UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐
Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒
Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
OMNICELL, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
☒
No fee required.
☐
Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
OMNICELL, INC.
4220 North Freeway
Fort Worth, Texas 76137
4220 North Freeway
Fort Worth, Texas 76137
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY23, 202321, 2024
TO BE HELD ON MAY
Dear Stockholder:
You are cordially invited to attend the 20232024 Annual Meeting of Stockholders (the “Annual Meeting”) of Omnicell, Inc., a Delaware corporation (the “Company”). The meeting will be held on Tuesday, May 23, 202321, 2024 at 1:30 p.m.9:00 a.m. Pacific Time. The Annual Meeting will be held in a virtual meeting format only, via live audio webcast.
To attend the Annual Meeting, please visit meetnow.global/MJQW2CP.MQTNXNX. The live audio webcast will begin promptly at 1:30 p.m.9:00 a.m. Pacific Time, with online access beginning at 1:15 p.m.8:45 a.m. Pacific Time. If you plan to attend the Annual Meeting, please refer to the attendance and registration information in the accompanying proxy statement (“Proxy Statement”).
The Annual Meeting will be held for the following purposes:
1. To elect the three Class III directors named in these proxy materials to hold office until the 20262027 Annual Meeting of Stockholders.
2. To hold an advisory vote to approve named executive officer compensation.
3. To hold an advisory vote on the frequency of future advisory votes to approve named executive officer compensation.
These items of business are more fully described in the Proxy Statement accompanying this notice.
The record date for the Annual Meeting is March 27, 2023.28, 2024. Only stockholders of record at the close of business on that date may vote at the Annual Meeting or any adjournment or postponement thereof.
| | | Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on Tuesday, May | | |
| | | The Proxy Statement and annual report to stockholders are available at https://ir.omnicell.com/financials/annual-reports-and-proxy-statements | | |
By Order of the Board of Directors
/s/ Corey J. Manley
Corey J. Manley
Corporate Secretary
Corporate Secretary
Fort Worth, Texas
April6, 20234, 2024
April
| | | You are cordially invited to attend the Annual Meeting. Whether or not you expect to attend the virtual meeting, we urge you to vote and submit your proxies in advance of the Annual Meeting by completing, dating, signing and returning the enclosed proxy, or voting over the telephone or the Internet, as instructed in these materials, as promptly as possible in order to ensure your representation at the meeting. If you received proxy materials by mail, a return envelope (for which postage is prepaid if it is mailed within the United States) is enclosed for your convenience. Even if you vote in advance of the meeting by proxy, you may still vote electronically during the Annual Meeting if you follow the instructions in these materials. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote electronically during the Annual Meeting, you must obtain a proxy issued in your name from that record holder and follow the advance registration instructions described in these materials. | | |
TABLE OF CONTENTS
OMNICELL, INC.
4220 North Freeway
Fort Worth, Texas 76137
OMNICELL, INC.
4220 North Freeway
Fort Worth, Texas 76137
PROXY STATEMENT
FOR THE20232024 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY23, 202321, 2024
FOR THE
TO BE HELD ON MAY
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OMNICELL, INC.
4220 North Freeway
Fort Worth, Texas 76137
4220 North Freeway
Fort Worth, Texas 76137
PROXY STATEMENT
FOR THE20232024 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY23, 202321, 2024
FOR THE
TO BE HELD ON MAY
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why am I receiving these materials?
The Company has sent you this proxy statement and the enclosed proxy card because the Board of Directors (the “Board”) of Omnicell, Inc. (“Omnicell,” the “Company,” “our,” “us,” or “we”) is soliciting your proxy to vote at the 20232024 Annual Meeting of Stockholders (the “Annual Meeting”). You are invited to attend the Annual Meeting via live audio webcast to vote on the proposals described in this proxy statement. However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card, or follow the instructions below to submit your proxy over the telephone or the Internet.
The Company intends to mail this proxy statement and accompanying proxy card on or about April 6, 2023,11, 2024, to all stockholders of record entitled to vote at the Annual Meeting.
Who can vote at the Annual Meeting?
Only stockholders of record at the close of business on March 27, 2023,28, 2024, will be entitled to vote at the Annual Meeting. On the record date, there were 45,068,86045,923,492 shares of common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If on March 27, 2023,28, 2024, your shares were registered directly in your name with Omnicell’s transfer agent, Computershare Trust Company, N.A. (“Computershare”), then you are a stockholder of record. As a stockholder of record, you may vote electronically during the Annual Meeting or vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to fill out and return the enclosed proxy card or vote by proxy over the telephone or on the Internet as instructed below to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If on March 27, 2023,28, 2024, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote your shares electronically during the Annual Meeting unless you request and obtain a valid proxy from your broker or other agent and follow the advance registration instructions below.
A list of names of stockholders entitled to vote at the Annual Meeting will be available for ten days prior to the Annual Meeting at our principal executive office.
What am I voting on?
There are sixfour matters scheduled for a vote:
•
The election of the three Class III directors named in these proxy materials to hold office until the 20262027 Annual Meeting of Stockholders (Proposal No. 1);
1
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An advisory vote on the frequency of future advisory votes to approve named executive officer compensation (Proposal No. 3)2);
•
The approval of an amendment to the Omnicell, Inc. 1997 Employee Stock Purchase2009 Equity Incentive Plan, as amended, to, among other items, add an additional 3,000,0002,462,000 shares to the number of shares of common stock authorized for issuance under such plan (Proposal No. 4);
•
The ratification of the selection of Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm of the Company for the year ending December 31, 20232024 (Proposal No. 6)4).
What if another matter is properly brought before the Annual Meeting?
The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment.
How can I participate in the Annual Meeting?
Stockholders of Record: Shares Registered in Your Name
If on March 27, 2023,28, 2024, your Omnicell shares were registered directly in your name with Omnicell’s transfer agent, Computershare, then you are a stockholder of record. You can participate in the Annual Meeting at meetnow.global/MJQW2CPMQTNXNX by entering the 15-digit control number (found on your proxy card, or in an email you previously received from Computershare).
Beneficial Owners: Shares Registered in the Name of a Broker or Bank
If on March 27, 202328, 2024 your Omnicell shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are a beneficial owner of shares. You must register in advance to participate in the Annual Meeting. To register, you must obtain a legal proxy from the bank, broker or other holder of record reflecting Omnicell shares held as of March 27, 2023,28, 2024, and forward a copy or image of the legal proxy, along with your full name and email address, to Computershare at legalproxy@computershare.com. Requests for registration must be labeled as “Legal Proxy” and be received by Computershare no later than 5:00 p.m. (Eastern Time) on May 18, 2023.16, 2024. You will then receive a confirmation email from Computershare with a 15-digit control number, and can participate in the Annual Meeting at meetnow.global/MJQW2CPMQTNXNX by entering your control number.
Alternatively, participants can join as a “Guest” in listen-only mode, but will not have the option to submit questions or vote shares during the Annual Meeting.
How do I vote?
You may either vote “For” all the nominees to the Board or you may “Withhold” your vote for any nominee you specify. For each of the other matters to be voted on, you may vote “For” or “Against” or abstain from voting, except for Proposal No. 3, where you may vote for a frequency of “One Year,” “Two Years,” “Three Years” or abstain.voting. The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote electronically during the Annual Meeting, vote by proxy using the enclosed proxy card, vote by proxy over the telephone or vote by proxy over the Internet. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the Annual Meeting and vote electronically during the meeting even if you have already voted by proxy.
•
To vote your shares electronically during the Annual Meeting, follow the instructions above for participating in the Annual Meeting. Join the Annual Meeting as a “Stockholder” with your control number and click on the “Vote Tab” link on the meeting center website.
•
To vote using the proxy card, simply complete, sign and date the enclosed proxy card and return it promptly in the envelope provided. If you return your signed proxy card to us before the Annual Meeting, we will vote your shares as you direct.
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To vote over the telephone, dial toll-free 1-800-652-VOTE (1-800-652-8683) using a touch-tone phone and follow the recorded instructions. You will be asked to provide the control number from the enclosed proxy card. Your vote must be received by 11:59 p.m. Pacific Time, on May 22, 2023,20, 2024, to be counted.
•
To vote over the Internet, go to http://www.investorvote.com/OMCL and follow the steps outlined to complete an electronic proxy card. You will be asked to provide the company number and control number from the enclosed proxy card. You will be able to vote until the polls are closed at the Annual Meeting.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from Omnicell. Simply complete and mail the proxy card to ensure that your vote is counted. Alternatively, you may vote by telephone or over the Internet as instructed by your broker or bank. To vote your shares electronically during the Annual Meeting, you must obtain a valid proxy from your broker, bank or other agent and register in advance by following the instructions above, join the Annual Meeting as a “Stockholder” with your control number and click on the “Vote Tab” link on the meeting center website.
Follow the instructions from your broker or bank included with these proxy materials or contact your broker or bank to request a proxy form.
We provide Internet proxy voting to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.
How do I ask questions during the Annual Meeting?
If you are a stockholder of record, or a beneficial owner who registered in advance by following the instructions above, you can join the Annual Meeting as a “Stockholder” with your control number and may submit questions during the meeting by clicking on the message icon, labelled “Q&A,” in the upper right-hand corner of the meeting center website.
Only questions pertinent to meeting matters will be answered during the meeting, subject to time constraints, and in accordance with our rules of conduct for the Annual Meeting, which will be posted on the meeting center website.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you owned as of March 27, 2023.28, 2024.
What are “broker non-votes”?
As discussed below, when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed by the NYSE to be “non-routine,” the broker or nominee cannot vote the shares. These unvoted shares are counted as “broker non-votes.”
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record and do not vote by completing your proxy card, by telephone, through the Internet or electronically during the Annual Meeting, your shares will not be voted.
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Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner and do not instruct your broker, bank or other agent how to vote your shares, the question of whether your broker or nominee will still be able to vote your shares depends on whether the New York Stock Exchange (“NYSE”) deems the particular proposal to be a “routine” matter. Brokers and nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of the NYSE, “non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation (including any advisory stockholder votes on executive compensation and on the frequency of stockholder votes on executive compensation), and certain corporate governance proposals, even if management-supported. We believe that Proposal No. 6,4, to ratify the selection of Deloitte as the independent registered public accounting firm of the Company for the year ending December 31, 2023,2024, is a “routine” matter on which brokers can vote on your behalf if you do not furnish voting instructions. Accordingly, we believe your broker or nominee may not vote your shares on Proposal Nos. 1, 2, 3, 4 and 53 without your instructions, but may vote your shares on Proposal No. 64 even in the absence of your instructions. For Proposal Nos. 1, 2, 3, 4 and 5,3, if you own shares in street name and do not direct your broker how to vote your shares on the proposals, the result will be a broker non-vote. Broker non-votes will not impact the voting results on Proposal Nos. 1, 2, 3, 4 or 5.3.
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card without marking any voting selections, your shares will be voted as follows:
•
“For” the election of all three Class III directors;
•
“For” an advisory resolution approving named executive officer compensation;
•
“For” the approval of our recommendation of “One Year” as the frequency of future advisory votes to approve named executive officer compensation.
•
“For” the ratification of the selection of Deloitte as the independent registered public accounting firm of the Company for the year ending December 31, 2023.2024.
If any other matter is properly presented at the Annual Meeting, your proxy holder (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors and employees may also solicit proxies in person, by telephone or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one set of proxy materials?
If you receive more than one set of proxy materials, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.
Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are the record holder of your shares, you may revoke your proxy in any one of three ways:
•
You may submit another properly completed proxy card with a later date.
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You may send a timely written notice that you are revoking your proxy to Omnicell’s Corporate Secretary at our principal executive office.
•
You may attend the Annual Meeting and vote electronically during the meeting.meeting (until the polls are closed). Simply attending the Annual Meeting will not, by itself, revoke your proxy.
Your most current proxy card or telephone or Internet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by your broker or bank.
When are stockholder proposals due for next year’s Annual Meeting?
Our annual meeting of stockholders generally is held in May of each year. To submit a proposal for inclusion in our proxy materials for the 20242025 Annual Meeting of Stockholders, such proposal must be received at our principal executive office no later than December 8, 202312, 2024 and comply with all applicable requirements of Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Proposals must be sent to our Corporate Secretary at the Company’s principal executive office.
Pursuant to Omnicell’s bylaws, stockholders wishing to submit proposals or director nominations that are not to be included in our proxy materials must have given timely notice thereof in writing to our Corporate Secretary. To be timely for the 20242025 Annual Meeting of Stockholders, you must notify our Corporate Secretary, in writing, not later than the close of business on February 23, 2024,20, 2025, nor earlier than the close of business on January 24, 2024.21, 2025. We also advise you to review Omnicell’s bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations. A stockholder’s notice to our Corporate Secretary must set forth the information required by Omnicell’s bylaws with respect to each matter the stockholder proposes to bring before the annual meeting and otherwise comply with any additional requirements set forth in our bylaws.
In addition to satisfying the foregoing requirements under the Company’s bylaws, to comply with the universal proxy rules, stockholders 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 Exchange Act, no later than March 24, 2025.
How are votes counted?
Votes will be counted by the inspector of elections appointed for the Annual Meeting.
How many votes are needed to approve each proposal?
•
For the election of directors, the three nominees receiving the most “For” votes (from the holders of votes of shares present virtually in person or represented by proxy and entitled to vote on the election of directors) will be elected. Only votes “For” will affect the outcome. Broker non-votes and “Withheld” votes will have no effect. However, it is our policy that any nominee for director in an uncontested election who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall submit his or her offer of resignation for consideration by the Corporate Governance Committee. This policy is further explained below under the heading “Proposal No. 1: Election of Directors.”
•
For the approval of the advisory vote to approve named executive officer compensation, Proposal No. 2 must receive a “For” vote from the majority of the outstanding shares of common stock present virtually in person or represented by proxy and entitled to vote at the Annual Meeting. If you abstain from voting, it will have the same effect as an “Against” vote. Broker non-votes will have no effect.
•
For the approval of the amendment to the Omnicell, Inc. 2009 Equity Incentive Plan, as amended, to, among other items, add an additional 1,600,0002,462,000 shares to the number of shares of common stock authorized for
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issuance under such plan, Proposal No. 43 must receive a “For” vote from the majority of the outstanding shares of common stock present virtually in person or represented by proxy and entitled to vote thereon at the Annual Meeting. If you abstain from voting, it will have the same effect as an “Against” vote. Broker non-votes will have no effect.
•
For the ratification of the selection of Deloitte as the independent registered public accounting firm of the Company for its fiscal year ending December 31, 2023,2024, Proposal No. 64 must receive a “For” vote from the majority of shares present virtually in person or represented by proxy and entitled to vote thereon at the Annual Meeting. If you abstain from voting, it will have the same effect as an “Against” vote. Brokers may vote without instruction on this proposal. Accordingly, there will not be any broker non-votes on Proposal No. 6.4.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the outstanding shares entitled to vote are represented by stockholders present at the virtual meeting or represented by proxy. On the record date, there were 45,068,86045,923,492 shares outstanding and entitled to vote. Thus, the holders of 22,534,43122,961,747 shares must be present virtually in person or represented by proxy at the meeting to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person virtually during the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of shares present at the virtual meeting in person or represented by proxy may adjourn the meeting to another date.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced during the Annual Meeting. Final voting results will be published in a Current Report on Form 8-K that we expect to file within four business days of the Annual Meeting. If final voting results are not available to us in time to file a Current Report on Form 8-K within four business days after the Annual Meeting, we intend to file a Current Report on Form 8-K to publish preliminary results and, within four business days after the final results are known to us, file an additional Current Report on Form 8-K to publish the final results.
What proxy materials are available on the Internet?
This proxy statement and our Annual Report on Form 10-K are available at https://ir.omnicell.com/financials/annual-reports-and-proxy-statements.
6
BOARD AND CORPORATE GOVERNANCE MATTERS
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Omnicell’s Board presently has ten members. Following the conclusion of the Annual Meeting, as further described below, the Board will consist of nine members. The Board members are divided into three classes, each with a three-year term: Class I,II, with a term expiring at the Annual Meeting; Class II, with a term expiring in 2024; and Class III, with a term expiring in 2025.2025; and Class I, with a term expiring in 2026.
Although directors are elected by a plurality of votes, it is our policy that any nominee for director in an uncontested election who receives a greater number of votes “withheld” from his or her election than votes “for” such election shall submit his or her offer of resignation for consideration by the Corporate Governance Committee, which will then consider all of the relevant facts and circumstances and recommend to our Board the action to be taken with respect to such offer of resignation. Our Board will then act on our Corporate Governance Committee’s recommendation within ninety days following certification of the stockholder vote. Promptly following our Board’s decision, we will disclose that decision and an explanation of such decision in a filing with the Securities and Exchange Commission (“SEC”) or a press release.
Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors (unless the Board determines by resolution that any such vacancies will be filled by stockholders). A director elected by the Board to fill a vacancy in a class, including a vacancy created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is elected and qualified. It is the Company’s policy to encourage directors and nominees for director to attend the Company’s Annual Meeting of Stockholders. NineSix of the tennine then-current directors attended our 20222023 Annual Meeting of Stockholders.
Our Corporate Governance Committee seeks to assemble a Board that, as a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and management experience necessary to oversee and direct the Company’s business. To that end, the Corporate Governance Committee has evaluated the current directors in the broader context of the Board’s overall composition. The Corporate Governance Committee maintains a goal of recruiting directors who complement and strengthen the skills of other directors and who also exhibit integrity, collegiality, sound business judgment and other qualities, such as gender or racial/ethnic diversity, that the Corporate Governance Committee views as critical to effective functioning of the Board.
For information about the director nominees and each director whose term is continuing after the Annual Meeting, including information regarding the specific and particular experience, qualifications, attributes or skills of each director nominee and continuing director that led the Corporate Governance Committee to believe that such individuals should serve on the Board, please refer to the section below entitled “Information about our Directors and Nominees.”
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE “FOR” EACH NAMED NOMINEE.
A VOTE “FOR” EACH NAMED NOMINEE.
7
INFORMATION ABOUT OUR DIRECTORS AND NOMINEES
The following tables and the brief biographies that follow provide information, as of the date of this proxy statement, about each director nominee and each continuing director.
| | | Age | | Position(s) within Omnicell | | Director Since | | Class | | Current Term Expires | | Independent | | | Current Committee Membership | | | | Age | | Position(s) within Omnicell | | Director Since | | Class | | Current Term Expires | | Independent | | | Current Committee Membership(2) | | ||||||||||||||||||||||||||||||||
| | Audit | | Comp. | | Corp. Gov. | | M&A | | | | | Audit(2) | | Comp.(2) | | Corp. Gov.(2) | | M&A(2) | | ||||||||||||||||||||||||||||||||||||||||||||||
| Director Nominees | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Randall A. Lipps | | 66 | | President, Chief Executive Officer and Chairman of the Board | | 1992 | | II | | 2024 | | No | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||
| Mark W. Parrish | | 68 | | Director | | 2013 | | II | | 2024 | | Yes | | Chair | | X | | | | | | ||||||||||||||||||||||||||||||||||||||||||||
| Kaushik “Bobby” Ghoshal | | 55 | | Director | | 2023 | | II | | 2024 | | Yes | | | | | | X | | | | ||||||||||||||||||||||||||||||||||||||||||||
| Continuing Directors | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||
| Joanne B. Bauer | | 67 | | Lead Independent Director | | 2014 | | I | | 2023 | | Yes | | | | Chair | | | | | | | | 68 | | Lead Independent Director | | 2014 | | I | | 2026 | | Yes | | | | Chair | | | | | | ||||||||||||||||||||||
| Robin G. Seim | | 63 | | Director | | 2019 | | I | | 2023 | | Yes | | Chair | | | | | | X | | | |||||||||||||||||||||||||||||||||||||||||||
| Sara J. White | | 77 | | Director | | 2003 | | I | | 2023 | | Yes | | | | | | Chair | | | | | |||||||||||||||||||||||||||||||||||||||||||
| Continuing Directors | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||
| Randall A. Lipps | | 65 | | President, Chief Executive Officer and Chairman of the Board | | 1992 | | II | | 2024 | | No | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||
| Vance B. Moore | | 62 | | Director | | 2012 | | II | | 2024 | | Yes | | | | X | | | | X | | | |||||||||||||||||||||||||||||||||||||||||||
| Mark W. Parrish | | 67 | | Director | | 2013 | | II | | 2024 | | Yes | | X | | X | | | | | | | |||||||||||||||||||||||||||||||||||||||||||
| Edward P. Bousa | | 64 | | Director | | 2021 | | III | | 2025 | | Yes | | X | | | | | | X | | | | 65 | | Director | | 2021 | | III | | 2025 | | Yes | | X | | | | | | X | | ||||||||||||||||||||||
| Bruce E. Scott | | 67 | | Director | | 2019 | | III | | 2025 | | Yes | | | | | | X | | Chair | | | | 68 | | Director | | 2019 | | III | | 2025 | | Yes | | X | | | | Chair | | Chair | | ||||||||||||||||||||||
| Mary Garrett | | 64 | | Director | | 2022 | | III | | 2025 | | Yes | | | | | | X | | | | | | 65 | | Director | | 2022 | | III | | 2025 | | Yes | | | | | | X | | | | ||||||||||||||||||||||
| Robin G. Seim | | 64 | | Director | | 2019 | | I | | 2026 | | Yes | | | | | | | | X | | ||||||||||||||||||||||||||||||||||||||||||||
| Eileen J. Voynick | | 69 | | Director | | 2024 | | I | | 2026 | | Yes | | | | | | X | | | | ||||||||||||||||||||||||||||||||||||||||||||
| Non-Continuing Director | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||||
| Vance B. Moore(1) | | 63 | | Director | | 2012 | | II | | 2024 | | Yes | | | | X | | | | X | | ||||||||||||||||||||||||||||||||||||||||||||
(1)
Mr. Moore (a Class II director) will retire at the end of his current term, and therefore, his term as a director, including his positions as a member of the Compensation Committee and a member of the M&A Committee, will expire at the Annual Meeting.
(2)
In connection with the conclusion of Mr. Moore’s, term, the Board approved the following changes to the Company’s committee membership, to be effective following the Annual Meeting: (a) Ms. Garrett and Ms. Voynick will become members of the Compensation Committee; (b) Mr. Seim will become Chair of the Audit Committee and Mr. Parrish will step down as Chair of the Audit Committee but will remain a member of the Audit Committee; and (c) Mr. Bousa will become Chair of the M&A Committee, Mr. Scott will step down as chair of the M&A Committee but will remain a member of the M&A Committee, and Ms. Voynick and Mr. Ghoshal will become members of the M&A Committee.
As reflected below, our three director nominees and six continuing directors exhibit a range of skills, experience, industry and professional background, tenure, diversity and perspectives that we believe enhance the Board’s ability to effectively fulfill its oversight responsibilities.
Board Diversity Matrix
The table below provides information regarding certain diversity attributes of our directors as of April 6, 2023,4, 2024, with categories as set forth by Nasdaq Listing Rule 5605(f).
| Board Diversity Matrix | | ||||||
| Total Number of Directors: 9 | | ||||||
| | | | Female | | | Male | |
| Gender Identity | | | | | | | |
| Directors | | | 3 | | | 6 | |
| Demographic Background | | | | | | | |
| African American or Black | | | ― | | | 1 | |
| White | | | 3 | | | 5 | |
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| | | ||||||
| Total Number of Directors: 10 | | ||||||
| | | | Female | | | Male | |
| Gender Identity | | | | | | | |
| Directors | | | 3 | | | 7 | |
| Demographic Background | | | | | | | |
| African American or Black | | | ― | | | 1 | |
| Asian | | | ― | | | 1 | |
| White | | | 3 | | | 5 | |
Diversity of Experience
The following graphics represent certain characteristics of our continuing directors and nominees.
![[MISSING IMAGE: bc_directors-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-042703/bc_directors-bw.jpg)
![[MISSING IMAGE: bc_directors-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-043646/bc_directors-bw.jpg)
| | Diversity of Tenure Balanced tenure is reflective of thoughtful refreshment | | | Independence 89% of directors are independent | |
| | ![[MISSING IMAGE: pc_tenure-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-042703/pc_tenure-bw.jpg) ![[MISSING IMAGE: pc_tenure-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-043646/pc_tenure-bw.jpg) | | | ![[MISSING IMAGE: pc_independence-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-042703/pc_independence-bw.jpg) |
racially or ethnically diverse | |||||
![[MISSING IMAGE: pc_gender-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-042703/pc_gender-bw.jpg) | ![[MISSING IMAGE: pc_gender01-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-042703/pc_gender01-bw.jpg) ![[MISSING IMAGE: pc_independence-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-043646/pc_independence-bw.jpg) | |
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Gender and Racial/Ethnic Diversity
| | 55% of directors are women or racially or ethnically diverse | | | 2 of 3 Committee Chairs are women or racially or ethnically diverse | |
| | | | | ||
| | ![[MISSING IMAGE: pc_gender-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-043646/pc_gender-bw.jpg) | | | ![[MISSING IMAGE: pc_gender01-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-043646/pc_gender01-bw.jpg) | |
Director Nominees
Class III Nominees for Election for a Three-Year Term Expiring at the 2027 Annual Meeting of Stockholders
Randall A. Lipps
Randall A. Lipps, age 66, has served as Chairman of the Board and a director of Omnicell since founding Omnicell in September 1992, and as its President and Chief Executive Officer since October 2002. From June 2013 to October 2018, Mr. Lipps was a director of Invuity, Inc., a medical device company. Mr. Lipps serves as a member of the Board of Trustees of the American Nurses Foundation. Mr. Lipps received both a B.S. in economics and a B.B.A. from Southern Methodist University.
The Corporate Governance Committee believes Mr. Lipps’ extensive knowledge of the Company, including his founding of the Company and his nearly three decades of leading the Company as the President and CEO, provide the Board with invaluable current knowledge of the Company and extensive knowledge of the industry’s needs for improvements in healthcare economics and patient safety. In addition, his role in the operations of the Company provides the Board with a practical understanding of the issues and opportunities facing the Company.
Mark W. Parrish
Mark W. Parrish, age 68, has served as a director of Omnicell since January 2013. Mr. Parrish served as Chief Executive Officer of TridentUSA Health Services, a provider of mobile X-ray and laboratory services to the long-term care industry, from 2008 to August 2018, and as Executive Chairman of TridentUSA Health Service from August 2018 to September 2019. In February 2019, TridentUSA Health Services filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Commencing in 1993, Mr. Parrish held management roles of increasing significance with Cardinal Health Inc. and its affiliates, including Chief Executive Officer of Healthcare Supply Chain Services for Cardinal Health from 2006 to 2007. Mr. Parrish also serves as a director and Vice Chairman of Viatris, Inc. (formerly, Mylan N.V.), a global pharmaceutical company, as the Chairman of Safecor, a privately held hospital services firm, as President of the International Federation of Pharmaceutical Wholesalers, an association of pharmaceutical wholesalers and pharmaceutical supply chain service companies, and is a senior adviser to Frazier Healthcare Ventures, a health-care oriented growth equity firm. Mr. Parrish received a B.A. from the University of California, Berkeley.
The Corporate Governance Committee believes Mr. Parrish’s extensive leadership experience in the healthcare industry, including serving as the chairman and chief executive officer of a multi-service provider in the long-term care market and various other management roles, provides the Board with valuable insight regarding the healthcare industry and, specifically, the long-term care market.
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Kaushik “Bobby” Ghoshal
Kaushik “Bobby” Ghoshal, age 55, has served as a director of Omnicell since July 2023. He was originally identified as a candidate to serve as a director by an independent professional search firm. He is currently the Chief Commercial Officer, SaaS of ResMed Inc. (“ResMed”), a global leader in digital health and cloud-connected medical devices, he previously served as President — SaaS Business from August 2021 to December 2023, and served as Chief Technology Officer of ResMed, from April 2018 until August 2021. Prior to that, Mr. Ghoshal served as Chief Operating Officer for Brightree LLC, a ResMed-owned provider of cloud-based SaaS for out-of-hospital care from June 2016 until April 2018. From 2012 until 2016, Mr. Ghoshal served as ResMed’s Vice President, Information Technology. Prior to 2012, Mr. Ghoshal held a number of technology management positions with Freescale Semiconductor, Motorola, Compuware and Wipro Infotech. Mr. Ghoshal holds an M.B.A. from Arizona State University and a B.S. degree in electronics engineering and telecommunications from the National Institute of Technology in Calicut, India.
The Corporate Governance Committee believes Mr. Ghoshal’s extensive leadership experience in the healthcare and technology industries, including digital health and cloud computing, provides the Board with valuable expertise, particularly with respect to software products, digital and business transformation, information security, data analytics and artificial intelligence and machine learning. In addition, the Corporate Governance Committee considers Mr. Ghoshal’s business leadership experience to be an important asset to the Board.
Continuing Directors
Class I Directors Continuing in Office Until the 2026 Annual Meeting of Stockholders
Joanne B. Bauer
Joanne B. Bauer, age 67,68, has served as a director of Omnicell since January 2014. Since October 2013, Ms. Bauer has served as a Director of Advocate Health Inc. (and its predecessors Aurora Healthcare and Advocate Aurora Health), an integrated not-for-profit healthcare provider serving communities throughout eastern Wisconsin, northern Illinois, North Carolina and Georgia. From October 2001 until June 2014, Ms. Bauer served as President of Global Health Care at Kimberly-Clark Corporation, a global consumer packaged goods company. Ms. Bauer joined Kimberly-Clark in 1981 and held various marketing and management positions within its adult care and health care businesses. Ms. Bauer received a B.A. degree from Lawrence University and an M.B.A. from the University of Wisconsin, Oshkosh.
The Corporate Governance Committee believes Ms. Bauer’s leadership and management in the healthcare industry, including serving as the president of the healthcare segment of a large multinational corporation and in various management and marketing roles, provide the Board with valuable insight regarding the healthcare industry.
Robin G. Seim
Robin G. Seim, age 63,64, has served as a director of Omnicell since March 2019. Mr. Seim initially joined Omnicell in January 2006 and served in various financial and operational leadership roles, including Chief Financial Officer from January 2006 to August 2015 and President of Global Automation and Medication Adherence from March 2016 until his retirement in March 2019. Prior to joining Omnicell, Mr. Seim served as Chief Financial Officer of several technology companies, including Villa Montage Systems, Inc. from 1999 to 2001, Candera, Inc. from 2001 to 2004 and Mirra, Inc., in 2005. Prior to 1999, Mr. Seim held a number of management positions with Nortel Networks, Bay Networks and International Business Machines Corporation (“IBM”). Mr. Seim received a B.S. in accounting from California State University, Sacramento.
The Corporate Governance Committee believes Mr. Seim brings to the Board a deep understanding of the Company’s financial and business operations and the healthcare industry, gained through his 13 years of experience as an executive officer of Omnicell in various financial and operational leadership roles. The Corporate Governance Committee believes that Mr. Seim’s extensive knowledge of the Company and its
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industry, combined with his prior financial expertise and leadership experience, provide the Board with invaluable insights into the Company’s financial and business operations, the healthcare industry, as well as financial and operational matters generally.
The Corporate Governance Committee believes Mr. Lipps’Ms. Voynick’s extensive knowledge of the Company, including his founding of the Companyleadership and his nearly three decades of leading the Company as the President and CEO, provide the Board with invaluable current knowledge of the Company and extensive knowledge of the industry’s needs for improvements in healthcare economics and patient safety. In addition, his role in the operations of the Company provides the Board with a practical understanding of the issues and opportunities facing the Company.
Class III Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders
Edward P. Bousa
Edward P. Bousa, age 64,65, has served as a director of Omnicell since July 2021. He was a partner at Wellington Management Company LLC, an investment management firm, from 2005 until June 2020. Prior to that, Mr. Bousa held positions of increasing responsibility upon joining Wellington Management Company LLC in April 2000. Mr. Bousa was a mutual fund manager at Putnam Investments, LLC from 1992 to 2000. From 1983 to 1992, he was an equity research analyst and portfolio manager at Fidelity Investments, Inc. Mr. Bousa began his career as a commodity merchandiser at Louis Dreyfus Corporation from 1980 to 1982. Mr. Bousa is a Chartered Financial Analyst. He has also served as a director of Azenta, Inc., a leading global provider of biological and chemical compound sample exploration and management solutions for the life sciences industry, since January 2024, including as a member of the Audit and Environmental, Social and Governance Committees. He received a B.A. in economics from Williams College and an M.B.A. from the Harvard Business School.
The Corporate Governance Committee believes Mr. Bousa’s extensive background and experience working with financial institutions through the capital markets brings valuable expertise to the Board. In addition, the Corporate Governance Committee considers Mr. Bousa’s financial and leadership skills and managerial roles, as well as his background and experience as an investment professional to be important assets to the Board.
Bruce E. Scott
Bruce E. Scott, age 67,68, has served as a director of Omnicell since May 2019. From April 2014 to November 2018, Mr. Scott served as President of the EnvisionPharmacies division of EnvisonRxOptions, a health carehealthcare and pharmacy benefit management company and a subsidiary of the Rite Aid Corporation. From September 2008 to April 2012, Mr. Scott held various executive roles at Medco Health Solutions, Inc.,
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a pharmacy benefit management company, including President of Accredo Infusion Services, President of Critical Care Systems and Senior Vice President and Chief Pharmacist. From 2004 to July 2008, Mr. Scott was Chief Operating Officer of McKesson Medication Management LLC, a provider of pharmacy management services. Previously, he held several senior leadership roles at Allina Hospitals and Clinics, including as the Director of Pharmacy of United Hospital from 1987 to 1998. Mr. Scott serves as Chair of the University of Wisconsin, School of Pharmacy Board of Visitors, an advisory board for the School of Pharmacy. Mr. Scott received a B.S. in pharmacy from the University of Wisconsin and an M.S. in pharmacy administration from the University of Kansas where he also completed a pharmacy residency program.
The Corporate Governance Committee believes Mr. Scott’s leadership and management in the healthcare industry, and his extensive background and experience with pharmacy benefit management and healthcare payers in particular, provide the Board with valuable insight regarding the healthcare industry in general, as well as the internal operations and needs of our pharmacy customers.
Mary Garrett
Mary Garrett, age 64,65, has served as a director of Omnicell since May 2022. Ms. Garrett is currently the President of M. Power Coaching and Consulting, LLC, a firm focused on developing executive leaders and helping organizations align brand and culture, customer experience and employee engagement for positive impact on business vitality and growth. Ms. Garrett has held this position since June 2018. From September 2008 until December 2015, Ms. Garrett served as the chief marketing officer, global markets at IBM, a leading global provider of technology products and services. Prior to that, Ms. Garrett served as vice president, IBM Global Technology Services, from 2005 to 2008, as vice president, channels, small and medium business, tech services from 2002 to 2004 and vice president, marketing e-business hosting during 2001. She joined IBM as an electrical engineer and served in key positions of increasing authority and responsibility from 1981 to 2001. Ms. Garrett currently serves as a director of PROCEPT BioRobotics Corp., a surgical robotics company, and has served on the board of this company since December 2021. Ms. Garrett previously served as a director of Ethan Allen Interiors, Inc., a leading interior design company,
manufacturer and retailer in the home furnishings marketplace, from January 2016 until November 2021, and was a member of the Audit Committee. She has also served as a director of Hillrom Corporation (subsequently acquired by Baxter International, Inc.), a global medical technology company, from March 2017 until December 2021, and was chair of the Nominating/Corporate Governance Committee and a member of the Audit Committee. Ms. Garrett received a B.S. in bio-medical engineering from Brown University and an M.S. in bio-electrical engineering from Brown University.
The Corporate Governance Committee believes Ms. Garrett’s extensive background and experience in the technology industry, including digital transformation, big data and cognitive analytics, cybersecurity and cloud computing, provides the Board with valuable expertise. In addition, the Corporate Governance Committee considers Ms. Garrett’s marketing expertise and business leadership experience, as well as her broad international background, to be important assets to the Board.
BOARD LEADERSHIP STRUCTURE
It is the policy of the Board that the positions of Chief Executive Officer and Chairman may be held by the same person. The Board recognizes, however, that there may be circumstances that arise in the future that would lead it to separate these offices. The Board is currently chaired by the President and Chief Executive Officer (“CEO”) of the Company, Mr. Lipps. The Board has also appointed Ms. Bauer to serve as Lead Independent Director.
The Company believes that combining the positions of CEO and Chairman helps to ensure that the Board and management act with a common purpose. The Company believes that combining the positions of CEO and Chairman provides a single, clear chain of command to execute the Company’s strategic initiatives and business plans. In addition, the Company believes that a combined CEO and Chairman is better positioned to act as a bridge between management and the Board, facilitating the regular flow of information. The Company also believes that it is advantageous to have a Board Chairman with an extensive history with, and knowledge of, the Company (as is the case with the Company’s CEO).
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The Board believes that its independent directors provide significant independent leadership to balance the combined position of our CEO and Chairman. To further augment and facilitate that leadership, the Board has appointed a Lead Independent Director. The Lead Independent Director is empowered to, among other duties and responsibilities, provide general leadership of the affairs of the independent directors, including leadership in anticipating and responding to crisis, discuss and collaborate with the Chairman to set appropriate meeting agendas and meeting schedules, recommend to the Chairman the retention of outside advisors and consultants who report directly to the Board, preside over Board meetings in the absence of the Chairman and during independent director closed session portions of the meetings, preside over any portions of meetings of the Board during which the performance of the Board is discussed, preside over and establish the agendas for meetings of the independent directors, consult with and coordinate with the committee chairs regarding meeting agendas and informational requirements, consult with the chair of the Corporate Governance Committee or Compensation Committee, respectively, regarding the evaluation or compensation of the CEO, act as liaison between the Chairman and the independent directors, provide advice and consultation to the Chairman and other senior executives of the Company, monitor information delivered by the management team to the Board and provide input on such information, and, as appropriate upon request, act as a liaison to stockholders, customers and other key constituents of the Company. In addition, it is the responsibility of the Lead Independent Director to coordinate the Board appointment of an Interim CEO and/or Chairman during extended periods of the Chairman’s absence. As a result, the Company believes that the Lead Independent Director can help ensure the effective independent functioning of the Board in its oversight responsibilities. In addition, the Company believes that the Lead Independent Director is better positioned to build a consensus among directors and to serve as a conduit between the other independent directors and the Chairman, for example, by facilitating the inclusion on meeting agendas of matters of concern to the independent directors.
INDEPENDENCE OF THE BOARD OF DIRECTORS
As required under The Nasdaq Stock Market, LLC (“Nasdaq”) listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. The Board consults with the Company’s counsel to ensure that the Board’s
determinations are consistent with the relevant securities laws and other laws and regulations regarding the definition of “independent,” including those set forth in the applicable listing standards of Nasdaq, as in effect from time to time.
Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent auditors, the Board has affirmatively determined that all of the Company’s directors and director nominees are independent directors within the meaning of the applicable Nasdaq listing standards, except for Mr. Lipps, the President and CEO of the Company. In making this determination, the Board found that none of the independent directors nominees or appointees for director had a material or other disqualifying relationship with the Company. Mr. Lipps, the Company’s President and CEO, is not an independent director by virtue of his employment with the Company.
ROLE OF THE BOARD IN RISK OVERSIGHT
One of the Board’s key functions is informed oversight of the Company’s risk management process. The Board administers this oversight function directly through the Board as a whole, as well as through the Board’s standing committees that address risks inherent in their respective areas of oversight. In particular, our Board is responsible for monitoring and assessing strategic risk exposure, including a determination of the nature and level of risk appropriate for the Company. Our Audit Committee has the responsibility to consider and discuss our enterprise risk exposure, including major financial risk exposures, and the steps our management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken.
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and quarterly reports from the Company’s risk management personnel on the progress of the Company’s broader Enterprise Risk Management risk mitigation activities. For more information, security awareness trainingplease see Item 1C, “Cybersecurity” in our Annual Report on an annual basis. We possess insurance that currently includes coverageForm 10-K for cyber-attacks. However, we have seen a trend where the amount of coverage being offered by insurance providers for such cyber-attacks is decreasing while the cost of obtaining such coverage is increasing. If this trend continues, the insurance coverage we possess may not be adequate or the cost to obtain such coverage may become prohibitive.
Our Corporate Governance Committee monitors the effectiveness ofrisks associated with our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct.practices. The Corporate Governance Committee is also responsible for overseeing the Company’s environmental, social and governance initiatives and progress and related risks.(“ESG”) initiatives. Our Compensation Committee assesses and monitors whether any of our compensation policies and programs hashave the potential to encourage excessive risk-taking.
Typically, the Audit Committee receives and discusses with management a quarterly report regarding risk management and the areas of risk the Company has addressed in such quarter. The Audit Committee reports to the entire Board on the risk management activities of the Company generally each quarter, but at least annually, and the applicable Board committees meet at least annually with the employees responsible for risk management in such committees’ respective areas of oversight. Both the Board as a whole and the various standing committees receive periodic reports from management, as well as incidental reports as matters
may arise. It is the responsibility of the committee chairs to report findings regarding material risk exposures to the Board as quickly as possible.
DIRECTOR AND EXECUTIVE OFFICER STOCK OWNERSHIP GUIDELINES
| | Board Members | | | 5x annual cash retainer | |
| | Chief Executive Officer | | | 6x annual base salary | |
| | Other Named Executive Officers | | | 3x annual base salary | |
Individuals who are subject to these guidelines at the time of their adoption have five years from the date of their respective appointments to attain the required ownership levels. If an individual becomes subject to a greater ownership amount, due to a promotion or an increase in base salary, the individual is expected to meet such greater ownership amount within the later of the original period or three years from the effective date of the promotion or base salary change.
As of May 5, 2022,2023, each of our directors excluding Mr. Bousa and Ms. Garrett, had satisfied our revised stock ownership guidelines to the extent applicable. Mr. Bousa, who joined the Board in July 2021, has until July 2026 to meethave met the stock ownership requirements. Ms. Garrett, who joinedrequirements or are within the Board in May 2022, has until May 2027 to meetfive year phase-in period after joining the stock ownership requirements.Board.
MEETINGS OF THE BOARD OF DIRECTORS
The Board met fivesix times during 2022.2023. Each Board member attended 75% or more of the aggregate number of the meetings of the Board and of the committees on which he or she served, as held during the period for which he or she was a director or committee member, respectively.
INFORMATION REGARDING COMMITTEES OF THE BOARD OF DIRECTORS
The Board has four standing committees: an Audit Committee, a Compensation Committee, a Corporate Governance Committee and a Mergers & Acquisitions Committee. The following table provides membership and meeting information for 20222023 for each of the Board committees:
| Name | | | Audit | | | Compensation | | | Corporate Governance | | | M&A | |
| Joanne B. Bauer | | | | | | X* | | | | | | | |
| Edward P. Bousa | | | X | | | | | | | | | X | |
| Mary Garrett | | | | | | | | | X | | | | |
| Vance B. Moore | | | | | | X | | | | | | X | |
| Mark W. Parrish | | | X | | | X | | | | | | | |
| Bruce E. Scott | | | | | | | | | X | | | X* | |
| Robin G. Seim | | | X* | | | | | | | | | X | |
| Sara J. White | | | | | | | | | X* | | | | |
| Total meetings in fiscal year 2022 | | | 17 | | | 6 | | | 4 | | | 1 | |
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| Name | | | Audit(3) | | | Compensation(3) | | | Corporate Governance(3) | | | M&A(3) | |
| Joanne B. Bauer | | | | | | X* | | | | | | | |
| Edward P. Bousa | | | X | | | | | | | | | X | |
| Mary Garrett | | | | | | | | | X | | | | |
| Kaushik “Bobby” Ghoshal | | | | | | | | | X | | | | |
Vance B. Moore(1) | | | | | | X | | | | | | X | |
| Mark W. Parrish | | | X* | | | X | | | | | | | |
| Bruce E. Scott | | | X | | | | | | X* | | | X* | |
| Robin G. Seim | | | | | | | | | | | | X | |
Eileen J. Voynick(2) | | | | | | | | | | | | | |
| Total meetings in fiscal year 2023 | | | 12 | | | 7 | | | 5 | | | None | |
*
Denotes Committee Chair
(1)
Mr. Moore (a Class II director) will retire at the end of his current term, and therefore, his term as a director, including his positions as a member of the Compensation Committee and a member of the M&A Committee, will expire at the Annual Meeting.
(2)
Eileen J. Voynick, who became a director as of January 5, 2024, joined the Corporate Governance Committee at that time.
(3)
In connection with the conclusion of Mr. Moore’s, term, the Board approved the following changes to the Company’s committee membership, to be effective following the Annual Meeting: (a) Ms. Garrett and Ms. Voynick will become members of the Compensation Committee; (b) Mr. Seim will become Chair of the Audit Committee and Mr. Parrish will step down as Chair of the Audit Committee but will remain a member of the Audit Committee; and (c) Mr. Bousa will become Chair of the M&A Committee, Mr. Scott will step down as chair of the M&A Committee but will remain a member of the M&A Committee, and Ms. Voynick and Mr. Ghoshal will become members of the M&A Committee.
Below is a description of each committee of the Board. The Board has determined that each member of the Audit Committee, Compensation Committee and Corporate Governance Committee meets the applicable Nasdaq rules and regulations regarding “independence” and that each member is free of any relationship that would impair his or her individual exercise of independent judgment with regard to the Company.
Audit Committee
The Audit Committee is currently composed of three directors: Mr. SeimParrish (Chair), Mr. ParrishBousa and Mr. Bousa.Scott. Following the Annual Meeting, the Audit Committee will continue to be as currently composed.composed of four directors: Mr. Seim (Chair), Mr. Parrish, Mr. Bousa and Mr. Scott. The Audit Committee met seventeentwelve times during fiscal year 2022.2023. The Audit Committee was established by the Board in accordance with Section 3(a)(58)(A) of the Exchange Act, to oversee the Company’s corporate accounting and financial reporting processes, audits of its financial statements and the independence and performance of its internal and external auditors. For this purpose, the Audit Committee performs several functions. The Audit Committee evaluates the performance of and assesses the qualifications of the independent registered public accounting firm; determines and approves the engagement of the independent registered public accounting firm; determines whether to retain or terminate the existing independent registered public accounting firm or to appoint and engage a new independent registered public accounting firm; reviews and approves the retention of the independent registered public accounting firm to perform any proposed permissible non-audit services; monitors the rotation of partners of the independent registered public accounting firm on the Company’s audit engagement team as required by law; reviews and approves or rejects transactions between the Company and any related persons; confers with management and the independent registered public accounting firm regarding the effectiveness of internal control over financial reporting; establishes procedures, as required under applicable law, for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting control or auditing matters and the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and meets to review the
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Company’s annual audited financial statements and quarterly unaudited financial statements with management and the independent registered public accounting firm, including reviewing the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K. The Audit Committee has adopted a written Audit Committee Charter that can be found under “Leadership & GovernanceGovernanc — Governance Documents” on the Company’s investor relations website at ir.omnicell.com.
The Board reviews the Nasdaq listing standards definition of independence for Audit Committee members on an annual basis and has determined that all members of the Company’s Audit Committee are independent (as independence is currently defined in Rule 5605(c)(2)(A)(i) of Nasdaq listing standards). The Board has also determined that Mr. Seim,Parrish, the current Audit Committee Chair, qualifiesand Mr. Seim, who will become the Audit Committee Chair following the Annual Meeting, each qualify as an “audit committee financial expert,” as defined in applicable SEC rules.
Compensation Committee
Overview
The Compensation Committee currently is composed of three directors: Ms. Bauer (Chair), Mr. Moore and Mr. Parrish. Following the Annual Meeting, the Compensation Committee will continue to be as currently composed.composed of four directors: Ms. Bauer (Chair), Ms. Garrett, Mr. Parrish and Ms. Voynick. All members of the Company’s Compensation Committee are independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards). The Compensation Committee met sixseven times during fiscal year 2022.2023. The Compensation Committee Charter can be found under “Leadership & Governance — Governance Documents” on the Company’s investor relations website at ir.omnicell.com.
The Compensation Committee acts on behalf of the Board to review, adopt and oversee the Company’s compensation strategy, policies, plans and programs, including:
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reviewing and approving the overall compensation philosophy for the Company’s executive officers and directors;
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overseeing the adoption and administration of, and establishing guidelines relating to, the Company’s stock option and purchase plans, profit sharing plans, stock bonus plans, deferred compensation plans and other similar programs, including approving and granting options, restricted stock, restricted stock units or other equity awards under such plans to the Company’s executive officers, employees and consultants; and
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preparing the Compensation Committee Report, included in this proxy statement.
Compensation Committee Processes and Procedures
The Compensation Committee generally meets at least six times per year and with greater frequency if necessary. The agenda for each meeting is usually outlined by the Chair of the Compensation Committee and then more fully developed by the Company’s CEO, Chief Financial Officer, Chief Legal and Administrative Officer and Chief Administrative and People Officer. The Compensation Committee meets regularly in executive session. However, from time to time, various members of management and other employees as well as outside advisors or consultants may be invited by the Compensation Committee to make presentations, provide financial or other background information or advice or otherwise participate in Compensation Committee meetings. The CEO may not participate in or be present during any deliberations or final determinations of the Compensation Committee regarding his own compensation. The charter of the Compensation Committee grants the Compensation Committeehas full access to all books, records, facilities and personnel of the Company, as well as authority to obtain, at the expense of the Company, advice and assistance from internal and external legal, accounting or other advisors and consultants and other external resources that the Compensation Committee considers necessary or appropriate in the performance of its duties. In particular, the Compensation Committee has the sole authority to retain compensation consultants to assist in its evaluation of executive and director compensation, including the authority to approve the consultant’s reasonable fees and other retention terms.
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During the past fiscal year, the Compensation Committee engaged each of Radford, which is part of the Rewards Solutions practice at Aon plc (January 2022 through May 2022), and Exequity LLP (June 2022 through present)(“Exequity”) as its compensation consultantsconsultant to assist in its evaluation of executive and director compensation. During fiscal year 2022,2023, the Compensation Committee requested that RadfordExequity assist in continuing to refine the Company’s executive compensation program. As part of its engagement, RadfordExequity was requested by the Compensation Committee to develop areview the Company’s comparative group of companies and to perform analyses of competitive performance and compensation levels for that group. RadfordExequity ultimately developed recommendations regarding executive compensation levels and types of compensation elements that were presented to the Compensation Committee for its consideration.
The specific determinations of the Compensation Committee with respect to executive compensation for 2022fiscal year 2023 are discussed in the Compensation Discussion and Analysis included in this proxy statement, and the Compensation Committee’s determinations with respect to director compensation are discussed in the section of this proxy statement entitled “Director Compensation.”
Compensation Committee Interlocks and Insider Participation
During fiscal year 2022,2023, Ms. Bauer (Chair), Mr. Moore and Mr. Parrish served as members of the Compensation Committee. None of these individuals are or have been officers of Omnicell.the Company. None of the Company’s executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving as a member of our Board or Compensation Committee.
Corporate Governance Committee
The Corporate Governance Committee is responsible for identifying, reviewing and evaluating candidates to serve as directors of the Company (consistent with criteria approved by the Board), reviewing and evaluating incumbent directors and recommending appropriate director nominee slates to recommend for election to the Board, making recommendations to the Board regarding the membership of the committees of the Board, assessing the performance of the Board and developing a set of corporate governance principles for the Board and the Company. The Corporate Governance Committee is also responsible for overseeing the Company’s environmental, social, and governanceESG initiatives and progress.
The Corporate Governance Committee currently consists of threefour directors: Ms. White (Chair), Mr. Scott (Chair), Ms. Garrett, Mr. Ghoshal and Ms. Garrett.Voynick. Following the Annual Meeting, the Corporate Governance Committee will continue to be as currently composed. All members of the Corporate Governance Committee are independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing standards). The Corporate Governance Committee met fourfive times during fiscal year 2022.2023. Our Corporate Governance Committee Charter and Corporate Governance Guidelines can be found under “Leadership & Governance — Governance Documents” on the Company’s investor relations website at ir.omnicell.com.
Qualifications of Directors
The Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including being able to read and understand basic financial statements, being over 21 years of age and having the highest levels of personal integrity and ethics. The Corporate Governance Committee also intends to consider such factors as possessing relevant expertise upon which to be able to offer advice and guidance to management, having sufficient time to devote to the affairs of the Company, demonstrated excellence in his or her field, having the ability to exercise sound business judgment and having the commitment to rigorously represent the long-term interests of the Company’s stockholders. Candidates for director nominees are reviewed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of stockholders.
In conducting this assessment, the Corporate Governance Committee considers diversity (such as gender or racial/ethnic diversity), age, skills, industry and professional background, independence and such other factors as it deems appropriate given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability.
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Retirement Age Policy
In general, directors are expected to retire from the Board at age 75, or at the conclusion of the term in which they reach age 75 unless otherwise recommended for nomination by the Corporate Governance Committee.
Service on Other Boards
Directors may not serve on the boards of more than two other public companies without first obtaining the prior approval of the Lead Independent Director. In addition, no member of the Audit Committee may serve on more than two other public company audit committees without first obtaining the prior approval of the Lead Independent Director.
Nomination of Directors for Re-Election
In the case of incumbent directors whose terms of office are set to expire, when deciding whether to nominate a director for re-election, the Corporate Governance Committee reviews the qualifications set forth above, in addition to such directors’ overall service to the Company during their term, including the number of meetings attended, level of participation, quality of performance, and any other relationships and transactions that might impair such directors’ independence.
Identification of Director Candidates
In the case of new director candidates, the Corporate Governance Committee (and the other members of the Board, as needed) generally identify potential candidates through their personal and professional networks, but may also engage, if deemed appropriate, a professional search firm. The Corporate Governance Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates after considering the function and needs of the Board. The Corporate Governance Committee meets to discuss and consider such candidates’ qualifications and then selects a nominee for recommendation to the Board by majority vote.
Majority Vote Resignation PoliciesPolicy
Our Corporate Governance Guidelines require that any nominee for director in an uncontested election who receives a greater number of votes “withheld” and/or “against” from his or her election than votes “for” such election shall submit his or her offer of resignation for consideration by our Corporate Governance Committee, which will then consider all of the relevant facts and circumstances and recommend to our Board the action to be taken with respect to such offer of resignation. Our Board will then act on our Corporate Governance Committee’s recommendation within ninety days following certification of the stockholder vote. Promptly following our Board’s decision, we will disclose that decision and an explanation of such decision in a filing with the SEC or a press release. Any director who submits his or her offer to
resign from the Board pursuant to this policy shall not participate in deliberations regarding whether to accept the offer of resignation. If a majority of the members of the Corporate Governance Committee are subject to this evaluation process, then the independent directors on the Board who are not subject to the evaluation will appoint a special committee of the Board among themselves solely for the purpose of conducting the required evaluation. This special committee will make the recommendation to the Board otherwise required of the Corporate Governance Committee.
Candidates Recommended by Stockholders
At this time, the Corporate Governance Committee does not consider director candidates recommended by stockholders. The Corporate Governance Committee believes that it is in the best position to identify, review, evaluate and select qualified candidates for Board membership, based on the comprehensive criteria for Board membership approved by the Board.
Management Succession Planning
The Corporate Governance Committee periodically reviews, in conjunction with the CEO, the plans for succession to the offices of the Company’s executive officers, including recommendations and evaluations
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of potential successors, along with any development plans recommended for such individuals. Such succession planning involves both short-term and long-term succession planning and talent management. The Board also has regular and direct exposure to senior leadership in meetings held throughout the year and discusses key leader development and retention.
Mergers and Acquisitions (M&A) Committee
The M&A Committee is responsible for advising management, and reviewing and evaluating merger and acquisition opportunities brought to the M&A Committee by management. The Board has delegated to the M&A Committee the authority to make all necessary and appropriate approvals on behalf of the Board relating to acquisitions and equity investments by the Company (and its subsidiaries) of a value up to $100 million, although in practice, the M&A Committee generally reports to and discusses all material transactions with the Board prior to final decisions.
The M&A Committee currently consists of four directors: Mr. Scott (Chair), Mr. Bousa, Mr. Moore and Mr. Seim. Following the Annual Meeting, the M&A Committee will continue to be as currently composed.composed of five directors: Mr. Bousa (Chair), Mr. Ghoshal, Mr. Scott, Mr. Seim and Ms. Voynick. The M&A Committee met one timedid not meet during fiscal year 2022.2023. Our M&A Committee Charter can be found under “Leadership & Governance — Governance Documents” on the Company’s investor relations website at ir.omnicell.com.
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Company’s Board has adopted a formal process by which stockholders may communicate with the Board or any of its directors. Stockholders who wish to communicate with the Board may do so by sending written communications addressed to the Lead Independent Director of Omnicell, Inc. at the Company’s principal executive office. These communications will be reviewed by the Lead Independent Director, who will determine whether they should be forwarded to the Board or the identified director(s). The purpose of this screening is to avoid having the Board consider irrelevant or inappropriate communications (such as advertisements, solicitations and hostile communications). The screening procedures have been approved by a majority of the independent members of the Board. All communications directed to the Audit Committee in accordance with the Company’s “Open Door Policy for Reporting Complaints Regarding Accounting and Auditing Matters” (the “Omnicell Open Door Policy”) that relate to questionable accounting or auditing matters involving the Company will be promptly and directly forwarded to the Audit Committee. The Omnicell Open Door Policy can be found under “Leadership & Governance — Governance Documents” on the Company’s investor relations website at ir.omnicell.com.
CODE OF ETHICS
Omnicell has adopted the Omnicell Code of Conduct, a code of ethics that applies to all officers, directors and employees of the Company. The Omnicell Code of Conduct is available under “Leadership & Governance — Governance Documents” on the Company’s investor relations website at ir.omnicell.com. If the Company makes any substantive amendments to its Code of Conduct or grants any waiver from a provision thereof to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website.
CORPORATE GOVERNANCE GUIDELINES
The Board has reaffirmed the governance practices followed by the Company by readopting the Corporate Governance Guidelines to assure that the Board will have the necessary authority and practices
in place to review and evaluate the Company’s business operations, as needed, and to make decisions that are independent of the Company’s management. The guidelines are also intended to align the interests of directors and management with those of the Company’s stockholders. The Corporate Governance Guidelines set forth the practices the Board intends to follow with respect to board composition and selection, board meetings and involvement of senior management, CEO performance evaluation and succession planning, and board committees and compensation. The Corporate Governance Guidelines, as well as the charters for each committee of the Board, are available under “Leadership & Governance — Governance Documents” on the Company’s investor relations website at ir.omnicell.com.
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ESG AND SUSTAINABILITY
Omnicell is committed to sustainable, responsible business practices and defines its corporate responsibility approach through Innovation, Environmental, Social and Governance pillars in order to meet stockholders’ expectations of performance. This provides Omnicell the opportunity to more closely link its sustainability progress with its business success while addressing climate change and business strategy risks. Further information about the Company’s corporate responsibility and sustainability efforts, including our Corporate ResponsibilityESG Report, is available at www.omnicell.com/corporate-social-responsibility-esg.environmental-social-governance. However, we are not including the information contained on, or that can be accessed through, this website as part of, or incorporating it by reference into, this proxy statement.
POLICY AGAINST HEDGING TRANSACTIONS
Our insider trading policy prohibits directors, executive officers and other employees from engaging in any “short sale” of Omnicell’s securities or purchasing option puts, calls or similar derivative securities of or related to Omnicell or companies engaged in business with Omnicell. In addition, such policy prohibits directors, executive officers, direct reports of our CEO or other executive officers, and other employees identified as having access to certain nonpublic information about the Company from engaging in any separate transaction that directly or indirectly alters or offsets a transaction authorized under a pre-approved trading plan adopted under Rule 10b5-1 of the Exchange Act (such as a hedging transaction).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our executive officers and directors are only permitted to enter into a material transaction or agreement with the Company with the prior consent of the Audit Committee. In approving or rejecting the proposed transaction or agreement, the Audit Committee considers the relevant facts and circumstances available, including, but not limited to the risks, the costs and the benefits to Omnicell, the terms of the transaction or agreement, the availability of other sources for comparable services or products, and, if applicable, the impact on a director’s independence. The Audit Committee approves only those transactions or agreements that, in light of known circumstances, are in, or are not inconsistent with, Omnicell’s best interests, as the Audit Committee determines in the good faith exercise of its discretion. The Board has adopted a written Related-Person Transactions Policy that can be found under “Leadership & Governance — Governance Documents” on the Company’s investor relations website at ir.omnicell.com. We have entered into indemnity agreements with our executive officers and directors, which provide, among other things, that the Company will indemnify the officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings to which he or she is or may be made party by reason of his or her position as a director, officer or other agent of Omnicell, and otherwise to the fullest extent permitted under Delaware law and our bylaws. Other than as disclosed below, there
There have been no transactions since January 1, 2022,2023, and there are no currently proposed transactions, in which Omnicell was or is a participant and for which the amount involved exceeds $120,000, in which any related person had or will have a direct or indirect material interest.
DIRECTOR COMPENSATION
We believe it is essential for our long-term success to attract highly talented candidates for our Board. Commensurate with this philosophy, the Board compensates its non-employee directors with long-term equity-based compensation and a cash fee on a quarterly basis. In May 2022 the Board, upon recommendation by the Compensation Committee, approved a change to the methodology used to determinedetermining the number of shares of restricted stock to be awarded to non-employee directors as part of their annual and/or new director equity grant, — using athe Board uses the 20-day average closing price of the Company’s common stock for the period immediately preceding the restricted stock grant date. In December 2022, the Board approved a further change to theThe Board’s fiscal year 2023 non-employee director compensation policyprogram is further described below, which did not change as compared to provide for a per meeting fee of $1,250 per committee member for certain non-regularly scheduled meetings of the committees of the Board duly convened and held that such Committee member attends. The Board’sfiscal year 2022 non-employee director compensation plan is further described below.program.
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Each non-employee director is entitled to receive cash compensation in the amount of $22,500 per quarter at the time of and upon physical attendance, or attendance via electronic means, at each quarterly Board meeting and is eligible for reimbursement for expenses incurred in attending Board and committee meetings.
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Each new non-employee director is entitled to receive a restricted stock grant with a targeted value of $160,000 as of the grant date, which will vest in full on the date of the following annual meeting, so long as the recipient remains a director until such date.
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Each non-employee director continuing his or her service on the Board following the annual meeting of stockholders is entitled to receive a restricted stock grant with a targeted value of $160,000 as of the grant date, which will vest in full on the date of the following annual meeting, so long as the recipient remains a director until such date.
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Committee members and chairpersons, as well as the Lead Independent Director, are eligible for additional compensation for their service as follows:
| Position | | | Annual Cash Fees(1) ($) | | | Meeting Fees(2) ($) | | | Targeted Value of Annual Restricted Stock Grant(3) ($) | | | Total Value of Annual Compensation ($) | | ||||||||||||
| Audit Committee Chairperson | | | | | 20,000 | | | | | | 1,250 | | | | | | 20,000 | | | | | | 40,000 | | |
| Audit Committee Member (non-Chair) | | | | | 10,000 | | | | | | 1,250 | | | | | | 10,000 | | | | | | 20,000 | | |
| Compensation Committee Chairperson | | | | | 20,000 | | | | | | 1,250 | | | | | | 20,000 | | | | | | 40,000 | | |
| Compensation Committee Member (non-Chair) | | | | | 10,000 | | | | | | 1,250 | | | | | | 10,000 | | | | | | 20,000 | | |
| Corporate Governance Committee Chairperson | | | | | 11,000 | | | | | | 1,250 | | | | | | 11,000 | | | | | | 22,000 | | |
| Corporate Governance Committee Member (non-Chair) | | | | | 7,500 | | | | | | 1,250 | | | | | | 7,500 | | | | | | 15,000 | | |
| Mergers & Acquisitions Committee Member | | | | | — | | | | | | 1,250 | | | | | | — | | | | | | — | | |
| Lead Independent Director | | | | | 17,500 | | | | | | — | | | | | | 17,500 | | | | | | 35,000 | | |
(1)
Annual cash fees are paid in four equal installments at each quarterly Board meeting.
(2)
Represents the per-meeting cash compensation fee received by each member of the M&A Committee
for each meeting duly convened and held that such member attends, as well as for certain other non-regularly scheduled meetings of the other committees of the Board duly convened and held that such member attends. Such compensation is paid quarterly in arrears at each quarterly Board meeting.
(3)
Represents the targeted value of restricted stock granted to each non-employee director serving in such capacity (as a chairperson, committee member or Lead Independent Director, as applicable) at the time of the annual meeting of stockholders. Such grant will vest in full at the following year’s annual meeting of stockholders, so long as the director continues to serve in such capacity.as a director.
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If a new non-employee director does not begin his or her initial term coincident with the occurrence of the annual meeting of stockholders or a non-employee director joins a committee during the current board year, such director is entitled to receive his or her applicable restricted stock grants described above which will generally be awarded on a pro-rata basis covering his or her service up to the next annual meeting.
The table below summarizes, for fiscal year 2022,2023, certain information with respect to the compensation of all non-employee directors of Omnicell. Mr. Lipps, our Chairman, President and CEO, did not receive compensation for serving on the Board. Please see the 20222023 Summary Compensation Table for the compensation received by Mr. Lipps for his service as our Chairman, President and CEO.
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DIRECTOR COMPENSATION FOR FISCAL YEAR 20222023
| Director | | Fees Earned or Paid in Cash(1) ($) | | Stock Awards(2)(3) ($) | | Option Awards(4) ($) | | All Other Compensation ($) | | Total ($) | | | Fees Earned or Paid in Cash(1) ($) | | Stock Awards(2)(3) ($) | | Option Awards(4) ($) | | All Other Compensation ($) | | Total ($) | | ||||||||||||||||||||||||||||||||||||||||
| Joanne B. Bauer | | | | 128,750 | | | | | 194,824 | | | | | — | | | | | — | | | | | 323,574 | | | | | | 127,500 | | | | | 214,187 | | | | | — | | | | | — | | | | | 341,687 | | | ||||||||||
| Edward P. Bousa | | | | 98,750 | | | | | 167,695 | | | | | — | | | | | — | | | | | 266,445 | | | | | | 117,500 | | | | | 184,299 | | | | | — | | | | | — | | | | | 301,799 | | | ||||||||||
| Mary Garrett | | | | 48,750 | | | | | 165,288 | | | | | — | | | | | — | | | | | 214,038 | | | | | | 97,500 | | | | | 181,634 | | | | | — | | | | | — | | | | | 279,134 | | | ||||||||||
James T. Judson(5) | | | | 67,500 | | | | | — | | | | | — | | | | | — | | | | | 67,500 | | | ||||||||||||||||||||||||||||||||||||
Kaushik “Bobby” Ghoshal(5) | | | | 24,375 | | | | | 149,549 | | | | | — | | | | | — | | | | | 173,924 | | | ||||||||||||||||||||||||||||||||||||
| Vance B. Moore | | | | 100,000 | | | | | 167,695 | | | | | — | | | | | — | | | | | 267,695 | | | | | | 100,000 | | | | | 184,299 | | | | | — | | | | | — | | | | | 284,299 | | | ||||||||||
| Mark W. Parrish | | | | 110,000 | | | | | 177,540 | | | | | — | | | | | — | | | | | 287,540 | | | | | | 126,250 | | | | | 202,557 | | | | | — | | | | | — | | | | | 328,807 | | | ||||||||||
| Bruce E. Scott | | | | 102,500 | | | | | 165,288 | | | | | — | | | | | — | | | | | 267,788 | | | | | | 108,750 | | | | | 189,017 | | | | | — | | | | | — | | | | | 297,767 | | | ||||||||||
| Robin G. Seim | | | | 105,000 | | | | | 177,540 | | | | | — | | | | | — | | | | | 282,540 | | | | | | 127,500 | | | | | 195,174 | | | | | — | | | | | — | | | | | 322,674 | | | ||||||||||
Bruce D. Smith(5) | | | | 48,750 | | | | | — | | | | | — | | | | | — | | | | | 48,750 | | | ||||||||||||||||||||||||||||||||||||
| Sara J. White | | | | 101,000 | | | | | 168,679 | | | | | — | | | | | — | | | | | 269,679 | | | ||||||||||||||||||||||||||||||||||||
Sara J. White(6) | | | | 101,000 | | | | | 185,452 | | | | | — | | | | | — | | | | | 286,452 | | | ||||||||||||||||||||||||||||||||||||
(1)
Cash amounts included in this column represent cash fees paid to each non-employee director for his or her Board or committee service during fiscal year 2022.2023. Cash fees are paid on a quarterly basis at each quarterly Board meeting.
(2)
The dollar amounts in this column represent the grant date fair value of stock awards calculated in accordance with Accounting Standards Codification (“ASC”) Topic 718 “Stock Compensation” (“ASC Topic 718”) based on the closing stock price on the date of grant.
(3)
The aggregate number of shares subject to restricted stock awards outstanding as of December 31, 2022,2023, all of which were granted in 2022,fiscal year 2023, for each of the non-employee directors listed in the table above was as follows: Ms. Bauer, 1,781;2,974; Mr. Bousa, 1,533;2,559; Ms. Garrett, 1,511;2,522; Mr. Judson, 0;Ghoshal, 2,402; Mr. Moore, 1,533;2,559; Mr. Parrish, 1,623;2,825; Mr. Scott, 1,511;2,637; Mr. Seim, 1,623; Mr. Smith, 0;2,710; and Ms. White, 1,542.2,575.
(4)
No options were granted to the individuals in the table in 2022.fiscal year 2023. The aggregate number of shares subject to outstanding stock options held by each of the non-employee directors listed in the table above as of December 31, 20222023 was as follows: Ms. Bauer, 19,329;0; Mr. Bousa, 0; Ms. Garrett, 0; Mr. Judson,Ghoshal, 0; Mr. Moore, 0; Mr. Parrish, 0; Mr. Scott, 6,381; Mr. Seim, 6,381; Mr. Smith, 0; and Ms. White, 0.
(5)
(6)
Ms. White resigned from the Board at the 2021 Annual Meeting of Stockholders and received pro-rated fees for the year.on January 5, 2024.
Following her separation from the Board in fiscal year 2024, Ms. White and the Company entered into a consulting agreement under which Ms. White will provide limited monthly consulting services. The consulting agreement has a term of one year, subject to a one-year renewal term, and Ms. White will receive an annual consulting fee of $45,000 and an additional fee of $11,250 (subject to an annual maximum fee of $45,000) for attendance at each regularly scheduled quarterly Board meeting that Ms. White is invited to attend.
EXECUTIVE OFFICERS
The information required by Item 7 of Schedule 14A may be found under the heading “Information About Our Executive Officers” in Part I, Item 1 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.2023. Such information is incorporated herein by reference.
EXECUTIVE COMPENSATION
PROPOSAL NO. 2: ADVISORY VOTE ON EXECUTIVE COMPENSATION
Our stockholders have indicated their preference that we solicit a non-binding advisory vote on the compensation of our named executive officers, commonly referred to as a “say-on-pay” vote, every year. Our Board has adopted a policy that is consistent with that preference. In accordance with that policy, this year, we are again asking our stockholders to approve, on an advisory basis, the compensation of our “Named Executive Officers” or “NEOs” as disclosed in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this proxy statement.
For details on our executive compensation program, including our compensation philosophy and objectives and the fiscal year 20222023 compensation of our NEOs, we urge you to read the Compensation Discussion and Analysis included in this proxy statement, as well as the compensation tables and the related narrative disclosure.
As discussed in those disclosures, we believe that our compensation policies and decisions are appropriately designed to align the interests of our executive officers with those of our stockholders, to emphasize strong pay-for-performance principles and to enable us to attract and retain talented and experienced executives to lead the Company in a competitive environment.
Applying these philosophies, the Compensation Committee has set specific compensation goals designed to help the Company achieve our short- and long-term business and performance goals. In setting executive officer compensation, the Compensation Committee seeks to design a compensation program that it believes will attract, retain and incentivize our executive officers to help the Company achieve its performance goals.
Highlights of our fiscal year 20222023 executive compensation program include:
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Emphasis on at-risk or variable pay: A significant majority of our NEOs’ compensation consists of (i) performance-based cash and equity awards which are earned or vest only upon the achievement of certain Company and individual performance metrics and (ii) restricted stock units for which the value received varies based on our stock price. Approximately 90%92% of our CEO’s fiscal year 20222023 target pay was at-risk or variable, and approximately 86%87% of the average fiscal year 20222023 target pay of our other continuing NEOs (excluding Dan S. Johnston(Nchacha Etta and Corey J. Manley)Manley, excluding the one-time cash bonus and one-time sign on equity award of 24,000 RSUs granted to Mr. Etta in connection with his hiring and appointment as Executive Vice President and Chief Financial Officer) was at-risk or variable, in each case, based on Company and individual performance and based on annualized base salaries and target annual cash bonuses. Mr. Johnston was excluded from the above percentage due to his retirement and Mr. Manley was excluded as prior to his appointment as Senior Vice President and Chief Legal Officer in May 2022 he was not previously a participant in our executive officer compensation program.
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Pay-for-performance alignment: We believe that the alignment of our CEO’s total compensation with our stock price performance, earnings per sharerevenues, non-GAAP free cash flow and annual bookingsnon-GAAP EBITDA reflects our emphasis on pay-for-performance principles.
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Comparison to our peer group: The Compensation Committee makes pay decisions after completing an evaluation of market practices and a comparison of compensation to our peer group companies.
In summary, the elements of our compensation package as well as the amount of compensation paid to our NEOs are designed to emphasize strong pay-for-performance principles and provide reasonable compensation to our NEOs as compared to market practicepractices and our peer group to our NEOs.group.
For these reasons, the Board is asking stockholders to support the compensation of our NEOs, as described in this proxy statement, by casting a non-binding advisory vote “FOR” the following resolution:
“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the Named Executive Officers, as disclosed in the Company’s proxy statement for the 20232024 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the 20222023 Summary Compensation Table and the other related tables and disclosure.”
While the advisory vote we are asking you to cast is non-binding, the Compensation Committee and the Board value the views of our stockholders and will take into account the outcome of the vote when considering future compensation decisions for our named executive officers.
Recommendation of the Board of Directors
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
A VOTE “FOR” PROPOSAL NO. 2.
A VOTE “FOR” PROPOSAL NO. 2.
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis (“CD&A”) provides information regarding the compensation paid to our Named Executive Officers (“NEOs”) during fiscal 2022.2023.
These individuals are:
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Randall A. Lipps, Chairman, President and Chief Executive Officer;
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Nchacha E. Etta, Executive Vice President and Chief Financial Officer;
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Corey J. Manley, Executive Vice President and Chief Legal and Administrative Officer;
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Peter J. Kuipers, former Executive Vice President and Chief Financial Officer;
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Scott P. Seidelmann, former Executive Vice President and Chief Commercial Officer; and
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Christine Mellon, former Executive Vice President and Chief Administrative and People Officer;Officer.
Executive Summary
We are a leading provider ofleader in transforming the pharmacy care delivery model, committed to solving the critical challenges inherent in medication management solutions and adherence tools for health systemselevating the role of clinicians within healthcare as an essential component of care delivery. We are focused on helping customers define and pharmacies. Our product and solution offerings aredeliver a medication management strategy that is designed to deliver ondrive improved clinical and financial outcomes across all care settings, to be the industry vision ofhealthcare providers’ most trusted partner to enable the Autonomous Pharmacy (automation solutions to automate worktransformation, improving operational efficiencies and streamline workflows; predictive and prescriptive analytics to provide actionable insights; and technology-enabled services to support improved efficiency, regulatory compliance and patient outcomes) that can lead to a better standard of care for patients.ultimately targeting zero-error medication management. This puts us in a highly competitive industry requiring us to recruit, incentivize and retain specific skill sets and experience in our leaders. Our executive compensation approach is designed to continue to support our commitment to being the carehealthcare providers’ and retail pharmacies’ most trusted partner and executing on the industry vision ofto enable the Autonomous Pharmacy.Pharmacy transformation.
Fiscal 20222023 Executive Compensation Highlights
The Compensation Committee of our Board (the “Compensation Committee”) took the following key actions with respect to the compensation of our NEOs for fiscal 2022:2023:
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Base salaries — In February 2023, the Compensation Committee determined to leave the annual base salaries of our then-serving NEOs, other than Mr. Manley, unchanged, from fiscal 2022 base
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Performance-based cash bonuses — TheOur current-serving NEOs (excluding Mr. Johnston and Mr. Manley) earned annual cash bonuses ranging from 34%54% to 36%77% of each such NEO’s total incentive target.
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Long-term equity incentive compensation — The NEOsEach of Messrs. Lipps, Etta and Manley were granted long-term equity incentive awards in the following forms:
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Time-based restricted stock units (“RSUs”), which vest over a four-year period, contingent on continued service; and
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Performance-based restricted stock units (“PSUs”), with the potential to earn between 50% and 200% of the target PSU award, provided certain performance criteria are achieved and contingent on continued service.
Executive Severance Plan. — On July 30, 2023 the alignmentCompany adopted the new Omnicell, Inc. Executive Severance Plan (“Executive Severance Plan”) to further align our approach to retentive compensation with market practice after considering the input of our executive officers’ interest with those of our stockholders,Exequity LLP (“Exequity”), the Company’s independent compensation consultant, and the emphasispractices of companies in our 2023 peer group. See the section below titled “Other Benefits and Compensation CommitteePractices — Severance and compensation philosophy place on strong pay-for-performance principles, noneChange of the target shares subject to the PSUs granted in February 2022 (May of 2022Control Benefits” for Mr. Manley) were earned and, accordingly, the 2022 PSUs were not eligible for vesting and were forfeited.additional information regarding our Executive Severance Plan.
Our Executive Compensation Philosophy
Our executive compensation program is designed to provide our executive officers incentives and rewards, while balancing the short-term and long-term interests of our stockholders with our ability to attract and retain talented executives. The Compensation Committee has the primary responsibility for establishing our executive compensation philosophy and determining the specific components and levels of each executive’s compensation. Our executive compensation program is based on four guiding principles established by the Compensation Committee:
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Enhance stockholder value by aligning the financial interests of our executive officers with those of our stockholders;
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Enable us to attract, motivate and retain the people needed to: (i) define and create industry-leading products and services and (ii) make the Company the carehealthcare providers’ and retail pharmacies’ most trusted partner and execute on the industry vision ofto enable the Autonomous Pharmacy;Pharmacy transformation;
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Integrate compensation closely with the achievement of our business and performance objectives; and
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Reward individual performance that contributes to our short-term and long-term success.
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We have created a compensation program that combines short-term and long-term components, cash and equity and fixed and performance-based contingent payments, in the proportions we believe are aligned with these four guiding principles.
An important element of our compensation philosophy is to provide executives with compensation packages that are competitive with the compensation packages for executives in comparable positions at advanced services technology companies of similar size and industry to us in order to attract, motivate and retain dynamic and innovative executives to lead our strategic initiatives. As such, the Compensation Committee considers a benchmarkingcompetitive market analysis when determining the size, components and mix of executive officer compensation elements. For additional information, see the section below entitled “Executive Compensation-Setting Process.”
“Pay for Performance” Program Design
To align our NEOs’ interests with those of our stockholders and motivate and reward individual performance that contributes to our short-term and long-term success, a significant majority of our NEOs’ target total compensation is at-risk or variable based on Company and individual performance (including stock price performance). We consider annual cash bonuses to be “at-risk” because the value received (if any) is subject to both the achievement of Company and individual performance goals. We consider PSUs to be “at-risk” because the value received (if any) is subject solely to Company performance goals.performance. We consider RSUs to be “variable” because the value received varies based on our stock price. The charts below represent the mix of target pay for fiscal 20222023 of our CEO and the average of our other continuing NEOs (excluding Ms. Mellon and Messrs. ManleyKuipers and Johnston). Mr. Johnston has been excluded from the chart because he retired from the company in July 2022 and did not serve as an executive officer for the full year. Mr. Manley has been excluded from this chart because, as noted above, priorSeidelmann due to his appointment as Senior Vice President and Chief Legal Officer in May 2022 he did not participate in the Company’s executive officer compensation program. His compensation is based on competitive benchmarking as of his appointment date, as more fully described in the CD&A section titled “Employment Arrangements” below.their separations). Target pay, as shown below, consists of each NEO’s (i) annualized base salary for fiscal 20222023 at the rate effective in July 2022;as of December 31, 2023; (ii) target annual cash bonus as a percentage of annualized base salary for fiscal 20222023 at the rate effective July 2022,as of December 31, 2023, and excluding potential overachievement bonus payments; and (iii) the grant date fair value of equity awards granted to such NEO during fiscal 20222023 (as reported in the 20222023 Summary Compensation Table). As reflected in the charts below, for fiscal 2022,2023, approximately 90%92% of our CEO’s target pay, and 86%87% of the average target pay of our other continuing NEOs, (excluding Messrs. Johnston and Manley), respectively, was at-risk or variable, in each case, based on Company and individual performance. We believe this target pay mix reflects the strong pay-for-performance design of our executive compensation program.
| | ![[MISSING IMAGE: pc_ceotarget-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-042703/pc_ceotarget-bw.jpg) ![[MISSING IMAGE: pc_ceotrgt-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-043646/pc_ceotrgt-bw.jpg) | | | ![[MISSING IMAGE: pc_neotarget-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-042703/pc_neotarget-bw.jpg) ![[MISSING IMAGE: pc_neotrgt-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-043646/pc_neotrgt-bw.jpg) | |
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Elements of Our Executive Compensation Program
The table below describes the principal elements of our 20222023 executive compensation program, including the primary objectives of each element, any associated performance measures, and whether each element is categorized as “fixed,” “at-risk” or “variable” based on Company or individual performance (including stock price performance). See the section below entitled “Elements of Compensation and 20222023 Determinations” for additional information regarding these compensation elements.
| Compensation Element | | | Type | | | Primary Objective(s) | | | Performance Measures | | |||
| Annual Base Salary | | | Fixed | | | Provide base amount of market competitive pay and predictable level of financial stability | | | Not applicable, although adjustments may be made to recognize individual performance | | |||
| Annual Cash Performance- Based Bonus | | | At-risk | | | Incentivize and reward the achievement (and over- achievement) of short-term corporate and individual goals | | | Corporate Threshold Targets: • • • Advanced Services • • Individual Targets (quarterly) | | |||
| Long-Term Equity Incentive Awards | | | PSUs | | | At-risk | | | Incentivize and retain executives, align the interests of stockholders and executives, and motivate and reward achievement of long-term corporate financial goals (no payout if performance measure is not met) | | | Total stockholder return over a one-year performance period as measured against the Nasdaq Health Care Index | |
| | | | RSUs | | | Variable | | | Incentivize and retain executives and align the interests of stockholders and executives by linking realized value to stock price performance | | | Stock price appreciation | |
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Executive Compensation Practices
We employ a number of practices designed to reinforce our pay-for-performance executive compensation philosophy:
| | WHAT WE DO | | | WHAT WE DON’T DO | | ||||||
| | ![[MISSING IMAGE: ic_tick-bw.gif]](https://capedge.com/proxy/DEF 14A/0001104659-23-042703/ic_tick-bw.gif) ![[MISSING IMAGE: ic_tick-bw.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-043646/ic_tick-bw.gif) | | | Significant majority of NEO compensation is at-risk or variable based on Company and individual performance (including | | | ![[MISSING IMAGE: ic_cross-bw.gif]](https://capedge.com/proxy/DEF 14A/0001104659-23-042703/ic_cross-bw.gif) ![[MISSING IMAGE: ic_cross-bw.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-043646/ic_cross-bw.gif) | | | No guaranteed bonuses or base salary increases | |
| | | | | Multi-year vesting periods for equity awards | | | | | | No employment contracts that guarantee continued employment of our executive officers | |
| | | | | Multiple performance metrics for at-risk compensation | | | | | | No “single trigger” change of control arrangements | |
| | | | | Meaningful stock ownership guidelines for all executive officers and non-employee directors | | | | | | No tax gross ups of executive perquisites or severance or change of control payments or benefits* | |
| | | | | Perquisites provided to our executives are limited | | | | | | No repricing, cash-out or exchange of “underwater” stock options without stockholder approval | |
| | | | | Annual advisory vote for stockholders to approve NEO compensation | | | | | | No special health, welfare or retirement plans for executive officers | |
| | | | | Maintain a fully (100%) independent Compensation Committee | | | | | | No short sales of our common stock or purchases of derivatives | |
| | | | | Retain an independent compensation consultant to advise the Compensation Committee | | | | | | No dividend payments on unearned equity awards | |
| | | | | Annual executive compensation review (including review of compensation peer group and compensation-related risk assessment) | | | | | | | |
*
In limited instances, a tax gross upreimbursement may be provided for amounts related to event-related expenses incurred by an executive officer or their spouse or guest for attendance at certain of the Company’s business events where such attendance is encouraged.
“Say-on-Pay” Vote
In May 2022,2023, we held a stockholder advisory vote on the compensation of our NEOs. Our stockholders approved, on an advisory basis, the compensation of our NEOs, with approximately 94.5%90.9% of stockholder votes cast in favor of our “say-on-pay” resolution. In addition, over the past five years, on average, our stockholders approved, on an advisory basis, the compensation of our NEOs, with approximately 94.8% of stockholder votes cast in favor of our “say-on-pay” resolution. In evaluating our compensation practices during fiscal 20222023 and in early 2023,2024, we were mindful of the support our stockholders expressed for our philosophy of linking compensation to our operating and organizational objectives and the enhancement of stockholder value.
As a result, the Compensation Committee retained our general approach to executive compensation, continued to apply the same general principles and philosophy as in the prior fiscal year in determining executive compensation and did not make any changes to our executive compensation program in response to the 20222023 “say-on-pay” vote. The Compensation Committee will continue to consider stockholder concerns and feedback in the future. In 2017,2023, our stockholders included their approval of the Board and management recommendation that we solicit a “say-on-pay” vote on an annual basis. Our Board has adopted a policy that is consistent with that preference, and, accordingly, we are holding a say-on-pay vote at this Annual Meeting. In addition,A “say-on-frequency” vote is required every six years, and as required by SEC disclosure rules, we are askingsuch, our stockholders to re-approve the frequency of future “say-on-pay” votes on an annual basis, as further describednext say-on-frequency vote will be in Proposal No. 3.2029.
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Executive Compensation-Setting Process
Role of the Compensation Committee
Our Board has delegated to the Compensation Committee the responsibility for developing our compensation philosophy, establishing our executive compensation program and overseeing equity awards under our equity incentive plans. On an annual basis, the Compensation Committee approves the individual compensation packages for each of our executive officers. For additional information regarding the responsibilities of the Compensation Committee and its role in setting our 20222023 executive compensation, please refer to the section above entitled “Board and Corporate Governance Matters — Information Regarding Compensation Committees of the Board of Directors — Compensation Committee.”
Role of Management
Although the Compensation Committee maintains ultimate authority over our executive officers’ compensation, the Compensation Committee considers the input and evaluations of our President and CEO, Mr. Lipps, as it relates to executive officers other than Mr. Lipps. In conjunction with the Compensation Committee’s annual review, Mr. Lipps develops cash and equity compensation proposals for each executive officer (other than himself) to present to the Compensation Committee for discussion and approval. Mr. Lipps does not participate in the final determination of his own compensation. In addition, from time to time, various members of management and other employees may be invited by the Compensation Committee to make presentations, provide financial or other background information or advice or otherwise participate in Compensation Committee meetings.
Role of Compensation Consultant
The Compensation Committee engaged the services of Radford through May 2022Exequity in 2023, to serve as an independent advisor to the Compensation Committee to assist in reviewing the compensation of the Company’s executive officers. In May 2022,At the request of the Compensation Committee, appointed Exequity LLP (“Exequity”)identified companies for a competitive market analysis, as discussed in the section below entitled “Competitive Market Analysis.” Exequity ultimately developed recommendations regarding 2023 executive compensation levels and types of compensation elements that were presented to the Compensation Committee for its independent compensation advisor. Compensation decisions made prior to June 1, 2022 were determined after considering the input of Radford, while compensation decisions made after June 1, 2022 were determined based on the input of Exequity.consideration.
For additional information regarding the engagement of Radford and Exequity as compensation consultantsconsultant and theirits roles in settingadvising with respect to our 20222023 executive compensation, please refer to the section above entitled “Board and Corporate Governance Matters — Information Regarding Compensation Committees of the Board of Directors — Compensation Committee — Compensation Committee Processes and Procedures.”
As part of its engagement, RadfordExequity worked closely with the Compensation Committee to identify comparable peer companies, provided the Compensation Committee with reports summarizing a comparison of the total compensation of our executive officers with such peer companies and provided an assessment of the specific elements of our executive compensation components in relation to the peer companies. The Compensation Committee believes benchmarkinga competitive market analysis of executive compensation is crucial to maintaining compensation levels competitive with other leading technology companies with which we compete for personnel. Additionally, benchmarkingthe competitive market analysis provides guideposts, that the Compensation Committee uses to determine the size, mix and components of executive compensation.
Historically it has been, and continues to be, challenging to find appropriately sized industry competitors for comparison. Therefore, the Compensation Committee, with the assistance of Radford,Exequity, has developed a group of publicly traded companies viewed as comparable publicly-traded companiesto the Company based on the following selection criteria that we believe provides a meaningful cross section from which to benchmark executive compensation:
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Companies with similar revenue size to ours (i.e., approximately 0.5 times to 2.53.0 times our then-current trailing twelve-month revenue);
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•
Companies with a similar market capitalization, enterprise value, EBITDA, or number of employees as ours (ours;
•i.e.
Companies with similar financial structures or limitations (i.e., approximately 0.3 times to 3.0 times our 30-day average market capitalization as of a recent date)cyclicality, outsourcing strategies);
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Industry similarity, to the extent possible, with a primary focus on three industry subcategories that we believe are representative of portions of our business: the healthcare management and software industry,industry; the medical equipment and supplies industryindustry; and the logistics and supply chain management and manufacturing industry (software companies are also considered and included where appropriate); and
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Companies, to the extent reasonable, with which we believe we may compete for executive personnel.
For allthe decisions relating to the 20222023 compensation of our NEOs (other than Mr. Manley)Etta), including the long-term equity compensation awards madeapproved for Messrs. Lipps and Manley in February 2022 and March 2022,May 2023, the Compensation Committee utilized a report prepared by RadfordExequity in late 20212022 (the “2022“2023 Peer Group Report”). To the extent that there are statements relating to percentiles included in this Compensation Discussion and Analysis, they are intended to reference performance against peer companies as identified in the 20222023 Peer Group Report. Mr. ManleyEtta joined the Company and was appointed SeniorExecutive Vice President and Chief LegalFinancial Officer in May 2022June 2023 and his compensation levels were determined uponin connection with his appointment.hiring. In settingconnection with Mr. Manley’s compensation levels,Etta’s employment offer, the Compensation Committee considered market data gathered by RadfordExequity based on companies in our 20222023 peer group as identified in the 20222023 Peer Group Report, as well as other factors discussed below in the section entitled “Elements of Compensation and 20222023 Determinations.” The companies identified for benchmark comparison in the 20222023 Peer Group Report and selected by the Compensation Committee as our 20222023 peer group were as follows:
| | | |||||||
| | • | | | • GoodRx Holdings, Inc. | | | • | |
| | • ACI Worldwide, Inc. | | | • Haemonetics Corporation | | | • Nutanix, Inc. | |
| | • Allscripts Healthcare Solutions, Inc. | | | • HealthEquity, Inc. | | | • NuVasive, Inc. | |
| | • Blackbaud Inc | | | • | ||||
| | | • | | | |||
| | • CONMED Corporation | | | • | | | • | |
| | • Evolent Health, Inc. | | | • | | | • | |
| | • Globus Medical, Inc | | | • | | | | |
The Compensation Committee and its compensation consultantsconsultant strive to maintain a consistent peer group year over year for comparability of competitive analysis. However, on a yearly basis, the peer group is reviewed and refined to take into consideration comparability of peer companies’ financial performance relative to Omnicell, as well as the acquisition of or any fundamental changes in the peer companies’ operating businesses. As part of this review process, the Compensation Committee made the following changes to the 20212022 peer group in determining the 20222023 peer group:
•
Removed Cantel Medical Corp. and HMSInovalon Holdings, Corp., each of whichInc. as it was acquired in 2021;
•
Removed Cornerstone OnDemand,Commvault Systems, Inc. as it was not viewed as a strong industry/sector fit;
•
Added the following companies due to: (i) being a competitor in the software-as-a service space, and/or (ii) financial profile or size comparability: GoodRx Holdings,Abiomed, Inc.; HealthEquity,ACI Worldwide, Inc.; Multiplan,Integra LifeSciences Holding Corporation; ModivCare, Inc.; Nutanix, Inc.; PegasystemsR1 RCM Inc.; and Phreesia,Teladoc Health, Inc.
As of the date of the 20222023 Peer Group Report, based on the 2022 peer group, our revenue registered at the 55th51st percentile of the companies in the 2023 peer group and our market capitalization registered at the 79th75th percentile of the companies in the 2023 peer group.
Elements of Compensation and 20222023 Determinations
Our executive compensation program consists of three principal components: a base salary,salary; a performance-based cash bonus plan (together with base salary, the “total cash compensation”); and long-term equity incentive compensation. The long-term equity incentive compensation is further divided
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incentive compensation. The long-term equity incentive compensation is further divided into two components: RSUs that vest over time if the executive remains employed with the Company and PSUs that initially vest only upon the achievement of certain Company performance metrics and, provided those performance metrics are achieved, vest over time if the executive remains employed with the Company. We also provide our executive officers with certain other benefits, including limited perquisites, severance and double trigger change of control benefits and the ability to participate in our 401(k) plan and other employee benefit plans with all other eligible employees. The philosophy underlying each of the components of compensation and the specific factors weighing on the compensation determinations for 20222023 are discussed in each section below.
Cash Compensation
Overview. The cash component of our executive compensation program serves a two-fold purpose. Base salaries are intended to provide financial stability, predictability and security of compensation for our executive officers for fulfilling their core job responsibilities, while the performance-based cash bonus plan is intended to incentivize and reward the achievement of predetermined corporate and individual short-term objectives. The Compensation Committee’s objective that provides guidance in its cash compensation decision makingdecision-making has been, and continues to be, for each executive officer to be able to achieve (i) approximately between the 50th and 75th percentiles for comparable positions identified in the 20222023 Peer Group Report in total cash compensation, assuming achievement of each of his or her performance objectives, resulting in payment in full of the executive’s total performance-based cash bonus and (ii) approximately the 50th percentile for comparable positions identified in the 20222023 Peer Group Report in base salary. In determining the level of base salary and the potential maximum performance-based bonus for each executive officer, the
The Compensation Committee analyzes compensation from the comparable total cash compensation metric identified in the 20222023 Peer Group Report, for each executiveinput from Exequity, and sets the executive’s total targeted cash compensation with the goal of achieving or moving each executive toward the objective percentile for each executive in a responsible and measured manner if the executive’s current compensation is significantly different than the objective. The Compensation Committee also considers management’s financial forecasts for the upcoming fiscal year and works to establish an aggregate compensation scheme that fits within the Company’s budgetary model.
The Compensation Committee determined the base salary for Mr. Manley,Etta, who was appointed Senior Vice President and Chief Legal Officerjoined the Company in May 2022,June 2023, taking into consideration various factors including market data gathered by RadfordExequity for comparable positions based on our 20222023 peer group, the scope of Mr. Manley’sEtta’s role, his qualifications and prior experience, other input provided by RadfordExequity and the recommendation of our CEO. In addition,With respect to Mr. Manley, in connection withFebruary 2023, the Compensation Committee determined to increase Mr. Johnston’s retirement fromManley’s base salary by 5.6% after considering individual performance and the Company, Ms. Mellon2023 Peer Group Report. Subsequent to these actions, in May 2023, Mr. Manley was appointed as Chief AdministrativeLegal and PeopleAdministrative Officer, effective as of June 1, 2022, and in2023. In light of Ms. Mellon’sMr. Manley’s appointment and the increased scope responsibilities and duties of such role,responsibilities, the Compensation Committee approved an additional 15% increase in Ms. Mellon’s 2022of approximately 5.3% to Mr. Manley’s annual base salary, as well as an increase to his individual bonus target as a percentage of base salary, each effective in June 2022.2023.
The table below sets forth, for each then-serving NEO, 2023 base salary and the targeted total cash compensation approved by the Compensation Committee in February 2023, the corresponding percentile that such targeted total cash compensation represented in comparison to peer companies identified in the 2023 Peer Group Report, and the percentage increase such approved 2023 targeted total cash compensation represented from the 2023 targeted total cash compensation that was approved.
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| Named Executive Officer | | | 2023 Base Salary(1) ($) | | | 2023 Base Salary Percentile to Peer Group | | | 2023 Targeted Total Cash Compensation(1) ($) | | | 2023 Targeted Total Cash Percentile to Peer Group | | | 2022 Targeted Total Cash Compensation ($)(2) | | | 2022 Targeted Total Cash Percentile to Peer Group | | | Percentage Increase from 2022 Targeted Total Cash | | ||||||||||||
| Randall A. Lipps | | | | | 813,100 | | | | >75th | | | | | 1,829,475 | | | | >75th | | | | | 1,829,475 | | | | 50th – 75th | | | | | 0% | | |
| Corey J. Manley | | | | | 400,000(3) | | | | <50th | | | | | 760,000 | | | | 50th – 75th | | | | | 540,000 | | | | <50th | | | | | 40.7%(3) | | |
Peter J. Kuipers(4) | | | | | 472,800 | | | | >75th | | | | | 898,320 | | | | >75th | | | | | 898,320 | | | | >75th | | | | | 0% | | |
Scott P. Seidelmann(4) | | | | | 457,100 | | | | >75th | | | | | 868,490 | | | | >75th | | | | | 868,490 | | | | >75th | | | | | 0% | | |
Christine Mellon(4) | | | | | 400,000 | | | | >75th | | | | | 760,000 | | | | >75th | | | | | 760,000 | | | | 50th – 75th | | | | | 0% | | |
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2023 base salary and the2023 targeted total cash compensation approved byrefer to an executive officer’s annualized salary and incentive target effective February 2023 (June 5, 2023 for Mr. Manley), assuming, in the Compensation Committee in February 2022, the corresponding percentile that suchcase of 2023 targeted total cash compensation, represented in comparison to peer companies identified in the 2022 Peer Group Report,achievement of 100% of an executive officer’s Individual Targets (as defined below) and the percentage increase such approved 2022 targeted total cash compensation represented fromachievement of the 2021 targeted total cash compensation that was approved.Corporate Threshold Targets (as defined below).
| Named Executive Officer | | | 2022 Base Salary(1) ($) | | | 2022 Base Salary Percentile to Peer Group | | | 2022 Targeted Total Cash Compensation(1) ($) | | | 2022 Targeted Total Cash Percentile to Peer Group | | | 2021 Targeted Total Cash Compensation ($)(2) | | | 2021 Targeted Total Cash Percentile to Peer Group | | | Percentage Increase from 2021 Targeted Total Cash(3) | | ||||||||||||
| Randall A. Lipps | | | | | 813,100 | | | | 50th – 75th | | | | | 1,829,475 | | | | 50th – 75th | | | | | 1,793,475 | | | | 75th | | | | | 2.0% | | |
| Peter J. Kuipers | | | | | 472,800 | | | | 50th – 75th | | | | | 898,329 | | | | >75th | | | | | 880,650 | | | | >75th | | | | | 2.0% | | |
| Scott P. Seidelmann | | | | | 457,100 | | | | 50th – 75th | | | | | 868,490 | | | | >75th | | | | | 851,390 | | | | >75th | | | | | 2.0% | | |
Christine Mellon(4) | | | | | 400,000 | | | | <50th | | | | | 760,000 | | | | 50th – 75th | | | | | 646,000 | | | | >75th | | | | | 17.6%(5) | | |
Dan S. Johnston(6) | | | | | 392,700 | | | | 50th – 75th | | | | | 746,130 | | | | >75th | | | | | 731,500 | | | | >75th | | | | | 2.0% | | |
2022 base salary and 2022 targeted total cash compensation refer to an executive officer’s annualized salary and incentive target effective July 2022, (June 6, 2022 for Ms. Mellon), assuming, in the case of 2022 targeted total cash compensation, achievement of 100% of an executive officer’s Individual Targets (as defined below) and the achievement of the Corporate Threshold Targets (as defined below).
As previously disclosed, Mr. Johnston retiredKuipers separated from the Company effective July 2, 2022.in August 2023, Ms. Mellon separated from the Company in October 2023 and Mr. Seidelmann Separated from the Company in November 2023.
Performance-Based Bonus. The second component of cash compensation for our executive officers is a quarterly performance-based bonus, which is intended to be a substantial component of our executives’ cash compensation. The Compensation Committee determines each executive officer’s performance-based bonus target (as a percentage of his or her base salary), taking into consideration a benchmarkingthe competitive market analysis of competitive pay practices for comparable positions identified in the 20222023 Peer Group Report, with a view towards maintaining consistent bonus percentages amongst the Company’s executive officers and targeting total cash compensation between the 50th and 75th percentiles for each executive officer as compared to the 2023 peer group. The performance-based bonus target percentages for 20222023 remained the same as those determined by the Compensation Committee for 2021.2022, except that with respect to Mr. Manley in February 2023, the Compensation Committee determined to increase Mr. Manley’s performance-based bonus target to 75%, after considering individual performance and the 2023 Peer Group Report. Subsequent to these actions, in May 2023, Mr. Manley was appointed as Chief Legal and Administrative Officer, effective as of June 1, 2023, and in light of Mr. Manley’s appointment and the increased scope and responsibilities, the Compensation Committee approved an additional increase in Mr. Manley’s percentage-based bonus target to 90%, effective in June 2023.
The Compensation Committee continued to use the bonus plan established in March 2010 (the “2010 Bonus Plan”) to determine the performance-based bonuses for 2022.2023. Under the 2010 Bonus Plan, the Company maintained its quarterly threshold target provision, under which the Company had to meet a certain threshold strategic financial performance criterion set by the Compensation Committee for an executive to earn any cash bonus (the “Corporate Threshold Target”) for a particular quarter. Failure to meet the Corporate Threshold Target results in forfeiture of any bonus for the quarter. Upon successful
achievement of the Corporate Threshold Targets in a given quarter, the executive was then eligible to receive his or her individual bonus amounts, derived as a percentage of his or her quarterly salary, based on such executive’s achievement of his or her individual objectives (“Individual Targets”). Failure to meet an Individual Target results in forfeiture of the percentage of cash bonus associated with the Individual Target.
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Generally, the Corporate Threshold Target and Individual Targets are binary performance measures such that either the measures are met and an executive is eligible for 100% of his or her cash bonus amount or if either the Corporate Threshold Target or an Individual Target is not met the executive will not receive a cash bonus amount. For the first, second, third and fourth quarters of 2022,2023, if the applicable Corporate Threshold Target was met and all of a participant’s Individual Targets were achieved, the executive would receive 100% of his or her eligible cash bonus amount (the “Incentive Target”) for the quarter. If the Corporate Threshold Target was not met for the quarter, the executive was ineligible for a cash bonus. However, in the third quarter of 2022, in light of the previously disclosed cybersecurity event experienced by the Company in May 2022, recognizing the impact of (i) delayed invoicing, which affected the timing of cash collections, and (ii) delayed customer implementations, which affected revenues, and in an effort to reflect the Company’s focus on restoring the Company’s critical information technology systems, the Compensation Committee adopted certain adjusted/reduced performance thresholds that if achieved would have resulted in a partial payout under the 2010 Bonus Plan. Similarly, if an executive failed to meet an Individual Target the executive was ineligible for the percentage of cash bonus associated with that Individual Target (for example, if an executive had four Individual Targets for a given quarter that were equally weighted (i.e., each Individual Target was worth 25% of the Incentive Target), if an executive failed to meet one Individual Target but met the other three Individual Targets, the executive would be eligible to receive only 75% of the Incentive Target). In addition, the 2010 Bonus Plan allows the Compensation Committee to set additional threshold or overachievement bonus payment criteria to reward executives for particularly high company performance or for the achievement of specified financial target(s) that are of strategic importance to the Company (the “Strategic Goals”), which are typically set in the first quarter of the fiscal year.
The Compensation Committee also determined that, regardless of whether the Annual Profit Threshold was met, an overachievement bonus would be payable to each NEO if the Company met certain overachievement metrics set by the Compensation Committee relating to (i) publicly reported annual product bookingsnon-GAAP EBITDA (the “Product Bookings“EBITDA Overachievement Target”), (ii) annual advanced services bookingsrevenue (the “Advanced Services BookingsRevenue Overachievement Target”) and (iii) annual advanced services recurring revenuenon-GAAP free cash flow (the “Advanced Services Recurring Revenue“Free Cash Flow Overachievement Target”). The overachievement potential payments would be based on the percentage of overachievement and would apply that percentage to the amount of each NEO’s Incentive Target for the full year of 2022,2023, as more specifically set forth in the table below, with a 50%37.5% weighting on the Bookings Overachievement Target and 25% weighting on each of the Advanced Services BookingsEBITDA Overachievement Target and Advanced Services Recurring Revenue Overachievement Target. The Compensation Committee further determined that, regardless of whether the Annual Profit Threshold was met, a separate overachievement bonus would be payable to each NEO basedTarget and 25% on the number of strategic acquisitions entered into by the Company during fiscal 2022 on or before December 31, 2022 (the “Strategic Acquisitions Target”),Free Cash Flow Overachievement Target, with the applicable overachievement percentage being applied to each NEO’s Incentive Target for the full year of 2022,2023, as more specifically set forth in the table below.
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| Overachievement Target | | | Threshold | | | Overachievement Percentage | |
| | | | | | | | |
| First | | | Annual reported | | | Additional | |
| Final | | | Annual reported | | | Additional 30% of Incentive Target | |
Advanced Services | | | | | | | |
| First Advanced Services | |||||||
| | | Annual Advanced Services Revenue = | | | Additional 5% of Incentive Target | | |
| Final Advanced Services | | | Annual Advanced Services Revenue = | | | Additional | |
Free Cash Flow Overachievement Target(3): | | | | | | | |
| First Target (Threshold) | | | | | Additional | | |
Target (Maximum) | | | | | Additional 20% of Incentive Target | |
(1)
For each incremental $1,000,000 of annual reported bookingsnon-GAAP EBITDA in excess of $1,416,000,000,$141,000,000, the BookingsEBITDA Overachievement PercentageTarget is increased by an additional .50%1.50% of Incentive Target, up to a maximum BookingsEBITDA Overachievement Percentage of 30% of each NEO’s Incentive Target.
(2)
For each incremental $1,000,000 of bookingsadvanced services revenue in excess of $393,000,000,$216,000,000, the Advance Services BookingsRevenue Overachievement Percentage is increased by an additional .50%1.50% of Incentive Target, up to a maximum Advanced Services BookingsRevenue Overachievement Percentage of 15%30% of each NEO’s Incentive Target.
(3)
For each incremental $1,000,000 of recurring revenueFree Cash Flow in excess of $218,000,000,$60,000,000, the Advanced Services Recurring RevenueFree Cash Flow Overachievement Percentage is increased by an additional 1.0%0.25% of Incentive Target, up to a maximum Advanced Services BookingsFree Cash Flow Overachievement Percentage of 15%20% of each NEO’s Incentive Target.
Corporate Threshold Targets. The Compensation Committee established the Corporate Threshold Targets on a quarterly basis, and such targets were intended to incent the executive officers to achieve results that were consistent with the Company’s board-approved financial plan. The actual amount of each target was set by the Compensation Committee based on a combination of the input of management, historical quarterly results, the Company’s desired growth, financial forecasts and analyst expectations, as well as the Company’s views on the market environment and expected headwinds and macroeconomic uncertainty for 2023. The following table sets forth the quarterly Corporate Threshold Targets applicable to the NEOs for 2023:
36
| Corporate Threshold Targets | | | Quarter 1 | | | Quarter 2 | | | Quarter 3 | | | Quarter 4 | | ||||||||||||
Quarterly Profit Target(1) | | | | $ | 40,600,000 | | | | | $ | 90,700,000 | | | | | $ | 150,100,000 | | | | | | — | | |
| Reduced/Adjusted Profit Targets(2) | | | | | | | | | | | | | | | | | | | | | | | | | |
| 98% of Quarterly Profit Target | | | | | | | | | | | | | | | | $ | 147,100,000 | | | | | | | | |
| 96% of Quarterly Profit Target | | | | | | | | | | | | | | | | $ | 144,100,000 | | | | | | | | |
| 94% of Quarterly Profit Target | | | | | | | | | | | | | | | | $ | 141,100,000 | | | | | | | | |
Annual Profit Threshold Target(1) | | | | | — | | | | | | — | | | | | | — | | | | | $ | 220,700,000 | | |
| Corporate Threshold Targets | | | Quarter 1 | | | Quarter 2 | | | Quarter 3 | | | Quarter 4 | | ||||||||||||
Quarterly Profit Target(1) | | | | $ | 16,800,000 | | | | | $ | 50,800,000 | | | | | $ | 86,900,000 | | | | | | — | | |
Annual Profit Threshold Target(1) | | | | | — | | | | | | — | | | | | | — | | | | | $ | 141,000,000 | | |
(1)
The Quarterly Profit Target and the Annual Profit Threshold Target represented the minimum profitamount required to meet the cash equivalent of that quarter’s desired earnings per shareEBITDA target based on non-GAAP netEBITDA. EBITDA for incentive purposes is defined as earnings before interest income excludingand expense, taxes, depreciation, amortization, and share-based compensation expenses pursuant to ASC Topic 718, amortization of intangible assets as determined pursuant to ASC Topic 805 “Business Combinations” (“ASC Topic 805”)well as excluding certain other non-GAAP adjustments such as acquisition-related expenses, executive transition costs, severance-related expenses, and other items that the Compensation Committee determined were unusual, non-recurring or not reflective of normal operations. The Annual Profit Target represented the year-to-date target through the end of the fourth quarter of 2022.
The Compensation Committee determined that the actual profit achieved by the Company for the each of the first, second and secondthird quarters of 20222023 met or exceeded the applicable Quarterly Profit Target set by the Compensation Committee in the respective quarters. For the third quarter of 2022, the Compensation Committee determined that neither the Quarterly Profit Target nor any of the Reduced/Adjusted Profit Targets was met. For fourth quarter of 2022,2023, the Compensation Committee determined that the actual profit achieved by the Company for 20222023 did not meet the Annual Profit Threshold Target. The Compensation Committee further determined that the Company did not meet any ofeither the First BookingsEBITDA Overachievement or First Advanced Services Bookings Overachievement, First Advanced Services Recurring Revenue Overachievement or Strategic Acquisition TargetsTarget in the fourth quarter of 20222023, however, the Compensation Committee also determined the Company exceeded the First Free Cash Flow Overachievement Target in the fourth quarter of 2023 by approximately $60,600,000 and therefore the then-serving NEOs would not receive any overachievementan additional bonus payments.equal to approximately 20% of their respective Incentive Targets. As a result, the then-serving NEOs did notwere entitled to receive any overachievement bonus payments.payments equal to a total of approximately 20% of their respective Incentive Targets.
The Compensation Committee continues to feel that the “threshold performance gate” structure better emphasizes its desire to motivate individual performance, while retaining the Company’s financial performance as paramount and the primary focus of each executive’s efforts.
Individual Targets. For each quarter of 2022,2023, the Compensation Committee established Individual Targets for each NEO and determined achievement of such targets. The Individual Targets are designed to
encourage progress in, and create a strong incentive for, the executive to excel in areas that are primarily within their control, while emphasizing the importance of the Company’s success by requiring achievement of the Corporate Threshold Targets (or Reduced/Adjusted Profit Targets) before bonus eligibility.
In 2022,2023, the quarterly Individual Targets for our NEOs other than Mr. Lipps, included objectives in the following areas and varied by individual:
•
Corporate Scorecard — the Company has implemented a Corporate Scorecard, which outlines company-wide goals in four areas (people success, customer success,financial objectives, including total revenues, advanced services revenues and operational expenditures. The 2023 annual targets for total revenues, advance services revenues and product success,operational expenditures were $1.150 billion, $203.4 million and financial success).$459.5 million, respectively. The Corporate Scorecard accounted for between 30% and 50% of each NEO’s (including Mr. Lipps) potential bonus during the first, second, third and thirdfourth quarters of 2022,2023, which the Compensation Committee believes appropriately reflects an emphasis on achieving broad Company-wide results by all NEOs. The Corporate Scorecard required that a 90% rating be achieved for there to be any payout on this quarterly Individual Target.
•
Operating Objectives — environmental, social, governance, quality and compliance enhancements and related trainings and reporting strategies, Board-related corporate governance initiatives, implementation of information technology tools, vendor-related initiatives, information security and cybersecurity improvements, quarterly spending at or below departmental budget, completion of
37
objectives by those directly reporting to the officer, organizational changes, improvement of internal departmental processes and talent recruitment, retention and development and cost reduction initiatives; and
•
Strategic Objectives — development of short and long-term business objectives, models and strategies, sales, marketing and customer experience initiatives, stockholder outreach initiatives, evaluation of possible acquisition targets, strategic relationships and international planning and product development objectives.
Each NEO other than Mr. Lipps, generally has, on a quarterly basis, approximately three to five Individual Targets, relating to a variety of objectives, which are approved by the Compensation Committee. Each Individual Target is given a percentage weighting such that achievement of all Individual Targets corresponds to 100% achievement of the Incentive Target. As originally set, for executives other than Mr. Lipps, each Individual Target is generally weighted between 25%10% and 50%25% of that quarter’s total Incentive Target.
The following table sets forth the percentages of the Individual Targets achieved in each quarter of 2022,2023, as well as the actual cash bonus earned by each participating NEO based on achievement of the Individual Targets in each quarter of 2022:2023:
| | | | Percentage of Individual Targets Achieved | | | Cash Bonus for Achievement of Individual Targets(1) | | ||||||||||||||||||||||||||||||||||||||||||
| Named Executive Officer | | | First Quarter (%) | | | Second Quarter (%) | | | Third Quarter (%) | | | Fourth Quarter (%) | | | First Quarter ($) | | | Second Quarter ($) | | | Third Quarter ($)(2) | | | Fourth Quarter ($)(2) | | ||||||||||||||||||||||||
| Randall A. Lipps | | | | | 99% | | | | | | 50 | | | | | | 50 | | | | | | 100 | | | | | | 225,334 | | | | | | 124,306 | | | | | | 0 | | | | | | 0 | | |
| Peter J. Kuipers | | | | | 100 | | | | | | 50 | | | | | | 50 | | | | | | 100 | | | | | | 96,265 | | | | | | 56,155 | | | | | | 0 | | | | | | 0 | | |
| Scott P. Seidelmann | | | | | 100 | | | | | | 50 | | | | | | 50 | | | | | | 100 | | | | | | 93,067 | | | | | | 54,289 | | | | | | 0 | | | | | | 0 | | |
| Christine Mellon | | | | | 100 | | | | | | 50 | | | | | | 50 | | | | | | 100 | | | | | | 70,615 | | | | | | 42,231 | | | | | | 0 | | | | | | 0 | | |
Dan S. Johnson(4) | | | | | 100 | | | | | | 50 | | | | | | N/A | | | | | | N/A | | | | | | 79,962 | | | | | | 46,644 | | | | | | N/A | | | | | | N/A | | |
| | | | Percentage of Individual Targets Achieved | | | Cash Bonus for Achievement of Individual Targets(1) | | ||||||||||||||||||||||||||||||||||||||||||
| Named Executive Officer | | | First Quarter (%) | | | Second Quarter (%) | | | Third Quarter (%) | | | Fourth Quarter (%) | | | First Quarter ($) | | | Second Quarter ($) | | | Third Quarter ($) | | | Fourth Quarter ($)(2) | | ||||||||||||||||||||||||
| Randall A. Lipps | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | 273,639 | | | | | | 234,548 | | | | | | 273,639 | | | | | | 0 | | |
| Nchacha E. Etta | | | | | N/A | | | | | | N/A | | | | | | 100 | | | | | | 100 | | | | | | N/A | | | | | | N/A | | | | | | 115,096 | | | | | | 0 | | |
| Corey J. Manley | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | 73,846 | | | | | | 66,346 | | | | | | 96,923 | | | | | | 0 | | |
Peter J. Kuipers(3) | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | N/A | | | | | | 114,563 | | | | | | 98,197 | | | | | | 52,372 | | | | | | N/A | | |
Scott P. Seidelmann(3) | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | N/A | | | | | | 110,759 | | | | | | 94,936 | | | | | | 110,759 | | | | | | N/A | | |
Christine Mellon(3) | | | | | 100 | | | | | | 100 | | | | | | 100 | | | | | | N/A | | | | | | 96,923 | | | | | | 83,077 | | | | | | 96,923 | | | | | | N/A | | |
(1)
The table reflects cash bonuses earned, but not paid, in each quarter of 2022.2023. Cash bonuses under the 2010 Bonus Plan are typically paid in the quarter following the quarter in which the bonus is earned.
(2)
No cash bonus was achieved for the fourth quarter as the Quarterly Profit Target, Reduced/Adjusted Profit Targets or Annual Profit Threshold Target as applicable, was not met.
(3)
Each of Mr. Johnston retiredKuipers, Ms. Mellon and Mr. Seidelmann separated from his position with the Company effective July 2, 2022in August 2023, October 2023 and as such wasNovember 2023, respectively, and were not eligible forto receive a bonus infor the fourth quarter. As part of Mr. Kuipers’ separation agreement, Mr. Kuipers was eligible for and received a pro-rated third quarter 2023 bonus payment, determined based on achievement of the Corporate Target and his individual performance goals and pro-rated for his service to the Company during the third or fourth quarter 2022.quarter.
Overachievement Bonus. The Compensation Committee determined that the Company did not meet any ofeither the First BookingsEBITDA Overachievement or First Advanced Services Bookings Overachievement, First Advanced Services Recurring Revenue Overachievement or Strategic Acquisition TargetsTarget in the fourth quarter of 2022.2023, however, the Compensation Committee determined that the Company exceeded the First Free Cash Flow Overachievement Target in the fourth quarter of 2023 by approximately $60,600,000 and therefore the then-serving NEOs would receive an additional bonus equal to approximately 20% of their respective Incentive Targets. As a result, the then-serving NEOs did notwere entitled to receive any overachievement bonus payments.payments equal to a total of approximately 20% of their respective Incentive Targets multiplied
38
against their respective actual earnings for the period in which they were participants in the 2010 Bonus Plan for the 2023 performance year.
The following table sets forth the actual fourth quarter 2023 bonus amounts for each then-serving NEO associated with the EBITDA Overachievement Target, Advanced Services Revenue Overachievement Target and the Free Cash Flow Overachievement Target:
| Named Executive Officer | | | EBITDA Overachievement Bonus ($) | | | Advanced Services Revenues Overachievement Bonus ($) | | | Free Cash Flow Overachievement Bonus ($) | | | Total Overachievement Bonus ($) | | ||||||||||||
| Randall A. Lipps | | | | | 0 | | | | | | 0 | | | | | | 203,275 | | | | | | 203,275 | | |
| Nchacha E. Etta | | | | | 0 | | | | | | 0 | | | | | | 46,696 | | | | | | 46,696 | | |
| Corey J. Manley | | | | | 0 | | | | | | 0 | | | | | | 69,646 | | | | | | 69,646 | | |
As noted above each of Mr. Kuipers, Ms. Mellon and Mr. Seidelmann separated from the Company in August 2023, October 2023 and November 2023, respectively, and were not eligible to receive the Company’s Overachievement Bonus.
Total Cash Bonuses Earned. The following table sets forth, for each participating NEO, the Incentive Target, earned incentive bonuses, the percentage of total Incentive Target earned and the total cash bonus earned (including overachievement bonus payments) for 2022:2023:
| Named Executive Officer | | | 2022 Incentive Target(1) ($) | | | Total Cash Bonus Earned for Achievement of Individual Targets ($) | | | % of Total 2022 Incentive Target Earned (%) | | | Total Cash Bonus Earned(2) ($) | | ||||||||||||
| Randall A. Lipps | | | | | 1,005,606 | | | | | | 349,640(3) | | | | | | 35 | | | | | | 349,640(3) | | |
| Peter J. Kuipers | | | | | 421,013 | | | | | | 152,420 | | | | | | 36 | | | | | | 152,420 | | |
| Scott P. Seidelmann | | | | | 407,029 | | | | | | 147,356 | | | | | | 36 | | | | | | 147,356 | | |
| Christine Mellon | | | | | 335,077 | | | | | | 112,846 | | | | | | 34 | | | | | | 112,846 | | |
Dan S. Johnston(4) | | | | | 173,250 | | | | | | 126,606 | | | | | | 73 | | | | | | 126,606 | | |
| Named Executive Officer | | | 2023 Incentive Target ($) | | | Total Cash Bonus Earned for Achievement of Individual Targets(1) ($) | | | % of Total 2023 Incentive Target Earned(1) (%) | | | Total Cash Bonus Earned(2) ($) | | ||||||||||||
| Randall A. Lipps | | | | | 1,016,375 | | | | | | 781,826 | | | | | | 77 | | | | | | 985,102 | | |
| Nchacha E. Etta | | | | | 213,750(3) | | | | | | 115,096 | | | | | | 54 | | | | | | 161,792 | | |
| Corey J. Manley | | | | | 320,192(4) | | | | | | 237,115 | | | | | | 74 | | | | | | 306,761 | | |
Peter J. Kuipers(5) | | | | | 265,132 | | | | | | 265,132 | | | | | | 100 | | | | | | 265,132 | | |
Scott P. Seidelmann(5) | | | | | 316,454 | | | | | | 316,454 | | | | | | 100 | | | | | | 316,454 | | |
Christine Mellon(5) | | | | | 276,923 | | | | | | 276,923 | | | | | | 100 | | | | | | 276,923 | | |
(1)
The total cash bonus earned for achievement of Individual Targets, and percentage of total 2023 Incentive Target earned, do not take into account any amounts contained in this table differ from the amounts as set forth in “Grant of Plan-Based Awards in Fiscal 2022” belowearned due to portionsachievement of the 2022 Incentive Targets for the first and second quarters of 2022 for each NEO being based on the NEO’s annual base salary for 2021.EBITDA Overachievement Target, Advanced Services Revenues Overachievement Target or Free Cash Flow Overachievement Target.
(2)
The total cash bonus earned includes the cash bonus if any, earned from achievement of Corporate Threshold Targets and Individual Targets. As previously disclosed, our NEOs did not earn any overachievement bonus in fiscal 2022.Targets, as well as the Free Cash Flow Overachievement Target.
(3)
(4)
The 2023 Incentive Target for Mr. Johnston retiredManley is a blended amount based upon his base salary in effect in 2023, taking into account his base salary increase and bonus target change as of June 5, 2023.
(5)
Mr. Kuipers, Mr. Seidelmann and Ms. Mellon were not eligible for the fourth quarter bonus due to their separations from his position with the Company effective July 2, 2022.during 2023. Each of their bonuses is reported at 100%, reflecting the achievement of the performance goals during the first three quarters of the year. As part of Mr. Kuipers’ separation agreement, he was eligible for and received a pro-rated third quarter bonus payment, determined based on achievement of the Corporate Target and his individual performance goals and pro-rated for his service to the Company during the third quarter.
Equity Compensation
Overview. Long-term equity-based compensation is intended to incentivize and retain our executive officers through the tying of our long-term financial performance to the executive officer’s financial success
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using a mix of time-based vesting and performance-based vesting. We believe that the combination of both time-based vesting and performance-based vesting, with shared financial success are long-term incentives that motivate our executive officers to grow revenues and earnings, enhance stockholder value and align the interests of our stockholders and executives over the long-term. Equity-based compensation is awarded in two components: (i) RSUs that vest over time if the executive remains employed with the Company and (ii) PSUs that initially vest only upon the achievement of the Company TSR index performance metric noted above,described below, and provided thosethe performance metrics aremetric is achieved, thereafter vest over time if the executive remains employed with the Company.
Upon commencement of employment or appointment, executives generally are awarded initial time-based equity grants carrying a service-based vesting condition, with 25% of the shares generallysubject to the grant vesting
•
competitive equity compensation practices for comparable positions identified in the 20222023 Peer Group Report;
the executive’s level of responsibility and duties;
•
comparison to grant levels of other executive officers;
•
individual executive officer performance;
•
corporate performance;
•
the executive’s prior experience, experience within his or her specific job and breadth of knowledge; and
•
corporate objectives for share-based compensation charges and earnings dilution.
On an annual basis, management and the Compensation Committee establish a maximum aggregate share-based compensation expense for the executive awards, taking into consideration anticipated share-based compensation expenses for equity grants to other employees. The Compensation Committee balances this percentile objective with its commitment to stay within management’s share-based expense objective in finalizing the aggregate and individual awards. In determining equity compensation for the executive officers, the Compensation Committee reviews the equity compensation grants over a three-year period against a three-year rolling benchmark identified in the 20222023 Peer Group Report with an objective of making awards between the 50th and 75th percentiles (on a value basis) over the three-year period.
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In addition to the factors discussed above, with respect to the size of the awards on a year-over-year basis, the Compensation Committee also takes into consideration the following factors when determining the size and mix of the equity grants:
•
the combined size of the awards over a three-year period;
•
the effect of the awards on dilution;
•
our total equity compensation costs relative to total expenses; and
•
competitive equity compensation practices for comparable positions identified in the 20222023 Peer Group Report.
As in past years when setting the level of grants, the Compensation Committee took into consideration, to the extent applicable, corporate performance and individual contributions in 2021.2022. The Compensation Committee also reviewed, assessed and took into consideration competitive equity compensation practices for comparable positions identified in the 20222023 Peer Group Report. This input, and the Compensation Committee’s desire to maintain equity compensation expense within management’s established objective, resulted in the Compensation Committee setting a benchmark percentile for our total equity awards of between the 50th and 75th percentile as compared to the peer group in the RadfordExequity Report, including performance-based equity compensation elements.
With respect to our NEOs, the Compensation Committee set ratios for 20222023 equity awards of approximately 50% PSUs and 50% RSUs. The ratio of time-based and performance-based vesting was set based on the targeted award size, the retention and incentive aspects of each type of award as well as an analysis of competitive market trends amongst our 2023 peer group. For our CEO, the ratio of RSUs and PSUs was generally based on an estimation of the value determined utilizing the closing price of our common stock on the grant date. However, the actual numbers of PSUs and RSUs was set based on the grant date fair value, and a trailing average of the closing price of the Company’s common stock on the Nasdaq Global Select Market for the 20 trading days immediately prior to the grant date (the “Conversion Price”), dividing the grant date fair value by the Conversion Price, respectively. As a result, based on the application of ASC Topic 718, the amounts reported for our NEOs in the 2022 Summary Compensation Table below deviate from the targeted value approved by the Compensation Committee.
As the Compensation Committee determined to issue a fixed number of shares using an assumed price per share, based on the application of ASC Topic 718, the amounts reported for our NEOs in the 2023 Summary Compensation Table below deviate from the targeted value approved by the Compensation Committee. The 20222023 Summary Compensation Table below reflects the grant date fair values of the various awards granted to each NEO calculated in accordance with ASC Topic 718 as follows: (i) the closing price of our common stock on June 1, 2023 was $133.83,$72.92, the value used to determine the grant date fair value of each RSU, and (ii) the value for one PSU share using Monte Carlo methodology was $153.62.$122.29. With respect to Mr. Kuipers, Mr. Seidelmann and Ms. Mellon, the amounts reported in the 2023 Summary Compensation Table below represent the incremental fair value associated with the modification of their equity awards to provide for accelerated vesting as of their separation dates of all of their outstanding RSUs and outstanding and earned PSUs that would have otherwise vested within 12 months following their separation dates.
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The following table sets forth the equity awards granted by the Compensation Committee under the 2009 Equity Incentive Plan to our participating NEOs in February 2022 (RSUs) and March 2022 (PSUs) (February 2022 with respect to Mr. Lipps):June 2023:
| Named Executive Officer | | | Number of RSUs(1) | | | Number of PSUs(2) | | ||||||
| Randall A. Lipps | | | | | 23,305 | | | | | | 23,305 | | |
| Peter J. Kuipers | | | | | 9,988 | | | | | | 9,764 | | |
| Scott P. Seidelmann | | | | | 9,988 | | | | | | 9,764 | | |
| Christine M. Mellon | | | | | 4,994 | | | | | | 4,882 | | |
| Dan S. Johnston | | | | | 4,994 | | | | | | 4,882 | | |
| Named Executive Officer | | | Number of RSUs(1) | | | Number of PSUs(2) | | ||||||
| Randall A. Lipps | | | | | 47,000 | | | | | | 47,000(3) | | |
| Nchacha E. Etta | | | | | 39,000(4) | | | | | | 15,000 | | |
| Corey J. Manley | | | | | 12,000 | | | | | | 12,000 | | |
(1)
RSUs were granted pursuant to the 2009 Equity Incentive Plan. The right to receive the shares underlying the RSU grant vest as to 1/8th37.5% of the shares subject to the grant on August 15, 2024, with the remaining 62.5% of shares subject to each grant vesting in 10 equal semi-annual installmentsquarterly increments on each of February 15, May 15, August 15 and November 15 over four years commencing on June 15, 2022.the three following years. Vesting is contingent upon continued service.
(2)
PSUs were granted pursuant to the 2009 Equity Incentive Plan. The right to receive the shares underlying the PSU grant vest according to the description set forth in “Performance-Based Restricted Stock Unit Awards” below. Because the Company’s total stockholder return was approximately at the 29th34th percentile of the Index, none of the target number of shares subject to the awards granted are eligible for vesting. Based on this, our NEOs did not earn any of the 20222023 PSUs.
(3)
Subsequent to the initial grant of PSUs, in July 2023, Mr. Lipps and the Compensation Committee agreed to reduce Mr. Lipps’ grant by 9,000 shares such that Mr. Lipps’ final target number of PSU shares for 2023 was 38,000.
(4)
In connection with joining the Company, Mr. Etta was awarded a sign-on grant of 24,000 RSUs. The Board has historically provided sign-on grants to further align new executive and shareholder interests and to induce the candidate to accept employment with the Company. The right to receive the shares underlying the grant of 24,000 RSUs vest as to 25% of the shares subject to the grant on August 15, 2024, with the remaining 75% of the shares subject to the grant vesting in equal quarterly increments on November 15, February 15, May 15 and August 15 over the three following years. Vesting is contingent upon continued service. As part of the annual equity grant, Mr. Etta received 15,000 RSUs and 15,000 PSUs, as reflected in the table above.
As previously noted, in connection with their respective departures, none of Mr. Kuipers, Ms. Mellon or Mr. Seidelmann was granted long-term incentive compensation in fiscal 2023.
Performance-Based Restricted Stock Unit Awards. The number of PSUs that vest at the end of the performance period depends on the percentile ranking of the total shareholder return for Omnicell stock over the performance period relative to the total shareholder return of each of the other companies in the NASDAQ Health Care Index. Stock price appreciation is calculated based on the trailing 20-day average stock price just prior to the first trading day of March in the grant year, compared to the trailing 20-day average stock price just prior to the first trading day of March in the year subsequent to the grant year.
The following table shows the percent of PSU awards eligible for further time-based vesting based on our percentile placement:
| Percentile Placement of Our Total Stockholder Return | | | Percentage of Target PSUs Awarded | |
| Below the 35th percentile | | | 0% | |
| At or above the 35th percentile, but below the 50th percentile | | | 50 – 99% | |
| At or above the 50th percentile, but below the 90th percentile | | | 100 – 199% | |
| At or above the 90th percentile | | | 200% | |
On March 6, 2023,11, 2024, the Compensation Committee calculated that the Company’s total stockholder return based on the calculations above was at approximately the 29th34th percentile of the Index. Therefore, none of the target shares subject to the PSUs granted in March 2022 (May 2022 for Mr. Manley)June 2023 are eligible for vesting and the 20222023 PSUs were forfeited.
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Employment Arrangements.
Each of our continuing executive officers is an “at-will employee.” We have entered into written employment agreements with our NEOs other than Mr. Lipps. The primary elements covered in these employment agreements include: initial base salary, equity awards, eligibility to participate in the quarterly executive bonus plan, and inclusion in the executive change of controlseverance plan, as well as providingwhich provides for certain severance benefits as further described under the section titled “Severance and Change of Control Arrangements.”
Nchacha E. Etta Compensation.Mr. ManleyEtta joined Omnicell in April 2021June 2023 as Vice President and General Counsel. He subsequently was appointed SeniorExecutive Vice President and Chief Legal OfficerFinancial Officer. Taking into account various factors, including market data gathered by Exequity for comparable positions based on our 2023 peer group, the scope of Mr. Etta’s role, his qualifications and entered into an employment agreement with Omnicell effective May 11, 2022. Theprior experience, other input provided by Exequity and the recommendation of our CEO, the Compensation Committee determined the annual base salary, performance-based bonus target and long-term equity incentive compensation for Mr. Manley, taking into consideration various factors, including market data gathered by Radford for comparable positions based on our 2022 peer group, the scope of Mr. Manley’s role, his qualifications and prior experience, other input provided by Radford and the recommendation of our CEO.Etta. The primary elements covered in Mr. Manley’sEtta’s employment agreement include:consist of: (i) a base salary of $360,000;$475,000; (ii) an equity award with a targeted grant date fair value of $900,000$4,050,000 composed of: (i)of a one-time equity award of 24,000 RSUs (50%) (4,012and Mr. Etta’s 2023 annual equity award of 15,000 RSUs usingand 15,000 PSUs, each with the average closing pricevesting described above; (iv) cash sign-on bonus of our common stock as quoted on the Nasdaq Global Select Market for the 20 trading days immediately prior to the grant date of $112.17) that vest in equal increments every six months on June 15 and December 15 over a four-year vesting period and (ii) PSUs (50%) (3,640 PSUs reflecting the value for one PSU share using Monte Carlo methodology of $123.64), in an effort to focus on performance metrics and increase retentive compensation, 25% of the earned PSUs, if any, vest immediately on the date that the Compensation Committee formally certifies the Company’s performance and achievement of related performance metrics, as described above, and the remaining earned award, if any, vests in six equal increments semi-annually over the subsequent three-year period;$50,000; (v) eligibility to participate in the Company’s quarterly executive bonus plan; and (vi) inclusion in the executive change of control plan. Mr. Manley’s employment agreement also provides for certain severance benefits,plan, as described under the section titled “Severance and Change of Control Arrangements.” For 2022, Mr. Manley received a bonus of $47,635 as a bonus under the Company’s bonus program, as disclosed in the 2022 Summary Compensation Table.
Other Benefits and Compensation Practices.
Director and Executive Officer Stock Ownership Guidelines. Effective May 18, 2022, we adopted amendmentsPursuant to our Stock Ownership Guidelines for all Board members and executive officers. Pursuant to thestock ownership guidelines, each Board member and executive officer shouldare expected to beneficially own not less than the following amount of our common stock (as a multiple of their respective compensation):
| | Board Members | | | 5x annual cash retainer | |
| | Chief Executive Officer | | | 6x annual base salary | |
| | Other Executive Officers | | | 3x annual base salary | |
Individuals have five years from becoming subject to these guidelines to attain the ownership levels. If an individual becomes subject to a greater ownership amount, due to a promotion or an increase in base salary or due to revisions to these guidelines, the individual is expected to meet such higher ownership amount within the later of the original period or three years from the effective date of the promotion, base salary change or revision.
As of May 2022,2023, each of our then-serving named executive officersNEOs satisfied our stock ownership guidelines. Mr. Manleyguidelines or was appointed Senior Vice President and Chief Legal Officer in May 2022 and has until May 2027 to meet the stock ownership requirements.five-year phase-in period.
Severance and Change of Control Benefits. Our executive officers are entitledAfter considering the input of Exequity as well as the practices of the companies in our 2023 peer group, and to certain severancefurther align our approach to retentive compensation with market practice, on July 30, 2023, the Compensation Committee approved the Omnicell, Inc. Executive Severance Plan (the “Executive Severance Plan”), which superseded the Omnicell, Inc. Amended and double-trigger change of control benefits pursuant to our 2006Restated Severance Benefit Plan and the Executive Change of Control Benefit Plan, with respect to the Company’s executive officers. The Plan provides severance benefits to certain key management personnel of the Company, and 2007its subsidiaries, including those with the title of Executive Vice President or higher whose employment is terminated (i) by the Company for any reason other than for cause, death or disability; or (ii) during the 24-month period following the occurrence of a change in control (as defined in the Plan) of the Company or by the covered executive for good reason. Each of the NEOs were designated as participants in the Plan.
In connection with their terminations by the Company without cause, each of Mr. Kuipers, Ms. Mellon and Mr. Seidelmann received benefits under the terms of the Executive Severance Benefit Plan. In addition, in connection with their terminations of employment, the Compensation Committee approved the accelerated vesting of each of their outstanding RSUs and outstanding and earned PSU that would have otherwise vested within 12 months following their respective separation dates, and in the case of Messrs. Kuipers and Seidelmann, the extension of the period within which each could exercise his vested and outstanding stock
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options until the earlier of (i) the 24-month anniversary of such separation date and (ii) the normal expiration date of the applicable stock option.
The terms of the 2006 Executive Change of Control Benefit Plan and the 2007 Severance Benefit Plan are described in more detail below in the sections entitled “Severance and Change of Control Arrangements” and “Potential Payments Upon Termination or Change of Control.”
Other Benefits. We believe that establishing a competitive benefit package consistent with companies with which we compete for employees is an important factor in attracting and retaining talented employees. Thus, we provide our executive officers with employee benefits on the same basis as offered to our full time non-executive employees, including health and dental insurance, supplemental life insurance, short- and long-term disability and a 401(k) plan.
Perquisites. The Compensation Committee believes that perquisites and other personal benefits should be modest and reasonable and consistent with our desire to enhance the executive’s work effectiveness and to otherwise facilitate a balance of his or her personal and work requirement trade-offs. The Compensation Committee periodically reviews the levels of perquisites and other personal benefits provided to the executive officers. Weofficers and, from time to time, may modify the perquisites and personal benefits provided to better align with market practice. Based on market data, in 2023 the Compensation Committee determined to provide each executive officer with an annual perquisite allowance of $6,000, or in the case of($40,000 for Mr. Lipps an annual allowance of $40,000. The allowance may be used by the executive officer in his or her discretion for cybersecurity protection, health club memberships, or any other appropriate perquisite, and will not be grossed up for tax purposes. In addition, we pay up to $16,000 per year for each other executive officer (excluding Mr. Lipps)officer) for comprehensive financial counseling and tax planning services.services, as well as an additional reimbursement of up to $6,000 every three years for legal advice related to estate planning, and reimbursement of up to $6,000 annually for a comprehensive annual physical. We believe that a perquisite allowance and provision of comprehensive financial counseling and tax planning services allowsthese perquisites allow us to maintain the competitiveness of our compensation package and allows our executive officers to better focus on running the business. By not adding these perquisites to salary, we do not increase our bonus payouts, cost of severance or other elements of pay.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with management the CD&A contained in this proxy statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the CD&A be included in this proxy statement and incorporated into the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.2023.
COMPENSATION COMMITTEE
Joanne B. Bauer, Chair
Vance B. Moore
Mark W. Parrish
Vance B. Moore
Mark W. Parrish
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The following table shows compensation awarded to, paid to or earned by the NEOs for the fiscal years ended December 31, 20222023 and, to the extent required by SEC disclosure rules, 20212022 and 2020:2021:
| Named Executive Officer | | Year | | Salary ($) | | Bonus | | Stock Awards ($)(1) | | Option Awards ($)(1) | | Non-Equity Incentive Plan Compensation ($)(2) | | All Other Compensation ($) | | Total ($) | | | Year | | Salary ($) | | Bonus | | Stock Awards ($)(1) | | Option Awards ($) | | Non-Equity Incentive Plan Compensation ($)(2) | | All Other Compensation ($) | | Total ($) | | Adjusted Total Compensation ($)(3) | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Randall A. Lipps Chairman, President and Chief Executive Officer | | | | | 2022 | | | | | 804,485 | | | | | — | | | | | 6,699,022 | | | | | — | | | | | 349,640 | | | | | 49,250(4) | | | | | 7,902,397 | | | | | | | 2023 | | | | | 813,100 | | | | | — | | | | | 9,174,870(4)(5) | | | | | — | | | | | 985,102 | | | | | 49,000(6) | | | | | 11,022,072 | | | | | 9,921,462 | | | |||||||||||||||
| | | | 2021 | | | | | 768,123 | | | | | — | | | | | 6,001,550 | | | | | — | | | | | 1,624,740 | | | | | 43,000 | | | | | 8,437,413 | | | | | | 2022 | | | | | 804,485 | | | | | — | | | | | 6,699,022 | | | | | — | | | | | 349,640 | | | | | 49,250 | | | | | 7,902,397 | | | | | — | | | ||||||||||||||||||
| | | | 2020 | | | | | 721,000 | | | | | — | | | | | 3,527,148 | | | | | 2,523,671 | | | | | 1,216,689 | | | | | 40,000 | | | | | 8,028,508 | | | | | | 2021 | | | | | 768,123 | | | | | — | | | | | 6,001,550 | | | | | — | | | | | 1,624,740 | | | | | 43,000 | | | | | 8,437,413 | | | | | — | | | ||||||||||||||||||
Peter J. Kuipers Executive Vice President, Chief Financial Officer | | | | | 2022 | | | | | 467,792 | | | | | — | | | | | 2,836,640 | | | | | — | | | | | 152,420 | | | | | 73,861(5) | | | | | 3,530,713 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2021 | | | | | 455,654 | | | | | — | | | | | 2,999,987 | | | | | — | | | | | 697,151 | | | | | 23,334 | | | | | 4,176,126 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2020 | | | | | 435,000 | | | | | — | | | | | 1,088,241 | | | | | 719,356 | | | | | 528,526 | | | | | — | | | | | 2,771,123 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Scott P. Seidelmann Executive Vice President, Chief Commercial Officer | | | | | 2022 | | | | | 452,254 | | | | | — | | | | | 2,836,640 | | | | | — | | | | | 147,356 | | | | | 66,267(5) | | | | | 3,502,517 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2021 | | | | | 440,469 | | | | | 35,000 | | | | | 2,999,987 | | | | | — | | | | | 673,918 | | | | | 19,959 | | | | | 4,169,333 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2020 | | | | | 420,000 | | | | | — | | | | | 1,088,241 | | | | | 719,356 | | | | | 510,300 | | | | | 81,000 | | | | | 2,818,897 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christine Mellon Executive Vice President, Chief Administrative & People Officer | | | | | 2022 | | | | | 372,308 | | | | | — | | | | | 1,418,320 | | | | | — | | | | | 112,846 | | | | | 46,212(5) | | | | | 1,949,686 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2021 | | | | | 281,154 | | | | | 17,654 | | | | | 1,999,901 | | | | | — | | | | | 412,513 | | | | | 20,125 | | | | | 2,731,347 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corey J. Manley (3) Senior Vice President, Chief Legal Officer | | | | 2022 | | | | | 330,385 | | | | | — | | | | | 886,997 | | | | | — | | | | | 47,635 | | | | | 38,000(6) | | | | | 1,303,017 | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dan S. Johnston former, Executive Vice President, Chief Legal and Administrative Officer | | | | | 2022 | | | | | 207,308 | | | | | — | | | | | 1,418,320 | | | | | — | | | | | 126,606 | | | | | 66,325(7) | | | | | 1,818,559 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2021 | | | | | 373,654 | | | | | — | | | | | 1,499,993 | | | | | — | | | | | 549,580 | | | | | 23,334 | | | | | 2,446,561 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2020 | | | | | 350,000 | | | | | — | | | | | 725,527 | | | | | 479,524 | | | | | 425,250 | | | | | — | | | | | 1,980,301 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nchacha E. Etta (7) Executive Vice President, Chief Financial Officer | | | | 2023 | | | | | 259,423 | | | | | 50,000(8) | | | | | 4,678,230(4)(9) | | | | | — | | | | | 161,792 | | | | | 9,000(10) | | | | | 5,158,445 | | | | | — | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corey J. Manley Executive Vice President, Chief Legal and Administrative Officer | | | | | 2023 | | | | | 386,923 | | | | | — | | | | | 2,342,520(4) | | | | | — | | | | | 306,761 | | | | | 21,642(11) | | | | | 3,057,846 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2022 | | | | | 330,385 | | | | | — | | | | | 886,997 | | | | | — | | | | | 47,635 | | | | | 38,000 | | | | | 1,303,017 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Peter J. Kuipers Former Executive Vice President, Chief Financial Officer | | | | | 2023 | | | | | 294,591 | | | | | — | | | | | 758,642(12) | | | | | 423,349(13) | | | | | 265,132 | | | | | 971,738(14) | | | | | 2,713,452 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2022 | | | | | 467,792 | | | | | — | | | | | 2,836,640 | | | | | — | | | | | 152,420 | | | | | 73,861 | | | | | 3,530,713 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2021 | | | | | 455,654 | | | | | — | | | | | 2,999,987 | | | | | — | | | | | 697,151 | | | | | 23,334 | | | | | 4,176,126 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Scott P. Seidelmann Former Executive Vice President, Chief Commercial Officer | | | | | 2023 | | | | | 404,358 | | | | | — | | | | | 355,387(12) | | | | | 156,071(13) | | | | | 316,454 | | | | | 936,974(15) | | | | | 2,169,244 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2022 | | | | | 452,254 | | | | | — | | | | | 2,836,640 | | | | | — | | | | | 147,356 | | | | | 66,267 | | | | | 3,502,517 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2021 | | | | | 440,469 | | | | | 35,000 | | | | | 2,999,987 | | | | | — | | | | | 673,918 | | | | | 19,959 | | | | | 4,169,333 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christine Mellon Former Executive Vice President, Chief Administrative & People Officer | | | | | 2023 | | | | | 315,385 | | | | | — | | | | | 286,269(12) | | | | | — | | | | | 276,923 | | | | | 826,120(16) | | | | | 1,704,697 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2022 | | | | | 372,308 | | | | | — | | | | | 1,418,320 | | | | | — | | | | | 112,846 | | | | | 46,212 | | | | | 1,949,686 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | 2021 | | | | | 281,154 | | | | | 17,654 | | | | | 1,999,901 | | | | | — | | | | | 412,513 | | | | | 20,125 | | | | | 2,731,347 | | | | | — | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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