6)
| The amounts indicated for 2021 represent Company contributions to our qualified and non-qualified savings plans. On occasion, a family member accompanied Dr. Caforio and Dr. Boerner, at no incremental cost to the Company, when traveling on the Company's NetJets account on business. Dr. Caforio and Dr. Boerner paid the taxes on the imputed income as calculated using the Standard Industry Fare Level (SIFL) rate. We did not reimburse Dr. Caforio or Dr. Boerner for taxes they paid. |
TABLE OF CONTENTS
Grants of Plan-Based Awards Table in the Proxy Statements for the specified years. For performance share unit awards, the following represents the aggregate value based on the maximum number of shares that can be earned for the awards granted in the specified years. 2021 Fiscal Year
| | Giovanni Caforio, M.D. | | | AIP | | | | | | | | | $118,575 | | | $2,550,000 | | | $5,100,000 | | | | | | | | | | | | | |
| | | | | PSU | | | 03/10/21 | | | 03/01/21 | | | | | | | | | | | | 23,579 | | | 142,904 | | | 285,808(3) | | | $8,437,052(5) | |
| | | | | MSU | | | 03/10/21 | | | 03/01/21 | | | | | | | | | | | | 57,161 | | | 95,269 | | | 190,538(4) | | | $5,528,936(6) | |
| | David V. Elkins | | | AIP | | | | | | | | | $48,507 | | | $1,043,158 | | | $2,086,316 | | | | | | | | | | | | | |
| | | | | PSU | | | 03/10/21 | | | 03/01/21 | | | | | | | | | | | | 7,962 | | | 48,257 | | | 96,514(3) | | | $2,849,093(5) | |
| | | | | MSU | | | 03/10/21 | | | 03/01/21 | | | | | | | | | | | | 19,303 | | | 32,171 | | | 64,342(4) | | | $1,867,044(6) | |
| | Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil. | | | AIP | | | | | | | | | $48,978 | | | $1,053,281 | | | $2,106,562 | | | | | | | | | | | | | |
| | | | | PSU | | | 03/10/21 | | | 03/01/21 | | | | | | | | | | | | 7,747 | | | 46,949 | | | 93,898(3) | | | $2,771,869(5) | |
| | | | | MSU | | | 03/10/21 | | | 03/01/21 | | | | | | | | | | | | 18,779 | | | 31,299 | | | 62,598(4) | | | $1,816,437(6) | |
| | Christopher Boerner, Ph.D. | | | AIP | | | | | | | | | $47,484 | | | $1,021,152 | | | $2,042,304 | | | | | | | | | | | | | |
| | | | | PSU | | | 03/10/21 | | | 03/01/21 | | | | | | | | | | | | 6,915 | | | 41,910 | | | 83,820(3) | | | $2,474,366(5) | |
| | | | | MSU | | | 03/10/21 | | | 03/01/21 | | | | | | | | | | | | 16,764 | | | 27,940 | | | 55,880(4) | | | $1,621,498(6) | |
| | Sandra Leung | | | AIP | | | | | | | | | $51,182 | | | $1,100,678 | | | $2,201,356 | | | | | | | | | | | | | |
| | | | | PSU | | | 03/10/21 | | | 03/01/21 | | | | | | | | | | | | 5,798 | | | 35,139 | | | 70,278(3) | | | $2,074,607(5) | |
| | | | | MSU | | | 03/10/21 | | | 03/01/21 | | | | | | | | | | | | 14,056 | | | 23,426 | | | 46,852(4) | | | $1,359,528(6) | |
1)
| These equity awards were granted under our 2012 Stock Award and Incentive Plan. |
2)
| Target payouts under the 2021 annual incentive plan (“AIP”) are based on a targeted percentage of annual base salary. The Committee reviews Company and individual performance in determining the actual incentive award as reported in the Summary Compensation Table. The company performance for 2021 was based 30% on non-GAAP diluted earnings per share, 25% on total revenues (net of foreign exchange), 25% on pipeline performance, and 20% on Key Integration metric consisting of synergy realizations and human capital management, each weighted 10%. Maximum represents the maximum individual incentive award allowable under the 2021 AIP and for the Named Executive Officers is 200% of his or her target. For 2021, threshold payout for all measures was 46.50% of target. The threshold column above reflects the lowest possible combined payout of 4.65% of target based on the threshold payout on one of the least weighted metrics. |
3)
| Reflects PSUs which cliff vest on the third anniversary of the grant date. Performance targets under these PSUs are based 33% on 3-year cumulative total revenues (net of foreign exchange), 33% on 3-year cumulative operating margin, and 34% on 3-year relative TSR expressed as a percentile rank versus our peer group. Threshold payout for all three measures is 50% of target. The threshold column above reflects the lowest possible combined payout of 16.50% of target based on the threshold payout on one of the least weighted metrics only. The maximum performance will result in a payout of 200% of target. PSUs do not accrue dividend equivalents. |
4)
| Reflects MSUs which vest in equal annual installments on the first, second, third and fourth anniversaries of the grant date. Each MSU converts into the number of shares of Common Stock determined by applying a payout factor to the target number of shares vesting on a given date. The payout factor is a ratio of the average of the closing Common Stock price on the February 28 measurement date immediately preceding the vesting date plus the nine prior trading days divided by the average Common Stock price on the grant date (also a 10-day average). The minimum payout factor that must be achieved to earn a payout is 60% and the maximum payout factor is 200%. MSUs do not accrue dividend equivalents. |
5)
| Fair value for the portion of these PSUs related to the relative TSR measure (34% weighting) is estimated as of the date of grant on March 10, 2021 using a Monte Carlo simulation. Estimated fair value of this portion was determined to be $66.41, which represents 109% of the grant date closing Common Stock price of $60.93. 'The assumptions used in this Monte Carlo simulation were as follows: volatility for BMY of 27.1%, the average for the peers of 27.4% and correlation co-efficient average of 40.5% based on three-year historical stock price data; assumed dividend yield of 3.22% based on the most recent annualized payment of $1.96 per share and the grant date stock price of $60.93; BMY’s starting TSR of 0.1% and the average for the peers of 1.4%, and a risk-free rate of 0.31%. Fair value for the remaining portion of these PSUs, related to Company financial measures (66% weighting), is calculated based on the grant date closing Common Stock price of $60.93 on March 10, 2021 and a probable outcome of a 100% payout, discounted for the lack of dividends. Estimated fair value of this portion was determined to be $55.24, which represents 90.7% of the grant date closing Common Stock price of $60.93. Therefore, the estimated grant date fair value for the whole PSU award equals $59.04, which represents 96.9% of the grant date closing Common Stock price of $60.93. |
6)
| Fair value of these MSUs is estimated as of the date of grant on March 10, 2021 using a Monte Carlo simulation. Estimated fair value was determined to be $58.035, which represents 95.25% of the grant date closing Common Stock price of $60.93. The assumptions used in the Monte Carlo simulation were as follows: volatility for BMY of 25.5% based on four-year historical stock price data; assumed dividend yield of 3.22'% based on the most recent annualized payment of $1.96 per share and the grant date stock price of $60.93; BMY’s starting performance was 0.1%; and risk-free rate for each measurement period of: |
•
| Tranche 1 ending Feb 28, 2022: 0.08%; |
•
| Tranche 2 ending Feb 28, 2023: 0.16%; |
•
| Tranche 3 ending Feb 28, 2024: 0.31%; and |
•
| Tranche 4 ending Feb 28, 2025: 0.54% |
| | | | | | | | | | | |
| | Performance Share Units |
| |
Name
|
| 2015 |
| 2016 |
| 2017 |
| |
Giovanni Caforio, M.D. | | $ | 10,869,950 | | $ | 11,433,139 | | $ | 12,037,692 | | |
Charles Bancroft | | $ | 5,246,562 | | $ | 3,880,596 | | $ | 4,111,682 | | |
Thomas J. Lynch, Jr., M.D.(1) | | | n.a. | | | n.a. | | $ | 3,072,610 | | |
Sandra Leung | | $ | 4,000,898 | | $ | 2,787,993 | | $ | 2,899,997 | | |
Murdo Gordon | | $ | 1,936,940 | | $ | 1,932,229 | | $ | 2,650,923 | | |
(5) Represents incentive award earned under our annual incentive plan. Dr. Lynch's 2017 target incentive award was pro-rated based on his date of hire. For 2017, the payment was made on March 9, 2018. For 2016 and 2015, the payments were made on March 10, 2017 and March 11, 2016, respectively.
(6) Includes increase in estimated value of accrued pension benefits during the year. The company does not pay above-market interest rates on deferred compensation. 2014 was the last year of pay growth under our U.S. defined benefit pension plans. The present value of the accrued pension benefits for Mr. Bancroft, Mr. Gordon and Ms. Leung increased over the previous year because of a decrease in discount rates. Additionally, the increase reflects the fact that these Named Executive Officers are one year closer to age 60, the earliest age at which participants are eligible for an unreduced benefit. For Mr. Gordon, the increase was additionally due to an increase in exchange rates from CAD to USD. Mr. Gordon commenced his participation in the U.S. pension plan effective July 1, 2003. Additionally, Mr. Gordon was a participant in our KIP Supplemental Plan, payable in USD, and Canada RIP, payable in CAD, from August 1, 1989 through June 30, 2003. The change in value relating to the KIP Supplemental Plan and Canada RIP also reflects the difference in exchange rates used to convert the 2015, 2016 and 2017 amounts from CAD into USD. These exchange rates were 0.7335 for 2015, 0.7389 for 2016, and 0.7857 for 2017. For all three Named Executive Officers, the increase was partially offset by updated annuity and lump sum mortality projection scales. Dr. Caforio and Dr. Lynch are not participants in any of the company's defined benefit pension plans.
(7) The amounts indicated for 2017 represent company contributions to the qualified and non-qualified savings plans. In connection with his recruitment to join our company, Dr. Lynch received a reimbursement of legal fees ($25,000); as well as another benefit that is generally available to any of our salaried employees: reimbursement of relocation costs ($4,489.71); and a tax gross up on the payment of relocation costs ($2.279.01). Dr. Lynch paid the taxes on the imputed income related to both the legal fees and the relocation costs. We did not reimburse Dr. Lynch for taxes he paid with respect to the legal fees. These perquisites are valued based on the aggregate incremental cost. On occasion, a family member accompanied Dr. Caforio when traveling on the company's HeliFlite account on business. Dr. Caforio paid the taxes on the imputed income as calculated using the Standard Industry Fare Level (SIFL) rate. We did not reimburse Dr. Caforio for taxes he paid.
(8) Dr. Thomas J. Lynch was hired as Executive Vice President and Chief Scientific Officer effective March 16, 2017.TABLE OF CONTENTS
Table of Contents
Grants of Plan-Based Awards
2017 Fiscal Year
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| Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards(2)
|
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| Estimated Future Payouts Under
Equity Incentive
Plan Awards (shares)
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| All Other
Stock
Awards:
# of
Shares
|
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| Grant Date
Fair Value of
Stock and
|
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Name
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| Award
Type
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| Grant
Date(1)
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| Approval
Date
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| Threshold
($)
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| Target
($)
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| Maximum
($)
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| Threshold
(#)
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| Target
(#)
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(#)
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| or Stock
of Units
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| Option
Awards
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Giovanni Caforio, M.D. | | AIP | | | | | | | | $ | 276,939 | | $ | 2,381,250 | | $ | 4,762,500 | | | | | | | | | | | | | | | | |
| | PSU | | | 03/10/17 | | | 03/02/17 | | | | | | | | | | | | 21,228 | | | 128,654 | | | 257,308 | (3) | | | | $ | 7,473,511 | (5) |
| | MSU | | | 03/10/17 | | | 03/02/17 | | | | | | | | | | | | 51,461 | | | 85,769 | | | 171,538 | (4) | | | | $ | 5,177,017 | (6) |
Charles Bancroft | | AIP | | | | | | | |
$ |
139,182 | |
$ |
1,196,753 | |
$ |
2,393,506 | | | | | | | | | | | | | | | | |
| | PSU | | | 03/10/17 | | | 03/02/17 | | | | | | | | | | | | 7,251 | | | 43,944 | | | 87,888 | (3) | | | | $ | 2,552,707 | (5) |
| | MSU | | | 03/10/17 | | | 03/02/17 | | | | | | | | | | | | 17,578 | | | 29,296 | | | 58,592 | (4) | | | | $ | 1,768,307 | (6) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Thomas J. Lynch, Jr., M.D. | | AIP | | | | | | | | $ | 116,295 | | $ | 999,960 | | $ | 1,999,920 | | | | | | | | | | | | | | | | |
| | PSU | | | 04/03/17 | | | 03/02/17 | | | | | | | | | | | | 6,010 | | | 36,427 | | | 72,854 | (3) | | | | $ | 1,878,905 | (5) |
| | MSU | | | 04/03/17 | | | 03/02/17 | | | | | | | | | | | | 14,571 | | | 24,285 | | | 48,570 | (4) | | | | $ | 1,276,905 | (6) |
| | RSU | | | 04/03/17 | | | 03/02/17 | | | | | | | | | | | | | | | | | | | | | 25,184 | (7) | $ | 1,269,777 | (8) |
Sandra Leung | | AIP | | | | | | | |
$ |
110,187 | |
$ |
947,437 | |
$ |
1,894,874 | | | | | | | | | | | | | | | | |
| | PSU | | | 03/10/17 | | | 03/02/17 | | | | | | | | | | | | 5,114 | | | 30,994 | | | 61,988 | (3) | | | | $ | 1,800,441 | (5) |
| | MSU | | | 03/10/17 | | | 03/02/17 | | | | | | | | | | | | 12,398 | | | 20,663 | | | 41,326 | (4) | | | | $ | 1,247,219 | (6) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Murdo Gordon | | AIP | | | | | | | | $ | 98,509 | | $ | 847,024 | | $ | 1,694,048 | | | | | | | | | | | | | | | | |
| | PSU | | | 03/10/17 | | | 03/02/17 | | | | | | | | | | | | 4,675 | | | 28,332 | | | 56,664 | (3) | | | | $ | 1,645,806 | (5) |
| | MSU | | | 03/10/17 | | | 03/02/17 | | | | | | | | | | | | 11,333 | | | 18,888 | | | 37,776 | (4) | | | | $ | 1,140,080 | (6) |
(1) These equity awards were granted under our 2012 Stock Award and Incentive Plan.
(2) Target payouts under our 2017 annual incentive plan (AIP) are based on a targeted percentage of base salary earned during the year. The Committee reviews company and individual performance in determining the actual incentive award as reported in the Summary Compensation Table. The company performance for 2017 was based 50% on non-GAAP diluted earnings per share, 25% on total revenues (net of foreign exchange), and 25% on pipeline performance. Maximum represents the maximum individual incentive award allowable under our 2017 annual incentive plan and for the Named Executive Officers equals 200% of target. For 2017, threshold payout for all three measures was 46.50% of target. The threshold column above reflects the lowest possible combined payout of 11.63% of target based on the threshold payout on the least weighted metric only. The performance targets were the same for all employees participating in the plan. For Named Executive Officers, the Committee may use its discretion to award less than the threshold award even if threshold performance goals are met.
(3) Reflects performance share unit awards which cliff vest on the third anniversary of the grant date. Performance targets under this performance share unit award are based 33% on 3-year cumulative total revenues (net of foreign exchange), 33% on 3-year cumulative operating margin, and 34% on 3-year relative TSR expressed as a percentile rank versus our peer group. Threshold payout for all three measures was 50% of target. The threshold column above reflects the lowest possible combined payout of 16.50% of target based on the threshold payout on one of the least weighted metrics only. The maximum performance will result in a payout of 200% of target. These performance share unit awards do not accrue dividend equivalents.
(4) Reflects market share unit awards which vest in equal annual installments on the first, second, third and fourth anniversaries of the grant date. Each market share unit converts into the number of shares of common stock determined by applying a payout factor to the target number of shares vesting on a given date. The payout factor is a ratio of the average of the closing price on the measurement date of February 28 immediately preceding the vesting date plus the nine prior trading days divided by the average stock price on the grant date (also a 10-day average). The minimum payout factor that must be achieved to earn a payout is 60% and the maximum payout factor is 200%. These market share units do not accrue dividend equivalents.
(5) Fair value for the portion of these performance share unit awards related to the relative TSR measure (34% weighting) is estimated as of the date of grant on April 3, 2017 for Dr. Lynch and March 10, 2017 for all other Named Executive Officers using a Monte Carlo simulation. Fair value for the remaining portion of these performance share unit awards, related to company financial measures (66% weighting), is calculated based on the grant date closing price of $54.21 on April 3, 2017 for Dr. Lynch and $58.32 on March 10, 2017 for all other Named Executive Officers and a probable outcome of a 100% payout, discounted for the lack of dividends. Assumptions used in these calculations are included in Note 17, "Employee Stock Benefit Plans," of the Company's Form 10-K for the year ended December 31, 2017.
(6) Fair value of these market share unit awards is estimated as of the date of grant on April 3, 2017 for Dr. Lynch and March 10, 2017 for all other Named Executive Officers using a Monte Carlo simulation. Assumptions used in these calculations are included in Note 17, "Employee Stock Benefit Plans," of the Company's Form 10-K for the year ended December 31, 2017.
(7) Reflects a restricted stock unit award which vests in four equal installments on the first, second, third and fourth anniversaries of the grant date.
(8) The fair value of the restricted stock award is calculated based on the grant date closing price of $54.21 on April 3, 2017, discounted for the lack of dividends.
Table of Contents
Outstanding Equity Awards at Fiscal Year-End
2017
2021 Fiscal Year
| | Giovanni Caforio, M.D. | | | 1/1/2019-2/28/2022 | | | | | | | | | | | | | | | | | | | | | 297,516(5) | | | $18,550,123 | |
| | | | | 1/1/2020-2/28/2023 | | | | | | | | | | | | | | | | | | | | | 280,890(6) | | | $17,513,492 | |
| | | | | 1/1/2021-2/28/2024 | | | | | | | | | | | | | | | | | | | | | 285,808(7) | | | $17,820,129 | |
| | | | | 3/10/2018 | | | | | | | | | | | | | | | | | | | | | 18,726(8) | | | $1,167,566 | |
| | | | | 3/10/2019 | | | | | | | | | | | | | | | | | | | | | 99,172(9) | | | $6,183,374 | |
| | | | | 3/10/2020 | | | | | | | | | | | | | | | | | | | | | 140,446(9) | | | $8,756,808 | |
| | | | | 3/10/2021 | | | | | | | | | | | | | | | | | | | | | 57,161(10) | | | $3,564,013 | |
| | David V. Elkins | | | 1/1/2020-2/28/2023 | | | | | | | | | | | | | | | | | | | | | 96,304(6) | | | $6,004,554 | |
| | | | | 1/1/2021-2/28/2024 | | | | | | | | | | | | | | | | | | | | | 96,514(7) | | | $6,017,648 | |
| | | | | 3/10/2020 | | | | | | | | | | | | | | | | | | | | | 48,154(9) | | | $3,002,402 | |
| | | | | 3/10/2021 | | | | | | | | | | | | | | | | | | | | | 19,303(10) | | | $1,203,517 | |
| | | | | 8/1/2018 | | | 0 | | | 2,063 | | | $48.49 | | | 8/1/2028 | | | | | | | | | | | | | |
| | | | | 8/1/2018 | | | 74,954 | | | 46,260 | | | $48.49 | | | 8/1/2028 | | | | | | | | | | | | | |
| | | | | 3/1/2019 | | | | | | | | | | | | | | | 24,577(4)(12) | | | $1,532,376 | | | | | | | |
| | | | | 12/2/2019 | | | | | | | | | | | | | | | 17,584(11) | | | $1,096,362 | | | | | | | |
| | Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil. | | | 1/1/2020-2/28/2023 | | | | | | | | | | | | | | | | | | | | | 89,082(6) | | | $5,554,263 | |
| | | | | 1/1/2021-2/28/2024 | | | | | | | | | | | | | | | | | | | | | 93,898(7) | | | $5,854,540 | |
| | | | | 3/10/2020 | | | | | | | | | | | | | | | | | | | | | 44,542(9) | | | $2,777,194 | |
| | | | | 3/10/2021 | | | | | | | | | | | | | | | | | | | | | 18,779(10) | | | $1,170,896 | |
| | | | | 7/27/2015 | | | 5,843 | | | 0 | | | $70.89 | | | 7/27/2025 | | | | | | | | | | | | | |
| | | | | 5/1/2017 | | | 21,288 | | | 0 | | | $66.35 | | | 5/1/2027 | | | | | | | | | | | | | |
| | | | | 7/31/2017 | | | 21,288 | | | 0 | | | $72.42 | | | 7/31/2027 | | | | | | | | | | | | | |
| | | | | 10/30/2017 | | | 12,233 | | | 0 | | | $54.29 | | | 10/30/2027 | | | | | | | | | | | | | |
| | | | | 1/29/2018 | | | 0 | | | 1,800 | | | $55.52 | | | 1/29/2028 | | | | | | | | | | | | | |
| | | | | 1/29/2018 | | | 0 | | | 3,494 | | | $55.52 | | | 1/29/2028 | | | | | | | | | | | | | |
| | | | | 5/8/2018 | | | 0 | | | 8,491 | | | $44.70 | | | 5/8/2028 | | | | | | | | | | | | | |
| | | | | 7/30/2018 | | | 0 | | | 8,491 | | | $47.81 | | | 7/30/2028 | | | | | | | | | | | | | |
| | | | | 10/29/2018 | | | 1 | | | 0 | | | $38.41 | | | 10/29/2028 | | | | | | | | | | | | | |
| | | | | 10/29/2018 | | | 8,489 | | | 8,491 | | | $38.41 | | | 10/29/2028 | | | | | | | | | | | | | |
| | | | | 2/4/2019 | | | | | | | | | | | | | | | 3,593(4)(12) | | | $224,024 | | | | | | | |
| | | | | 3/1/2019 | | | | | | | | | | | | | | | 23,350(4)(12) | | | $1,455,873 | | | | | | | |
| | | | | 12/2/2019 | | | | | | | | | | | | | | | 17,584(11) | | | $1,096,362 | | | | | | | |
| | Christopher Boerner, Ph.D. | | | 1/1/2019-2/28/2022 | | | | | | | | | | | | | | | | | | | | | 63,818(5) | | | $3,979,052 | |
| | | | | 1/1/2020-2/28/2023 | | | | | | | | | | | | | | | | | | | | | 68,900(6) | | | $4,295,915 | |
| | | | | 1/1/2021-2/28/2024 | | | | | | | | | | | | | | | | | | | | | 83,820(7) | | | $5,226,177 | |
| | | | | 3/10/2018 | | | | | | | | | | | | | | | | | | | | | 1,762(8) | | | $109,861 | |
| | | | | 3/10/2019 | | | | | | | | | | | | | | | | | | | | | 21,274(9) | | | $1,326,434 | |
| | | | | 3/10/2020 | | | | | | | | | | | | | | | | | | | | | 34,450(9) | | | $2,147,958 | |
| | | | | 3/10/2021 | | | | | | | | | | | | | | | | | | | | | 16,764(10) | | | $1,045,235 | |
| | | | | 12/2/2019 | | | | | | | | | | | | | | | 5,275(11) | | | $328,896 | | | | | | | |
| | Sandra Leung | | | 1/1/2019-2/28/2022 | | | | | | | | | | | | | | | | | | | | | 75,246(5) | | | $4,691,588 | |
| | | | | 1/1/2020-2/28/2023 | | | | | | | | | | | | | | | | | | | | | 69,452(6) | | | $4,330,332 | |
| | | | | 1/1/2021-2/28/2024 | | | | | | | | | | | | | | | | | | | | | 70,278(7) | | | $4,381,833 | |
| | | | | 3/10/2018 | | | | | | | | | | | | | | | | | | | | | 4,737(8) | | | $295,352 | |
| | | | | 3/10/2019 | | | | | | | | | | | | | | | | | | | | | 25,084(9) | | | $1,563,987 | |
| | | | | 3/10/2020 | | | | | | | | | | | | | | | | | | | | | 34,726(9) | | | $2,165,166 | |
| | | | | 3/10/2021 | | | | | | | | | | | | | | | | | | | | | 14,056(10) | | | $876,367 | |
1)
| Represents Celgene stock options that were assumed by the Company and converted into BMS stock options in connection with the Closing and in accordance with the terms of the merger agreement. Pursuant to legacy Celgene equity plans, options granted to employees are immediately exercisable. However, the shares of Common Stock acquired upon exercise would be subject to the same vesting schedule as the underlying options (i.e., in four equal annual installments beginning on the first anniversary of the grant date). Unvested options are included in the Unexercisable Column. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Option Awards |
| Stock Awards | |
| |
| Grant Date/
Performance
Award
|
|
| Number of Securities
Underlying Unexercised
Options (#)
|
|
| Option
Exercise
|
|
| Option
Expiration
|
|
| Number of
Shares or
Units of
Stock That
Have Not
Vested
|
|
| Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
|
|
| Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Rights That
Have Not
Vested
|
|
| Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Rights That
Have Not
Vested
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name
|
|
| Period
|
|
| Exercisable (1)
|
|
| Unexercisable
|
|
| Price
|
|
| Date
|
|
| (#) (2)
|
|
| ($) (2)(3)
|
|
| (#)
|
|
| ($) (3)
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Giovanni Caforio, M.D. | | | 1/1/2015-2/28/2018 | | | | | | | | | | | | | | | | | | | | | 121,333 | (5) | $ | 7,435,285 | |
| | | 1/1/2016-2/28/2019 | | | | | | | | | | | | | | | | | | | | | 54,550 | (6) | $ | 3,342,793 | |
| | | 1/1/2017-2/28/2020 | | | | | | | | | | | | | | | | | | | | | 64,327 | (7) | $ | 3,941,959 | |
| | | 3/10/2014 | | | | | | | | | | | | | | | | | | | | | 11,404 | (8) | $ | 698,837 | |
| | | 3/10/2015 | | | | | | | | | | | | | | | | | | | | | 14,103 | (9) | $ | 864,232 | |
| | | 5/5/2015 | | | | | | | | | | | | | | | | | | | | | 32,160 | (8) | $ | 1,970,765 | |
| | | 3/10/2016 | | | | | | | | | | | | | | | | | | | | | 54,550 | (9) | $ | 3,342,824 | |
| | | 3/10/2017 | | | | | | | | | | | | | | | | | | | | | 51,461 | (10) | $ | 3,153,555 | |
Charles Bancroft | | | 3/4/2008 | | |
37,460 | | |
0 | |
$ |
22.14 | | |
3/3/2018 | | | | | | | | | | | | | |
| | | 3/3/2009 | | | 52,884 | | | 0 | | $ | 17.51 | | | 3/2/2019 | | | | | | | | | | | | | |
| | | 12/2/2013 | | | | | | | | | | | | | | | 6,401 | (11) | $ | 392,253 | | | | | | | |
| | | 1/1/2015-2/28/2018 | | | | | | | | | | | | | | | | | | | | | 47,349 | (5) | $ | 2,901,541 | |
| | | 1/1/2016-2/28/2019 | | | | | | | | | | | | | | | | | | | | | 18,515 | (6) | $ | 1,134,599 | |
| | | 1/1/2017-2/28/2020 | | | | | | | | | | | | | | | | | | | | | 21,972 | (7) | $ | 1,346,444 | |
| | | 3/10/2014 | | | | | | | | | | | | | | | | | | | | | 13,658 | (8) | $ | 836,962 | |
| | | 3/10/2015 | | | | | | | | | | | | | | | | | | | | | 11,779 | (9) | $ | 721,817 | |
| | | 3/10/2016 | | | | | | | | | | | | | | | | | | | | | 18,516 | (9) | $ | 1,134,660 | |
| | | 3/10/2017 | | | | | | | | | | | | | | | | | | | | | 17,578 | (10) | $ | 1,077,155 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Thomas J. Lynch, Jr., M.D. | | | 4/3/2017 | | | | | | | | | | | | | | | 25,184 | (12) | $ | 1,543,276 | | | | | | | |
| | | 1/1/2017-2/28/2020 | | | | | | | | | | | | | | | | | | | | | 18,214 | (7) | $ | 1,116,123 | |
| | | 4/3/2017 | | | | | | | | | | | | | | | | | | | | | 14,571 | (10) | $ | 892,911 | |
Sandra Leung | | | 3/3/2009 | | |
169,893 | | |
0 |
(4) |
$ |
17.51 | | |
3/2/2019 | | | | | | | | | | | | | |
| | | 1/1/2015-2/28/2018 | | | | | | | | | | | | | | | | | | | | | 36,133 | (5) | $ | 2,214,236 | |
| | | 1/1/2016-2/28/2019 | | | | | | | | | | | | | | | | | | | | | 13,302 | (6) | $ | 815,147 | |
| | | 1/1/2017-2/28/2020 | | | | | | | | | | | | | | | | | | | | | 15,497 | (7) | $ | 949,656 | |
| | | 3/10/2014 | | | | | | | | | | | | | | | | | | | | | 10,240 | (8) | $ | 627,507 | |
| | | 3/10/2015 | | | | | | | | | | | | | | | | | | | | | 8,989 | (9) | $ | 550,846 | |
| | | 3/10/2016 | | | | | | | | | | | | | | | | | | | | | 13,302 | (9) | $ | 815,147 | |
| | | 3/10/2017 | | | | | | | | | | | | | | | | | | | | | 12,398 | (10) | $ | 759,737 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Murdo Gordon | | | 8/1/2013 | | | | | | | | | | | | | | | 1,510 | (11) | $ | 92,533 | | | | | | | |
| | | 1/1/2015-2/28/2018 | | | | | | | | | | | | | | | | | | | | | 19,744 | (5) | $ | 1,209,885 | |
| | | 1/1/2016-2/28/2019 | | | | | | | | | | | | | | | | | | | | | 9,219 | (6) | $ | 564,940 | |
| | | 1/1/2017-2/28/2020 | | | | | | | | | | | | | | | | | | | | | 14,166 | (7) | $ | 868,092 | |
| | | 3/10/2014 | | | | | | | | | | | | | | | | | | | | | 3,676 | (8) | $ | 225,265 | |
| | | 3/10/2015 | | | | | | | | | | | | | | | | | | | | | 4,912 | (9) | $ | 301,007 | |
| | | 3/10/2016 | | | | | | | | | | | | | | | | | | | | | 9,219 | (9) | $ | 564,940 | |
| | | 3/10/2017 | | | | | | | | | | | | | | | | | | | | | 11,333 | (10) | $ | 694,474 | |
(1) These stock option awardsTABLE OF CONTENTS
2)
| Represents RSUs as of December 31, 2021. |
3)
| Values are based on the closing Common Stock price on December 31, 2021 of $62.35. |
4)
| Represents Celgene RSUs that were assumed by the Company and converted into BMS RSUs in connection with the Closing and in accordance with the terms of the merger agreement. |
5)
| Represents target number of PSUs granted under the 2019-2021 award at max payout of 200%. The award vested and was paid out on March 10, 2022. |
6)
| Represents target number of PSUs granted under the 2020-2022 award at max payout of 200%. These PSUs cliff vest on the third anniversary of the grant date. |
7)
| Represents target number of PSUs granted under the 2021-2023 award at max payout of 200%. These PSUs cliff vest on the third anniversary of the grant date. |
8)
| Represents MSUs at target payout of 100%. These MSUs vest in four equal installments of 25% on each of the first four anniversaries of the grant date, subject to a payout factor. |
9)
| Represents MSUs at maximum payout of 200%. These MSUs vest in four equal installments of 25% on each of the first four anniversaries of the grant date, subject to a payout factor |
10)
| Represents MSUs at threshold payout of 60%. These MSUs vest in four equal installments of 25% on each of the first four anniversaries of the grant date, subject to a payout factor. |
11)
| These RSUs vest in four equal installments on each of the first, second, third, and fourth anniversaries of the grant date. |
12)
| These RSUs, assumed by the Company and converted from Celgene RSUs, continue to vest in three equal installments on each of the first, second, and third anniversaries of the grant date according to the pre-Closing vesting schedule. |
TABLE OF CONTENTS
Option Exercises and Stock Vesting 2021 Fiscal Year
| | Giovanni Caforio, M.D. | | | 0 | | | $0 | | | 0 | | | $0(3) | |
| | | | | | | | | | | 92,892 | | | $5,659,910(4) | |
| | | | | | | | | | | 128,217 | | | $7,812,262(5) | |
| | David V. Elkins | | | 70,000 | | | $1,295,435 | | | 127,175 | | | $8,106,792(3) | |
| | | | | | | | | | | 8,175 | | | $498,103(4) | |
| | | | | | | | | | | 0 | | | $0(5) | |
| | Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil. | | | 150,967 | | | $1,451,320 | | | 98,007 | | | $6,066,113(3) | |
| | | | | | | | 7,562 | | | $460,753(4) | |
| | | | | | | | | | | 0 | | | $0(5) | |
| | Christopher Boerner, Ph.D. | | | 0 | | | $0 | | | 2,638 | | | $146,172(3) | |
| | | | | | | | | | | 15,643 | | | $953,128(4) | |
| | | | | | | | | | | 12,061 | | | $734,877(5) | |
| | Sandra Leung | | | 0 | | | $0 | | | 0 | | | $0(3) | |
| | | | | | | | | | | 23,086 | | | $1,406,630(4) | |
| | | | | | | | | | | 32,428 | | | $1,975, 838(5) | |
1)
| The value realized for each option award was determined by multiplying the number of options that were exercised by the difference between the market price of our Common Stock at the time of exercise and the exercise price of the stock option award. All options were converted legacy Celgene options. |
2)
| The value realized for each RSU and MSU award was determined by multiplying the number of units that vested by the closing share price of our Common Stock on the respective vesting date. The value realized for each PSU award was determined by multiplying the number of units that vested by the market price of our Common Stock on March 10, 2021, the vesting date. |
3)
| Reflects RSUs that vested during 2021. For Mr. Elkins and Dr. Vessey, RSUs also reflect the converted legacy Celgene PSU awards that vested on December 31, 2021. |
4)
| Reflects MSUs that vested during 2021. |
5)
| Reflects payouts of the vested 2018-2020 PSUs based on the closing Common Stock price of $60.93 on March 10, 2021. |
Benefit Equalization Plan—Retirement Plan The Benefit Equalization Plan—Retirement Income Plan (BEP—Retirement Plan) is a nonqualified plan that provides income for employees after retirement in excess of the first four anniversariesbenefits that were payable under the Bristol-Myers Squibb Company U.S. Retirement Income Plan (Retirement Plan or US-RIP), a tax-qualified defined benefit plan that was terminated effective February 1, 2019 with roughly $3.8 billion of the grant date. The Company has not granted stock options since 2009. (2) Represents restricted stock unitsPlan obligations transferred to Athene Holding, Ltd.
By way of background, as of December 31, 2017.
(3) Values based on closing stock price on December 29, 2017 of $61.28.
(4) This stock option award was not exercisable until the closing share price of common stock achieved a price of at least 15% above the option grant price and remained at that price for at least seven consecutive trading days. The threshold has been attained for this award.
(5) Represents the number of performance share units granted under the 2015-2017 award based on the actual payout achieved with regard to the one-year financial performance measures in 2015 and a threshold 3-year relative TSR multiplier of 80%. The actual number of units earned was based on BMS's actual three-year Total Shareholder Return (TSR) relative to our extended peer group. The award vested and was paid on March 10, 2018.
(6) Represents target number of performance share units granted under the 2016-2018 award at threshold payout of 50%.
(7) Represents target number of performance share units granted under the 2017-2019 award at threshold payout of 50%.
(8) Represents market share unit awards at maximum payout of 200%. These market share unit awards vest in four equal installments of 25% on each of the first four anniversaries of the grant date, subject to a payout factor.
(9) Represents market share unit awards a target payout of 100%. These market share unit awards vest in four equal installments of 25% on each of the first four anniversaries of the grant date, subject to a payout factor.
(10) Represents market share unit awards at threshold payout of 60%. These market share unit awards vest in four equal installments of 25% on each of the first four anniversaries of the grant date, subject to a payout factor.
(11) These restricted stock unit awards vest in three equal installments on each of the third, fourth, and fifth anniversaries of the grant date.
(12) This restricted stock unit award vests in four equal installments on each of the first, second, third, and fourth anniversaries of the grant date.
Table of Contents
Option Exercises and Stock Vesting
2017 Fiscal Year
| | | | | | | | | | | |
| | Option Awards |
| Stock Awards |
|
Name | | Number of Shares
Acquired on
Exercise
(#) |
| Value Realized
On Exercise (1)
($) |
| Number of Shares
Acquired on
Vesting
(#) |
| Value Realized
On Vesting (2)
($) |
|
Giovanni Caforio, M.D. | | 0 | | $ | 0 | | 0 | | $ | 0 | (3) |
| | | | | | | 41,366 | | $ | 2,391,366 | (4) |
| | | | | | | 51,789 | | $ | 3,020,334 | (5) |
Charles Bancroft | | 22,598 | | $ | 667,771 | | 6,401 | | $ | 399,870 | (3) |
| | | | | | | 26,836 | | $ | 1,565,076 | (4) |
| | | | | | | 62,025 | | $ | 3,617,298 | (5) |
Thomas J. Lynch, Jr., M.D. | | 0 | | $ | 0 | | 0 | | $ | 0 | (3) |
| | | | | | | 0 | | $ | 0 | (4) |
| | | | | | | 0 | | $ | 0 | (5) |
Sandra Leung | | 272,682 | | $ | 9,921,398 | | 0 | | $ | 0 | (3) |
| | | | | | | 20,130 | | $ | 1,173,982 | (4) |
| | | | | | | 46,498 | | $ | 2,711,763 | (5) |
Murdo Gordon | | 0 | | $ | 0 | | 1,510 | | $ | 84,726 | (3) |
| | | | | | | 8,896 | | $ | 518,815 | (4) |
| | | | | | | 16,696 | | $ | 973,711 | (5) |
(1) The value realized for each option award was determined by multiplying the number of options that were exercised by the difference between the market price of our common stock at the time of exercise and the exercise price of the stock option award. (2) The value realized for each restricted stock unit and market share unit award was determined by multiplying the number of units that vested by the closing share price of our common stock on the respective vesting date. The value realized for each performance share unit award was determined by multiplying the number of units that vested by the market price of our common stock on March 10, 2017, the vesting date.
(3) Reflects restricted stock units that vested during 2017.
(4) Reflects market share units that vested during 2017.
(5) Reflects payouts of the vested 2014-2016 performance share units based on the closing share price of $58.32 on March 10, 2017, the vesting date.
Retirement Plan
As of December 31, 2009, weBMS discontinued service accruals under the Retirement Income Plan and Benefit Equalization Plan (BEP)—the BEP—Retirement Plan in the U.S. and Puerto RicoU.S for active plan participants and we closed the plansplan to new entrants. For activeActive plan participants of the Retirement Plan at year end 2009 wewere provided five additional years of pay growth in the pension plans.plan. Accordingly, 2014 was the last year of pay growth under ourall of the BMS U.S. pension plans.
Theplans, including the Retirement Income PlanPlan. Ms. Leung is a tax-qualifiedthe only 2021 NEO participant in the company's defined benefit pension plan under Section 401(a) ofplans, including the Internal Revenue Code that provides income for employees after retirement. The benefit is calculated based on the employee's final average compensation and years of service. All U.S. employees hired before January 1, 2010 who were not participants in a pension plan through a collective bargaining agreement were eligible to participate if they worked at least 1,000 hours per year. Retirement Plan.
TABLE OF CONTENTS
Employees whose pay or benefits exceeded the IRS qualified plan limits
of the Retirement Plan were eligible for the BEP—Retirement Plan.
Table of Contents
The key plan provisions of the Retirement IncomePlan and the BEP—Retirement Plan are as follows:
The retirement benefit
generally equals:
o2% × Final Average Compensation × Years of Service through December 31, 2009, up to 40, minus
o1/70th of the Primary Social Security Benefit × Years of Service through December 31, 2009, up to 40.
•–
| 2% × Final Average Compensation × Years of Service through December 31, 2009, up to 40, minus |
–
| 1/70th of the Primary Social Security Benefit × Years of Service through December 31, 2009, up to 40. |
Final Average Compensation equals the average of the five consecutive years out of the last ten years, ending December 31, 2014, in which the employee'semployee’s compensation was the highest. Compensation equals the base salary rate plus the higher of annual incentive awards earned or paid during the year. Compensation is subject toIn the BEP—Retirement Plan, there are no limits definedon compensation and benefits imposed under Section 401(a)(17) and Section 415(b) of the Internal Revenue Code.
•Normal retirement age is 65. Employees are eligible for early retirement at age 55 with 10 or more years of service.
•Employees eligible for early retirement may receive their pension without any reduction at age 60. The pension is generally reduced by 4% for each year that the retirement age precedes age 60.
•Employees are 100% vested after attaining five years of service.
•The pension is generally payable as a monthly life annuity, with or without survivor benefits, or a lump sum.The BEP—Retirement Plan
is a nonqualified plan that provides income for employees after retirement in excess of the benefits payable under the Retirement Income Plan. The benefit is calculated using the same formula as the Retirement Income Plan, but without the limits on compensation and benefits imposed under Section 401(a)(17) and Section 415(b) of the Internal Revenue Code. Employees whose pay or benefits exceeded the IRS qualified plan limits were eligible for the BEP—Retirement Plan. The provisions are the same as those above for the Retirement Income Plan, except for the following:
•Compensation is not subject to the limits under Section 401(a)(17) of the Internal Revenue Code.
•Compensation includes the higher of annual incentive award earned or paid during the year.
•The pension is paid as a cash lump sum or, if an election is made at least 12 months prior to retirement, the lump sum may be credited to the Benefit Equalization Plan—Savings Plan. A distribution for an executive classified as a "Specified Employee"“Specified Employee” of the company, as defined under Section 409A of the Internal Revenue Code, is subject to 409A regulations and is therefore subject to a six-month delay following the executive'sexecutive’s separation from service.
Key International Supplemental Program
The Key International Supplemental Program (KIP Supplemental Plan) is provided to supplement an employee's frozen retirement benefit under his or her Home Country Plan by providing an additional benefit that applies final average salary increases to the benefit formula used to determine his or her retirement benefit under his or her Home Country Plan for the period the employee is employed by a participant employer.
Specifically, the retirement income each KIP Supplemental Plan participant would be entitled to receive under the KIP Supplemental Plan is determined as follows:
•The benefit that the participant would be entitled to receive under the benefit formula of his Home Country Plan, based on actual service credited under such Home Country Plan and his Final Average Salary, reduced by the actual benefit, if any, that the participant is entitled to receive from such Home Country Plan, based on actual service and earnings credited under such Home Country Plan (without any salary increases provided while employed by any participating employer).
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•Final Average Salary equals the average annual rate of compensation for the five consecutive years out of the last ten years, ending December 31, 2014, in which the employee's compensation was the highest.
Under the KIP Supplemental Plan, a Section 409A Participant means a U.S. Participant who accrued benefits under the Plan after December 31, 2004, that are subject to the requirements of Code section 409A.
•A Section 409A Participant will be paid his Retirement Income in a cash lump sum on or about the first day of the month following the month in which his separation from service occurs; except, however, that if his separation of service occurs prior to his earliest retirement date, payment will be made on or about the first day of the month following such earliest retirement date.
•A distribution for an executive classified as a "Section 409A Specified Employee" of the company, as defined under Section 409A of the Code, is subject to a six-month delay following separation from service, to comply with Section 409A requirements.
The Pension Plan for Employees of Bristol-Myers Squibb Canada
The Pension Plan for Employees of Bristol-Myers Squibb Canada (Canada Retirement Income Plan) is a defined benefit plan. The plan was amended effective July 1, 2010 to close the defined benefit component of the plan for future benefit accruals and to create a defined contributions component for future benefit accruals.
•Normal retirement age is 65. Early retirement age is 55.
•Employees eligible for early retirement with 10 or more years of service may receive their pension without any reduction at age 62. The pension is reduced by 4% for each year that the retirement age precedes age 62.
•Employees eligible for early retirement with fewer than 10 years of service may receive their pension at any time between the Early Retirement Date and the Normal Retirement Date (each as defined in Article 12 of the plan document) the normal retirement pension shall be actuarially reduced if the date precedes the Normal Retirement Date.
•The pension is payable in an annuity form of payment.
The retirement benefit equals:
•For credited service prior to January 1, 2002, if the member was covered under a predecessor plan, the member's pension benefit under the applicable predecessor pension plan, if any; and
•For credited service from January 1, 2002 until June 30, 2010, inclusively:
o1.2% of the member's final average compensation to the average Years' Maximum Pensionable Earnings ("YMPE"), plus
o1.6% of the member's final average compensation that is in excess of such average YMPE, multiplied by the member's credited service accrued from January 1, 2002 to June 30, 2010, inclusively.
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Present Value of Accumulated Pension Benefits
2017
2021 Fiscal Year
| | Giovanni Caforio, M.D.(3) | | | Benefit Equalization Plan Retirement Plan | | | 0.0 | | | $0 | | | $0 | |
| | David V. Elkins(3) | | | Benefit Equalization Plan Retirement Plan | | | 0.0 | | | $0 | | | $0 | |
| | Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil.(3) | | | Benefit Equalization Plan Retirement Plan | | | 0.0 | | | $0 | | | $0 | |
| | Christopher Boerner, Ph.D.(3) | | | Benefit Equalization Plan Retirement Plan | | | 0.0 | | | $0 | | | $0 | |
| | Sandra Leung(4) | | | Benefit Equalization Plan Retirement Plan | | | 17.8 | | | $9,691,865 | | | $0 | |
1)
| Reflects the years of credited service through December 31, 2009 at which time we discontinued service accruals under the U.S. Benefit Equalization Plan-Retirement Plan (BEP-Retirement Plan). The company terminated the US-RIP as of February 1, 2019 and transferred all remaining liabilities to a leading third-party insurer, Athene Holdings Ltd. |
2)
| The present value of accumulated benefits was calculated based on the following assumptions which were used in the December 31, 2021 disclosure for the BEP-Retirement Plan: |
•
| 100% lump-sum utilization; and |
•
| FTSE Pension Discount Curve rates as of the measurement date 2022 IRS Applicable Mortality under IRC 417(e). |
| | | | | | | | | | | |
Name
|
| Plan Name |
| # of Years of
Credited
Service (1) |
| Present Value of
Accumulated
Benefits (2) |
| Payments During
Last Fiscal Year | |
Giovanni Caforio, M.D. (3) | | Retirement Income Plan | | 0.0 | | $ | 0.00 | | $ | 0 | |
| | Benefit Equalization Plan | | 0.0 | | $ | 0.00 | | $ | 0 | |
Charles Bancroft (4) | | Retirement Income Plan | | 25.6 | | $ | 1,792,582 | | $ | 0 | |
| | Benefit Equalization Plan | | 25.6 | | $ | 15,146,933 | | $ | 0 | |
Thomas J. Lynch Jr., M.D. (3) | | Retirement Income Plan | | 0.0 | | $ | 0.00 | | $ | 0 | |
| | Benefit Equalization Plan | | 0.0 | | $ | 0.00 | | $ | 0 | |
Sandra Leung (4) | | Retirement Income Plan | | 17.8 | | $ | 1,286,386 | | $ | 0 | |
| | Benefit Equalization Plan | | 17.8 | | $ | 8,563,787 | | $ | 0 | |
Murdo Gordon (5) | | Retirement Income Plan | | 6.5 | | $ | 387,753 | | $ | 0 | |
| | Benefit Equalization Plan | | 6.5 | | $ | 972,050 | | $ | 0 | |
| | KIP Supplemental Plan | | 13.9 | | $ | 1,146,080 | | $ | 0 | |
| | Canada Retirement Income Plan | | 13.9 | | $ | 316,260 | | $ | 0 | |
(1) For the Retirement Income and Benefit Equalization Plans only, reflects the years of credited service through December 31, 2009 at which time we discontinued service accruals under the plans.
(2) The present value of accumulated benefits was calculated based on the following assumptions which were used in the December 31, 2017 disclosure for the Retirement Income Plan, the Benefit Equalization Plan, the KIP Supplemental Plan, and the Canada Retirement Income Plan:
•65% lump-sum utilization for the Retirement Income Plan and 100% lump-sum utilization for the Benefit Equalization Plan•100% lump-sum utilization for the KIP Supplemental Plan and 0% lump-sum utilization for the Canada Retirement Income Plan•3.50% discount rate for annuities and 3.50% discount rate for lump sums for the Retirement Income Plan•3.20% discount rate for annuities and 3.20% discount rate for lump sums for the Benefit Equalization Plan•3.33% discount rate for annuities and 3.33% discount rate for lump sums for the KIP Supplemental Plan•3.50% discount rate for annuities for the Canada Retirement Income Plan•lump sum rate(s): Citigroup Regular yield curve and implied forward rates as of the measurement date•the RP-2014 mortality table with white collar adjustment regressed to base year 2006 projected generationally from 2006 with Scale MP-2017 for annuities under the Retirement Income Plan, the Benefit Equalization Plan, and the KIP Supplemental Plan•the 2014 Private Sector Canadian Pensioners mortality table 100% for males and 95% for females projected generationally using CPM Improvement Scale B for the Canada Retirement Income Plan•the lump-sum mortality table: 50/50 male/female blend of the RP-2014 mortality table regressed to base year 2006 projected generationally with Scale MP-2016 as described in Appendix B of Revenue Ruling 2017-60 for payments in 2018 and projected with Scale MP-2017 as described in the Appendix of IRS Notice 2018-02 for payments in 2019 and later
These assumptions are the same as those disclosed in conformity with generally accepted accounting principles. For active executives, payments are assumed to begin at age 60 for the Retirement Income and Benefit Equalization Plans and at age 62 for KIP Supplemental Plan and Canada Retirement Income Plan, the earliest age that employees are eligible for an unreduced pension, or current age if over age 60 or 62, respectively. The actual benefit received will vary based on age and interest rates at the time of retirement.
(3) Dr. Caforio and Dr. Lynch are not participants in any of the company's defined benefit pension plans. For Dr. Caforio, does not include the value of participation in the Italian government pension system.
(4) Mr. Bancroft and Ms. Leung have met the requirements for early retirement under the Retirement Income and Benefit Equalization Plans.
(5) Mr. Gordon commenced his participation in the U.S. pension plan effective July 1, 2003. He was a participant in our KIP Supplemental Plan, payable in USD, and Canada Retirement Income Plan, payable in CAD, from August 1, 1989 through June 30, 2003. The present value of accumulated benefits under the KIP Supplemental and Canada Retirement Income Plans listed in the table above was converted from CAD to USD using the exchange rate as of the end of December 2017 of 0.7857.
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| These assumptions are the same as those disclosed in conformity with generally accepted accounting principles. For active executives, payments are assumed to begin at age 60 for BEP-Retirement Plan, the earliest age that employees are eligible for an unreduced pension, or current age if over age 60. The actual benefit received will vary based on age and interest rates at the time of retirement. |
3)
| Dr. Caforio, Mr. Elkins, Dr. Boerner, Dr. Vessey are not participants in any of the Company's defined benefit pension plans. For Dr. Caforio, does not include the value of participation in the Italian government pension system. |
4)
| Ms. Leung has met the age and service requirements for early retirement under the BEP—Retirement Plan. |
Non-Qualified Deferred Compensation Plan
The Benefit Equalization
Plan (BEP)—Plan—Savings
Planand Investment Program (BEP—Savings Plan) is a nonqualified deferred compensation plan that allows employees to defer a portion of their total eligible cash compensation and to receive company matching
contributionscontribution credits in excess of contributions allowed under the Savings and Investment Program. The Savings and Investment Program is a tax-qualified plan, as defined under
SectionSections 401(a) and
Section 401(k) of the Internal Revenue Code. Employees who are eligible to participate in the Savings and Investment Program, and whose pay or benefits exceed the IRS qualified plan limits, are eligible for the BEP—Savings Plan. The key provisions of the BEP—Savings Plan are as follows:
Employee deferrals to the BEP—Savings Plan begin once the employee'semployee’s total eligible compensation paid for the year exceeds the limit under Section 401(a)(17) of the Internal Revenue Code, or total contributions to the Savings and Investment Program exceed the limits under Section 415(c) of the Internal Revenue Code.
TableEmployees may defer no less than 2% and up to 75% of Contents
•Employees maytheir eligible compensation (prior to January 2021, employees were able to defer up to 25% of their eligible compensation.
•- compensation).
The company matching contribution credit equals 100% of the employee'semployee’s contribution deferral credit on the first 6% of eligible compensation that an employee elects to contribute.
•defer.An additional, automaticdiscretionary company contribution whichcredit is applied to each individual account annually, in an amount based on a point system of a participant'sparticipant’s age plus service, equals:service: below 40 points—3% of total eligible cash compensation; between 40 and 59 points—4.5%; and at 60 points and above—6%.
•The plan is not funded.unfunded. Benefits are paid from general assets of the company.
•Company.Employees may allocate their contributions among 12 differentvarious notional investment options that provide different combinations of risk and return potential, and employees can generally elect to change their investment elections each business day.
•The employee'semployee’s full balance under the BEP—Savings Plan is paid following termination of employment,a separation from service, or, if eligible, an election can be made at least 12 months prior to a separation from service to defer payments until a later date that is no soonerearlier than five (5) years following the date of separation from service. A distribution for an executive classified as a "Specified Employee"“Specified Employee” of the company,Company, as defined under Section 409A of the Internal Revenue Code, is subject to 409A regulations and is therefore subject to a six-month delay following the executive'sexecutive’s separation from service.
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Non-Qualified Deferred Compensation Plan
20172021 Fiscal Year
| | Giovanni Caforio, M.D.(5) | | | $336,696 | | | $687,892 | | | $1,236,409 | | | $0 | | | $11,255,267 | |
| | David V. Elkins(5) | | | $169,533 | | | $246,249 | | | $51,139 | | | $0 | | | $466,921 | |
| | Rupert Vessey, M.A., B.M. B.Ch., F.R.C.P., D.Phil.(5) | | | $171,095 | | | $285,507 | | | $33,868 | | | $0 | | | $490,470 | |
| | Christopher Boerner, Ph.D.(5) | | | $231,183 | | | $252,800 | | | $276,109 | | | $0 | | | $2,442,620 | |
| | Sandra Leung(5) | | | $147,146 | | | $311,692 | | | $1,760,411 | | | $0 | | | $12,649,091 | |
1)
| The contribution amounts in this column reflect the deferral of a portion of 2021 base salary and the 2020 annual incentive award that was paid in March 2021. The base salary deferral amount is also included as 2021 Salary in the Summary Compensation Table. The 2020 annual incentive award deferral amount was also included as 2020 Non-Equity Incentive Plan Compensation in the previous year's Summary Compensation Table, as applicable. |
2)
| The contribution amounts in this column are included as 2021 All Other Compensation in the Summary Compensation Table. Includes the additional annual registrant contributions earned in 2021 but paid in February 2022. |
3)
| Aggregate earnings are not reflected in the 2021 Summary Compensation Table and were not reflected in prior years' Summary Compensation Tables. The company does not pay above-market interest rates on non-qualified deferred compensation. |
4)
| Portions of the aggregate balances in this column reflect amounts reported in the Summary Compensation Tables in prior years as follows: Dr. Caforio, $960,837 for 2018, $992,538 for 2019 and $965,990 for 2020; Ms. Leung, $423,265 for 2018, $462,306 for 2019 and $455,791 for 2020; and Dr. Boerner, $341,315 for 2019 and $433,470 for 2020. |
5)
| Reflects 2021 activity and aggregate balances in the non-qualified BEP-Savings Plan. |
| | | | | | | | | | | | | | | | |
Name | | Executive
Contributions
in 2017 (1) |
| Registrant
Contributions
in 2017 (2) |
| Aggregate
Earnings
in 2017 (3) |
| Aggregate
Withdrawals/
Distributions
in 2017 |
| Aggregate
Balance at
December 31,
2017 (2)(4) | |
Giovanni Caforio, M.D. (5) | | $ | 258,800 | | $ | 517,601 | | $ | 515,419 | | $ | 0 | | $ | 3,775,855 | |
Charles Bancroft (5) | |
$ |
135,477 | |
$ |
270,954 | |
$ |
758,834 | |
$ |
0 | |
$ |
4,753,134 | |
Thomas J. Lynch, Jr., M.D. (5) | |
$ |
31,569 |
|
$ |
63,539 |
|
$ |
2,036 |
|
$ |
0 |
|
$ |
97,144 | |
Sandra Leung (5) | |
$ |
298,181 | |
$ |
248,997 | |
$ |
1,104,830 | |
$ |
0 | |
$ |
6,255,852 | |
Murdo Gordon (5) | |
$ |
111,634 |
|
$ |
170,159 |
|
$ |
240,207 |
|
$ |
0 |
|
$ |
1,391,477 | |
(1) The contribution amounts in this column reflect the deferral of a portion of 2017 base salary and the 2016 annual incentive award that was paid in March 2017. The base salary deferral amount is also included as 2017 Salary in the Summary Compensation Table. The 2016 annual incentive award deferral amount was also included as 2016 Non-Equity Incentive Plan Compensation in the previous year's summary compensation table, as applicable.
(2) The contribution amounts in this column are included as All Other Compensation in the Summary Compensation Table Includes the additional annual registrant contributions earned in 2017 but paid in February 2018.
(3) Aggregate earnings are not reflected in the Summary Compensation Table and were not reflected in prior years' summary compensation tables. The company does not pay above-market interest rates on non-qualified deferred compensation.
(4) Portions of the aggregate balances in this column reflect amounts reported in the summary compensation tables in prior years as follows: Dr. Caforio, $567,066 for 2015 and $854,000 for 2016; Mr. Bancroft, $408,139 for 2015 and $479,378 for 2016; Ms. Leung, $562,579 for 2015 and $684,288 for 2016; Mr. Gordon, $193,264 for 2015 and $290,030 for 2016.
(5) Reflects 2017 activity and aggregate balances in the non-qualified BEP-Savings Plan.
Post-Termination Benefits
Following is a description of payments and benefits available under different termination scenarios:
The company does not offer any payments or benefits to salaried employees, including the Named Executive Officers, upon a voluntary termination, other than those that are vested at the time of termination, unless the applicable plan or award agreement provides otherwise.
Voluntary Termination for Good Reason
Under the Bristol-Myers Squibb Senior Executive Severance Plan, certain senior executives (including the Named Executive Officers) are eligible to receive severance payments and benefits if they voluntarily terminate their employment for
"good“good reason,
"” where
"good reason"“good reason” is defined as:
A material reduction in the executive’s weekly base salary;
The
executive's monthly base salary is materially reduced;
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•The executive'smaterial reduction in the executive’s grade level is reduced resulting in a material diminution of the executive'sexecutive’s authority, duties, or responsibilities; or
•
The locationrelocation of the executive'sexecutive’s job or office, is changed, so that it will be based at a location which is more than 50 miles further (determined in accordance with the company'scompany’s relocation policy) from their primary residence than their work location immediately prior to the proposed change in their job or office.
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A terminated executive who signs a general release will be eligible for the following:
Severance payments in the amount of 2 times annual base salary for our senior most executives including the Named Executive Officers, and 1.5 times annual base salary for other senior executives;
•Continuation of medical, dental and life insurance benefits;benefits until the earlier of (i) fifty-six weeks from termination date or (ii) the date the executive begins new employment; and
•In addition to being eligible to receive severance payments and benefits under the Bristol-Myers Squibb Senior Executive Severance Plan as described above, Mr. Elkins and Dr. Vessey are eligible to receive vesting of their converted legacy Celgene equity awards and their Inducement Awards if they voluntarily terminate their employment for “good reason,” where “good reason” is defined as:
A material reduction in the executive’s (i) annual base salary or (ii) target annual cash incentive compensation opportunity and target annual equity incentive compensation opportunity, in the aggregate;
A material diminution in the executive’s duties and responsibilities (other than temporarily while the Eligible Employee is physically or mentally incapacitated or as required by applicable law) or, for Mr. Elkins only, assignment of any duties inconsistent with his status as an officer or a member of the leadership team of the company;
A material adverse change in the executive’s reporting relationships;
A relocation of an executive’s primary work location that results in an increase to the executive’s one-way commute by 30 miles or more;
The company’s failure to timely pay any gross-up amounts due under certain legacy Celgene arrangements; or
For Dr. Vessey only, a change to the company’s by-laws that would cause the executive to cease to be eligible for indemnification or advancement under such by-laws.
If Mr. Elkins and Dr. Vessey are terminated and they sign a general release, they will be eligible for the following:
| • | Converted Legacy Celgene Stock Options – Employees are eligible to vest in their unvested legacy Celgene stock options. The legacy Celgene stock options will remain exercisable until the earlier of one year after termination and the original 10-year option term. |
| • | Converted Legacy Celgene Restricted Stock Units and Inducement Awards – Employees are eligible to vest in their unvested legacy Celgene RSUs and, where applicable, their unvested Inducement Awards. |
The following benefits are generally available to all salaried employees including the Named Executive Officers:
Annual Incentive
—EmployeesUnder the Annual Incentive Plan, employees are eligible for a pro-rata award based on the number of monthsdays worked in the performance period and paid by March 15th following the performance period.Converted Legacy Celgene Stock Options
—Employees haveMr. Elkins, Dr. Vessey and other employees are eligible to vest in all unvested options. Options will remain exercisable until the full term to exercise vested stock options. All outstanding options held by our employees vested asearlier of December 31, 2013.three years after termination and the original 10-year option term.Restricted Stock Units
—Employees are eligible to vest in a pro-rata portion of restricted stock unit awardsRSUs held at least one year from the grant date; provided that if an employee turns 65 on or prior to their retirement or death, then any unvested Restricted Stock UnitsRSUs held for at least one year will vest in full prior to their retirement or death.Converted Legacy Celgene Restricted Stock Units and Inducement Awards
—For death and disability only (not retirement)—Mr. Elkins, Dr. Vessey and, for legacy Celgene RSUs only, other employees, are eligible for full and immediate vesting of all unvested legacy Celgene RSUs and, where applicable, unvested Inducement Awards. Upon retirement, Mr. Elkins and Dr. Vessey are eligible (i) for full acceleration of all unvested legacy Celgene RSUs, but vesting follows theTABLE OF CONTENTS
normal schedule, and (ii) to vest in a pro-rata portion of Inducement Awards held at least one year from the grant date; provided that if an employee turns 65 on or prior to their retirement or death, then any unvested Inducement Awards held for at least one year will vest in full prior to their retirement or death.
Market Share Units—Employees are eligible to vest in a pro-rata portion of market share unit awardsMSUs held at least one year from the grant date, subject to performance provisions; provided that if an employee turns 65 on or prior to their retirement or death, then any unvested Market Share UnitsMSUs held for at least one year will vest in full upon their retirement or death, subject to performance provisions. Performance Share Units—•For the award granted in 2015, if at least one year from the start of the first performance year of a performance share unit award has passed and upon signing a general release, employeesEmployees are eligible to vest in a proportionate amountpro-rata portion of the performance share units, subject to performance provisions (in the case of death, only performance provisions exclude the 3-year TSR Modifier).
•For the awards granted in 2016 and 2017, ifunvested PSUs held at least one year from the grant date has passed and upon signing a general release, employees are eligible to vest in a proportionate amount of the performance share units, subject to performance provisions.
Defined Benefit Pension PlansExcess Benefit Plan—Employees aremay be eligible for benefits accrued under the Retirement Income Plan and the BEP—Retirement Plan. Savings Plans—Employees are eligible for benefits accumulated under theour Savings and Investment Program and the BEP—Savings Plan as(as well as a pro-rata annual contribution (if applicable) on eligible compensation paid in the year of separation from service or death.death). Post-Retirement Medical and Life Insurance—Employees age 55 or older with ten10 years of service or age 65 or over at the time of retirement are eligible for postretirementpost-retirement medical and life insurance benefits.benefits provided that they were employed by a company participating in the Bristol-Myers Squibb Company Health & Welfare Benefit Plan at the time that their employment ended. Employees retiring with less than 10 years of service are not eligible to receive a company subsidy for their postretirementpost-retirement medical coverage.
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Involuntary Termination Not for Cause
The following benefits are generally available to all salaried employees including the Named Executive Officers:
Annual Incentive—EmployeesUnder the Annual Incentive Plan, employees who are severance eligible and execute and do not revoke a separation agreement are eligible for a pro-rata award based on the number of monthsdays worked in the performance period if the termination occurs on or after September 30th of the plan year. IfFurther, an employee who is severance eligible to retire, or the employee'sand whose age plus years of service equalequals or exceedexceeds 70, and the employeewho has at least 10 years of service, upon signing and not revoking a separation agreement the employee is eligible for a pro-rata award based on the number of monthsdays worked in the performance period.period for a termination occurring at any point in the plan year. Converted Legacy Celgene Stock Options—Upon signing a general release, an employee has three monthsPursuant to exercise. If an employee isthe terms of the legacy Celgene equity plans, Mr. Elkins, Dr. Vessey and other employees are eligible to retire, orvest in all unvested options. Options will remain exercisable until the employee's age plus yearsearlier of service equal or exceed 70one year after termination and the employee has at least 10 years of service, the employee will have the full term to exercise. All outstanding options held by our employees vested as of December 31, 2013.original 10-year option term. Restricted Stock Units—Upon signing a general release, employees are eligible to vest in a pro-rata portion of restricted stock unit awardsRSUs held at least one year from the grant date; provided that if an employee turns 65 on or prior to their involuntary termination not for cause, then any unvested Restricted Stock UnitsRSUs held for at least one year will have vestedvest in full prior toupon their involuntary termination not for cause. Converted Legacy Celgene Restricted Stock Units and Restricted Stock Unit Inducement Awards—Pursuant to the terms of the legacy Celgene equity plans, Mr. Elkins, Dr. Vessey and, for legacy Celgene RSUs only, other employees are eligible to vest in all unvested legacy Celgene RSUs and, where applicable, unvested Inducement Awards.
Market Share Units—Upon signing a general release, employees are eligible to vest in a pro-rata portion of unvested market share unit awardsMSUs held at least one year from the grant date, subject to performance provisions; provided that if an employee turns 65 on or prior to their involuntary termination not for cause, then any unvested Market Share UnitsMSUs held for at least one year will vest in full upon their involuntary termination not for cause, subject to performance provisions. Performance Share Units—•For the award granted in 2015, if at least one year from the start of the first performance year of a performance share unit award has passed and uponUpon signing a general release, employees are eligible to vest in a proportionate amountpro-rata portion of the performance share units, subject to performance provisions.
•For the awards granted in 2016 and 2017, ifunvested PSUs held at least one year from the grant date, has passed and upon signing a general release, employees are eligible to vest in a proportionate amount of the performance share units, subject to performance provisions.
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Defined Benefit Pension PlansExcess Benefit Plan—Employees aremay be eligible for benefits accrued under the Retirement Income Plan and the BEP—Retirement Plan. If the employee'semployee’s age plus years of service equal or exceed 70 and the employee has at least 10 years of service, the employee is not eligible for early retirement, and the employee signs a general release, the retirement benefits are payable following termination of employment based upon enhanced adjustment factors similar to those applied to employees eligible for early retirement. Savings Plans—Employees are eligible for benefits accumulated under theour Savings and Investment Program and the BEP—Savings Plan. IfUnder the Savings and Investment Program and the BEP-Savings Plan, if the employee is either (1) involuntarily terminated not for cause on or after September 30th and the employee is receiving severance and signs a general release or (2) the employee qualifies for Rule of 70 Benefits,employee’s age plus years of service equal or exceed 70 and the employee has at least 10 years of service, the employee is not eligible for early retirement, and the employee is receiving severance and the employee signs a general release, the employee is eligible for a pro-rata annual contribution (if applicable) based on eligible compensation paid in the year of separation from service. Post-Retirement Medical Insurance—If the employee'semployee’s age plus years of service equal or exceed 70 and the employee has at least 10 years of service, the employee is not eligible for early retirement, and the employee signs a general release, the employee is eligible for continued medical coverage beyond the severance and COBRA period, provided that they were employed by a company participating in the Bristol-Myers Squibb Health & Welfare Benefit Plan at the time that their employment ended, and as long as no other group medical coverage is available, without company subsidy until age 55. At age 55, they become eligible for company-subsidized, postretirementpost-retirement medical benefits.
Table of ContentsSenior Executive Severance Plan
—Under the Bristol-Myers Squibb Senior Executive Severance Plan, certain senior executives (including the Named Executive Officers) are eligible to receive severance payments and benefits if they are involuntarily terminated not for "cause,"“cause,” where "cause"“cause” is defined as:
failure or refusal by the executive to substantially perform his or her duties (except where the failure results from incapacity due to disability); or
•severe misconduct or engaging in an activity, which may include a failure to take action, deemed detrimental to the interests of the company including, but not limited to, acts involving dishonesty, violation of company policies, violation of safety rules, disorderly conduct, discriminatory harassment, unauthorized disclosure of confidential information, or the entry of a plea of nolo contendere to, or the conviction of, a crime.
A terminated executive who signs a general release will be eligible for the following:
Severance payments in the amount of 2 times base salary for our senior-most executives, including the Named Executive Officers, and 1.5 times base salary for other senior executives;
•Continuation of medical, dental and life insurance benefits; and
•Outplacement services.
For Dr. Vessey, “cause” is defined as:
on or within four years following the Closing, the executive’s dishonesty, fraud, insubordination, willful misconduct, refusal to perform services (for any reason other than illness or incapacity), material violation of a written company policy, material breach of an employment or similar agreement, or misappropriation of company property; provided, that in the event of a dispute concerning the application of this provision, the Board must determine that it has been established by clear and convincing evidence that Cause exists and must adopt a resolution to that effect with approval of at least 75% of the Board (after reasonable notice and an opportunity to be heard is provided to the executive); and
after the four-year period following the Closing, “cause” is as defined above except for that the definition (i) includes materially unsatisfactory performance of the executive’s duties to the company that has not been cured within ten days after a written demand for substantial performance is delivered by the CMDC and (ii) does not include the requirement for a Board determination and resolution in the event of a dispute.
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For Mr. Elkins, “cause” includes the requirement for a Board determination and resolution as described above for Dr. Vessey in the event of a dispute at any time and is otherwise defined as:
the executive’s dishonesty, fraud, insubordination, willful misconduct, refusal to perform services (for any reason other than illness or incapacity), material violation of a written company policy, material breach of an employment or similar agreement, or misappropriation of company property, in each case, that has not been cured within ten days after a written notice is delivered by the company.
As disclosed in the CD&A, the company has entered into change-in-control agreements with certain senior executives, including all of the Named Executive Officers. The current agreements will expire on December 31,
2018,2022, and may be extended with revisions, as appropriate, beginning on January 1,
2019,2023 in one-year increments unless either the company or the executive gives prior notice of termination of the agreement or a change-in-control shall have occurred prior to January 1 of such year.
To trigger benefits, there must be both a change-in-control of the company and either (i) a subsequent involuntary termination without cause by the company or (ii) a good reason termination by the employee. Good reason
is further defined in the agreements and includes a reduction in job responsibilities,
or changes in pay and benefits as well as relocation beyond 50 miles. The executive has 120 days to assert a claim for payments under this provision.
ThisIn general, this protection extends for
either 36 months or 24 months following a change-in-control for
the vast majority of our
senior most executives who became eligible for change-in-control benefits after September 1, 2010, including Dr. Boerner, Mr. Elkins and Dr. Vessey and 36 months following a change-in-control for a few of our other senior most executives, including
all our Named Executive Officers. "Change-in-Control"Dr. Caforio and Ms. Leung:
“Change-in-Control” means the earliest to occur of any one of the following dates:
(i)The date any Person (as defined in Section 13(d)(3) of the Securities Exchange Act) shall have become the direct or indirect beneficial owner of thirty percent (30%) or more of the then outstanding common shares of the company;
(ii)The date of consummation of a merger or consolidation of the company with any other corporation other than (A) a merger or consolidation which would result in the voting securities of the company outstanding immediately prior thereto continuing to represent at least fifty one percent (51%) of the combined voting power of the voting securities of the company or the surviving entity outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the company in which no Person acquires more than fifty percent (50%) of the combined voting power of the company's then outstanding securities;
(iii)The date the stockholders of the company approve a plan of complete liquidation of the company or an agreement for the sale or disposition by the company of all or substantially all the company's assets; or
(iv)The date there shall have been a change in the composition of the Board of Directors of the company within a two-year period such that a majority of the Board does not consist of directors who were serving at the beginning of such period together with directors whose initial nomination for election by the company's stockholders or, if earlier, initial appointment to the Board, was approved by the vote of two-thirds of the directors then still in office who were in office at the beginning of the two-year period together with the directors who were previously so approved.
(i)
| The date any Person (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) shall have become the direct or indirect beneficial owner of thirty percent (30%) or more of the then outstanding common shares of the company; |
(ii)
| The date of consummation of a merger or consolidation of the company with any other corporation other than (A) a merger or consolidation which would result in the voting securities of the company outstanding immediately prior thereto continuing to represent at least fifty one percent (51%) of the combined voting power of the voting securities of the company or the surviving entity outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the company in which no Person acquires more than fifty percent (50%) of the combined voting power of the company’s then outstanding securities; |
(iii)
| The date the stockholders of the company approve a plan of complete liquidation of the company or an agreement for the sale or disposition by the company of all or substantially all the company’s assets; or |
(iv)
| The date there shall have been a change in the composition of the Board of Directors of the company within a two-year period such that a majority of the Board does not consist of directors who were serving at the beginning of such period together with directors whose initial nomination for election by the company’s stockholders or, if earlier, initial appointment to the Board, was approved by the vote of two-thirds of the directors then still in office who were in office at the beginning of the two-year period together with the directors who were previously so approved. |
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Each of our Named Executive Officers is eligible to receive the following benefits if he or she is terminated in connection with a change-in-control:
A cash payment equal to 2 years of base salary plus target annual incentive award for Dr. Boerner, Mr. Elkins and Dr. Vessey and 2.99 years of base salary plus target annual incentive award.
•award for Dr. Caforio and Ms. Leung.Payout of annual incentive award on a pro-rata basis at target.
•Vesting of unvested stock options, if any, including options held less than one year. Waiver of exercise thresholds placed on awards, where applicable.
•Vesting of unvested restricted stock units,RSUs, if any, including units held less than one year.
•Vesting of unvested
market share units,MSUs, subject to performance provisions, including units held less than one year.
Performance share units:
•For the award granted in 2015, payout
Payout of
a proportionate amount of the banked performance share units, further adjusted by the TSR Modifier which is determined by substituting for the TSR Measurement Date the date of the change in control.
•For the awards granted in 2016 and 2017, payout of a proportionate amount of theall outstanding performance share units at target.
•- target, including units held less than one year.
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Three additional years of service and age for pension purposes if a participant is in a pension planBEP—Retirement Plan sponsored by BMS, and eligibility for the plan'splan’s early retirement subsidy if the executive'sexecutive’s age and service fall below the normal eligibility threshold (i.e., 55 years old with at least 10 years of service). As of September 1, 2010, we no longer provide any pension subsidy or enhancement for newly eligible executives. In lieu of such subsidy or enhancement, we provide under the non-qualifiedcompany’s savings planplans a continuation of company matching contributions and automatic year-end contributions equal to the length of the severance period.
•period, which equals two years for Dr. Boerner, Mr. Elkins and Dr. Vessey.Eligibility for retiree medical benefits based on two years additional age and service for Mr. Elkins, Dr. Vessey and Dr. Boerner, and three years additional age and service.
•service for Dr. Caforio and Ms. Leung.Continuation of health benefits for two years for Dr. Boerner, Mr. Elkins and Dr. Vessey and three years.
•years for Dr. Caforio and Ms. Leung.Vesting of unvested match in the company'scompany’s savings plans.
•We no longer gross up compensation on excess parachute payments for any of our executives, including all of our Named Executive Officers.
•Payment of any reasonable legal fees incurred to enforce the agreement.
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The following illustrates the potential payments and benefits under the company'scompany’s plans and programs to the Named Executive Officers upon a termination of employment assuming an effective date of December 31, 2017.2020. To the extent payments and benefits are generally available to salaried employees on a nondiscriminatory basis, they are excluded from the table.
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Termination of Employment Obligations (Excluding Vested Benefits)
2017
2021 Fiscal Year
| | Voluntary Termination for Good Reason | |
| | Giovanni Caforio, M.D.(11)(12) | | | $3,400,000 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $38,864 | | | $0 | | | $3,438,864 | |
| | David V. Elkins (12) | | | $2,101,406 | | | $669,757 | | | $2,628,738 | | | $0 | | | $0 | | | $0 | | | $0 | | | $33,632 | | | $0 | | | $5,433,533 | |
| | Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil. (12)(14) | | | $2,121,800 | | | $0 | | | $1,096,362 | | | $0 | | | $0 | | | $0 | | | $0 | | | $34,064 | | | $0 | | | $3,252,226 | |
| | Christopher Boerner, Ph.D.(12) | | | $2,060,000 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $36,440 | | | $0 | | | $2,096,440 | |
| | Sandra Leung(11) | | | $2,217,282 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $23,797 | | | $0 | | | $2,241,079 | |
| | Involuntary Termination Not for Cause (Absent Change in Control) | |
| | Giovanni Caforio, M.D.(11)(12) | | | $3,400,000 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $38,864 | | | $0 | | | $3,438,864 | |
| | David V. Elkins(12) | | | $2,101,406 | | | $669,757 | | | $2,628,738 | | | $422,546 | | | $1,815,071 | | | $0 | | | $0 | | | $33,632 | | | $0 | | | $7.671.150 | |
| | Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil.(12)(14) | | | $2,121,800 | | | $0 | | | $1,096,362 | | | $390,810 | | | $1,678,961 | | | $0 | | | $0 | | | $34,064 | | | $0 | | | $5.321.997 | |
| | Christopher Boerner, Ph.D.(12) | | | $2,060,000 | | | $0 | | | $13,530 | | | $707,860 | | | $3,166,382 | | | $0 | | | $0 | | | $36,440 | | | $0 | | | $5,984,212 | |
| | Sandra Leung (11) | | | $2,217,282 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $23,797 | | | $0 | | | $2,241,079 | |
| | Qualifying Termination Within 2 or 3 Years Following a Change-in-control | |
| | Giovanni Caforio, M.D.(13)(12) | | | $12,707,500 | | | $0 | | | $0 | | | $11,761,579 | | | $12,940,306 | | | $0 | | | $0 | | | $115,638 | | | $0 | | | $37,525,023 | |
| | David V. Elkins(12) | | | $4,202,812 | | | $669,757 | | | $2,628,738 | | | $3,602,895 | | | $6,011,101 | | | $0 | | | $440,503 | | | $67,494 | | | $78,374 | | | $17,701,674 | |
| | Rupert Vessey, M.A., B.M., B.Ch., F.R.C.P., D.Phil. (12)(14) | | | $4,243,600 | | | $0 | | | $1,096,362 | | | $3,430,622 | | | $5,704,401 | | | $0 | | | $508,318 | | | $68,289 | | | $68,127 | | | $15,119,719 | |
| | Christopher Boerner, Ph.D.(12) | | | $4,120,000 | | | $0 | | | $328,896 | | | $3,785,455 | | | $6,750,572 | | | $0 | | | $431,671 | | | $73,386 | | | $88,929 | | | $15,578,910 | |
| | Sandra Leung (13) | | | $6,629,673 | | | $0 | | | $0 | | | $2,913,491 | | | $3,190,636 | | | $7,565,669 | | | $0 | | | $71,247 | | | $0 | | | $20,370,717 | |
1)
| For voluntary termination for good reason and involuntary termination not for cause, cash severance is equal to 2 times base salary. For change in control, cash severance is equal to 2 times base salary plus target annual incentive award for Mr. Elkins, Dr. Boerner, and Dr. Vessey, and 2.99 times for Dr. Caforio and Ms. Leung. |
2)
| For Mr. Elkins represents all in-the-money unvested options. |
3)
| For Dr. Boerner, for involuntary termination not for cause, represents pro-rata portion of awards held at least one year. For change in control, represents all unvested units. For Mr. Elkins represents all unvested RSUs. For Dr. Vessey, represents the unvested RSU Inducement Award. |
4)
| For involuntary termination not for cause, represents pro-rata portion of awards held at least one year. For change in control, represents all unvested units. The payout factor applied is equal to the 10-day average closing price on December 31, 2021 divided by the 10-day average closing price on the grant date. |
5)
| For change in control, represents a full payout of the 2019-2021, 2020-2022 and 2021-2023 PSU awards at target. For involuntary termination not for cause, represents a pro-rata payout of the 2019-2021 and 2020-2022 PSU awards at target. The 2021-2023 award is forfeited because as of December 31, 2021 the award had not been held for at least one year since the grant date. |
6)
| Values as of December 31, 2021 based on the closing Common Stock price of $62.35 on that day. |
7)
| Reflects BEP - Retirement Plan. Change-in-control values include early retirement subsidy and additional years of credited service and age. |
8)
| Change in control values reflect Company matching contributions and automatic year-end contributions under the Company's Savings Plans and equal to two additional years of service. |
9)
| For voluntary termination for good reason and involuntary termination not for cause, reflects health care benefit continuation through the severance period of 56 weeks. For change in control, represents continuation of health care benefits for two years for Mr. Elkins, Dr. Vessey and Dr. Boerner, and three years for Dr. Caforio and Ms. Leung. |
10)
| Reflects cost to the Company for providing retiree medical benefits. For change in control, includes additional years of credited service and age. |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Name
|
| Cash
Severance
(1) |
| Restricted
Stock
Units
(2)(5) |
| Market
Share
Units
(3)(5) |
| Performance
Share
Units
(4)(5) |
| Retirement
(6) |
| Health
(7) |
| Retiree
Medical
(8) |
| Total |
| |
Voluntary Termination for Good Reason | | | | | | | | | | | | | | | | | |
Giovanni Caforio, M.D. (10) | |
$ |
3,200,000 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
25,102 |
|
$ |
101,144 |
|
$ |
3,326,246 |
| |
Charles Bancroft (9) | |
$ |
2,009,218 | |
$ |
0 | |
$ |
0 | |
$ |
0 | |
$ |
0 | |
$ |
24,362 | |
$ |
0 | |
$ |
2,033,580 | | |
Thomas J. Lynch, Jr., M.D. (10) | |
$ |
2,000,000 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
23,790 |
|
$ |
62,191 |
|
$ |
2,085,981 |
| |
Sandra Leung (9) | |
$ |
1,908,772 | |
$ |
0 | |
$ |
0 | |
$ |
0 | |
$ |
0 | |
$ |
15,399 | |
$ |
0 | |
$ |
1,924,171 | | |
Murdo Gordon | |
$ |
1,734,398 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
472,482 |
|
$ |
22,222 |
|
$ |
147,697 |
|
$ |
2,376,799 |
| |
Involuntary Termination Not for Cause | | |
| | |
| | |
| | |
| | |
| | |
Giovanni Caforio, M.D. (10) | |
$ |
3,200,000 |
|
$ |
0 |
|
$ |
1,831,292 |
|
$ |
13,336,013 |
|
$ |
0 |
|
$ |
25,102 |
|
$ |
101,144 |
|
$ |
18,493,550 |
| |
Charles Bancroft (9) | |
$ |
2,009,218 | |
$ |
0 | |
$ |
0 | |
$ |
0 | |
$ |
0 | |
$ |
24,362 | |
$ |
0 | |
$ |
2,033,580 | | |
Thomas J. Lynch, Jr., M.D. (10) | |
$ |
2,000,000 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
0 |
|
$ |
23,790 |
|
$ |
62,191 |
|
$ |
2,085,981 |
| |
Sandra Leung (9) | |
$ |
1,908,772 | |
$ |
0 | |
$ |
0 | |
$ |
0 | |
$ |
0 | |
$ |
15,399 | |
$ |
0 | |
$ |
1,924,171 | | |
Murdo Gordon | |
$ |
1,734,398 |
|
$ |
38,790 |
|
$ |
367,374 |
|
$ |
2,195,445 |
|
$ |
472,482 |
|
$ |
22,222 |
|
$ |
147,697 |
|
$ |
4,978,407 |
| |
Qualifying Termination Within 3 Years Following a Change in Control | | |
| | |
| | |
| | |
| | |
| | |
Giovanni Caforio, M.D. (10) | |
$ |
11,960,000 |
|
$ |
0 |
|
$ |
11,014,222 |
|
$ |
15,466,718 |
|
$ |
0 |
|
$ |
75,187 |
|
$ |
103,735 |
|
$ |
38,619,862 |
| |
Charles Bancroft (11) | |
$ |
6,608,318 | |
$ |
360,020 | |
$ |
3,225,657 | |
$ |
727,761 | |
$ |
7,921,706 | |
$ |
72,955 | |
$ |
0 | |
$ |
18,916,417 | | |
Thomas J. Lynch, Jr., M.D. (10) | |
$ |
6,578,000 |
|
$ |
1,543,276 |
|
$ |
1,649,045 |
|
$ |
603,302 |
|
$ |
0 |
|
$ |
71,254 |
|
$ |
49,910 |
|
$ |
10,494,786 |
| |
Sandra Leung (11) | |
$ |
5,707,228 | |
$ |
0 | |
$ |
2,313,443 | |
$ |
513,281 | |
$ |
7,022,903 | |
$ |
46,140 | |
$ |
0 | |
$ |
15,602,995 | | |
Murdo Gordon | |
$ |
5,185,850 |
|
$ |
92,533 |
|
$ |
2,204,119 |
|
$ |
2,664,666 |
|
$ |
4,127,987 |
|
$ |
66,581 |
|
$ |
139,820 |
|
$ |
14,481,556 |
| |
(1) For voluntary termination for good reason and involuntary termination not for cause, severance is equal to 2 times base salary. For change in control, severance is equal to 2.99 times base salary plus target annual incentive award for these Named Executive Officers.
(2) For involuntary termination not for cause, represents pro-rata portion of awards held at least one year. For change in control, represents all unvested units.
(3) For involuntary termination not for cause, represents pro-rata portion of awards held at least one year. For change in control, represents all unvested units. The payout factor applied is equal to the 10-day average closing price on December 29, 2017 divided by the 10-day average closing price on the grant date.
(4) For change in control, represents a payout of the 2015-2017 award based on the actual payout on company financial metrics related to the first performance year, further adjusted by the TSR modifier determined by substituting for the TSR Measurement Date the date of December 29, 2017, and pro-rata payout of the 2016-2018 and 2017-2019 awards at target. For involuntary termination not for cause, the payment excludes the pro-rata payout of 2017-2019 award because as of December 31, 2017 the award was not held for at least one year since the grant date.
(5) Values as of December 29, 2017 based on the closing stock price of $61.28 on that day.
(6) Reflects Retirement Income Plan and Benefit Equalization Plan. Change-in-control values include early retirement subsidy and additional years of credited service and age.
(7) For voluntary termination for good reason and involuntary termination not for cause, reflects health care benefit continuation through the severance period. For change in control, represents continuation of health care benefits for 3 years.
(8) Reflects cost to the company for providing retiree medical benefits. For change in control, includes additional years of credited service and age.
(9) These Named Executive Officers are retirement-eligible under our stock plans and therefore are entitled to the following benefits, which are generally available to all retirement eligible participants in our stock plans:
•a pro-rata portion of restricted stock units held for one year from the grant date;•a pro-rata portion of market share units held for one year from the grant date, subject to performance provisions; and•a pro-rata portion of the performance share unit awards held one year from the grant date, subject to performance provisions.
(10) Dr. Caforio and Dr. Lynch are not participants in any of the company's pension plans.
(11) These Named Executive Officers are retirement-eligible under our stock plans and therefore the number of units used to calculate the change-in-control value reflects:
•Restricted Stock Units—the difference between a pro-rata portion of restricted stock units held for one year from the grant date and all unvested restricted stock units including units held less than one year.•Market Share Units—the difference between a pro-rata portion of market share units held for one year from the grant date and all unvested market share units including units held less than one year from the grant date, subject to performance provisions.•Performance Share Units—a pro-rata portion of the 2017-2019 award at target.
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11)
| These Named Executive Officers are retirement-eligible under our stock plans and therefore are entitled to the following benefits, which are generally available to all retirement eligible participants in our stock plans: |
•
| a pro-rata portion of RSUs held for one year from the grant date; |
•
| a pro-rata portion of MSUs held for one year from the grant date, subject to performance provisions; and |
•
| a pro-rata portion of PSUs held one year from the grant date, subject to performance provisions. |
12)
| Dr. Caforio, Mr. Elkins, Dr. Boerner, Dr. Vessey are not participants in any of our pension plans. |
13)
| These Named Executive Officers are retirement-eligible under our stock plans and therefore the number of units used to calculate the change-in-control value reflects: |
•
| Restricted Stock Units - the difference between a pro-rata portion of RSUs held for one year from the grant date and all unvested RSUs including units held less than one year from the grant date; |
•
| Market Share Units - the difference between a pro-rata portion of MSUs held for one year from the grant date and all unvested MSUs including units held less than one year from the grant date; and |
•
| Performance Share Units - (i) the difference between a pro-rata portion and all unvested units under the 2019-2021 and 2020-2022 PSUs and (ii) payout of the 2021-2023 PSU award at target. |
| Dr. Vessey is retirement-eligible under the legacy Celgene stock plans and, therefore, his converted Celgene stock options and RSUs are not forfeitable. The vesting continues to occur over the normal vesting schedule. |
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To determine the ratio of the CEO'sCEO’s annual total compensation to the median annual total compensation of all employees excluding the CEO, we identified the median employee as of October 2, 20171, 2020 using target total cash compensation (i.e., salary plus 20172020 target incentive award). We believe this measure most reasonably reflects the typical annual compensation of our employee population, which also includes legacy Celgene employees, and was consistently applied for all employees. As of October 15, 2021, the median employee previously identified was terminated. We identified an employee with substantially similar compensation to that of the original median employee based on the compensation measure used to select the original median employee (i.e., salary plus 2020 target incentive award). We estimate that the median employee's 2017employee’s 2021 total compensation, was $110,280, as determined in the same manner as "Total Compensation"“Total Compensation” in Thethe Summary Compensation Table.Table, was $148,649. Dr. Caforio's 2017Caforio’s 2021 total compensation was $18,687,123,$19,784,806, which was 169133:1 times that of the median of the annual total compensation of all employees.
Item 2—Advisory Vote to Approve the Compensation of Our Named Executive Officers Table of Contents
ITEM 2—ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
As required by Section 14A of the Securities Exchange Act of 1934, as amended, weWe are providing shareholders the opportunity to advise the Compensation and Management Development Committee and the Board of Directors regarding the compensation of our Named Executive Officers, as such compensation is described in the "Compensation“Compensation Discussion and Analysis" (CD&A)Analysis” section, the tabular disclosure regarding such compensation and the accompanying narrative disclosure, beginning on page 31.34. We strongly encourage you to read these sections for a detailed description of our executive compensation philosophy and programs, the compensation decisions the Committee has made under those programs, the factors considered in making those decisions, the changes approved to such programs in 2016 and the feedback we received from our shareholder engagement. Accordingly, we are requesting your non-bindingnonbinding vote on the following resolution:
“RESOLVED, that the shareholders of Bristol-Myers Squibb Company approve, on an advisory basis, the compensation of the company’s Named Executive Officers, as described in the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation and the accompanying narrative disclosure set forth in the company’s 2022 Proxy Statement.” |
"RESOLVED, that the shareholders of Bristol-Myers Squibb Company approve, on an advisory basis, the compensation of the company's Named Executive Officers, as described in the Compensation Discussion and Analysis section, the tabular disclosure regarding such compensation and the accompanying narrative disclosure set forth in the company's 2018 Proxy Statement." |
Our executive compensation programs are designed to enable us to attract and retain talented executives capable of leading our business in the highly complex and competitive business environment in which we operate. We seek to accomplish this goal in a way that rewards performance and is aligned with our shareholders'shareholders’ long-term interests. A significant portion of each executive'sexecutive’s pay depends on his or her individual performance against financial and operational objectives as well as a demonstration of key behaviorsvalues necessary to our continued evolution as a diversified specialtyleading biopharmaceutical company. In addition, a substantial portion of an executive'sexecutive’s compensation is in the form of equity awards that tie the executive'sexecutive’s compensation directly to creating shareholder value and achieving financial and operational results. We value input from our shareholders as expressed through their votes and other communications. As an advisory vote, this proposal is not binding on the company. However, consistent with our record of shareholder responsiveness, the Compensation and Management Development Committee will consider the outcome of the vote when making future executive compensation decisions.
The Board of Directors unanimously recommends a vote
"FOR"“FOR” the approval, on an advisory basis, of the compensation of our Named Executive Officers.
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Equity Compensation Plan Information The following table summarizes information concerning the
company'scompany’s equity compensation plans and outstanding
options, warrants and
exercisable optionsrights as of December 31,
2017:2021:
| | Equity compensation plans approved by security holders | | | 71.3(1) | | | $53.00(2) | | | 88.7(3) | |
| | Equity compensation plans not approved by security holders | | | 0.0 | | | | | | 0.0 | |
| | Total | | | 71.3 | | | $53.00 | | | 88.7 | |
1)
| At December 31, 2021, there were a total of approximately 19.1 million shares subject to restricted stock units, approximately 1.8 million shares subject to market share units and approximately 3.4 million shares subject to performance share units. In the case of market share units and performance share units, which require performance conditions to be met for vesting, the number of awards reflected in the table assume achievement of target performance; under these awards, approximately 5.2 million additional shares would be issued if specified above-target performance levels were fully achieved in the applicable performance period. |
2)
| The weighted average exercise price of outstanding awards does not take into account the shares issuable upon settlement of outstanding restricted stock units, market share units or performance share units which have no exercise price. If the awards that have no exercise price were included in the calculation of weighted average exercise price of outstanding options, warrants and rights, the weighted average exercise price for all such outstanding awards would be $34.92. |
3)
| All available shares may be used for stock options and for equity awards that do not require payment of an exercise price, including restricted stock, restricted stock units, market share units, performance share units and similar full-value awards. |
| | | | | | | | | | |
Plan Category | | Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(in millions) |
| Weighted-average
exercise price
of outstanding
options, warrants
and rights |
| Number of
securities remaining
available for future
issuance under equity
compensation plans
(excluding securities
reflected in column
(a)) (in millions) | |
| | | | (a) | | | (b) | | | (c) | |
| Equity compensation plans approved by security holders | | | 13.6 | (1) | $ | 19.06 | (1) | | 103.7 | |
| Equity compensation plans not approved by security holders(2) | | | 0.0 | | $ | N/A | | | 28.5 | |
| | | | | | | | | | | |
| | | | 13.6 | | $ | 19.06 | | | 132.2 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
(1)The weighted average exercise price of outstanding awards does not take into account the shares issuable upon vesting of outstanding restricted stock units, market share units or performance share units which have no exercise price. At December 31, 2017, there were a total of approximately 4.9 million shares subject to restricted stock units, approximately 1.5 million shares subject to market share units and approximately 3.5 million shares subject to performance share units.(2)No awards have been granted under this plan since 2006 and no future awards will be made under this plan.
TableItem 3—Ratification of Contents
ITEM 3—RATIFICATION OF THE APPOINTMENT OF INDEPENDENTthe Appointment of Independent Registered Public Accounting Firm
REGISTERED PUBLIC ACCOUNTING FIRM
Our Board of Directors, upon the recommendation of its Audit Committee, has ratified the Audit
Committee'sCommittee’s appointment of Deloitte & Touche LLP
(D&T)(“D&T”) as our independent registered public accounting firm for the year
2018.2022. The Audit Committee and the Board believe that the continued retention of D&T to serve as our independent registered public accounting firm is in the best interests of the company and its shareholders. As a matter of good corporate governance, we are asking shareholders to ratify such appointment. In the event our shareholders fail to ratify the appointment, the Board of Directors and the Audit Committee will reconsider such appointment. It is understood that even if the appointment is ratified, the Audit Committee at its discretion, may direct the appointment of a new independent registered public accounting firm at any time during the year if the Audit Committee
feelsdetermines that such a change would be in the best interests of our company and our shareholders.
The Audit Committee is directly responsible for appointing, compensating and providing oversight of the performance of our independent registered public accounting firm for the purpose of issuing audit reports and related work regarding our financial statements and the effectiveness of our internal control over financial reporting. The Audit Committee is also responsible for approving the audit fees of our independent registered public accounting firm. In order to assure continuing auditor independence, the Audit Committee periodically considers whether there should be a rotation of the independent registered public accounting firm. Further, in conjunction with the mandated rotation of the audit
firm'sfirm’s lead engagement partner, the Audit Committee and its chairperson participate in the process for the selection of D
&T's&T’s new lead engagement partner.
Representatives from D&T will be present at the Annual Meeting to respond to appropriate questions and to make any statements as they may desire.
The Board of Directors unanimously recommends a vote
"FOR"“FOR” the ratification of the appointment of Deloitte & Touche LLP as Bristol-Myers
Squibb'sSquibb Company’s independent registered public accounting firm for
2018.2022.
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The following table presents aggregate billed fees for professional audit services rendered by D&T for the fiscal years ended December 31, 20172021 and 20162020 for the audits of our annual financial statements and internal control over financial reporting, and fees billed for other services rendered by D&T during those periods.
| | Audit Fees | | | $18.53 | | | $17.45 | |
| | Audit Related Fees | | | 0.88 | | | 0.87 | |
| | Tax Fees | | | 9.40 | | | 10.40 | |
| | All Other Fees | | | 0.01 | | | 0.19 | |
| | Total | | | $28.82 | | | $28.90 | |
| | | | | | | | | | |
| | | | | | | | | | | |
| |
| | 2017 | | 2016 | |
|
|---|
| |
| | (in millions)
| |
|
|---|
| | | Audit | | $ | 10.14 | | $ | 9.97 | | |
| | | Audit Related | | | 0.98 | | | 0.84 | | |
| | | Tax | | | 7.33 | | | 7.39 | | |
| | | All Other | | | 0.35 | | | 0.11 | | |
| | | | | | | | | | | |
| | | Total | | $ | 18.80 | | $ | 18.31 | | |
| | | | | | | | | | | |
Audit fees for 20172021 and 20162020 were for professional services rendered for the audits of our consolidated financial statements, including accounting consultation,consultations and adoption of new accounting standards, and of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, statutory and subsidiary audits, timely reviews of quarterly financial statements, consents, and assistance with review of documents filed with the SEC.
Audit Related
fees for 20172021 and 20162020 were primarily for agreed-upon procedures, special purpose financial statement audits due diligence related to acquisitions, and other audit-related services that are not required by statute or regulation.
Tax fees were composed of both tax compliance and tax consulting fees as described below.
Tax Compliance fees were incurred for services related to tax compliance, including the preparation of tax returns, claims for refund, assistance with tax audits and appeals and preparation of transfer pricing documentation studies and suchstudies. Such amounts were $5.3$7.5 million and $5.4$8.3 million in 20172021 and 2016,2020, respectively. Additionally,
Tax Consulting fees were incurred for tax planning (excluding planning related to transactions or proposals for which the sole purpose may be tax avoidance or for which tax treatment may not be supported by the Internal Revenue Code) and tax advice, including assistance with
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advice related to acquisitions, internal restructurings, legislative updates, and requests for rulings or technical advice from tax authorities and suchauthorities. Such amounts were $2.0$1.9 million and $2.0$2.1 million in 20172021 and 2016,2020, respectively.
All Other
fees for 20162021 and 20172020 were related to subscription feessubscriptions to an accounting and reporting research library and a pharmaceutical alliance database,databases, as well as surveys,a benchmarking, commercial strategyforums and training programs.compliance procedures.
Pre-Approval Policy for Services Provided by our Independent Registered Public Accounting Firm
The Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm consistent with applicable SEC rules. Our independent registered public accounting firm is prohibited from providing tax consulting services relating to transactions or proposals in which the sole purpose may be tax avoidance or for which the tax treatment may not be supported by the Internal Revenue Code. Prior to the engagement of our independent registered public accounting firm for the next year'syear’s audit, a schedule of the aggregate of services expected to be rendered during that year for each of the four categories of services described above is submitted to the Audit Committee for approval. Prior to engagement, the Audit Committee pre-approves these services by category of service. The fees are budgeted by category of service and the Audit Committee receives periodic reports from our independent registered public accounting firm on actual fees versus the budget by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging our independent registered public accounting firm.
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The Audit Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such authority is delegated is required to report, for informational purposes, any pre-approval decisions to the Audit Committee at its next regularly scheduled meeting. During
2017,2021, the Audit Committee did not delegate pre-approval authority to any of its members.
As the Audit Committee of the Board of Directors, we are composed of independent directors as required by and in compliance with the listing standards of the New York Stock
Exchange.Exchange and applicable SEC rules. We operate pursuant to a written charter adopted by the Board of Directors that is published on the
company'scompany’s website.
Management has primary responsibility for the
company'scompany’s financial reporting process, principles and internal controls as well as preparation of its consolidated financial statements. The independent registered public accounting firm is responsible for performing an audit in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB)(“PCAOB”) to obtain reasonable assurance that
Bristol-Myers Squibb'sBristol Myers Squibb’s consolidated financial statements are free from material misstatement and expressing an opinion on the conformity of such financial statements with accounting principles generally accepted in the United States. We are responsible for overseeing and monitoring D
&T's&T’s auditing process on behalf of the Board of Directors.
As part of the oversight of the
company'scompany’s financial statements, we review and discuss with both management and D&T all annual and quarterly financial statements prior to their issuance. Management advised us that each set of financial statements reviewed was prepared in accordance with accounting principles generally accepted in the United States. We have reviewed with management significant accounting and disclosure issues and reviewed with D&T matters required to be discussed pursuant to auditing standards adopted by the PCAOB.
In addition, we have received the written disclosures and the letter from D&T required by PCAOB Ethics and Independence Rule 3526, "Communication“Communication with Audit Committees Concerning Independence"Independence”, and have discussed with D&T their independence from Bristol-MyersBristol Myers Squibb and its management. We have determined that D&T's&T’s provision of non-audit services in 20172021 was compatible with, and did not impair, its independence. We have also received written materials addressing D&T's&T’s internal quality control procedures and other matters, as required by the New York Stock Exchange listing standards.
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We have discussed with our internal auditors and D&T the overall scope and plans for their respective audits. We have met with the internal auditors and D&T, with and without management present, to discuss their evaluations of the company'scompany’s internal control over financial reporting, and the overall quality of the company'scompany’s financial reporting.
Based on the reviews and discussions described above, we recommended to the Board of Directors, and the Board has approved, that the audited consolidated financial statements for the year ended December 31,
20172021 be included in Bristol-Myers
Squibb'sSquibb Company’s Annual Report on Form 10-K for the year ended December 31,
20172021 for filing with the Securities and Exchange Commission.
In addition, we have confirmed there have been no new circumstances or developments since our respective appointments to the Committee that would impair any of our
member'smember’s ability to act independently.
The Audit Committee
Paula A. Price
Robert J. Bertolini
Michael Grobstein
Theodore R. Samuels
Gerald L. Storch
Phyllis R. Yale
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ShareholderSHAREHOLDER PROPOSALS
We expect
Proposals
The Company expects the following shareholder proposals (Items 4-5) to be presented at the
20182022 Annual Meeting. The Board of Directors has recommended a vote against these proposals for the
policy reasons set forth following each proposal. The stock holdings of each proponent will be provided upon request to the Corporate Secretary of
Bristol MyersBristol-Myers Squibb.
ITEM 4—SHAREHOLDER PROPOSAL ON ANNUAL REPORT DISCLOSING HOW RISKS RELATED TO PUBLIC CONCERN OVER DRUG PRICING STRATEGIES ARE INCORPORATED INTO INCENTIVE COMPENSATION PLANS
The proponents of this resolution are lead filer Trinity Health and other co-filers(1). Trinity Health is located at 766 Brady Avenue, Apt 635, Bronx, NY 10462.
Proposal 4—Annual Report Disclosing How Risks Related to Public Concern over Drug Pricing Strategies are Incorporated into Executive Compensation Plans
RESOLVED, that shareholders of Bristol-Myers Squibb Company ("BMS") urge the Compensation and Management Development Committee (the "Committee") to report annually to shareholders on the extent to which risks related to public concern over drug pricing strategies are integrated into BMS's incentive compensation policies, plans and programs (together, "arrangements") for senior executives. The report should include, but need not be limited to, discussion of whether incentive compensation arrangements reward, or not penalize, senior executives for (i) adopting pricing strategies, or making and honoring commitments about pricing, that incorporate public concern regarding the level or rate of increase in prescription drug prices; and (ii) considering risks related to drug pricing when allocating capital.
SUPPORTING STATEMENT
As long-term investors, we believe that senior executive incentive compensation arrangements should reward the creation of sustainable long-term value. To that end, it is important that those arrangements align with company strategy and encourage responsible risk management.
A key risk facing drug companies is potential backlash against high prices. Public outrage over drug prices and their impact on patient access may force price rollbacks and harm corporate reputation. Investigations regarding pricing of prescription medicines may bring about broader changes, with some favoring allowing Medicare to bargain over drug prices. (E.g., https://democrats-oversight.house.gov/news/press-releases/ cummings-and-welch-launch-investigation-of-drug-companies-skyrocketing-prices; https://democrats-oversight.house.gov/news/press-releases/cummings-and welch-propose-medicare-drug-negotiation-bill-in -meeting-with). The high prices of some BMS cancer drugs have stirred controversy. (E.g., http://www.businessinsider.com/r-the-cost-of-cancer-new-drugs-show-success-at-a -steep-price-2017-4).
A recent Credit Suisse analyst report stated that "US drug price rises contributed 100% of industry EPS growth in 2016" and characterized that fact as "the most important issue for a Pharma investor today." The report identified BMS as having the "greatest risk of future pricing pressures" of major pharmaceutical firms. (Global Pharma and Biotech Sector Review: Exploring Future US Pricing Pressure, Apr. 18, 2017, at 3).
We are concerned that the incentive compensation arrangements applicable to BMS's senior executives may not encourage them to take actions that result in lower short-term financial performance even when those actions may be in BMS's best long-term financial interests. BMS uses revenue and non-GAAP earnings per share, along with a pipeline goal and individual performance factors, as metrics for the annual bonus, and revenue and non-GAAP operating margin as metrics for performance share unit awards. (2017 Proxy Statement, at 43-44, 47).
In our view, excessive dependence on drug price increases is a risky and unsustainable strategy, especially when price hikes drive large senior executive compensation payouts. For example, coverage of the skyrocketing cost of Mylan's EpiPen noted that a 600% rise in Mylan's CEO's total compensation accompanied the 400% EpiPen priceincrease. (See, E.g., https://www.nbcnews.com/business/consumer/mylan-execs-gave-themselves-raises-
(1) The following stockholders have co-filed the Proposal: UAW Retiree Medical Benefits Trust, the Sister of St. Francis of Philadelphia, Boston Common Asset Management, LLC, Friends Fiduciary, American Baptist Home Mission Societies, Mercy Health, Daughters of Charity, Mercy Investment Services, Inc., School Sisters of Notre Dame Cooperative Investment Fund, Catholic Health Initiatives, and Monasterio De San Benito.
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they-hiked-epipen-prices-n636591; https://www.wsj.com/articles/epipen-maker-dispenses-outsize-pay-1473786288;https://www.marketwatch.com/story/mylan-top -executive-pay-was-second-highest-in-industry-just-as-company-raised-epipen-prices-2016-09-13).
The disclosure we request would allow shareholdersItem 4—Shareholder Proposal to better assess the extentLower Ownership Threshold for Special Shareholder Meetings to which compensation arrangements encourage senior executives to responsibly manage risks relating to drug pricing and contribute to long-term value creation. We urge shareholders to vote for this Proposal.
Board of Directors' Position
The Board of Directors recommends a vote "AGAINST" the proposal for the following reasons.
The Compensation Management and Development Committee's (the "Committee") charter sets forth the duties and responsibilities of the Committee, which include, among other things, determining and approving the compensation of our CEO and other senior executive officers. The charter makes clear that the duties and responsibilities of the Committee encompass a determination of risks relating to executive compensation, including, but not limited to, reputational risks. In particular, the charter provides that, in fulfilling its duties and responsibilities, the Committee must annually review incentive compensation programs to confirm incentive pay does not encourage unnecessary risk-taking.
Additionally, the Securities and Exchange Commission (the "SEC") rules currently require the company to provide significant disclosure regarding the material factors considered by the Committee in making compensation determinations for the Named Executive Officers, especially if the compensation policies and practices are reasonably likely to result in a material adverse effect on the company. This disclosure is set forth in the Compensation Discussion and Analysis ("CD&A") included in this Proxy Statement starting at page 31. The Committee reviews the CD&A and recommends its inclusion in the proxy statement, as stated in the Committee's report at page 53. Accordingly, the Board is already required to assess and provide disclosures that are generally aligned with what the Proposal seeks—an annual report on the extent to which reputational risks associated with public concern over drug pricing strategies are integrated into the company's incentive plans and programs.
In particular, the description of our compensation philosophy in the CD&A specifically notes that the company "has structured its compensation program to closely align the interests of executives with the those of shareholders" and has also designed the compensation program with certain principles in mind, including "to implement best practices in compensation governance, including risk management and promotion of effective corporate policies." Further, the CD&A notes that as a part of the administration of the Board's risk oversight function, the Committee annually conducts a worldwide review of our compensation policies and practices to "determine whether incentive pay encourages excessive risk or inappropriate risk taking," and discusses the manner in which we seek to address and mitigate these risks. Our compensation program achieves this by striking an appropriate balance between short-term and long-term incentives, linking payout to each executive's demonstration of our company behaviors, placing caps on our incentive award payout opportunities, following equity grant practices that limit potential for timing awards and having stock ownership and retention requirements. For example, our current long-term equity incentive (LTI) program (60% performance share units (PSUs) and 40% market share units (MSUs)) incorporates the company's stock price into its performance measures and generally magnifies the impact of changes in our stock price as well as relative total shareholder return (TSR) performance over the mid and longer-term. Also embedded in the review is the ongoing assessment of enterprise risk, including reputational risks stemming from the dynamic external environment, which covers our prudent and balanced approach to drug pricing. We evaluate the performance of each of our executives based on a number of factors, including how they demonstrate our company behaviors in the execution of their day-to-day decisions. Those behaviors include, among others, accountability. This evaluation is one input into the determination of payouts under both the annual incentive and long-term equity incentive programs. Therefore, given the direct link between payout and our executive compensation program's emphasis on sustainable long-term value, we minimize and appropriately reduce the possibility that our executive officers will make excessively or inappropriately risky decisions that could maximize short-term results at the expense of sustainable long-term value creation for our shareholders.
In addition, our Board firmly believes that prescription drugs are so important that everyone who needs them should have access to them. We have been, and remain, committed to facilitating access to our medicines to further our mission to help patients prevail over serious diseases. We are also sensitive to concerns about rising
10%
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costs of health care, including pharmaceuticals, and access to medicines. Consequently, we price our medicines based on a number of factors, including, among others, the value of scientific innovation for patients and society in the context of overall healthcare spend; economic factors impacting the healthcare systems' capacity to provide appropriate, rapid and sustainable access to patients; and the necessity to sustain our research and development (R&D) investment in innovative platforms to continue to address serious unmet medical needs. Furthermore, we take a thoughtful approach to pricing our products and have internal processes and controls in place that ensure that any price increase is thoroughly and appropriately vetted prior to implementation. This process also includes routine presentations to the Board on our drug pricing strategies.
The Board believes that its current process of annually disclosing to the SEC the material factors considered by the Committee in making compensation determinations for the Named Executive Officers is generally aligned with what the Proposal seeks—an annual report on the extent to which reputational risks associated with public concern over drug pricing strategies are integrated into the company's incentive plans and programs. Moreover, our internal processes and controls ensure that we take a prudent and balanced approach to drug pricing, including regular presentations to the Board of Directors. Therefore, the Board has demonstrated its commitment to evaluating and reporting on how enterprise risks, inclusive of reputation risks associated with drug pricing strategies are integrated into our compensation policies and practices, which makes the report requested by this Proposal duplicative and unnecessary. For these reasonsthe Board recommends that you vote against this proposal.
ITEM 5—SHAREHOLDER PROPOSAL ON SPECIAL SHAREOWNER MEETINGS
The proponent of this resolution is
Mr. James McRitchie of 9295 Yorkship Court, Elk Grove, California, 95758.Kenneth Steiner, 14 Stoner Ave., 2M, Great Neck, NY 11021
Proposal
5—4—Special
Shareowner Meetings RESOLVED:
The shareholders of Bristol-Myers Squibb (BMY) ('Company') hereby request that the Board of DirectorsShareholder Meeting Improvement
Shareholders ask our board to take the steps necessary to amend
our bylaws and eachthe appropriate
company governing
documentdocuments to give
holders with an aggregatethe owners of
15% net longa combined 10% of our outstanding common stock the power to call a special shareowner meeting. This
proposal does not impact our board's current powerincludes that each shareholder shall have an equal right per share to
callformally participate in the calling for a special
shareholder meeting.
SUPPORTING STATEMENT:
Delaware law allows 10%
It is important to adopt this proposal to make up for our complete lack of company sharesa shareholder right to callact by written consent. Many companies provide for both a special meeting. A shareholder right to call a special shareholder meeting isand a wayshareholder right to bring an important matteract by written consent.
The Bristol-Myers shareholders gave 43%-support to
a shareholder proposal for the
attention of both management and shareholders outside the annual meeting cycle. This is important because there could be 15-months between annual meetings. A shareholder right to act by written consent at the 2020 annual meeting. This 43%-support likely represented 51%-support from the shares that have access to independent proxy voting advice and are not forced to rely on the biased voting advice by management. BMY management should support a topic that earns majority shareholder support -especially at a company where the stock price performs so poorly.
Southwest Airlines is an example of a company that does not provide for shareholder written consent and yet provides for 10% of shares to call for a special shareholder meeting.
A reasonable shareholder right to call for a special shareholder meeting can make shareholder engagement meaningful. “Shareholder Engagement” is cited 6-times in our 2021 annual meeting proxy statement. If management is insincere in its shareholder engagement, a right for shareholders to call for a special meeting can make management think twice about insincerity. And management has never said what its shareholder engagement reveals about what shareholders have to say regarding the perennial poor price performance of BMY stock.
Our bylaws give no assurance that any engagement with shareholders will continue. A more reasonable shareholder right to call for a special shareholder meeting will help ensure that management engages with shareholders in good faith because shareholders will have a viable Plan B as an alternative.
A more reasonable right to call a special meeting
are two complimentary waysmight make for more of an incentive for 2 of our directors to
bring an important matterperform better compared to
the attention of both management and shareholders outside the annual meeting cycle. Both are associated with increased governance quality and shareholder value. Our Company offers no right of shareholders to act by written consent. Currently, 64% of S&P 500 companies have adopted company bylaws, articles of incorporation, or charter provisions to allow shareholders to call2021 since a special meeting. Evenmeeting can elect a new director:
Michael Bonney received almost 200 million negative votes.
Giovanni Caforio, Chairman and CEO, received more than half100 million negative votes.
Each of
all S&P 1500 companies allow shareholders this right. This topic won more than 38% supportthese negative director votes exceed the 2021 negative votes for BMY executive pay.
And BMY stock was at our Company$69 in 2017. According to Proxy Insight, 228 funds voted for, while 72 voted against. Unfortunately, large funds like Wellington, Vanguard, State Street, Fidelity and BlackRock were among those voting against. We hope they and others will reconsider their position this year, given our Company's low performance, compared to the S7P 500 over a two-year period.1999.
Please vote yes:
Special Shareholder Meeting Improvement — Proposal 4.
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This proposal topic won majority votes last year at Salesforce.com, NETGEAR, CVS Health and United Rentals. It may be possible to adopt this proposal by simply incorporating this text into our governing documents:
"Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Chairman of the Board or the President, and shall be called by the Chairman of the Board or President or Secretary upon the order in writing of a majority of or by resolution of the
Board of Directors, or at the request in writing of stockholders owning 15% net long of the entire capital stock of the Corporation issued and outstanding and entitled to vote." We urge the Board to join the mainstream of major U.S. companies and establish a right for shareholders owning 15% of our outstanding common stock to call a special meeting.
Please vote for: Special Shareowner Meetings—Proposal 5*
Directors’ Position
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Special Shareowner Meetings—Proposal 5
Board of Directors' Position
The Board of Directors recommends a vote
"AGAINST"“AGAINST” this proposal for the following
reasons: After careful consideration,reasons.
The Board has carefully considered the proposal and informed by dialogue with our shareholders on this topic, the Board believes the shareholder proposal to lower the threshold for holders of our common stock to call a special meeting isactions requested are not in the best interests of the companyCompany and its shareholders. The company's Bylaws currently provide that any person or persons holding at least 25%Company, which has always been committed to robust shareholder engagement and accountability to shareholders, gave shareholders the direct opportunity to vote upon the question of the company's common stockproper special meeting threshold at last year’s annual meeting. At the 2021 Annual Meeting, our shareholders overwhelmingly approved the Company’s current special meeting threshold, which requires 15% of the outstanding shares to call a special shareholder meeting, and entitledexplicitly rejected the same proponent’s proposal to vote mayset the special meeting standard at 10% of the outstanding shares.
Specifically, the Company took the following actions in 2021 related to this proposal:
At the 2021 Annual Meeting, the Board asked shareholders to approve an amendment to the Company’s Certificate of Incorporation to reduce the percentage of outstanding shares required for shareholders to call a special meeting upon written requestfrom 25% to 15% as a representation of its commitment to high standards of corporate governance and greater transparency and accountability to shareholders. This proposal received a resounding approval of approximately 98% of the votes cast at the 2021 Annual Meeting (excluding broker non-votes).
At the 2021 Annual Meeting, Mr. Steiner also submitted this same proposal to lower the ownership threshold to 10% in lieu of the Company’s proposed 15% threshold. Excluding broker non-votes, only approximately 32% of the votes cast at the 2021 Annual Meeting voted for this 10% standard.
Effective as of May 4, 2021, the Company amended its Amended and Restated Certificate of Incorporation to lower the ownership threshold for special shareholder meetings to 15%, and corresponding amendments to the company's Corporate Secretary. bylaws that were previously approved by the Board became effective.
Therefore, when presented with the direct choice between a 15% ownership threshold and a 10% threshold for the special meeting right, the Company’s shareholders overwhelmingly supported the Company’s proposed 15% level at the 2021 Annual Meeting.
The Board believes that this 25%15% threshold is reasonable, appropriate and aligned with our shareholders'shareholders’ interests. The current threshold is designed to strike a balance between assuring that shareholders have theIt has enhanced shareholders’ ability to call a special meeting, and protectingwhile appropriately balancing against the risk that a small minority of shareholders, including those with specialnarrow interests, could trigger the expense and distraction of a special meetingmay ineffectively use corporate resources to pursue matters that arean agenda not widely viewed as requiring immediate attention or for reasonsfavored by a majority of shareholders and that may not be in the best interests of the company or all of our shareholders. The company's current threshold is well within the mainstream, with 25% emerging as the most common threshold for
Holding a special meeting
rights at public companies.costs money and demands significant attention from the Board and senior management. In addition,
it creates a disruption to the
company's 25% threshold is equal to or lower thanCompany’s normal business operations. As such, the
comparable threshold adopted by approximately 69%calling of
Delaware corporations in the S&P 500 Index that permit shareholders to call a special
meeting. We believe thatmeeting should not be an ordinary process; and a special shareholder meeting should only be convened to discuss extraordinary events when fiduciary, strategic or similar considerations dictate the matter be addressed prior to the next annual meeting. Convening a special meeting imposes substantial legal, administrative and distribution costs associated with, among other things, preparing the required disclosure documents, printing and mailing. In addition, preparing for and conducting a special meeting requires a significant commitment of time and focus from the company's Board and senior management, distracting them from their primary focus of maximizing long-term financial returns and operating the company's business in the best interests of shareholders. The Board believes that a 25%15% threshold establishes the appropriate balance between meaningful accountability and mitigation of risk that may be presented by a lower threshold, including significant costs, Board and management distraction and waste of corporate resources.
Our
shareholders'shareholders’ ability to vote on significant matters is further ensured and protected by state law and other regulations. As a Delaware corporation, the
companyCompany is required to have all major corporate actions, such as mergers, a sale of all or substantially all of the
company'sCompany's assets or increases or decreases in authorized shares, approved by shareholders. As a New York Stock Exchange listed company, the
companyCompany is also required to, among other things, obtain shareholder approval for
adoption, and certain amendments, of equity compensation plans, significant issuances of securities to related parties or when such issuances represent more than 20% of the
company'sCompany's outstanding common stock or voting power.
The Board also believes that adoption of this proposal is unnecessary because the companyCompany is committed to high standards of corporate governance and has already takentakes a number of steps to achieve greater transparency and accountability to shareholders. Following extensive engagement with our shareholders throughout 2015, our Board amended the company's Bylaws to adopt a proxy access shareholder right in February 2016. The Board took particular care to adopt a bylaw with provisions that reflect the input of our shareholders, the details of which are described on page 11 of this Proxy Statement under the heading "Proxy Access Shareholder Right." In addition to engagingenhancing the right of shareholders to call a special meeting in the last year, the Board has in place robust corporate governance policies that promote Board accountability and provide shareholders with a meaningful voice to communicate their priorities to the Board and Company management. These policies include the annual election of
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directors using a majority vote standard, a market-standard proxy access right for shareholders to include their director nominations in the Company’s proxy statement, no super majority voting provisions, the right to submit proposals for inclusion in the Company’s proxy statement for consideration at an annual meeting, and the opportunity to vote annually on the advisory “say-on-pay” vote on executive compensation. In addition, the Board, our Lead Independent Director, and Company management regularly engage with shareholders to solicit and discuss their views on a regular basis,governance, executive compensation, and other matters.
As evidenced by the 2021 change to the special meeting threshold, our Board continually reassesses our corporate governance practices to identify additional steps to further benefit our shareholders. For example, our Board recommended,shareholders, and our shareholders approved, amendmentsseeks shareholder input on these governance decisions. It is the Board’s belief that a further reduction to our governing documents to eliminate all supermajority provisions applicable to common shareholders. In addition, the Board's Committee on Directors and Corporate Governance has created a process for shareholders to communicate directly with our non-management directors outside the annualspecial meeting cycle, whichthreshold is described on page 26 of this Proxy Statement under the heading "Communications with our Board of Directors." More information about the company's corporate governance practices and policies can be found beginning on page 17 of this Proxy Statement under the heading "Corporate Governance and Board Matters."unnecessary.
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The existing 25%15% threshold protects shareholder interests by ensuring that special meeting matters are (i) of concern to a significant number of shareholders, (ii) worth the significant expense to the company,Company, and (iii) not an unnecessary distraction to the Board and management. As informed by ongoing dialogue with our shareholders on this topic, the Board continues to believeShareholders overwhelmingly agreed that a 25%15% threshold ensures that a meaningful percentage of our shareholders agree on the need for a special meeting before a special meeting is called.
In light of the strong shareholder rights the companyCompany already has in place, including the right for shareholders of 25% to call a special meeting, shareholders’ significant support of the recent special meeting amendment, and the Board'sBoard’s demonstrated commitment to establishing good governance practices,the Board recommends that you vote against this proposal.
proposal.
The Board of Directors unanimously recommends a vote
"AGAINST"“AGAINST” the proposal.
VOTING SECURITIES AND PRINCIPAL HOLDERSItem 5—Shareholder Proposal on the Adoption of a Board Policy that the Chairperson of the Board be an Independent DirectorThe proponents of this resolution are lead filer Mercy Investment Services, Inc. and other co-filers1. Mercy Investment Services, Inc. is located at 2039 North Geyer Road, Saint Louis, MO 63131.
Proposal 5—Separate Chair & CEO
RESOLVED: Shareholders request the Board of Directors adopt as policy, and amend the bylaws as necessary, to require henceforth that the Chair of the Board of Directors, whenever possible, be an independent member of the Board. This independence policy shall apply prospectively so as not to violate any contractual obligations. If the Board determines that a Chair who was independent when selected is no longer independent, the Board shall select a new Chair who satisfies the requirements of the policy within a reasonable amount of time. Compliance with this policy is waived if no independent director is available and willing to serve as Chair. This policy would be phased in for the next CEO transition.
WHEREAS:
We believe:
The role of the CEO and management is to run the company.
The role of the Board of Directors is to provide independent oversight of management and the CEO.
There is a potential conflict of interest for a CEO to have an inside director act as Chair.
In our view, shareholders are best served by an independent Board Chair who can provide a balance of power between the CEO and the Board. Taking this step is in the long-term interests of shareholders and will promote effective oversight of management.
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As of March 2020, approximately 33% of S&P 500 firms had an independent chair. ISS reported in September 2020 that 85 percent of investors responding to its policy survey indicated that an independent chair is their preferred model.
Pharmaceutical companies are particularly in need of effective and unconflicted oversight because of the industry's high legal and regulatory risks related to product safety and the industry's commercial practices. Bristol-Myers Squibb is not immune to litigation and regulatory attention.
In October 2021 a class action lawsuit was filed against the company on behalf of former shareholders of Celgene Corporation who received Contingent Value Rights for violations of the federal securities laws. The complainant alleges that the company's public statements were false and materially misleading throughout the merger period and that when the market learned the truth about the company, former Celgene shareholders suffered losses.
In spring of 2021, the public discovered that the Internal Revenue Service (IRS) was claiming more than $1 billion in unpaid taxes from the company as a result of creating an offshore subsidiary in Ireland that the IRS deemed an “abusive tax shelter”. The company did not inform investors of this claim.
In January 2020, Bristol-Myers Squibb reached an “agreement in principle” to settle a 2013 whistleblower lawsuit accusing the company of manipulating the average manufacture price of its drugs in order to underpay Medicaid rebates.
The risk of lawsuits, sustained public controversy and regulatory intervention, whether ultimately found to be justified or not, are strong arguments for the need for continuous, effective and unconflicted board oversight of corporate management.
In order to ensure that our Board can provide rigorous oversight for our Company with greater independence and accountability, we urge a vote FOR this shareholder proposal.
Board of Directors’ Position The Board of Directors recommends a vote “AGAINST” the proposal for the following reasons.
The Board has carefully considered this proposal and believes the actions requested are not in the best interests of the Company and its shareholders. The Board believes that shareholder interests are best served when the Board has the flexibility to make leadership choices taking into consideration the Company’s needs and circumstances at any given time. Eliminating this flexibility is unnecessarily rigid and would deprive the Board of the ability to select the most qualified and appropriate individual to lead the Board as Board Chair. Moreover, our Lead Independent Director role, as well as our other corporate governance practices, already provide the independent leadership and management oversight requested by this proposal. Shareholder proposals regarding this topic have been voted on at prior Annual Meetings, and each time, the proposal has failed to receive a majority of shareholder support.
The Company’s carefully-considered governance documents provide the Board with the ability to design the Company’s board leadership structure as it deems appropriate based on the circumstances at the time. This enables the Board to tailor its structure to the strengths of the Company’s officers and directors in order to best address the Company’s evolving and complex business. It is crucial that the Board have this ability to adapt and adjust in order to effectively execute strategic initiatives and business plans. The Board believes that the Company and its shareholders are best served by allowing the Board to continue to follow its current policy of determining the most advantageous governance for the Company generally, and the best person to serve as the Board Chair specifically.
It is important to note that the Company’s Corporate Governance Guidelines do not explicitly mandate the integration of the roles of Board Chair and Chief Executive Officer. The Board elects our Board Chair and appoints our Chief Executive Officer, with each of these positions to potentially be held by the same person or by different people. In fact, due to the flexibility the existing policy affords, from 2005 until 2007 and from 2010 until 2017, the Board had a separate Board Chair and Chief Executive Officer. However, the Board presently believes that the combination of the offices of the Board Chair and Chief Executive Officer continues to be in the best interest of the Company and our shareholders, and is the best leadership structure for the Company and its shareholders at this time.
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Currently, the roles of Board Chair and Chief Executive Officer are held by Dr. Caforio. Specifically, the Company’s independent directors have determined that having Dr. Caforio fill a combined role, complemented by a strong Lead Independent Director, strikes the appropriate balance between consistent leadership, effective oversight and focused accountability. Having one individual serve in both roles positions Dr. Caforio to effectively drive future strategy and decision-making for the Company and ensures that the Company presents its message and strategy to all stakeholders with a unified voice. Dr. Caforio not only has extensive industry experience but also deep institutional knowledge of the Company. His breadth of knowledge and deep understanding of our evolving industry, accumulated over more than 30 years, reinforces the Board’s belief that having the Chief Executive Officer serve as Board Chair is highly advantageous for the Company at this time.
The Company’s Corporate Governance Guidelines provide that the independent directors will designate a Lead Independent Director when the Board Chair is not an independent director. The independent directors of the Board have elected Mr. Samuels to serve in that position. The Board believes the robust duties of the Lead Independent Director, who is selected annually by the Company’s independent directors, provide for effective, appropriate safeguards and oversight. The role of the Lead Independent Director at the Company is modeled on the role of an independent board chair, ensuring a strong, independent and active Board. The Company’s Corporate Governance Guidelines provide that the Lead Independent Director shall “preside over executive sessions of the Company’s independent directors, facilitate information flow and communication between the Directors and the Board Chair, and to perform such other duties specified by the Board.” The Lead Independent Director’s responsibilities include:
Serving as liaison between the independent directors and the Board Chair and Chief Executive Officer.
Reviewing and approving meeting agendas and sufficiency of time.
Calling meetings of the independent directors.
Presiding at all meetings of the independent directors and any Board meeting when the Board Chair and Chief Executive Officer is not present, including executive sessions of the independent directors.
Approving the quality, quantity and timeliness of information sent to the Board.
Serving a key role in Board and Chief Executive Officer evaluations.
Engaging with, and responding directly to, shareholder and stakeholder questions, as appropriate.
Providing feedback from executive sessions of the independent directors to the Board Chair and Chief Executive Officer and other senior management.
Recommending advisors and consultants.
Conducting, along with the Committee on Directors and Corporate Governance, an annual assessment of the Board and committees.
The Board ensures independent oversight of the Company through the Lead Independent Director role and other features of its governance structure. For example, the Company’s robust corporate governance policies and practices provide independent directors with the ability to effectively oversee the Company’s management. These include:
Director independence. Currently, 9 of the 10 director nominees are independent.
Fully independent Board committees. All members of the Audit Committee, Compensation and Management Development Committee, Committee on Directors and Corporate Governance and Science and Technology Committee are “independent” in accordance with or as defined in the rules adopted by the SEC and the New York Stock Exchange and the Company’s own Corporate Governance Guidelines.
Continued Board refreshment. The Board continually reviews its composition with a focus on refreshing necessary skills sets to oversee management’s execution of the Company’s strategy.
Regular executive sessions. Executive sessions of the independent directors of the Board generally take place at every regular Board meeting. In addition, each of the Board’s committees hold regularly scheduled executive sessions without management present.
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Independent evaluation of Chief Executive Officer performance. The Company’s Compensation and Management Development Committee, which is fully independent, is responsible for performing an annual evaluation of the Chief Executive Officer against his performance objectives.
In summary, the Board believes that rather than restricting the Board’s discretion in selecting the individual best suited to serve as Board Chair, the Board’s fiduciary duties are best fulfilled by retaining flexibility to determine a leadership structure that serves the best interests of the Company and its shareholders. The Board regularly reviews the Company’s governance structure, and will continue to do so; however, the Board believes the current leadership model, when combined with our independent board governance structure, strikes an appropriate balance between strong and consistent leadership and independent and effective oversight of the Company’s business and affairs. Given the current needs of the Company, the beneficial role of the Lead Independent Director, the Board believes it continues to be in the best interest of the Company and its shareholders to combine the Board Chair and Chief Executive Officer positions. For these reasons the Board recommends that you vote against this proposal.
Accordingly, the Board of Directors unanimously recommends a vote “AGAINST” this proposal.
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and Principal Holders
At the close of business on March 14,
2018,2022, there were
1,635,024,313.5092,125,202,526.509 shares of $0.10 par value common stock and
4,0673,469 shares of $2.00 convertible preferred stock outstanding and entitled to vote.
Common Stock Ownership by Directors and Executive Officers
The following table sets forth, as of March 14, 2018,2022, beneficial ownership of shares of our common stock by each director, each of theour Named Executive Officers and all directors and executive officers as a group, in each case, as of such date. Shares are beneficially owned when an individual has voting and/or investment power over the shares or could obtain voting and/or investment power over the shares within 60 days. Voting power includes the power to direct the voting of the shares and investment power includes the power to direct the disposition of the shares. Unless otherwise noted, shares listed below are owned directly or indirectly with sole voting and investment power. None of our directors and executive officers, individually or as a group, beneficially owns greater than 1% of our outstanding shares of common or preferred stock.
| | P. J. Arduini | | | 37,804 | | | 0 | | | 37,804 | |
| | C. Boerner, Ph.D. | | | 41,966 | | | 0 | | | 0 | |
| | G. Caforio, M.D. | | | 606,524 | | | 0 | | | 0 | |
| | D. V. Elkins | | | 205,615 | | | 74,954 | | | 0 | |
| | J. Haller, M.D. | | | 108,785 | | | 83,469 | | | 14,646 | |
| | S. Leung | | | 464,036 | | | 0 | | | 0 | |
| | M. Hidalgo-Medina, M.D., Ph.D. | | | 5,350 | | | 0 | | | 5,350 | |
| | P. A. Price | | | 8,255 | | | 0 | | | 8,255 | |
| | D. W. Rice | | | 10,363 | | | 0 | | | 10,363 | |
| | T. R. Samuels | | | 58,256 | | | 0 | | | 31,256 | |
| | G. L. Storch | | | 70,513 | | | 0 | | | 70,513 | |
| | R. Vessey, M.A, B.M., B.Ch., F.R.C.P., D.Phil. | | | 86,639 | | | 35,622 | | | 0 | |
| | K. H. Vousden, Ph.D. | | | 21,415 | | | 0 | | | 21,415 | |
| | P. Yale | | | 14,393 | | | 0 | | | 14,393 | |
| | All Directors and Executive Officers as a Group(4) | | | 1,861,984 | | | 194,045 | | | 213,995 | |
1)
| Consists of direct and indirect ownership of shares, shares credited to the accounts of the executive officers under the Bristol-Myers Squibb Company Savings and Investment Program, and Celgene Corporation 401(k) Plan, stock options that are currently exercisable, restricted stock units that vest within 60 days, the target number of market share units that vest within 60 days and deferred share units. |
2)
| Consists of shares underlying stock options that are currently exercisable, restricted stock units that vest within 60 days, and the target number of market share units that vest within 60 days. None of these shares have any voting rights. |
3)
| Consists of deferred share units that are valued according to the market value and shareholder return on equivalent shares of common stock. Deferred share units have no voting rights. |
4)
| Includes 21 individuals. |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| |
| | Bristol-Myers Squibb Company | |
|
|---|
| | Name | | Total
Common
Shares
Owned(1) | | Common
Shares
Underlying
Options or
Stock Units(2) | | Common
Shares
Underlying
Deferred
Share
Units(3) | |
|
|---|
| | | P. J. Arduini | | | 12,413 | | | 0 | | | 12,413 | | |
| | | C. A. Bancroft | | | 389,005 | | | 52,884 | | | 0 | | |
| | | J. Baselga, M.D., Ph.D. | | | 2,600 | | | 0 | | | 2,600 | | |
| | | R. J. Bertolini | | | 8,065 | | | 0 | | | 7,668 | | |
| | | G. Caforio, M.D. | | | 298,307 | | | 8,040 | | | 0 | | |
| | | M. W. Emmens | | | 8,012 | | | 0 | | | 7,752 | | |
| | | M. Gordon | | | 48,658 | | | 0 | | | 0 | | |
| | | M. Grobstein | | | 76,030 | | | 0 | | | 72,647 | | |
| | | A. J. Lacy | | | 64,324 | | | 0 | | | 62,019 | | |
| | | S. Leung | | | 640,492 | | | 169,893 | | | 0 | | |
| | | T. J. Lynch, Jr., M.D. | | | 21,618 | | | 12,367 | | | 0 | | |
| | | D. C. Paliwal | | | 23,277 | | | 0 | | | 20,020 | | |
| | | T. R. Samuels | | | 28,809 | | | 0 | | | 6,809 | | |
| | | V. L. Sato, Ph.D. | | | 59,784 | | | 0 | | | 59,784 | | |
| | | G. L. Storch | | | 41,549 | | | 0 | | | 41,549 | | |
| | | Karen H. Vousden, Ph.D. | | | 3,183 | | | 0 | | | 3,183 | | |
| | | All Directors and Executive Officers as a Group(4) | | | 2,041,356 | | | 243,184 | | | 296,446 | | |
| | | | | | | | | | | | | | |
(1)Consists of direct and indirect ownership of shares, shares credited to the accounts of the executive officers under the Bristol-Myers Squibb Company Savings and Investment Program, stock options that are currently exercisable, restricted stock units that vest within 60 days, the target number of market share units that vest within 60 days and deferred share units.(2)Consists of shares underlying stock options that are currently exercisable, restricted stock units that vest within 60 days, and the target number of market share units that vest within 60 days. None of these shares have any voting rights.(3)Consists of deferred share units that are valued according to the market value and shareholder return on equivalent shares of common stock. Deferred share units have no voting rights.(4)Includes 21 individuals.
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Principal Holders of Voting Securities The following table sets forth information regarding beneficial owners of more than 5% of the outstanding shares of our common stock. There are no beneficial owners of more than 5% of the outstanding shares of our preferred stock.
| | | | Name | | | | Number of Shares Beneficially Owned | | |
| | | Name
| | NumberPercent of Shares
Beneficially Owned | | Percent of
Class | |
|
|---|
| | Wellington Management Group LLP
c/o Wellington Management Company LLP
280 Congress Street
Boston, MA 02210 |
| | 138,081,570 (1) | | | 8.44% (1) | | |
| | | The Vanguard Group
Inc. 100 Vanguard Blvd.
Blvd Malvern, PA 19355 | | | 123,501,891 (2) 199,834,483(1) | | | 7.54% (2) 9.00%(1) | | |
| | | BlackRock, Inc.
55 East 52nd Street
New York, NY 10022 |
10055 | | 104,293,294 (3) | 169,266,706(2) | | 6.40% (3) | 7.6%(2) | |
1)
| | | | | | | | | | This information is based on the Form 13G/A filed by The Vanguard Group with the SEC on February 9, 2022 reporting beneficial ownership as of December 31, 2021. The reporting person has sole voting power with respect to zero shares, shared voting power with respect to 3,544,063 shares, sole dispositive power with respect to 190,661,867 shares and shared dispositive power with respect to 9,172,616 shares. |
2)
| This information is based on the Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 1, 2022 reporting beneficial ownership as of December 31, 2021. The reporting person has sole voting power with respect to 147,719,738 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 169,226,706 shares and shared dispositive power with respect to zero shares. |
(1)This information is based on the Schedule 13G/A filed by Wellington Management Group LLP with the SEC on February 8, 2018 reporting beneficial ownership as of December 31, 2017. The reporting person has sole voting power with respect to zero shares, shared voting power with respect to 40,154,614 shares, sole dispositive power with respect to zero shares and shared dispositive power with respect to 138,081,570 shares.(2)This information is based on the Schedule 13G/A filed by The Vanguard Group with the SEC on February 8, 2018 reporting beneficial ownership as of December 31, 2017. The reporting person has sole voting power with respect to 2,316,578 shares, shared voting power with respect to 359,728 shares, sole dispositive power with respect to 120,881,783 shares and shared dispositive power with respect to 2,620,108 shares.(3)This information is based on the Schedule 13G/A filed by BlackRock, Inc. with the SEC on February 8, 2018 reporting beneficial ownership as of December 31, 2017. The reporting person has sole voting power with respect to 90,017,995 shares, shared voting power with respect to zero shares, sole dispositive power with respect to 104,293,294 shares and shared dispositive power with respect to zero shares.
Section 16(a) Beneficial Ownership Reporting Compliance
Under Section 16(a) of the Securities Exchange Act of 1934, our directors, executive officers and the beneficial holders of more than 10% of our common stock are required to file reports of ownership and changes in ownership with the SEC. To the best of our knowledge, during 2017 all applicable Section 16(a) filing requirements were met, except that, due to administrative errors, two Form 4s were filed late: one for Thomas J. Lynch, Jr., M.D. relating to the conversion of 14,550.964 Deferred Share Units into common stock on May 14, 2017 after his retirement from the Board and the other for Joseph Caldarella relating to a sale of 8,096 shares of common stock on March 15, 2017.
Policy on Hedging and Pledging
Our insider trading policy prohibits all employees, including directors and executive officers, from engaging in any speculative or hedging transactions. Our insider trading policy also prohibits all employees, including directors and executive officers, from holding our securities in a margin account or pledging our securities as collateral for a loan except in certain limited circumstances pre-approved by our Corporate Secretary when a person wishes to pledge our securities as collateral for a loan and clearly demonstrates the ability to repay the loan without selling such securities. None of our directors or executive officers has pledged shares of our stock as collateral for a loan or holds shares of our stock in a margin account.
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Matters
Advance Notice Procedures
As set forth in our Bylaws, if you wish to propose any action, including the nomination of directors, at next
year'syear’s annual meeting, you must deliver notice to BMS containing certain information set forth in our Bylaws, not less than 90 but not more than 120 days before the anniversary of the prior
year'syear’s annual meeting. For our
20192023 Annual Meeting, we must receive this notice between January
1, 20193, 2023 and
January 31, 2019.February 2, 2023. These requirements are separate and distinct from the SEC requirements that a shareholder must meet to have a shareholder proposal included in our proxy statement. For further information on how a shareholder may nominate a candidate to serve as a director, please see page
11.12.
In addition to satisfying the foregoing advance notice requirements under our bylaws, to comply with the universal proxy rules under the Securities Exchange Act of 1934, as amended, shareholders who intend to solicit proxies in support of director nominees other than the company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Securities Exchange Act of 1934, as amended, no later than March 4, 2023.
Our Bylaws are available on our website at
www.bms.com/ourcompany/governance.governance. In addition, a copy of the Bylaw provisions discussed above may be obtained by writing to us at our principal executive offices, Bristol-Myers Squibb Company,
345 Park Avenue, New York, New York 10154, Attention: Corporate Secretary, until July 1, 2018, after which, please address to Bristol-Myers Squibb Company, 430 East 29th Street—
14th14th Floor, New York, New York 10016, Attention: Corporate Secretary.
20192023 Shareholder Proposals
Shareholder proposals relating to our
20192023 Annual Meeting of Shareholders must be received by us at our principal executive offices, Bristol-Myers Squibb Company,
345 Park Avenue, New York, New York 10154, Attention: Corporate Secretary, until July 1, 2018, after which, please address to Bristol-Myers Squibb Company, 430 East 29th Street—
14th14th Floor, New York, New York 10016, Attention: Corporate Secretary, no later than November
22, 2018.24, 2022. Such proposals must comply with SEC regulations under Rule 14a-8 regarding the inclusion of shareholder proposals in company sponsored proxy materials. Shareholders are encouraged to contact the Office of the Corporate Secretary prior to submitting a shareholder proposal or any time they have a concern. At the direction of the Board of Directors, the Office of the Corporate Secretary acts as corporate governance liaison to shareholders.
Compensation Committee Interlocks and Insider Participation
There were no Compensation and Management Development Committee interlocks or insider (employee) participation in
2017.2021.
Availability of Corporate Governance Documents
Our Corporate Governance Guidelines (including the standards of director independence), Principles of Integrity, Code of Ethics for Senior Financial Officers, Code of Business Conduct and Ethics for Directors, additional policies and guidelines, committee charters and links to Reports of Insider Transactions are available on our corporate governance webpage at www.bms.com/ourcompany/governance and are available to anyone who requests them by writing to: Corporate Secretary, Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154, until July 1, 2018, after which please address to Bristol-Myers Squibb Company, 430 East 29th Street—14th14th Floor, New York, New York 10016.
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FREQUENTLY ASKED QUESTIONS
Why am I receiving these materials?
This Proxy Statement is being delivered to all shareholders of record as of the close of business on March 14,
20182022 in connection with the solicitation of proxies on behalf of the Board of Directors for use at the Annual Meeting of Shareholders on May
1, 2018.3, 2022. We expect our proxy materials, including this Proxy Statement and the Annual Report, to be first made available to shareholders on or about March
22, 2018.24, 2022. Although the Annual Report and Proxy Statement are being delivered together, the Annual Report should not be deemed to be part of the Proxy Statement.
What is
"Notice and Access"“householding” and how does it
affect me? The U.S. Securities and Exchange Commission (SEC) has adopted a "Notice and Access" model which permits us to provide proxy materials to our shareholders electronically by posting the proxy materials on a publicly accessible website. Delivering proxy materials electronically will conserve natural resources and save us money by reducing printing and mailing costs. Accordingly, we have sent to most of our shareholders a "Notice of Internet Availability of Proxy Materials." This Notice provides instructions on how to access our proxy materials online and, if you prefer receiving a paper copy of the proxy materials, how you can request one. Employees and pension plan participants who have given consent to receive materials electronically received a link to access our proxy materials by email. We encourage all of our shareholders who currently receive paper copies of the proxy materials to elect to view future proxy materials electronically if they have Internet access. You can do so by following the instructions when you vote your shares online or, if you are a beneficial holder, by asking your bank, broker or other holder of record how to receive proxy materials electronically.
What is "householding" and how does it work?
"Householding"
“Householding” is a procedure we adopted whereby shareholders of record who have the same last name and address and who receive the proxy materials by mail will receive only one copy of the proxy materials unless we have received contrary instructions from one or more of the shareholders. This procedure reduces printing and mailing costs. If you wish to receive a separate copy of the proxy materials, now or in the future, at the same address, or if you are currently receiving multiple copies of the proxy materials at the same address and wish to receive a
single copy, you may contact us by writing to Shareholder Services, Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154, until July 1, 2018, after which, please address to Bristol-Myers Squibb Company, 430 East 29th Street—14th14th Floor, New York, New York 10016, or by calling us at (212) 546-3309. If you are a beneficial owner (your shares are held in the name of a bank, broker or other holder of record), the bank, broker or other holder of record may deliver only one copy of the Proxy Statement and Annual Report, or Notice of Internet Availability of Proxy Materials, to shareholders who have the same address unless the bank, broker or other holder of record has received contrary instructions from one or more of the shareholders. If you wish to receive a separate copy of the Proxy Statement and Annual Report, or Notice of Internet Availability of Proxy Materials, now or in the future, you may contact us at the address or phone number above and we will promptly deliver a separate copy. Beneficial owners sharing an address who are currently receiving multiple copies of the Proxy Statement and Annual Report, or Notice of Internet Availability of Proxy Materials, and wish to receive a single copy in the future, should contact their bank, broker or other holder of record to request that only a single copy be delivered to all shareholders at the shared address in the future.
Why are you holding a virtual Annual Meeting?
In light of the ongoing global COVID-19 pandemic, for the safety of all of our shareholders, directors, employees and the public, our 2022 Annual Meeting is being held in a virtual-only format with no physical location. Our goal for the Annual Meeting is to enable shareholders to participate in the meeting, while providing substantially the same access and possibilities for exchange with the Board and our senior management as an in-person meeting. We believe that this approach represents best practices for virtual shareholder meetings, including by providing a support line for technical assistance and addressing as many shareholder questions as time allows.
Who can attend the Annual Meeting?
Only shareholders of Bristol-Myers Squibb Company as of the record date, March 14, 2018,2022, their authorized representatives and guests of Bristol-Myers Squibb Company may attend the Annual Meeting. AdmissionOnly shareholders of record on the record date will be by ticket only. A form of government-issued photograph identification willentitled to participate, vote their shares and ask questions during the virtual meeting via audio webcast. To be requiredadmitted to the virtual 2022 Annual Meeting, shareholders should visit www.virtualshareholdermeeting.com/BMY2022 and enter the
meeting. Large bags, backpacks, briefcases, cameras, recording equipment and other electronic devices will not be permitted in16-digit control number included on your Important Notice Regarding the
meeting, and attendees will be subject to security inspections. Our offices are wheelchair accessible. We will provide, upon request, wireless headsets for hearing amplification. How do I receive an admission ticket?
If you are a registered shareholder (your shares are held in your name) and plan to attend the meeting, you should bring either the Notice of Internet Availability of Proxy Materials, on your proxy card, or on the top portioninstructions that accompanied your proxy materials.
We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing the Annual Meeting or during the meeting time, there will be a 1-800 number and international number available on the website to assist you. Technical support will be available 15 minutes prior to the start of the proxy card, bothmeeting and through the conclusion of which will servethe meeting.
How do I ask questions in the virtual meeting?
We are committed to ensuring that our shareholders have substantially the same opportunities to participate in the virtual Annual Meeting as they would at an in-person meeting.
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To submit a question during the meeting, visit www.virtualshareholdermeeting.com/BMY2022, enter your
admission ticket.16-digit control number and type your question into the “Ask a Question” field and click “Submit.” If you arewould like to submit a beneficial owner (your shares are held in the name of a bank, broker or other holder of
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record) and plan to attendquestion before the meeting, visit www.proxyvote.com with your 16-digit control number and select the “Submit a Question for Management” option. We encourage you can obtain an admission ticket in advance by writing to Shareholder Services, Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154. Please be suresubmit any question that is relevant to enclose proof of ownership, such as a bank or brokerage account statement. Shareholders who do not obtain tickets in advance may obtain them upon verification of ownership at the Registration Desk on the daybusiness of the Annual Meeting.
We may also issue ticketsmeeting. Questions pertinent to other individuals at our discretion.
meeting matters will be answered during the meeting as time allows.
All holders of record of our $0.10 par value common stock and $2.00 convertible preferred stock at the close of business on March 14,
20182022 will be entitled to vote at the
20182022 Annual Meeting. Each share is entitled to one vote on each matter properly brought before the meeting.
How do I vote if I am a registered shareholder?
Proxies are solicited to give all shareholders who are entitled to vote on the matters that come before the meeting the opportunity to do so whether or not they
attendparticipate in the
meeting in person.virtual meeting. If you are a registered holder, you can vote your shares by proxy in one of the following manners:
i)via Internet at www.proxyvote.com;
ii)by telephone at (800) 690-6903;
iii)by mail, if you received a paper copy of the proxy materials; or
iv)in person at the Annual Meeting.
i)
| via Internet at www.proxyvote.com; |
ii)
| by telephone at (800) 690-6903; |
iii)
| via audio webcast during the virtual 2021 Annual Meeting; or |
iv)
| by mail, if you received a paper copy of the proxy materials. |
Choosing to vote via Internet or calling the toll-free number listed above will save us expense. In order to vote online or via telephone, have the voting form in hand and either call the number or go to the website and follow the instructions. If you vote via the Internet or by telephone, please do not return a signed proxy card.
If you wish to vote during the virtual Annual Meeting, you can vote your shares via audio webcast at www.virtualshareholdermeeting.com/BMY2022.
If you received a paper copy of the proxy materials and choose to vote by mail, specify how you want your shares voted on each proposal by marking the appropriate boxes on the proxy card enclosed with the Proxy Statement, date and sign it, and mail it in the postage-paid envelope.
If you wish to vote in person, you can vote your shares at the Annual Meeting.
How do I vote if I am a beneficial shareholder?
If you are a beneficial shareholder, you have the right to direct your broker or nominee on how to vote the shares. You should complete a voting instruction card, which your broker or nominee is obligated to provide you. If you wish to vote
in person at the
virtual meeting, you must first obtain from the record holder a legal proxy issued in your name.
Under the rules of the New York Stock Exchange (NYSE), brokers that have not received voting instructions from their customers
ten10 days prior to the meeting date may vote their
customers'customers’ shares in the
brokers'brokers’ discretion on the proposals regarding routine matters, which in most cases includes the ratification of the appointment of the independent registered public accounting firm.
Under NYSE rules, the election of directors, the advisory vote to approve the compensation of our Named Executive Officers, and the approval of any shareholder proposals are considered
"non-discretionary"“non-discretionary” items, which means that your broker cannot vote your shares on these proposals.
What items will be voted upon at the Annual Meeting?
At the Annual Meeting, we will consider and act on the following items of business:
i)the election to the Board of Directors the 12 persons nominated by the Board, each for a term of one year;
ii)an advisory vote to approve the compensation of our Named Executive Officers;
iii)the ratification of the appointment of our independent registered public accounting firm; and
iv)two shareholder proposals, if presented at the meeting.
i)
| the election to the Board of Directors the 10 persons nominated by the Board, each for a term of one year; |
ii)
| an advisory vote to approve the compensation of our Named Executive Officers; |
iii)
| the ratification of the appointment of our independent registered public accounting firm; and |
iv)
| two shareholder proposals, if presented at the meeting. |
We do not know of any other matter that may be brought before the meeting. However, if other matters are properly presented for action, it is the intention of the named proxies to vote on them according to their best judgment.
What are the Board of
Directors'Directors’ voting recommendations?
For the reasons set forth in more detail in the Proxy Statement, our Board of Directors recommends a vote FOR the election of each director, FOR the advisory vote to approve the compensation of our Named Executive Officers, FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 20182022 and AGAINST the shareholder proposals.
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How will my shares be voted at the Annual Meeting?
Item | | | | | | Proposal | | | | Voting Options | | | Effect of
Abstentions | | | Broker Discretionary
Voting Allowed? | | | Effect of Broker
Non-Votes | |
| | | Voting Options |
| |
| | | | | | | | | | | | | | |
| 1 | | | | | | | | | | Election of Directors | | | |
| |
Item | |
Proposal | |
Voting
Options | |
Effect of
Abstentions | |
Broker Discretionary
Voting Allowed? | | Effect of
Broker
Non-
Votes | | |
| | | | | | | | | | | | | | |
| | 1 | | Election of Directors | | FOR, AGAINST or ABSTAIN (for each director nominee) | | | No effect—not counted as a vote cast | | No | No | | | No effect | | |
| | 2 | 2 | | Advisory vote to approve the compensation of our Named Executive Officers | | | FOR, AGAINST or ABSTAIN | | | Treated as a vote AGAINST the proposal | | No | No | | | No effect | | |
| | 3 | 3 | | Ratification of the appointment of an independent registered public accounting firm | | | FOR, AGAINST or ABSTAIN | | | Treated as a vote AGAINST the proposal | | Yes | Yes | | | Not applicable | | |
| | 4 | 4 | | Shareholder proposal on annual report disclosing how risks relatedProposal to public concern over drug pricing strategies are incorporated into incentive compensation plansLower the Ownership Threshold for Special Shareholder Meetings to 10% | | | FOR, AGAINST or ABSTAIN | | | Treated as a vote AGAINST the proposal | | No | No | | | No effect | | |
| | 5 | 5 | | Shareholder proposal to lowerProposal on the share ownership threshold to call special shareholder meetingsAdoption of a Board Policy that the Chairperson of the Board be an Independent Director | | | FOR, AGAINST or ABSTAIN | | | Treated as a vote AGAINST the proposal | | No | No | | | No effect | | |
| | | | | | | | | | | | | | |
How many votes are needed to elect the directors and to approve each of the proposals?
Director Elections
: A majority of votes cast with respect to each
director'sdirector’s election at the meeting is required to elect each director. A majority of the votes cast means that the number of votes cast
"for"“for” a director must exceed the number of votes cast
"against"“against” that director in order for the director to be elected. Abstentions will not be counted as votes cast for or against the director and broker non-votes will have no effect on this proposal.
Advisory Vote to Approve Compensation of ourOur Named
Executive Officers
: The affirmative vote of a majority of our outstanding shares present in person or by proxy and entitled to vote on the matter is required for the approval of the advisory vote to approve the compensation of our Named Executive Officers. Because your vote is advisory, it will not be binding upon our Board of Directors. Abstentions will be counted as votes against this proposal and broker non-votes will have no effect on this proposal.
Ratification of ourOur Auditors
: The affirmative vote of a majority of our outstanding shares present in person
or by proxy and entitled to vote on the matter is required for the ratification of the appointment of our independent registered public accounting firm. Abstentions will be counted as votes against this
proposal. As described above, a broker or other nominee may generally vote on routine matters such as this one, and therefore no broker non-votes are expected to exist in connection with this proposal.
Shareholder Proposals: The affirmative vote of a majority of our outstanding shares present in person or by proxy and entitled to vote on these mattersthis matter is required for the approval of eachthe shareholder proposal,proposals if presented at the meeting. Abstentions will be counted as votes against the proposals and broker non-votes will have no effect on the proposals.
How are the votes counted?
In accordance with the laws of Delaware, our Amended and Restated Certificate of Incorporation and our Bylaws, for all matters being submitted to a vote of shareholders, only proxies and ballots that indicate votes "FOR," "AGAINST"“FOR,” “AGAINST” or "ABSTAIN"“ABSTAIN” on the proposals, or that provide the designated proxies with the right to vote in
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their judgment and discretion on the proposals, are counted to determine the number of shares present and entitled to vote.vote on a given matter. Broker non-votes are not counted as shares present and entitled to vote on a given matter but will be counted for purposes of determining quorum (whether enough votes are present to hold the Annual Meeting).
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Can I change my vote after I return the proxy card, or after voting by telephone or electronically?
If you are a shareholder of record, you can revoke your proxy at any time before it is voted at the meeting by taking one of the following three actions:
i)by giving timely written notice of the revocation to the Corporate Secretary of Bristol-Myers Squibb;
ii)by casting a new vote by telephone or by the Internet; or
iii)by voting in person at the Annual Meeting.
i)
| by giving timely written notice of the revocation to the Corporate Secretary of Bristol-Myers Squibb Company; |
ii)
| by casting a new vote by telephone or by the Internet prior to the deadline for voting; or |
iii)
| by voting at the Annual Meeting. |
If you are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other holder of record. You may also vote
in person at the Annual Meeting if you obtain a legal proxy.
All shares that have been properly voted and not revoked will be voted at the Annual Meeting.
How do I designate my proxy?
If you wish to give your proxy to someone other than the persons named as proxies in the enclosed form of proxy, you may do so by crossing out the names of all three persons named as proxies on the proxy card and inserting the name of another person. The signed card must be presented at the meeting by the person you have designated on the proxy card.
An independent agent tabulates the proxies and the votes cast at the meeting. In addition, independent inspectors of election certify the results of the vote tabulation.
Yes, any information that identifies a shareholder or the particular vote of a shareholder is kept confidential.
Who will pay for the costs involved in the solicitation of proxies?
We will pay all costs of preparing, assembling, printing and distributing the proxy materials as well as the solicitation of all proxies. We have retained Georgeson Shareholder Communications Inc. to assist in soliciting proxies for a fee of $18,000,$22,000, plus reasonable out-of-pocket expenses. We may solicit proxies on behalf of the Board of Directors through the mail, in person, electronically, and by telecommunications. We will, upon request, reimburse brokerage firms and others for their reasonable expenses incurred for forwarding solicitation material to beneficial owners of stock.
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Categorical Standards of Independence
In determining director independence, the Board has adopted the following categorical standards to assist it in determining which relationships will be considered immaterial:
a)an immediate family member of the director is or has been employed by the company, provided that such family member is not, and has not been for at least a period of three years, an executive officer of the company;
b)more than three years has elapsed since i) the director was employed by the company, ii) an immediate family member of the director was employed by the company as an executive officer, or iii) an executive officer of the company was on the board of directors of a company that employed either the director or an immediate family member of the director as an executive officer;
c)the director, or an immediate family member of the director, received, in any twelve-month period within the last three years, $120,000 or less in direct compensation from the company (other than director's fees or compensation that was deferred for prior service with the company);
d)more than three years has elapsed since i) the director has been a partner with or employed by the company's independent auditor or ii) an immediate family member personally worked on the company's audit as a partner or employee of the company's independent auditor;
e)the director has an immediate family member who i) is an employee of, but not a partner of, the independent auditor and ii) does not personally work on the company's audit;
f)the director of the company, or an immediate family member of a director, is a director, an executive officer or an employee of, or is otherwise affiliated with, another company that makes payment to, or receives payment from, the company for property or services in an amount which, in any single fiscal year within the preceding three years, does not exceed the greater of $1 million or 2% of such other company's consolidated gross revenues;
g)the director of the company and/or an immediate family member of the director directly or indirectly owns, in the aggregate, 10% equity interest or less in another company that makes payment to, or receives payment from, the company for property or services; and
h)the director of the company is a director, executive officer, trustee of, or is otherwise affiliated with, a charitable organization or non-profit organization, and the company's, or the Bristol-Myers Squibb Foundation's discretionary charitable contributions to the organization, in the aggregate, in any single fiscal year within the preceding three years, do not exceed the greater of $1 million or 2% of that organization's consolidated gross revenues.
a)
| an immediate family member of the director is or has been employed by the company, provided that such family member is not, and has not been for at least a period of three years, an executive officer of the company; |
b)
| more than three years has elapsed since i) the director was employed by the company, ii) an immediate family member of the director was employed by the company as an executive officer, or iii) an executive officer of the company was on the board of directors of a company that employed either the director or an immediate family member of the director as an executive officer; |
c)
| the director, or an immediate family member of the director, received, in any 12-month period within the last three years, $120,000 or less in direct compensation from the company (other than director’s fees or compensation that was deferred for prior service with the company); |
d)
| more than three years has elapsed since i) the director has been a partner with or employed by the company’s independent auditor or ii) an immediate family member personally worked on the company’s audit as a partner or employee of the company’s independent auditor; |
e)
| the director has an immediate family member who i) is an employee of, but not a partner of, the independent auditor and ii) does not personally work on the company’s audit; |
f)
| the director of the company, or an immediate family member of a director, is an executive officer or an employee of, or is otherwise affiliated with, another company that makes payment to, or receives payment from, the company for property or services in an amount which in any single fiscal year within the preceding three years, does not exceed the greater of $1 million or 2% of such other company’s consolidated gross revenues; |
g)
| the director of the company and/or an immediate family member of the director directly or indirectly owns, in the aggregate, 10% equity interest or less in another company that makes payment to, or receives payment from, the company for property or services; |
h)
| the director of the company, or an immediate family member of a director, is an executive officer, or employee of, or is otherwise affiliated with, a charitable organization or non-profit organization, and the company’s, or the Bristol-Myers Squibb Foundation’s discretionary charitable contributions to the organization, in the aggregate, in any single fiscal year within the preceding three years, do not exceed the greater of $1 million or 2% of that organization’s consolidated gross revenues; and |
i)
| an executive officer of the Company serves or served on the compensation committee of the board of directors of a company that, at the same time within the last three years, employs or employed either the director or an immediate family member of the director as an executive officer. |
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EXHIBIT B
DIRECTIONS TO OUR LAWRENCE TOWNSHIP OFFICE AT
3401 PRINCETON PIKE
LAWRENCE TOWNSHIP, NEW JERSEY 08648
By Car:
From the North:
From Southern New Jersey:
From Western NJ / Pennsylvania
By Train:
New Jersey Transit and Amtrak train service is available to Princeton Junction, New Jersey. Our Lawrence Township office is approximately a 15 minute car drive from the station.
Parking:
Free parking for shareholders attending the 2018 Annual Meeting is available. Please go directly to the parking area reserved for shareholders.
Y O U R V O T E I S I M P O R T A N T
P L E A S E V O T E Y O U R P R O X Y
VOTE BY INTERNET - www.proxyvote.com Use the internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time, either on (i) Thursday, April 26, 2018 for shares in employee benefit plans or (ii) Monday, April 30, 2018 for all other shares. Have your proxy card in hand when you access the website and follow the instructions to vote the shares. P.O. BOX 4000 PRINCETON, NJ 08540 ELECTRONIC DELIVERYTABLE OF FUTURE SHAREHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by Bristol-Myers Squibb Company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time, either on (i) Thursday, April 26, 2018 for shares in employee benefit plans or (ii) Monday, April 30, 2018 for all other shares. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Bristol-Myers Squibb Company, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. We recommend you mail your proxy by April 23, 2018 to ensure timely receipt of your proxy. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E42966-P03046-Z71837 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. BRISTOL-MYERS SQUIBB COMPANY THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH DIRECTOR UNDER ITEM 1. 1. Election of Directors Nominees: For ! ! ! ! ! ! ! ! ! ! ! ! Against ! ! ! ! ! ! ! ! ! ! ! ! Abstain ! ! ! ! ! ! ! ! ! ! ! ! ! 1A) P. J. Arduini 1B) J. Baselga, M.D., Ph.D. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 2 and 3. For Against Abstain 1C) R. J. Bertolini ! ! ! ! ! ! 2. Advisory vote to approve the compensation of our Named Executive Officers Ratification of the appointment of an independent registered public accounting firm 1D) G. Caforio, M.D. 3. 1E) M. W. Emmens 1F) M. Grobstein THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEMS 4 and 5. 1G) A. J. Lacy ! ! ! 4. Shareholder Proposal on Annual Report Disclosing How Risks Related to Public Concer n Over Drug Pricing Strategies are Incorporated into Incentive Compensation Plans Shareholder Proposal to Lower the Share Ownership Threshold to Call Special Shareholder Meetings 1H) D. C. Paliwal 1I) T. R. Samuels ! ! ! 1J) G. L. Storch 5. 1K) V. L. Sato, Ph.D. 1L) K. H. Vousden, Ph.D. For address changes and/or comments, please check this box and write them on the back where indicated. YesNo ! ! Please indicate if you plan to attend this meeting. Note: Please sign as name appears on this card. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) DateCONTENTS
ADMISSION TICKET 2018 Annual Meeting of Shareholders Tuesday, May 1, 2018 10:00 A.M. Bristol-Myers Squibb Company 3401 Princeton Pike Lawrence Township, New Jersey PHOTO IDENTIFICATION WILL BE REQUIRED This is your admission ticket to the meeting. This ticket admits only the shareholder(s) listed on the reverse side of this card and is not transferable. Bristol-Myers Squibb Company is located at 3401 Princeton Pike, Lawrence Township, New Jersey. Directions to the facility can be found on the inside back cover of the Proxy Statement or you can call the company at 609-302-3000. Free parking for shareholders attending the 2018 Annual Meeting is available at Bristol-Myers Squibb. Important Notice Regarding the Availability of Proxy Materials for the 2018 Annual Meeting: The Notice of 2018 Annual Meeting, Proxy Statement and Annual Report are available at www.proxyvote.com. E42967-P03046-Z71837 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS, MAY 1, 2018 The undersigned hereby appoints Giovanni Caforio, M.D., Charles Bancroft, and Sandra Leung, and each of them proxies, with full power of substitution in each of them, for and on behalf of the undersigned to vote as proxies, as directed and permitted herein, at the Annual Meeting of Shareholders of the company to be held at Bristol-Myers Squibb Company, 3401 Princeton Pike, Lawrence Township, New Jersey, on May 1, 2018 at 10:00 A.M., and at any adjournments or postponements thereof upon matters set forth in the Proxy Statement and, in their judgment and discretion, upon such other business as may properly come before the meeting. This proxy also provides voting instructions for shares held by the Trustee of the Bristol-Myers Squibb Company Savings and Investment Program, the Bristol-Myers Squibb Company Employee Incentive Thrift Plan, and the Bristol-Myers Squibb Puerto Rico, Inc. Savings and Investment Program, and directs such Trustee to vote at the Annual Meeting all of the shares of common stock of Bristol-Myers Squibb Company which are allocated to the undersigned’s employee plan account in the manner directed on the reverse side of this card. If no direction is given or if direction is received after April 26, 2018, the Trustee will vote the shares in the same proportion as to which it has received instructions. When properly executed, your proxy will be voted as you indicate, or where no contrary indication is made, will be voted FOR Items 1, 2 and 3, and AGAINST Items 4 and 5. The full text of the items and the position of the Board of Directors on each appear in the Proxy Statement and should be reviewed prior to voting. (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Address Changes/Comments:
