UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

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

Amgen Inc.AMGEN INC.

(Name of Registrant as Specified Inin Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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x
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.0-11

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 (4)Robert A. Bradway

Date Filed:Chairman of the Board,

Chief Executive Officer and President

LOGO

Amgen Inc.

One Amgen Center Drive

Thousand Oaks, CA 91320-1799

April 3, 2014


LOGO

April 12, 2012

DEAR STOCKHOLDER:Dear Stockholder:

You are invited to attend the 20122014 Annual Meeting of Stockholders, or Annual Meeting, of Amgen Inc. to be held on Wednesday,Thursday, May 23, 2012,15, 2014, at 11:00 A.M., local time, at the Four Seasons Hotel Westlake Village, Two Dole Drive, Westlake Village, California 91362.

At this year’s Annual Meeting you will be asked to: (i) elect fourteen12 directors to serve for the ensuing year; (ii) ratify the selection of our independent registered public accountants; (iii) hold an advisory vote to approve our executive compensation; (iv) approve the proposed amendment to Amgen’s Restated Certificate of Incorporation, as amended, to authorizeconsider one stockholder action by written consent; (v) consider four stockholder proposals,proposal, if properly presented at the Annual Meeting and (vi)(v) transact such other business as may properly come before the Annual Meeting or any continuation, postponement or adjournment thereof. The accompanying Notice of Annual Meeting of Stockholders and proxy statement describe these matters. We urge you to read this information carefully.

The Board of Directors unanimously believes that the election of its nominees for directors, the ratification of its selection of independent registered public accountants and the advisory vote to approve our executive compensation and the amendment to Amgen’s Restated Certificate of Incorporation, as amended, are advisable and in Amgen’sthe best interests of Amgen and that of itsour stockholders. Accordingly, the Board of Directors recommends a vote FOR the election of the fourteen12 nominees for directors, FOR the ratification of the selection of Ernst & Young LLP as our independent registered public accountants and FOR the advisory vote to approve our executive compensation and FOR the approval of the proposed amendment to Amgen’s Restated Certificate of Incorporation, as amended.compensation. The Board of Directors unanimously believes that the stockholder proposals areproposal is not in the best interests of Amgen and its stockholders, and, accordingly, recommends a vote AGAINST the stockholder proposals.proposal. In addition to the business to be transacted as described above, management will speak on our developments of the past year and respond to comments and questions of general interest to stockholders.

If you plan to attend the Annual Meeting, you will need an admittance ticket orand proof of ownership of our Common Stock as of the close of business on March 26, 2012.17, 2014. Please read “INFORMATION CONCERNING VOTING AND SOLICITATION—Attendance at the Annual Meeting” in the accompanying proxy statement.

It is important that your shares be represented and voted whether or not you plan to attend the Annual Meeting in person. We are pleased to use the Securities and Exchange Commission rule that permits companies to furnish proxy materials to certain of our stockholders over the Internet. If you are viewing the proxy statement on the Internet, you may grantsubmit your proxy electronically via the Internet by following the instructions on the Notice Regarding the Availability of Proxy Materials previously mailed to you and the instructions listed on the Internet site. If you have received a paper copy of the proxy statement and proxy card, you may grant asubmit your proxy to vote your shares by completing and mailing the proxy card enclosed with the proxy statement, or you may grantsubmit your proxy electronically via the Internet or by telephone by following the instructions on the proxy card. If your shares are held in “street name,” which means shares held of record by a broker, bank, trust or other nominee, you should review the Notice Regarding the Availability of Proxy Materials or proxy statement and voting instruction form used by that firm to determine whether and how you will be able to submit your proxy by telephone or over the Internet. Submitting a proxy over the Internet, by telephone or by mailing a proxy card, will ensure your shares are represented at the Annual Meeting. Your vote is important, regardless of the number of shares that you own.

On behalf of the Board of Directors, I thank you for your participation. We look forward to seeing you on May 23.15.

Sincerely,

 

LOGOLOGO

Kevin W. SharerRobert A. Bradway

Chairman of the Board, and

Chief Executive Officer and President


AMGEN INC.Amgen Inc.

One Amgen Center Drive

Thousand Oaks, California 91320-1799

Notice of Annual Meeting of Stockholders

To be Held on May 15, 2014

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 23, 2012

TO THE STOCKHOLDERS OF AMGEN INC.To the Stockholders of Amgen Inc.:

NOTICE IS HEREBY GIVEN that the 20122014 Annual Meeting of Stockholders, or Annual Meeting, of Amgen Inc., a Delaware corporation, will be held on Wednesday,Thursday, May 23, 2012,15, 2014, at 11:00 A.M., local time, at the Four Seasons Hotel Westlake Village, Two Dole Drive, Westlake Village, California 91362, for the following purposes:

 

1.

To elect fourteen12 directors to the Board of Directors of Amgen for a term of office expiring at the 20132015 annual meeting of stockholders. The nominees for election to the Board of Directors are Dr. David Baltimore, Mr. Frank J. Biondi, Jr., Mr. Robert A. Bradway, Mr. François de Carbonnel, Dr. Vance D. Coffman, Mr. Robert A. Eckert, Mr. Greg C. Garland, Dr. Rebecca M. Henderson, Mr. Frank C. Herringer, Dr. Tyler Jacks, Dr. Gilbert S. Omenn, Ms. Judith C. Pelham Admiral J. Paul Reason, USN (Retired), Mr. Leonard D. Schaeffer, Mr. Kevin W. Sharer and Dr. Ronald D. Sugar;

 

2.

To ratify the selection of Ernst & Young LLP as our independent registered public accountants for the fiscal year ending December 31, 2012;2014;

 

3.

To hold an advisory vote to approve our executive compensation;

 

4.

To approve the proposed amendment to Amgen’s Restated Certificate of Incorporation, as amended, to authorize stockholder action by written consent;

5.

To consider fourone stockholder proposals,proposal, if properly presented; and

 

6.5.

To transact such other business as may properly come before the Annual Meeting or any continuation, postponement or adjournment thereof.

The foregoing items of business are more fully described in the proxy statement accompanying this Notice of Annual Meeting of Stockholders.

The Board of Directors has fixed the close of business on March 26, 201217, 2014 as the record date for the determination of stockholders entitled to notice of, and to vote at, this Annual Meeting and any continuation, postponement or adjournment thereof. Whether or not you plan on attending the Annual Meeting, we encourage you to submit your proxy as soon as possible using one of three convenient methods: (i) by accessing the Internet site described in these voting materials or voting instruction form provided to you; (ii) by calling the toll-free number in the voting instruction form provided to you or (iii) by signing, dating and returning any proxy card or instruction form provided to you. By submitting your proxy promptly, you will save the Company the expense of further proxy solicitation.

By Order of the Board of Directors

 

LOGO

David J. Scott

Secretary

Thousand Oaks, California

April 12, 20123, 2014


TABLE OF CONTENTS  

TABLE OF CONTENTSTable of Contents

 

Information Concerning Voting and SolicitationProxy Statement Summary

   1  

Item 1 Election of DirectorsInformation Concerning Voting and Solicitation

   73  

Item 1 — Election of Directors

8
Item 2 — Ratification of Selection of Independent Registered Public Accountants

16

Item 3 Advisory Vote to Approve Our Executive Compensation

   17  

Item 3 — Advisory Vote to Approve Our Executive Compensation

18
Item 4 Approval of Amendment to Our Restated Certificate of Incorporation to Authorize Stockholder Action by Written ConsentProposal

   21  

Item 5 Stockholder Proposals

23

Security Ownership of Directors and Executive Officers

   3124
Security Ownership of Certain Beneficial Owners26
Corporate Governance27
Executive Compensation38  

Security Ownership of Certain Beneficial OwnersCompensation Discussion and Analysis

   3338

Executive Compensation Tables

64

Director Compensation

83  

Corporate GovernanceAudit Matters

   3488  

Executive CompensationAnnual Report and Form 10-K

   4490  

Compensation DiscussionCertain Relationships and AnalysisRelated Transactions

   4490  

Executive Compensation TablesOther Matters

   7192  

Director Compensation

93

Audit Matters

97

Certain Relationships and Related Transactions

98

Annual Report and Form 10-K

99

Other Matters

100

Appendix A: Amgen Inc. Board of Directors Guidelines for Director Qualifications and Evaluations

   A-1  

LOGOï 2014 Proxy Statement


PROXY STATEMENT SUMMARY  

Proxy Statement Summary

This summary contains highlights about our Company and the upcoming 2014 Annual Meeting of Stockholders. This summary does not contain all of the information that you should consider in advance of the meeting and we encourage you to read the entire proxy statement before voting.

2014 Annual Meeting of Stockholders

Date and Time:

Thursday, May 15, 2014 at 11:00 A.M., local time

Appendix B: Proposed AmendmentLocation:

Four Seasons Hotel Westlake Village, Two Dole Drive, Westlake Village, California 91362

Record Date:

March 17, 2014

Mail Date:

We intend to mail the Notice Regarding the Availability of Proxy Materials, or the proxy statement and proxy card, as applicable, on or about April 3, 2014 to our stockholders.

Voting Matters and Board Recommendations

MatterOur Restated CertificateBoard Vote Recommendation

Election of Incorporation12 Nominees to the Board of Directors (page 8)

FOR each Director Nominee

Ratification of Selection of Independent Registered Public Accountants (page 17)

FOR

Advisory Vote to Approve Our Executive Compensation (page 18)

FOR

Stockholder Proposal (page 21)

AGAINST

2013 Performance Highlights

Our stock price increased from $86.20 to $114.08 per share during 2013, with a one-year total shareholder return, or TSR, of 35%, including our dividends, and a three-year TSR of 114%.

We returned $1.4 billion of cash to our stockholders through dividends in 2013. Since the initiation of our first dividend in July 2011, we have raised the dividend three times over the previous quarterly amount by an average of 30% and returned a total of $3 billion of cash to our stockholders through dividends. In addition, we repurchased $0.8 billion of our stock in 2013 for a total return of capital of $2.2 billion to our stockholders.

We grew revenues by 8% over 2012 to $18.7 billion in 2013.

We grew adjusted net income by 14% to $5.8 billion(1) in 2013.

Our year-over-year adjusted earnings per share growth is 17%.(1)

We effectively advanced the pipeline and successfully acquired Onyx Pharmaceuticals, Inc.

(1)

Adjusted net income and adjusted earnings per share are reported and reconciled in our Form 8-K dated as of January 28, 2014.

LOGOï 2014 Proxy Statement1


PROXY STATEMENT SUMMARY  

Executive Compensation Highlights

Each element of direct compensation for our executive officers in 2013 was targeted at the market median of our peer group.

Our equity award pay mix is 80% performance units and 20% time-vested restricted stock units.

Performance units under our long-term incentive performance award program are earned and paid in shares based strictly on our TSR performance as compared to our comparator group (for awards granted in

  B-1

2013 and 2014, the Standard & Poor’s 500) over a three-year performance period.


Annual cash incentive award payments for 2013 were earned based on our financial and operational performance against targets. Financial goals of revenues and adjusted net income were each weighted 30%, and various operational goals relating to “Deliver the Best Pipeline” and “Deliver Strategic Priorities” were each weighted 20%.

AMGEN INC.

One Amgen Center Drive

Thousand Oaks, California 91320-1799Corporate Governance Highlights

 

 

The independent members of our Board of Directors, or Board, elected Vance D. Coffman as our lead independent director with specific and significant duties. We have active participation by all directors, including the 11 independent director nominees. We believe that the current structure of our Board best positions us to benefit from the respective strengths of our Chief Executive Officer, or CEO, and lead independent director. (page 28)

11 of our 12 director nominees (all directors except our CEO) meet the criteria for independence under The NASDAQ Stock Market listing standards and the requirements of the Securities and Exchange Commission. Additionally, all members of the Audit, Compensation and

Management Development, Corporate Responsibility and Compliance and Governance and Nominating Committees are independent. (page 32)

Our independent directors meet privately on a regular basis.

The Amended and Restated Bylaws of Amgen Inc. provide for a majority voting standard for uncontested director elections.

We hold an annual advisory vote to approve our executive compensation. (page 18)

We have significant stock ownership requirements. (page 58)

PROXY STATEMENT2    LOGOï 2014 Proxy Statement


INFORMATION CONCERNING VOTING AND SOLICITATION

Amgen Inc.

One Amgen Center Drive

Thousand Oaks, California 91320-1799

Proxy Statement

Information Concerning Voting and Solicitation

General

The enclosed proxy is solicited on behalf of the Board of Directors, or Board, of Amgen Inc., a Delaware corporation, for use at our 20122014 Annual Meeting of Stockholders, or Annual Meeting, to be held on Wednesday,Thursday, May 23, 2012,15, 2014, at 11:00 A.M., local time, or at any continuation, postponement or adjournment thereof, for the purposes discussed in this proxy statement and in the accompanying Notice of Annual Meeting of Stockholders and any business properly brought before the Annual Meeting. Amgen may also be referred to as the Company, we, us or our in this proxy statement. Proxies are solicited to give all stockholders of record an opportunity to vote on matters properly presented at the Annual Meeting. The Annual Meeting will be held at the Four Seasons Hotel Westlake Village, Two Dole Drive, Westlake Village, California 91362.

Pursuant to the rules adopted by the Securities and Exchange Commission, or SEC, we have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending a Notice Regarding the Availability of Proxy Materials, or Notice, to certain of our stockholders of record, and we are sending a paper copy of the proxy materials and proxy card to other stockholders of record who we believe would prefer receiving such materials in paper form. Brokers and other nominees who hold shares on behalf of beneficial owners will be sending their own similar Notice. Stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to receive a printed set of the proxy materials. Instructions on how to request a printed copy by mail or electronically may be found on the Notice and on the website referred to in the Notice, including an option to request paper copies on an ongoing basis. We intend to make this proxy statement available on the Internet and to mail the Notice, or to mail the proxy statement and proxy card, as applicable, on or about April 12, 20123, 2014 to all stockholders entitled to notice of and to vote at the Annual Meeting.

In this proxy statement when we refer to our fiscal year, we mean the twelve-month period ending December 31 of the stated year (for example, fiscal 2011 is January 1, 2011 through December 31, 2011), unless specifically stated otherwise.

Important Notice Regarding the Availability of Proxy Materials for the 20122014 Stockholder Meeting to Be Held on May 23, 2012.15, 2014.

This proxy statement, our 20112013 annual report and our other proxy materials are available at:www.amstock.com/ProxyServices/www.astproxyportal.com/ast/Amgen. At this website, you will find a complete set of the following proxy materials: notice of 20122014 annual meeting of stockholders; proxy statement; 20112013 annual report to stockholders and form proxy card. You are encouraged to access and review all of the important information contained in the proxy materials before submitting a proxy or voting at the meeting.

What Are You Voting On?

You will be entitled to vote on the following proposals at the Annual Meeting:

 

The election of fourteen12 directors to serve on our Board for a term of office expiring at the 20132015 annual meeting of stockholders;

 

The ratification of the selection of Ernst & Young LLP as our independent registered public accountants for the fiscal year ending December 31, 2012;2014;

The advisory vote to approve our executive compensation;

 

The proposed amendment to our Restated Certificate of Incorporation, as amended, to authorizeOne stockholder action by written consent;proposal, if properly presented; and

 

Four stockholder proposals, ifAny other business as may properly presented.come before the Annual Meeting.

Who Can Vote

The Board has set March 26, 201217, 2014 as the record date for the Annual Meeting. You are entitled to notice and to vote if you were a stockholder of record of our common stock, $.0001

LOGOï 2014 Proxy Statement3


INFORMATION CONCERNING VOTING AND SOLICITATION  

par value per share, or Common Stock, as of the close of business on March 26, 2012.17, 2014. You are entitled to one vote on each proposal for each share of Common Stock you held on the record date. Your shares may be voted at the Annual Meeting only if you are present in person or your shares are represented by a valid proxy.

Difference Between a Stockholder of Record and a “Street Name” Holder

If your shares are registered directly in your name, you are considered the stockholder of record with respect to those shares.

If your shares are held in a stock brokerage account or by a bank, trust or other nominee, then the broker, bank, trust or other nominee is considered to be the stockholder of record with respect to those shares. However, you are still considered to be the beneficial owner of those shares, and your shares are said to be held in “street name.” Street name holders generally cannot submit a proxy or vote their shares directly and must instead instruct the broker, bank, trust or other nominee how to vote their shares using the methods described below.

Shares Outstanding and Quorum

At the close of business on March 26, 2012,17, 2014, there were 782,409,949756,487,286 shares of our Common Stock outstanding and entitled to vote at the Annual Meeting. The presence of a majority of the outstanding shares of our Common Stock entitled to vote constitutes a quorum, which is required to hold and conduct business at the Annual Meeting. Shares are counted as present at the Annual Meeting if:

 

you are present in person at the Annual Meeting; or

 

your shares are represented by a properly authorized and submitted proxy (submitted by mail, by telephone or over the Internet).

If you are a record holder and you submit your proxy, regardless of whether you abstain from voting on one or more matters, your shares will be counted as present at the Annual Meeting for the purpose of determining a quorum. If your shares are held in “street name,” your shares are counted as present for purposes of determining a quorum if your broker, bank, trust or other nominee submits a proxy covering your shares. Your broker, bank, trust or other nominee is entitled to submit a proxy covering your shares as

to certain “routine” matters, even if you have not instructed your broker, bank, trust or other nominee on how to vote on those matters. Please see the subsection “If You Do Not Specify How You Want Your Shares Voted” below. In the absence of a quorum, the Annual Meeting may be adjourned, from time to time, by vote of the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting.

Voting Your Shares

You may vote by attending the Annual Meeting and voting in person or you may vote by submitting a proxy. The method of voting by proxy differs (1) depending on whether you are viewing this proxy statement on the Internet or receiving a paper copy and (2) for shares held as a record holder and shares held in “street name.”

Shares Held as a Record Holder.If you hold your shares of Common Stock as a record holder and you are viewing this proxy statement on the Internet, you may vote by submittingsubmit a proxy over the Internet by following the instructions on the website referred to in the Notice previously mailed to you. You may request paper copies of the proxy statement and proxy card by following the instructions on the Notice. If you hold your shares of

Common Stock as a record holder and you are reviewing a paper copy of this proxy statement, you may vote your shares by submittingsubmit a proxy over the Internet or by telephone by following the instructions on the proxy card, or by completing, dating and signing the proxy card that was included with the proxy statement and promptly returning it in the pre-addressed, postage-paid envelope provided to you.

Shares Held in Street Name.If you hold your shares of Common Stock in street name, you will receive a Notice from your broker, bank, trust or other nominee that includes instructions on how to vote your shares. Your broker, bank, trust or other nominee may allow you to deliver your voting instructions over the Internet and may also permit you to submit your voting instructions by telephone. In addition, you may request paper copies of the proxy statement and proxy card from your broker by following the instructions on the Notice provided by your broker, bank, trust or other nominee.

The Internet and telephone voting facilities will close at 11:59 P.M., Eastern Time, on May 22, 2012.14, 2014. Stockholders who submit a proxy through the Internet or telephone should be aware that they may incur costs to access the Internet or telephone, such as usage charges from telephone companies or Internet service

4    LOGOï 2014 Proxy Statement


INFORMATION CONCERNING VOTING AND SOLICITATION  

providers and that these costs must be borne by the stockholder. Stockholders who submit a proxy by Internet or telephone need not return a proxy card or the form forwarded by your broker, bank, trust or other holder of record by mail.

YOUR VOTE IS VERY IMPORTANT. You should submit your proxy even if you plan to attend the Annual Meeting.

Voting in Person

If you plan to attend the Annual Meeting and wish to vote in person, you may request a ballot at the Annual Meeting. Please note that if your shares are held of record by a broker, bank, trust or other nominee, and you decide to attend and vote at the Annual Meeting, your vote in person at the Annual Meeting will not be effective unless you present a legal proxy, issued in your name from the record holder (your broker, bank, trust or other nominee). Even if you intend to attend the Annual Meeting, we encourage you to submit your proxy to vote your shares in advance of the Annual Meeting. Please see the important instructions and requirements below regarding “Attendance at the Annual Meeting.”

Changing Your Vote

As a stockholder of record, if you vote bysubmit a proxy, you may revoke that proxy or change your vote at any time before it is voted at the Annual Meeting. Stockholders of record may revoke a proxy or change his or her vote prior to the Annual Meeting by (i) delivering a written notice of revocation to the attention of the Secretary of the Company at our principal executive offices at One Amgen Center Drive, Thousand Oaks, California 91320-1799, Mail Stop 38-5-A, (ii) duly submitting a later-dated proxy over the Internet, by mail or by telephone or (iii) attending the Annual Meeting in person and voting in person. Attendance at the Annual Meeting will not, by itself, revoke a proxy.

If your shares are held in the name of a broker, bank, trust or other nominee, you may change your voting instructions by following the instructions of your broker, bank, trust or other nominee.

If You Receive More Than One Proxy Card or Notice

If you receive more than one proxy card or Notice, it means you hold shares that are registered in more than one account. To ensure that all of your shares are voted, sign and return each proxy card or, if you submit a proxy by telephone or the Internet, submit one proxy for each proxy card or Notice you receive.

How Will Your Shares Be Voted

Stockholders of record as of the close of business on March 26, 201217, 2014 are entitled to one vote for each share of our Common Stock held on all matters to be voted upon at the Annual Meeting. All shares entitled to vote and represented by properly submitted proxies received before the polls are closed at the Annual Meeting, and not revoked or superseded, will be voted at the Annual Meeting in accordance with the instructions indicated on those proxies.YOUR VOTE IS VERY IMPORTANT.

If You Do Not Specify How You Want Your Shares Voted

As a stockholder of record, if you submit a signed proxy card or submit your proxy by telephone or Internet and do not specify how you want your shares voted, the proxy holder will vote your shares:

 

FOR the election of the fourteen12 nominees listed in this proxy statement to serve on our Board for a term of office expiring at the 20132015 annual meeting of stockholders;

 

FOR the ratification of the selection of Ernst & Young LLP as our independent registered public accountants for the fiscal year ending December 31, 2012;2014;

 

FOR the advisory vote to approve our executive compensation;

FOR the amendment to our Restated Certificate of Incorporation, as amended, to authorize stockholder action by written consent; and

 

AGAINST the fourone stockholder proposals,proposal, if properly presented.

A “broker non-vote” occurs when a nominee holding shares for a beneficial owner has not received voting instructions from the beneficial owner and the nominee does not have discretionary authority to vote the shares. If you hold your shares in street name and do not provide voting instructions to your broker or other nominee, your shares will be considered to be broker non-votes and will not be voted on any proposal on which your broker or other nominee does not have discretionary authority to vote. Shares that constitute broker non-votes will be counted as present at the Annual Meeting for the purpose of determining a quorum, but will not be considered entitled to vote on the proposal in question. Brokers generally have discretionary authority to vote on the ratification of the selection of Ernst & Young LLP as our independent registered public accountants. Brokers, however, do not have discretionary authority to vote on the election of directors to serve on our Board, the advisory vote to approve our executive compensation the amendment to our Restated Certificate of Incorporation or on any stockholder proposal.proposals.

LOGOï 2014 Proxy Statement5


INFORMATION CONCERNING VOTING AND SOLICITATION  

In their discretion, the proxy holders named in the proxy are authorized to vote on any other matters that may properly come before the Annual Meeting and at any continuation, postponement or adjournment thereof. The Board knows of no other items of business that will be presented for consideration at the Annual Meeting other than those described in this proxy statement. In addition, other than the stockholder proposalsproposal described in this proxy statement, no other stockholder proposal or nomination was received on a timely basis, so no such matters may be brought to a vote at the Annual Meeting.

Counting of Votes

All votes will be tabulated as required by Delaware law, the state of our incorporation, by the inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes. Shares held by persons attending the Annual Meeting but not voting, shares represented by proxies that reflect abstentions as to one or more proposals and broker non-votes will be counted as present for purposes of determining a quorum.

Election of Directors.We have a majority voting standard for the election of directors in an uncontested elections,election, which is generally defined as an election in which the number of nominees does not exceed the number of directors to be elected at the meeting. In the election of directors, you may either vote “for,” “against” or “abstain.”“abstain” for each nominee. Cumulative voting is not permitted. Under our majority voting standard, in uncontested elections of directors, such as this election, each director must be elected by the affirmative vote of a majority of the votes cast by the shares present in person or represented by proxy and entitled to vote. A “majority of the votes cast” means that the number of votes cast “for” a director nominee exceeds the number of votes cast “against” the nominee. For these purposes, abstentions will not count as a vote “for” or “against” a nominee’s election and thus will have no effect in determining whether a director nominee has received a majority of the votes cast. Brokers do not have discretionary authority to vote on this proposal. Broker non-votes will have no effect on the election of directors as brokers are not entitled to vote on this proposal.for or against a nominee without instruction from the beneficial owner. If a director nominee is an incumbent director and does not receive a majority of the votes cast in an uncontested election, that director will continue to serve on the Board as a “holdover” director, but must tender his or her resignation to the Board promptly after certification of the election results

of the stockholder vote. The Governance and Nominating Committee of the Board will then

recommend to the Board whether to accept the resignation or whether other action should be taken. The Board will act on the tendered resignation, taking into account the recommendation of the Governance and Nominating Committee, and the Board’s decision will be publicly disclosed within 90 days after certification of the election results of the stockholder vote. A director who tenders his or her resignation after failing to receive a majority of the votes cast will not participate in the recommendation of the Governance and Nominating Committee or the decision of the Board with respect to his or her resignation.

Ratification of Auditors.The ratification of the selection of Ernst & Young LLP requires the affirmative vote of a majority of the shares present or represented by proxy at the Annual Meeting and entitled to vote on the matter. Abstentions will have the same effect as votes “against” the ratification. Because brokers have discretionary authority to vote on the ratification, we do not expect any broker non-votes in connection with the ratification.

Advisory Vote on Executive Compensation.The approval of the advisory vote on our executive compensation requires the affirmative vote of a majority of the shares present or represented by proxy at the Annual Meeting and entitled to vote on the matter. Abstentions will have the same effect as votes “against” the proposal. Brokers do not have discretionary authority to vote on this proposal. Brokernon-votes, however, will have no effect on the proposal as brokers are not entitled to vote on such proposal in the absence of voting instructions from the beneficial owner.

Amendment to Our Restated Certificate of Incorporation.Stockholder Proposal. The approval of the proposed amendment to our Restated Certificate of Incorporation, as amended, to authorize stockholder action by written consent requires the affirmative vote of the holders of not less than a majority of the outstanding shares of our Common Stock entitled to vote on the matter. In addition, the proposed amendment will be effective only if a Certificate of Amendment to the Restated Certificate of Incorporation, which includes the amendment to the Restated Certificate of Incorporation, as amended, approved by stockholders, is filed with the Secretary of State of the State of Delaware. Abstentions will have the same effect as votes against the proposed amendment to the Restated Certificate of Incorporation. Brokers do not have discretionary authority to vote on this proposal, and broker non-votes will have the same effect as votes against the proposal.

Stockholder Proposals.The approval of each of the stockholder proposals, if properly presented at the Annual Meeting, requires the affirmative vote of a majority of the shares present or represented by proxy at the Annual Meeting and entitled to vote on the matter. Abstentions will have the same effect as votes “against” such proposal. Brokers do not have discretionary authority to vote on these proposals.the proposal. Broker non-votes, therefore, will have no effect on the four stockholder proposalsproposal as brokers are not entitled to vote on such proposalsproposal in the absence of voting instructions from the beneficial owner.

Inspector of Election

All votes will be tabulated by the inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes.

6   ��LOGOï 2014 Proxy Statement


INFORMATION CONCERNING VOTING AND SOLICITATION  

Solicitation of Proxies

We will bear the entire cost of solicitation of proxies, including preparation, assembly and mailing of this proxy statement, the proxy, the Notice and any additional information furnished to stockholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding shares of our Common Stock in their names that are beneficially owned by others to forward to those beneficial owners. We may reimburse persons representing beneficial owners for their costs of forwarding the solicitation materials to the beneficial owners. Original solicitation of proxies may be supplemented by telephone, facsimile, electronic mail or personal solicitation by our directors, officers or staff members. No additional compensation will be paid to our directors, officers or staff members for such services. In addition, we have retained Georgeson Inc.AST Phoenix Advisors to assist in the solicitation of proxies for a fee of approximately $200,000$150,000 plus distribution costs and other costs and expenses. A list of stockholders entitled to vote at the Annual Meeting will be available for examination by any stockholder for any purpose germane to the Annual Meeting during ordinary business hours at our principal

executive offices at One Amgen Center Drive, Thousand Oaks, California, 91320-1799 for the ten days prior to the Annual Meeting and also at the Annual Meeting.

Attendance at the Annual Meeting

To attend the Annual Meeting, you will need an admittance ticket and proof of ownership of our Common Stock as of the close of business on March 26, 2012.17, 2014. If you have received a paper copy of the proxy statement, to receive an admittance ticket you will need to complete and return the postage-paid reply card attached to this proxy statement. If you received electronic delivery of this proxy statement, you will receive an e-mail with instructions for obtaining an admittance ticket. If you are viewing the proxy statement over the Internet, please follow the instructions indicated on the website referred to in the Notice. Each stockholder is entitled to one admittance ticket. Directions to attend the Annual Meeting will be sent with your admittance ticket and are available at the website referred to in the Notice andwww.amstock.com/ProxyServices/Amgen.www.astproxyportal.com/ast/Amgen.

You must bring certain documents with you to be admitted to the Annual Meeting. The purpose of this requirement is to help us verify that you are actually a stockholder of the

Company. Please read the following rules carefully, because they specify the documents that you must bring with you to the Annual Meeting to be admitted. The items that you must bring with you differ depending upon whether or not you were a record holder of the Company’s Common Stock as of the close of business on March 26, 2012.17, 2014. A “record holder” of stock is someone whose shares of stock are registered in his or her name in the records of the Company’s transfer agent. Many stockholders are not record holders because their shares of stock are registered in the name of their broker, bank, trust or other nominee, and the broker, bank, trust or other nominee is the record holder instead.All persons must bring a valid personal photo identification (such as a driver’s license or passport). If you are a record holder, at the Annual Meeting, we will check your name for verification purposes against our list of record holders as of the close of business on March 26, 2012.17, 2014.

If a broker, bank, trust or other nominee was the record holder of your shares of Common Stock as of the close of business on March 26, 2012,17, 2014, then you must also bring to the Annual Meeting:

 

Proof that you owned shares of our Common Stock as of the close of business on March 26, 2012.17, 2014.

If you intend to vote at the Annual Meeting, the executed proxy naming you as the proxy holder, signed by the broker, bank, trust or other nominee who was the record holder of your shares of Common Stock as of the close of business on March 17, 2014.

Examples of proof of ownership include the following: (1) an original or a copy of the voting information form from your bank or broker with your name on it; (2) a letter from your bank or broker stating that you owned shares of our Common Stock as of the close of business on March 26, 201217, 2014 or (3) a brokerage account statement indicating that you owned shares of our Common Stock as of the close of business on March 26, 2012.17, 2014.

If you are a proxy holder for a stockholder of the Company who owned shares of our Common Stock as of the close of business on March 26, 2012,17, 2014, then you must also bring to the Annual Meeting:

 

The executed proxy naming you as the proxy holder, signed by a stockholder of the Company who owned shares of our Common Stock as of the close of business on March 26, 2012.17, 2014.

LOGOï 2014 Proxy Statement7


 ITEM 1 — ELECTION OF DIRECTORS  

ITEMItem 1

ELECTION OF DIRECTORSElection of Directors

Under ourthe Amgen Inc. Restated Certificate of Incorporation as amended, or Certificate of Incorporation, and ourthe Amended and Restated Bylaws of Amgen Inc., the Board of Directors, or Board, has the power to set the number of directors from time to time by resolution. TheOn July 8, 2013, Leonard D. Schaeffer resigned from our Board, has currently fixedand on October 16, 2013, Greg C. Garland was appointed to serve on our Board. Gilbert S. Omenn will not be standing for re-election to the Board at the 2014 Annual Meeting of Stockholders, or Annual Meeting. Effective as of the Annual Meeting, the Board will fix the authorized number of directors at thirteen and increased it to fourteen contingent upon all12. Effective January 1, 2014, the independent members of the nominees for director set forth below beingour Board elected including Dr. Tyler Jacks, a new nominee for director. In October 2011, Robert A. Bradway was appointedVance D. Coffman to serve for another

term as aour lead independent director with specific and significant duties as a result, we currently have thirteen directors in office.discussed under “Corporate Governance.” Based upon the recommendation of our Governance and Nominating Committee, the Board has nominated each of the current directors set forth below to stand for re-election, eachor in the case of whom is currently a director, and Dr. JacksMr. Garland to stand for initial election by our stockholders, in each case for a one-year term expiring at our 20132015 annual meeting of stockholders and until his or her successor is elected and qualified, or until his or her earlier retirement, resignation, disqualification, removal or death.

 

Nominee

 Age  Director
Since
  Audit Governance
and
Nominating
 Executive Compensation
and
Management
Development
 Equity
Award
 Corporate
Responsibility
and
Compliance

Dr. David Baltimore

  74    1999   X X    

Mr. Frank J. Biondi, Jr.

  67    2002   C  X   

Mr. Robert A. Bradway

  49    2011        

Mr. François de Carbonnel

  65    2008   X X    

Dr. Vance D. Coffman

  68    2007    C X X X 

Dr. Rebecca M. Henderson

  51    2009    X    X

Mr. Frank C. Herringer

  69    2004    X X C C 

Dr. Tyler Jacks

  51    n/a        

Dr. Gilbert S. Omenn

  70    1987   X     X

Ms. Judith C. Pelham

  66    1995   X     X

Admiral J. Paul Reason, USN (Retired)

  71    2001      X  X

Mr. Leonard D. Schaeffer

  66    2004     X X  C

Mr. Kevin W. Sharer

  64    1992     C  X 

Dr. Ronald D. Sugar

  63    2010    X  X  
Nominee  Age   Director
Since
   Audit   Governance
and
Nominating
   Executive   Compensation
and
Management
Development
   Equity
Award
   Corporate
Responsibility
and
Compliance
 

David Baltimore

   76     1999     X     X          

Frank J. Biondi, Jr.

   69     2002     C       X     X      

Robert A. Bradway

   51     2011         C       X    

François de Carbonnel

   67     2008     X     X          

Vance D. Coffman

   70     2007       C     X     X     X    

Robert A. Eckert

   59     2012     X             X  

Greg C. Garland

   56     2013     X     X          

Rebecca M. Henderson

   53     2009       X           X  

Frank C. Herringer

   71     2004       X     X     C     C    

Tyler Jacks

   53     2012       X           X  

Judith C. Pelham

   68     1995     X         X      

Ronald D. Sugar

   65     2010       X     X         C  

 

“C”

“C” indicates Chair of the committee.

Vacancies on the Board (including any vacancy created by an increase in the size of the Board) may be filled only by a majority of the directors remaining in office, even though less than a quorum.quorum of the Board. A director elected by the Board to fill a vacancy (including a vacancy created by an increase in the size of the Board) will serve until the next annual meeting of stockholders and until such director’s successor is elected and qualified, or until such director’s earlier retirement, resignation, disqualification, removal or death.

If any nominee should become unavailable for election prior to the 2012 Annual Meeting of Stockholders, or Annual Meeting, an event that currently is not anticipated by the Board, the proxies will be voted in favor of the election of a substitute nominee or nominees proposed by the Board or the number of directors may be reduced accordingly. Each nominee has agreed to serve if elected and the Board has no reason to believe that any nominee will be unable to serve.

8    LOGOï 2014 Proxy Statement


 ITEM 1 — ELECTION OF DIRECTORS  

THE BOARD RECOMMENDS THAT THE STOCKHOLDERSA VOTE “FOR” EACH OF THE NOMINEES NAMED BELOW. PROXIES WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES UNLESS OTHERWISE SPECIFIED.

Set forth below is biographical information for each nominee and a summary of the specific qualifications, attributes, skills and experiences which led our Board to conclude that each nominee should serve on the Board at this time. All of our directors meet the qualifications and skills of our Amgen Inc. Board of Directors Guidelines for Director Qualifications and Evaluations inAppendix A. There are no family relationships among any of our directors or among any of our directors and our executive officers.

DAVID BALTIMOREDavid Baltimore

Dr. 

David Baltimore is President Emeritus and Robert Andrews Millikan Professor of Biology at the California Institute of Technology, or Caltech. He received the Nobel Prize in Medicine as a co-recipient in 1975. Dr. Baltimore has been a director of Regulus Therapeutics Inc., a biopharmaceutical company, since 2008, serving on its Compensation Committee and chairing its Nominating and Governance Committee. Dr. Baltimore was a director of BB Biotech, AG, a Swiss investment company, from 20041994 to March 2011 and served as a director of MedImmune, Inc., a privately-held antibody formulation company, from 2003 to 2007. He has also been a directormember of Regulus Therapeutics Inc., a privately-held biopharmaceutical company, since 2008, andthe board of directors of Immune Design Corp. (formerly Vaccsys), a privately-held vaccine company of which he is a founder, since 2008. Also in 2008, he became a founder of Calimmune, Inc., a privately-held company developing a stem-cell HIV/AIDS therapy, and serves as Chairman of the board of directors.

Dr. Baltimore was President of Caltech from 1997 to 2006. Prior to this, he was a professor at the Massachusetts Institute of Technology, or MIT, and at The Rockefeller University where he also served as the President. During this time he was also the Chairman of the National Institutes of

Health AIDS Vaccine Research Committee, a director and member of the Whitehead Institute for Biomedical Research, and a professor of microbiology and research professor of the American Cancer Society. He was a postdoctoral fellow at MIT and Albert Einstein College of Medicine and on the staff of The Salk Institute for Biological Studies. Dr. Baltimore has been awarded honorary degrees from numerous institutions, including Harvard, Yale and Columbia.

Dr. Baltimore holds leadership roles in a number of scientific and philanthropic non-profit organizations, currently serving as a director and member of the Board of Scientific Counselors of the Broad Institute of MIT and Harvard, a director of the Foundation for Biomedical Research, and a member of the Human Genome Organisation.Organisation and a member of the scientific advisory board of Immune Design Corp.

The Board concluded that Dr. Baltimore should serve on the Board because Dr. Baltimore has spent his career in scientific academia at a number of well-known and highly regarded institutions. This experience provides Dr. Baltimore with extensive scientific knowledge and a deep understanding of our industry and of the research and development activities and operations of our Company.

LOGOROBERT A. BRADWAYï 2014 Proxy Statement9

Mr. Robert A. Bradway has served as a director of the Company since October 2011. Mr. Bradway has been the Company’s President and Chief Operating Officer since May 2010 and will succeed to the role of Chief Executive Officer in May 2012. Mr. Bradway joined the Company in 2006 as Vice President, Operations Strategy and served as Executive Vice President and Chief Financial Officer from April 2007 to May 2010. Prior to joining the Company, he was a Managing Director and Head of International Banking at Morgan Stanley in London since 2001 where he had responsibility for the firm’s banking department and corporate finance activities in Europe and focused on healthcare.


 ITEM 1 — ELECTION OF DIRECTORS  

Mr. Bradway has been a director of Norfolk Southern Corporation, a transportation company, since July 2011, serving on its Audit and Finance Committees.

The Board concluded that Mr. Bradway should serve on the Board due to Mr. Bradway’s knowledge of all aspects of our business, combined with his leadership and management skills having served as our President and Chief Operating Officer and formerly our Chief Financial Officer. During this time, Mr. Bradway provided strong leadership through a variety of challenges and this positions him well to serve as a director and provides the Board with a knowledgeable perspective with regard to the Company’s products and operations.

FRANKFrank J. BIONDIBiondi

Mr. 

Frank J. Biondi, Jr. has served as Senior Managing Director of WaterView Advisors LLC, an investment advisor organization, since 1999. Prior to WaterView Advisors, Mr. Biondi was the Chairman and Chief Executive Officer of Universal Studios, Inc. from 1996 to 1998, the President and Chief Executive Officer of Viacom, Inc. from 1987 to 1996, Executive Vice President of Entertainment Business Sector of The Coca-Cola Company and Chairman and Chief Executive Officer of Coca-Cola Television from 1985 to 1987, Chairman and Chief Executive Officer of Time Inc.’s subsidiary Home Box Office, Inc. from 1982 to 1984, Vice President of Time Inc. from 1978 to 1984 and Chairman and Chief Executive Officer of its subsidiary Home Box Office, Inc. in 1984 and Assistant Treasurer of the Children’s Television Workshop from 1974 to 1978.

Mr. Biondi has been a director of Cablevision Systems Corp., a telecommunications, media and entertainment company, since 2005,2005; Hasbro, Inc., a toy and games company, since 1999,2002, serving on its Compensation and Nominating, Governance and Social Responsibility Committees; Seagate Technology, a manufacturer of hard disk drives, since 2005, serving on its Compensation Committee and chairing its Finance Committee; and RealD Inc., a global licensor of three-dimensional technologies, since July 2010. He2010, serving on

its Audit Committee and chairing its Compensation Committee. Mr. Biondi serves onas the Compensation and Nominating and Governance Committees of Hasbro, on the Audit, Compensation and Finance and Strategic and Financial Transactions Committees of Seagate Technology and on the Compensation and Audit Committeeslead director of RealD. From 2008 until May 2010, Mr. Biondi was a director of Yahoo! Inc., a provider of Internet services, serving on its Compensation Committee. From 2002 to 2008, he was a director of Harrahs Entertainment, Inc., a gaming corporation, serving on its Compensation and Governance Committees, and from 1995 to 2008 he was a director of The Bank of New York Mellon Corporation, an asset management and securities services company, serving on its Compensation and Risk Committees. He has also been a director of Vail Resorts, Inc., a mountain resort operator, and The Seagram Company, a liquor and spirits company.

The Board concluded that Mr. Biondi should serve on the Board due to Mr. Biondi’s experience as chief executive officer of many large, public companies and his current role with WaterView Advisors which provide valuable management and leadership skills, as well as an understanding of the operations and financial results and prospects of our Company. Given his financial and leadership experience, Mr. Biondi has been determined to be an Audit Committee financial expert by our Board.

VANCE D. COFFMANRobert A. Bradway

Dr. Vance D. Coffman

Robert A. Bradway has served as our director since October 2011 and Chairman of the Board since January 1, 2013. Mr. Bradway has been our President since May 2010 and Chief Executive Officer since May 2012. From May 2010 to May 2012, Mr. Bradway served as our Chief Operating Officer. Mr. Bradway joined Amgen in 2006 as Vice President, Operations Strategy and served as Executive Vice President and Chief Financial Officer from April 2007 to May 2010. Prior to joining Amgen, he was a Managing Director at Morgan Stanley in London where he had responsibility for the firm’s banking department and corporate finance activities in Europe and focused on healthcare.

Mr. Bradway has been a director of 3M Company,Norfolk Southern Corporation, a consumer and office products and servicestransportation company, since 2002July 2011, serving on its Audit and he has been a director of Deere & Company, a farm and construction machinery company, since 2004. He serves on the CompensationGovernance and Nominating and Governance Committees of 3M and the Compensation and Corporate Governance Committees of Deere. Dr. Coffman was also director of Bristol-Myers Squibb Company, a pharmaceutical company, and a member of its Audit, Governance and Compliance Committees, from 1998 to 2007.

Dr. Coffman was the Chairman of the Board and Chief Executive Officer of Lockheed Martin Corporation, an aerospace and defense company, from 1998 to 2005, and was ex officio member of all board committees. From 1997 to 1998, he was Vice Chairman of the Board and Chief Executive Officer of Lockheed Martin. He is currently on the Board of Trustees of the Naval Postgraduate School Foundation, the Advisory Board of Stanford University and the Board of Governors of the Iowa State University Foundation. Dr. Coffman has been a Member of the National Academy of Engineering since 1997 and a Fellow of the American Institute of Aeronautics and Astronautics and the American Astronautical Society since 1989 and 1997, respectively.Committees.

The Board concluded that Dr. CoffmanMr. Bradway should serve on the Board as duringdue to Mr. Bradway’s knowledge of all aspects of our business, combined with his service as Chairman of the Board and Chief Executive Officer of Lockheed Martin, Dr. Coffman acquired important leadership and management skills that provide insight intohaving served as our President and Chief Operating Officer and formerly our Chief Financial Officer. During this time, Mr. Bradway provided strong leadership through a variety of challenges and this positions him well to serve as a director and provides the operations of our CompanyBoard with a knowledgeable perspective with regard to the Company’s products and the challenges of managing a complex organization.operations.

10    LOGOFRANÇOIS DE CARBONNELï 2014 Proxy Statement

Mr. 


 ITEM 1 — ELECTION OF DIRECTORS  

François de Carbonnel

François de Carbonnel is a director of corporations and corporate advisor. Mr. de Carbonnel was a director of Thomson S.A., a French multimedia corporation, from 2007 to January 2010, serving as Chairman of the Audit Committee since April 2007throughout his tenure as a director, and as non-executive Chairman of the Board from April 2008 to April 2009. He has also been a director and ChairmanPresident of the Remuneration and Nominating Committee of Solocal Group (formerly known as Pages Jaunes S.A.), a French company which offers online content, advertising solutions and transactional services and publishes directories, and internet band advertising, since 2004 and serves as chairman of Quilvest S.A., a Luxembourg company which provides wealth managementthe Remuneration and private equity services, since 2006.Appointments Committee. In 2013, Mr. de Carbonnel was appointed lead director of Solocal Group. Mr. de Carbonnel has been a director of Mazars Group, a privately-held international organization specializing in audit, accountancy, tax, legal and advisory services since December 2011, where he also serves as chair of the Audit Committee. Mr. de Carbonnel has been a director of Groupe Foncier de L’Ile de France (GFI), a privately-held French real estate company since 1995. Mr. de Carbonnel became the Chairman of Woodside Holdings Investment Management Pte. Ltd., a non-listed Singapore-based fund management company, in 2012. From 2004 until October 2013, Mr. de Carbonnel was a director of a number of funds managed by Ecofin, a privately-held investment management firm that provides discretionary fund management services and advice to institutions, utilities and infrastructure industries since 2004industries. Mr. de Carbonnel was a director of Quilvest S.A., a Luxembourg company which

provides wealth management and of Mazars Group, a privately-held international organization specializing in audit, accountancy, tax, legal and advisoryprivate equity services, since December 2011.from 2006 to 2012.

Mr. de Carbonnel was the Senior Advisor of the Global Corporate and Investment Bank of Citigroup from 2004 to 2006, and its Managing Director from 1999 to 2004. He was the Chairman and Chief Executive Officer of Midial S.A., a French listed company, from 1994 to 1998, Chairman of General Electric Capital SNC from 1996 to 1998. He was a corporate Vice President of General Electric Company and President of General Electric Capital-Europe from 1990 to 1992, President of Strategic Planning Associates, an international consulting company, from 1981 to 1990 and Vice President of Boston Consulting Group from 1971 to 1981. He has been a member of the business board of advisors of the Carnegie Mellon Tepper School of Business since 1984. Mr. de Carbonnel is a French citizen and resides in Europe.

The Board concluded that Mr. de Carbonnel should serve on the Board because Mr. de Carbonnel has acquired knowledge, skills and brings a strong vantage point through his international career as an executive officer of well-known consulting companies as well as a number of public companies. This perspective is important as the Company undertakes further global expansion plans. Given his experience in the financial industry, Mr. de Carbonnel has been determined to be an Audit Committee financial expert by our Board.

LOGOREBECCA M. HENDERSONï 2014 Proxy Statement11


 ITEM 1 — ELECTION OF DIRECTORS  

Vance D. Coffman

Vance D. Coffman is our lead independent director. Dr. Coffman has been a director of 3M Company, a consumer and office products and services company, since 2002 and he has been a director of Deere & Company, a farm and construction machinery company, since 2004. He serves on the Nominating and Governance Committee and chairs the Compensation Committee of 3M Company and serves on the Corporate Governance and Executive Committees and chairs the Compensation Committee of Deere & Company. Dr. Coffman was also director of Bristol-Myers Squibb Company, a pharmaceutical company, and a member of its Audit and Governance Committees, from 1998 to 2007.

Dr. Coffman was the Chairman of the Board and Chief Executive Officer of Lockheed Martin Corporation, an aerospace and defense company, from 1998 to 2005, and was ex officio member of all board committees. From 1997

to 1998, he was Vice Chairman of the Board and Chief Executive Officer of Lockheed Martin. He is currently on the Board of Trustees of the Naval Postgraduate School Foundation, the Stanford Engineering Advisory Council of Stanford University and the Board of Governors of the Iowa State University Foundation. Dr. Coffman has been a Member of the National Academy of Engineering since 1997 and a Fellow of the American Institute of Aeronautics and Astronautics and the American Astronautical Society since 1989 and 1997, respectively.

The Board concluded that Dr. Coffman should serve on the Board as during his service as Chairman of the Board and Chief Executive Officer of Lockheed Martin, Dr. Coffman acquired important leadership and management skills that provide insight into the operations of our Company and the challenges of managing a complex organization.

Robert A. Eckert

Robert A. Eckert was the Chief Executive Officer of Mattel, Inc., a toy design, manufacture and marketing company, having held this position from 2000 through December 2011. He was President and Chief Executive Officer of Kraft Foods Inc., a consumer packaged food and beverage company, from 1997 to 2000, Group Vice President from 1995 to 1997, President of the Oscar Mayer Foods Division from 1993 to 1995 and held various other senior executive and other positions from 1977 to 1992.

Mr. Eckert was Chairman of the Board of Mattel, Inc. from 2000 through 2012. He has been a director of McDonald’s Corporation, a company which franchises and operates McDonald’s restaurants in the global restaurant industry, since 2003, serving as the Chair of the Compensation Committee and a member of the Executive and Governance Committees. Mr. Eckert has been a director of Smart & Final

Stores LLC, a privately-held warehouse store, since 2013. Mr. Eckert also has served as a director of Levi Strauss & Co., a privately-held jeans and casual wear manufacturer, since 2010. Mr. Eckert is on the Global Advisory Board of the Kellogg Graduate School of Management and serves on the Eller College National Board of Advisors at the University of Arizona.

The Board concluded that Mr. Eckert should serve on our Board because of Mr. Eckert’s recent and long-tenured experience as a Chief Executive Officer of large public companies, his broad international experience in marketing and business development and his valuable leadership experience. Given his financial and leadership experience, Mr. Eckert has been determined to be an Audit Committee financial expert by our Board.

12    LOGOï 2014 Proxy Statement

Dr. 


 ITEM 1 — ELECTION OF DIRECTORS  

Greg C. Garland

Greg C. Garland has served as a director of the Company since October 2013. Mr. Garland was first identified to the Governance and Nominating Committee as a potential director candidate by the Board of Directors’ outside director search firm. Mr. Garland is the Chairman, President and Chief Executive Officer of Phillips 66, an energy manufacturing and logistics company with midstream, chemical, refining and marketing and specialties businesses created through the repositioning of ConocoPhillips, having held this position since April 2012. Mr. Garland chairs the Executive Committee of Phillips 66. Prior to Phillips 66, Mr. Garland served as Senior Vice President, Exploration and Production, Americas of ConocoPhillips from 2010 to April 2012. He was President and Chief Executive Officer of

Chevron Phillips Chemical Company (now a joint venture between Phillips 66 and Chevron) from 2008 to 2010 and Senior Vice President, Planning and Specialty Chemicals from 2000 to 2008. Mr. Garland served in various positions at Phillips Petroleum Company from 1980 to 2000. Mr. Garland is a member of the Engineering Advisory Board for Texas A&M University.

The Board concluded that Mr. Garland should serve on our Board because of Mr. Garland’s experience as a Chief Executive Officer and his over 30 years of international experience in a highly regulated industry. Given his financial and leadership experience, Mr. Garland has been determined to be an Audit Committee financial expert by our Board.

Rebecca M. Henderson

Rebecca M. Henderson has been the John and Natty McArthur University Professor at Harvard University since September 2011, andwhere she has been on the faculty ofa joint appointment at the Harvard Business School, servingand is the Co-Director of the Business and Environment Initiative. From 2009 to 2011, Dr. Henderson served as the Senator John Heinz Professor of Environmental Management since July 2009.at Harvard Business School. Prior to this, she was a professor of management at MIT for 21 years, having been the Eastman Kodak LFM Professor of Management since 1999. Since 1995, she has also been a Research Associate at the National Bureau of Economic Research. She specializes in technology strategy and the broader strategic problems faced by companies in high technology industries. Dr. Henderson has been a director of IDEXX Laboratories, Inc., a company which develops and commercializes technology-based products and services for veterinary, food and water applications, since 2003, serving on its Finance Committee and chairing its Nominating and Governance Committees.Committee.

Dr. Henderson has also served as a director of the Ember Corporation, a privately-held semiconductor chip manufacturer,

and on its Compensation Committee, from 2001 to July 2009. She has further been a director of Linbeck Construction Corporation, a privately-held facility solutions company.company, from 2000 until 2004. In May 2011, Dr. Henderson was appointed to the U.S. Department of Commerce Innovation Advisory Board which was established as a result of the America COMPETES Reauthorization Act of 2010 signed into law by President Obama on January 4, 2011 and will guidewhich guided a study of U.S. economic competitiveness and innovation to help inform national policies at the heart of U.S. job creation and global competitiveness. Dr. Henderson has published articles, papers and reviews in a range of scholarly journals, and sits on the editorial board ofResearch Policy, a multi-disciplinary journal. Dr. Henderson received an undergraduate degree from the Massachusetts Institute of Technology and a doctorate from Harvard University.

The Board concluded that Dr. Henderson should serve on the Board because Dr. Henderson’s study of the complex strategy issues faced by high technology companies provides unique insight into the Company’s strategic and technology issues.

LOGOFRANK C. HERRINGERï 2014 Proxy Statement13

Mr. 


 ITEM 1 — ELECTION OF DIRECTORS  

Frank C. Herringer

Frank C. Herringer has been Chairman of the Board of Transamerica Corporation, a financial services company, since 1995. Mr. Herringer was an executive with Transamerica for 20 years, including its Chief Executive Officer from 1991 until its acquisition by Aegon N.V., a life insurance, pensions and asset management company, in 1999, subsequently serving on Aegon’s Executive Board for one year and he is currently a director of Aegon USU.S. Holding Corporation.Corporation, a position he has held since 1999. Mr. Herringer has been a director of The Charles Schwab Corporation, a brokerage and banking company, since 1996, serving on its Compensation, Nominating and Corporate Governance Committees, and of Safeway Inc., a food and drug retailer, since 2008, serving on its Executive Compensation and Executive Committees and chairing its Nominating and Corporate Governance Committees.Committee. He is also currently a director of Cardax Pharmaceuticals, Inc., a biotechnology company, which he joined in 2005, and a member of the

Board of Trustees of the California Pacific Medical Center Foundation, a not-for-profit organization which develops philanthropic resources for the California Pacific Medical Center, a privately-held, not-for-profit academic medical center, which he joined in 2013. From 2002 to 2005, Mr. Herringer was a director of AT&T Corporation, and a member of its Audit and Compensation Committees. He is also currently a director of Cardax Pharmaceuticals, Inc., a privately-held biotechnology company, and sat on the Board of Trustees of the California Pacific Medical Center, a privately-held not-for-profit academic medical center, from 1983 until 2009. In 2004, Mr. Herringer was named an Outstanding Director of the Year by the Outstanding Director’sDirectors Exchange. Mr. Herringer received an undergraduate degree and master of business administration from Dartmouth College.

The Board concluded that Mr. Herringer should serve on the Board due to Mr. Herringer’s career as Transamerica’s Chief Executive Officer and Chairman of the Board which developed Mr. Herringer’s management and leadership skills and provides an informed perspective on our financial performance, prospects and strategy.

TYLER JACKSTyler Jacks

The Governance and Nominating Committee has recommended Dr. 

Tyler Jacks as a new nominee to stand for initial election to the Board at the Annual Meeting. Dr. Jacks was first identified to the Governance and Nominating Committee as a potential director candidate by Dr. David Baltimore, a member of the Company’s Board. Dr. Jacks joined the Massachusetts Institute of Technology in 1992 and is currently the David H. Koch Professor of Biology and director of the David H. Koch Institute for Integrative Cancer Research, which brings together biologists and engineers to improve detection, diagnosis and treatment of cancer. Dr. Jacks has been an investigator with the Howard Hughes Medical Institute, a nonprofit medical research organization, since 2002.1994. Dr. Jacks has been a director of Thermo Fisher Scientific, Inc., a life sciences supply company, since May 2009, and serves on its Strategy and Finance Committee and scientific advisory board. He was a founder of T2 Biosystems, Inc., a privately-held biotechnology company, since 2006.2006 and served on the scientific advisory board until 2013. Dr. Jacks serves on numerousis a consultant scientific advisory boards includingadvisor to Epizyme, Inc., a privately-held biopharmaceutical company, since 2007 and2007. Dr. Jacks served on the scientific advisory board of Aveo Pharmaceuticals Inc., a cancer therapeutics company, since 2001. Dr. Jacksfrom 2001 until 2013. He was appointed to the National Cancer Advisory Board, which advises and assists the Director of the National Cancer Institute with respect to the National Cancer Program, in

October 2011. Dr. Jacks was a director of the Massachusetts Institute of Technology’s Center for Cancer Research from 2001 to 2008 and received numerous awards including the Paul Marks Prize for Cancer Research and the American Association for Cancer Research Award for Outstanding Achievement. He was elected to the National Academy of Sciences as well as the Institute of Medicine in 2009.

The Board concluded that Dr. Jacks should serve on the Board due to Dr. Jacks’ extensive scientific expertise relevant to our industry, including his broad experience as a cancer researcher and service on several scientific advisory boards. His expertise in the field of oncology, which includes pioneering the use of technology to study cancer-associated genes and to construct animal models of many human cancer types, is evidenced by his recent appointment to the National Cancer Advisory Board and by his numerous awards for cancer research. Dr. Jacks’ scientific knowledge and thorough understanding of our industry positions him to provide valuable insights into the scientific activities of our Company.

14    LOGOGILBERT S. OMENNï 2014 Proxy Statement

Dr. Gilbert S. Omenn has been Professor of Internal Medicine, Human Genetics and Public Health and Director of the Center for Computational Medicine and Bioinformatics at the University of Michigan since 1997. From 1997 to 2002, he was the Chief Executive Officer of the University of Michigan Health System and Executive Vice President of the University of Michigan for Medical Affairs. Previously he was a professor of medicine and of environmental health and Dean of the School of Public Health and Community Medicine at the University of Washington, as well as a senior member of the Fred Hutchinson Cancer Research Center. He has been an affiliate faculty member of the Institute for Systems Biology in Seattle since June 2009.


 ITEM 1 — ELECTION OF DIRECTORS  

Dr. Omenn was a director of Rohm & Haas Co., a manufacturer of specialty chemicals (now a wholly-owned subsidiary of The Dow Chemical Company) from May 1987 until March 2009, where he served on the Audit, Nominating, and Sustainability Committees, and of OccuLogix, Inc., an early-stage eye disease therapy company, from 2005 until 2008, serving on its Finance and Compensation Committees. Dr. Omenn has been a member of the scientific advisory boards of: Motorola, Inc., an electronics and equipment company, from 1998 to December 2010; Galectin Therapeutics, Inc. (formerly Pro-Pharmaceuticals Inc), an early-stage pharmaceutical company, since July 2009; Compendia Biosciences Inc., a privately-held bioinformatics firm, since February 2007; Innocentive Innovation Inc., a privately-held information technology firm, since 2006, and Armune BioSciences, Inc. a privately-held early-stage in vitro diagnostic company, since February 2008, as well as a director of the latter.

Dr. Omenn’s civic, scientific and non-profit leadership roles include serving as a director of the Harvard Medical Alumni Association, Hastings Center, the Center for Public Integrity, the U.S. Civilian R&D Foundation CRDF-Global, Population Services International, Center for Naval Analysis (CNA) and the Salzburg Global Seminar. Previously, he served as a director of United Way, the Fred Hutchinson Cancer Research Center, and the American Association for the Advancement of Science. Earlier he served as Associate Director of the Office of Science and Technology Policy and Associate Director of the Office of Management and Budget in the Executive Office of the President of the United States from 1977 to 1981 and Chair of the Presidential/Congressional Commission on Risk Assessment and Risk Management from 1994 to 1997. Dr. Omenn has received several honors and awards and has published many significant papers, reviews and books.

The Board concluded that Dr. Omenn should serve on the Board due to Dr. Omenn’s broad scientific, medical and research experience, including his leadership roles at the University of Michigan and the University of Washington, which provides perspectives on the requirements and behaviors of the medical community as well as special insight into the research and development, risk management, and compliance activities of our Company.

JUDITHJudith C. PELHAMPelham

Ms. 

Judith C. Pelham is the President Emeritus of Trinity Health, a national system of healthcare facilities, including hospitals, long-term care, home care, psychiatric care, residences for the elderly and ambulatory care, and one of the largest Catholic healthcare systems in the U.S. Prior to her current position at Trinity Health, she was the President and Chief Executive Officer of Trinity Health from 2000 to 2004, the President and Chief Executive Officer of Mercy Health Services, a system of hospitals, home care, long-term care, ambulatory services and managed care, from 1993 to 2000, the President and Chief Executive Officer of the Daughters of Charity Health Services of Austin, a network of hospitals, home care and ambulatory services, from 1982 to 1992, and the Assistant Vice President of Brigham and Women’s Hospital from 1976 to 1980.

In February 2011, Ms. Pelham becamehas been a director of Health Care REIT, Inc., a public real estate investment trust for senior living and health care real estate, since May 2012 and serves on its Compensation, Planning, Nominating/Corporate Governance and Investment Committees. Ms. Pelham was a director of Zoll Medical Corporation, a medical products and software solutions company.company, from February 2011 to April 2012 when it became a wholly owned subsidiary of Asahi Kasei Group. Ms. Pelham was a director of Eclipsys Corporation, a healthcare IT solutions company, from 2009 to August 2010 when it merged with AllScripts and was a member of its Compensation Committee. In addition, from 2005 to 2006 she was a director of Hospira, Inc., a specialty

pharmaceutical delivery company, and a member of its Audit and Public Policy and Compliance Committees. She also sits on the board of trustees of Smith College and is a member of its Audit, Finance, and Buildings and Grounds, and AdvancementLibraries Committees and chairs the Audit and Information Technology Committees.

Ms. Pelham has received numerous honors for her civic and healthcare systems leadership, including the CEO IT Achievement Award in 2004 from Modern Healthcare and the Healthcare Information Management Systems Society for her leadership in implementing information technology in healthcare provider organizations and the National Quality Healthcare Award in 2004 from the National Committee for Quality Healthcare, for innovation and implementation of clinical quality and patient safety systems. She received the American Hospital Association Partnership for Action Grassroots Advocacy Award in 1992 in recognition of her work in healthcare reform.

The Board concluded that Ms. Pelham should serve on the Board due to Ms. Pelham’s career as an executive leader at a number of large healthcare systems, as well her extensive experience developing programs to improve the health status of communities and championing innovation and advances in the delivery of, access to and financing of healthcare, provide anher understanding of the nation’s healthcare system, the patient populations served by our Company’s products and the operations of our Company.

LOGOJ. PAUL REASONï 2014 Proxy Statement15

Admiral J. Paul Reason, USN (Retired) served as Commander-in-Chief of the U.S. Atlantic Fleet, as Naval Aide to the President of the United States and in numerous other roles and assignments in his 34 years career in the U.S. Navy. Upon leaving the Navy, Admiral Reason was an executive at SYNTEK Technologies, Inc., a consulting and professional services company, then served as the President and Chief Operating Officer of Metro Machine Corporation, a shipyard operator, from 2000 to 2005, and its Vice Chairman and President from 2005 to 2006. Since 2006, he has been an independent consultant.


 ITEM 1 — ELECTION OF DIRECTORS  

Admiral Reason has served as a director of Norfolk Southern Corporation, a transportation company, and on its Audit, Finance and Compensation Committees since 2002. Admiral Reason was a director of Todd Shipyards Corporation, a shipbuilding company, from 2007 until February 2011, when it ceased to be a public company and became a wholly-owned subsidiary of Vigor Industrial LLC, and served on its Compensation Committee since 2007. From 2001 to 2006, he was a director of Wal-Mart Stores, Inc., a retail company, and served on its Audit Committee. In addition to his active service in the U.S. Navy, Admiral Reason is a member of the National War Powers Commission and was Chairman of the U.S. Navy Memorial Foundation. He authoredSailing New SeasRonald D. Sugar, a blueprint for the governance of maritime forces in the 21st century. He has been the Chairman of ORAU Foundation, which provides educational and technical support to the Oak Ridge National Laboratory, and a member of the Naval Studies Board of National Academics NRC-NSB, both since 2007.

The Board concluded that Admiral Reason should serve on the Board due to Admiral Reason’s leadership in the U.S. Navy and in executive positions at Metro Machine Corporation which provides broad leadership and strategic skills and perspective, particularly with regard to interaction with government agencies in our heavily regulated industry.

LEONARD D. SCHAEFFER

Mr. Leonard D. Schaeffer has been a Senior Advisor for TPG Capital, a private investment firm, since 2006 and a partner at North Bristol Partners LLC, a privately-held consulting company since 2006. From 2007 to 2011, Mr. Schaeffer served as the Chairman of the Board of Surgical Care Affiliates, LLC, a privately-held company operating a national network of ambulatory surgical centers and surgical hospitals. From November 2004 to November 2005, Mr. Schaeffer served as Chairman of the Board of WellPoint, Inc., the largest health insurance company in the United States created by the combination of WellPoint Health Networks, Inc. and Anthem, Inc. From 1992 until 2004, Mr. Schaeffer served as Chairman of the Board and Chief Executive Officer of WellPoint Health Networks, Inc. He was a director of Allergan, Inc., a specialty pharmaceutical company, from 1993 to May 2011, serving as Chair of its Organization and Compensation Committee and as a member of its Corporate Governance Committee, and serves as a director of Quintiles Transnational Corp., a privately-held clinical research and consulting services company, since 2008, serving as Chair of its Corporate Governance and Compliance Committee and on its Audit Committee. Mr. Schaeffer was a director of the National Institute for Health Care Management from 1993 to 2005 and has served on its Advisory Board from 2005 to present.

Mr. Schaeffer has been the Chairman of the Board, from 1989 to 2004, and Chief Executive Officer, from 1986 to 2002, of Blue Cross of California, President and Chief Executive Officer of Group Health, Inc., a health maintenance organization, from 1983 to 1986, Executive Vice President and Chief Operating Officer of the Student Loan Marketing Association (Sallie Mae) from 1980 to 1982, and Administrator of the Centers for Medicaid and Medicare Services, or CMS (formerly the Health Care Financing Administration), from 1978 to 1980. Prior to CMS, Mr. Schaeffer was employed by the Department of Health and Human Services in 1978, the Illinois Bureau of the Budget from 1975 to 1976 and the Illinois Department of Mental Health from 1972 to 1975. Mr. Schaeffer was named the Judge Widney Professor and Chair at the University of Southern California in 2007 and serves on the board of The Brookings Institution, the RAND Corporation and the board of fellows of Harvard Medical School. Mr. Schaeffer is also a member of the Institute of Medicine of the National Academy of Sciences.

The Board concluded that Mr. Schaeffer should serve on the Board as Mr. Schaeffer’s career as a chief executive officer of health insurance organizations such as Blue Cross and WellPoint, as well as his experience with and insight gained into government reimbursement programs while with CMS, provide a deep understanding of the nation’s healthcare system, healthcare industry, private and public reimbursement programs and the operations of our Company.

KEVIN W. SHARER

Mr. Kevin W. Sharer has been the Company’s Chief Executive Officer, or CEO, since May 2000 and has been Chairman of our Board of Directors since January 2001. Effective as of May 23, 2012, Mr. Sharer will step down as CEO of the Company. Mr. Sharer will remain as Chairman of the Board until December 31, 2012 at which time he will retire from the Board and the Company. Mr. Sharer served as Amgen’s President and Chief Operating Officer from 1992 to May 2000, as CEO and President from May 2000 to May 2010 and has been a director of Amgen since November 1992. Under Mr. Sharer’s leadership as CEO, the Company has successfully launched nine products and completed the biotechnology industry’s largest-ever acquisition, which brought our eighth product, Enbrel®. During Mr. Sharer’s tenure as CEO, Amgen has grown its annual revenues from over $3 billion in 1999 to revenues approaching $16 billion in 2011. Prior to joining the Company, Mr. Sharer was an executive with MCI Communications Corporation and the General Electric Company and a consultant with McKinsey & Company, Inc.

Mr. Sharer’s leadership skills were shaped by his training at the U.S. Naval Academy. He became lieutenant commander in the U.S. Navy, serving on two nuclear attack submarines and overseeing one nuclear submarine’s construction. After he left the U.S. Navy, he attended business school, receiving his MBA from the University of Pittsburgh.

Mr. Sharer has been a director of Chevron Corporation, a petroleum, exploration, production and refining company, since 2007 and a member of its Board Nominating and Governance and Management Compensation Committees. He has served as a director of Northrop Grumman Corporation, a global security company, since 2003 and is on its Policy Committee. From 2001 to 2007, Mr. Sharer was a director of 3M Company, and from 1996 to 2005 he was a director of Unocal Corporation, a crude petroleum and natural gas company, serving on its Board Governance and Management Development and Compensation Committees. He was also the Chairman of the Board of Pharmaceutical Research and Manufacturers of America from 2005 to 2007. He is Chairman of the Board of the Los Angeles County Museum of National History.

The Board concluded that Mr. Sharer should serve on the Board because Mr. Sharer’s knowledge regarding our Company’s operations and the markets and industries in which we compete provides a critical link between management and the Board of Directors, enabling the Board to provide its oversight function with the benefit of management’s perspective of the business.

RONALD D. SUGAR

Dr. Ronald D. Sugar is the retired Chairman of the Board and Chief Executive Officer of Northrop Grumman Corporation, a global securityaerospace and defense company, having held these posts from 2003 through 2009. He was President and Chief Operating Officer of Northrop Grumman Corporation from 2001 until 2003. He was President, Chief Operating Officer and director of Litton Industries, Inc., a developer of military products, from 2000 until 2001, and Chief Financial Officer of TRW, Inc., an aerospace, automotive and credit reporting company, from 1994 to 1996, and President and Chief Operating Officer of TRW Aerospace, a developer of missile systems and spacecraft, from 1998 to 2000. He is a senior advisor to Ares Management LLC, a privately-held asset manager and Securities and Exchange Commission registered investment advisor, and a senior advisor to Northrop Grumman Corporation, both since 2010.

Dr. Sugar has been a director of Chevron Corporation, a petroleum, exploration, production and refining company, since 2005, and chairs its Audit Committee.2005. Dr. Sugar has also been a director of Apple Inc.,

a manufacturer and seller of, among other things, personal computers, mobile communication and media devices since 2010 and of Air Lease Corporation, an aircraft leasing company, since 2010. Dr. Sugar chairs the Audit Committee of Chevron, chairs the Audit and Finance Committee of Apple, chairs the Compensation Committee of Air Lease, and serves on the Air Lease Governance Committee. Dr. Sugar is a member of the National Academy of Engineering, trustee of the University of Southern California, member of UCLA Anderson School of Management Board of Visitors, director and member of the Los Angeles Philharmonic Association and national trustee of the Boys and Girls Clubs of America.

The Board concluded that Dr. Sugar should serve on our Board because Dr. Sugar’s board and senior executive-level expertise, including his recent experience as Chairman and Chief Executive Officer of Northrop Grumman Corporation, provides valuable leadership experience and insight in the areas of operations, government affairs, technology and finance.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE ABOVE FOURTEEN12 NAMED NOMINEES.

16    LOGOï 2014 Proxy Statement


 ITEM 2 — RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS 

ITEMItem 2

RATIFICATION OF SELECTION OF INDEPENDENTRatification of Selection of Independent Registered Public Accountants

REGISTERED PUBLIC ACCOUNTANTS

The Audit Committee of the Board of Directors has selected Ernst & Young LLP, or Ernst & Young, as our independent registered public accountants for the fiscal year ending December 31, 2012,2014, and the Board has further directed that management submit this selection for ratification by the stockholders at our 2014 Annual Meeting.Meeting of Stockholders. Ernst & Young has served as our independent registered public accounting firm and has audited our financial statements since the Company’s inception in 1980. The Audit Committee periodically considers whether there should be a rotation of our independent registered public accountants. The members of the Audit Committee believe that the continued retention of Ernst & Young as our independent registered public accountants is in the best interests of the Company. A representative of Ernst & Young is expected to be present at the Annual Meeting and will have an opportunity to make a statement and respond to appropriate questions.

Stockholder ratification of the selection of Ernst & Young as our independent registered public accountants is not required by ourthe Amgen Inc. Restated Certificate of Incorporation, ourthe Amended and Restated Bylaws of Amgen Inc., or otherwise. However, the Board is submitting the selection of Ernst & Young to the stockholders for ratification because we believe it is a matter of good corporate governance practice. If our stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain Ernst & Young, but still may retain them. Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in our best interests and that of our stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS.

LOGOï 2014 Proxy Statement17


 ITEM 3 — ADVISORY VOTE TO APPROVE OUR EXECUTIVE COMPENSATION  

ITEMItem 3

ADVISORY VOTE TO APPROVE OUR EXECUTIVE COMPENSATIONAdvisory Vote to Approve Our Executive Compensation

This advisory stockholder vote, commonly known as “Say on Pay,” gives you as a stockholder the opportunity to endorse or not endorse our executive pay program and policies. Accordingly, you are being asked to vote on the compensation of our Named Executive Officers, or NEOs, as disclosed in the Compensation Discussion and Analysis and related compensation tables and the narrative in this proxy statement.

Our executive compensation programs reflectprogram is designed to achieve the following objectives that are strongly aligned with the interests of our stockholders:objectives:

 

Pay for performance in a manner that strongly aligns with stockholder interests by rewarding performance on both aour short- and long-term basis. Our executive cash incentive and equity incentive programs for 2011 depended primarily on achieving our business and financial goals, growth in the price of our Common Stock and our relative long-term total shareholder return, or TSR. The largest portion of long-term incentive, or LTI, equity awards granted to our NEOs is based on the performance of our TSR relative to our peer group’s TSR over a three-year period. We generally do not offer defined benefit or traditional executive supplemental defined benefit pension plans to our NEOs.measurable performance.

 

Attract, motivate and retain the highest level of executive talent by providing competitive compensation, consistent with their roles and responsibilities, our success and their contributions to this success. To attract executive talent with proven skills and experience, we believe the inducements and compensation packages we offer need to provide a sufficient catalyst for executives to agree to join our management team, account for compensation lost in joining our team and compare favorably to compensation obtainable at companies where we compete for high caliber executive talent.

 

Mitigate compensation riskby maintaining pay practices thatrewardthat reward actions and outcomes consistent with the sound operation of our Company and with the creation of long-term stockholder value. Examples include our clawback policy, which applies to cash or equity compensation payouts awarded to executive officers, and our executive stock ownership guidelines, which by requiring executives to hold significant amounts of the Company’s equity, further aligns their interests with the interests of our stockholders and our long-term success.

 

Consider all Amgen staff members in the design of our executive compensation programs, to ensure a consistent approach that encourages and rewards all staff members who contribute to our success. As a result, there are no special plans for our NEOs.

Our 20112013 Executive Compensation Was Aligned With Our Performance:Performance

 

Our solid performance in 2011 grew revenues by 4% over 2010 to $15.6 billion. Our strong balance sheet permitted us to initiate payment of quarterly dividends, with a dividend of $0.28 per share declared in July and October 2011, and an increased dividend declared in December 2011 for stockholders of record in February 2012 of $0.36 per share. In 2011, we returned $500 million of cashFollowing extensive outreach to our stockholders through dividendsover the past several years, our Compensation and $8.3 billion through stock repurchases equalManagement Development Committee, or Compensation Committee, has implemented a number of compensation program changes to approximately 15%further reinforce the relationship between pay and performance. A significant majority of each NEO’s compensation is connected to our performance and our execution of our Common Stock outstanding as of December 31, 2010.

strategic priorities. Our stock price increased from $54.90 to $64.21 per share during 2011, reflecting strong stock price appreciation of approximately 17% and a one-year TSR of 18%, including the impact of our dividends under our new plan to return capital to stockholders.

Our annual cash incentive award program for 2011 resulted in payment of 181.9% of target opportunity based on our financial (revenue and adjusted earnings per share, or EPS) and operational objectives. This annual cash incentive award program payment was primarily driven by our strong revenue and EPS2013 performance (which benefited from our strategic decision to expand our stock repurchase program reflecting our confidence in the long-term value of our Company) and, to a lesser degree, our execution and advancement of our pipeline. Going forward, we have determined to replace EPS with adjusted net

income as one of the two primary financial goals in our annual cash incentive award program to align compensation with a measure that more directly correlates with the underlying performance of our operations.

However, given our TSR for the longer-term 2009-2011 performance period under our performance award program, our performance award program payout for the 2009-2011 performance period was reduced to only 45.5% of target.

In December 2011, we announced that Kevin W. Sharer, our Chairman of the Board and Chief Executive Officer, or CEO, notified us of his plan to step down as CEO on May 23, 2012, the date of the Company’s 2012 Annual Meeting of Stockholders, and as Chairman of the Board at the end of 2012. Prior to that time, the Board of Directors, or Board, had engaged in extensive succession planning efforts. As a result, the independent members of the Board announced that Robert A. Bradway, our President and Chief Operating Officer, will succeed Mr. Sharer as CEO effective May 23, 2012. There is no separation agreement with Mr. Sharer and no employment agreement with Mr. Bradway.

In March 2012, the Compensation and Management Development Committee, or Compensation Committee, targeted Mr. Bradway’s LTI equity award compensation for CEO at the median of our 2012 peer group, resulting in a 34% reduction in targeted LTI equity award value from the previous CEO award value in 2011. This reduction was primarily due to our change in compensation philosophy to target the median of our peer group to be responsive to our stockholders. In addition, Mr. Bradway’s base salary was set slightly above the 30th percentile of our peer group and his annual cash incentive award target was set at the median of our 2012 peer group. In sum, Mr. Bradway’s total target compensation falls below the median of our 2012 peer group, resulting in target compensation that is 32% lower than Mr. Sharer’s 2011 total target compensation, reflective of Mr. Sharer’s service in this role in excess of ten years.

Also in December 2011, Dr. Roger M. Perlmutter, Executive Vice President, Research and Development, announced his plans to retire effective February 12, 2012. The Board appointed Dr. Sean E. Harper, our Senior Vice President, Global Development and Corporate Chief Medical Officer, who has a decade of experience at our Company, as Dr. Perlmutter’s successor.

We successfully recruited Anthony C. Hooper as our new Executive Vice President, Global Commercial Operations. Mr. Hooper is a seasoned global business leader who has led commercial operations in mature and emerging pharmaceutical markets, and his experience is key to our global expansion objectives. Now, with Messrs. Bradway and Hooper and Jonathan M. Peacock, our Executive Vice President and Chief Financial Officer, we have significantly strengthened the international experience and expertise of our senior management team to help us navigate our entry into new markets worldwide.

2011 Stockholder Outreach and Resulting Changes to Our Compensation Programs:

During 2011 management engaged in extensive outreach efforts with our stockholders to discuss concerns those stockholders had with our compensation policies and practices. We reached out to stockholders comprising over 59% of our outstanding shares. We made the following changes effective for our 2012 compensation program:highlights include:

 

 

ChangedDelivering for Stockholders — Robust One-year and Three-year Total Shareholder Return. Our stock price increased from $86.20 to $114.08 per share during 2013, reflecting appreciation of approximately 32% and a one-year total shareholder return, or TSR, of 35%, including our compensation philosophy and significantly reduced the grant value of regular annual LTI equity awardsby lowering the benchmarking target by 25 percentage pointsdividends. This compares to the 50Standard & Poor’s 500 average one-year TSR of 32%. Our three-year TSR is 114% compared with our peer group average three-year TSR of 103%.

Consistent with this robust three-year TSR, the performance units earned in 2013 under our long-term incentive, or LTI, performance award program (for the 2011-2013 performance period) were 122.7% of target performance units based on our TSR for the 2011-2013 performance period compared with the average TSR of our 13-company peer group for this period.

Strong Financial Performance. Our strong operating performance resulted in above-target performance on our pre-established goals for 2013 revenues and adjusted net income that comprise 60% of the weighting under our 2013 annual cash incentive award program.

Our solid performance in 2013 grew revenues by 8% over 2012 to $18.7 billion and grew adjusted net income by 14% to $5.8 billion.(1) In addition,our year-over-year adjusted earnings per share grew 17%(1) in 2013.

(1)

Adjusted net income and adjusted earnings per share are reported and reconciled in our Form 8-K dated as of January 28, 2014.

18    LOGOï 2014 Proxy Statement


 ITEM 3 — ADVISORY VOTE TO APPROVE OUR EXECUTIVE COMPENSATION  

Ÿ

Our strong cash flows and balance sheet in 2013 permitted us to return $1.4 billion of cash to our stockholders through dividends. Since our first dividend in July 2011, we have raised the dividend three times over the previous quarterly amount by an average of 30% and returned a total of $3 billion of cash to our stockholders through dividends. In addition, we repurchased $0.8 billion of our stock in 2013 for a total return of capital of $2.2 billion to our stockholders.

Advancement of the Pipeline.We exceeded our pre-established goal of “Deliver the Best Pipeline” that represents a 20% weighting under our 2013 annual cash incentive award program.

During 2013, we successfully advanced the pipeline through our own clinical trial activities (as well as through the Onyx Pharmaceuticals, Inc. acquisition and the ivabradine license) such that we had two phase 3 data read-outs in December 2013 and three phase 3 data read-outs in January 2014 on evolocumab (AMG 145), we expect additional Phase 3 data read-outs on seven more of our innovative clinical programs (Kyprolis®, talimogene laherparepvec, trebananib, brodalumab, velcalcetide (AMG 416), romosozumab and rilotumumab) and, with the ivabradine license, we have data to support a U.S. filing.

Execution on Key Strategic Priorities, including International Expansion. We exceeded our pre-established goals of “Deliver Strategic Priorities” comprising 20% of the weighting under our 2013 annual cash incentive award program.

We successfully acquired Onyx Pharmaceuticals, a global biopharmaceutical company engaged in the development and commercialization of innovative therapies for improving the lives of people with certain cancers.

We also advanced our efforts to develop a presence in cardiovascular disease by licensing U.S. commercial rights to ivabradine, an innovative product already approved in over 100 countries for heart failure and angina.

We commenced our first pivotal studies for our biosimilar product candidates: in psoriasis and rheumatoid arthritis for our biosimilar for Humira® (adalimumab); in non-small cell lung cancer for our biosimilar for Avastin® (bevacizumab) and in breast cancer for our biosimilar for Herceptin® (trastuzumab).

We continued to expand internationally, including the commencement of operations of our alliances in Japan and China and our acquisition from F. Hoffmann-La Roche of rights to filgrastim and pegfilgrastim in key emerging growth markets around the world.

Positive 2013 Say on Pay Vote and Engagement With Our Stockholders

In 2013, we received over 85% stockholder support on our say on pay advisory vote. We have engaged consistently in broad direct stockholder outreach over the past several years and have found these interactions highly valuable and informative and will continue to engage with our stockholders to further enhance our understanding of the perspectives of our investors. Since our 2013 annual meeting of stockholders, we have engaged in outreach activities with stockholders comprising approximately 45% of our outstanding shares and have had extensive discussions with stockholders owning approximately 40% of our outstanding shares. In 2013, the predominant feedback from our

investors was that they are satisfied with our compensation program. While we are pleased with our say on pay results and stockholder feedback, we will continue to reach out to understand and address the concerns of our stockholders. Therefore, our stockholder outreach efforts will continue after the filing of this proxy statement, as well as through our executive compensation website (accessible atwww.amgen.com/executivecompensation) that we initiated in 2008 and invites stockholders to provide feedback directly to the Compensation Committee regarding our executive compensation program.

LOGOï 2014 Proxy Statement19


 ITEM 3 — ADVISORY VOTE TO APPROVE OUR EXECUTIVE COMPENSATION  

We Have Implemented Compensation Best Practices

We are mindful of compensation and governance best practices and have implemented the following practices, among others:

Our LTI equity award grants are primarily performance-based with 80% of LTI equity awards granted as performance units.

We target the 50th percentile, or median, of our peer group to be responsive to our stockholders. When combined with changes in our peer group (as described below), this resulted in reductions in LTI equity award grant date targeted valuations for 2012all elements of 34% for Mr. Sharer, our current CEO, on an annual basis and a 72% reduction based on the actual grant provided to Mr. Sharer in 2012 to reflect his partial year of service as CEO in 2012.compensation.

 

Replaced time-vested LTIWe have no “single-trigger” equity awards with performance-based equity awardsby increasingvesting acceleration upon a change of control for restricted stock units and stock options, and our double-trigger cash severance is limited to a multiple of two times target annual cash compensation, without tax gross-ups.

We have a clawback policy that requires our Board of Directors, or Board, to consider the weightingrecapture of performance units from 50% to 80% of our regular annualpast cash or LTI equity award grant values,payouts to our NEOs if the amounts were determined based on financial results that are later

 

resulting in 80% of units granted being inrestated and the form of performance units. To make this shift, we eliminated time-vested stock options and a portion ofNEOs’ misconduct is determined by the value of time-vested restricted stock units, or RSUs, as illustrated inBoard to have caused the following chart:restatement.

 

LTI Equity Awards  2010  Allocation 2011  Allocation 2012 Allocation

Performance Units

  40% 50% 80%

Stock Options

  40% 25% 0%

RSUs

  20% 25% 20%

Linked actual pay delivery from LTI equityOur incentive compensation plans contain recoupment provisions applicable to all staff members that expressly allow the Compensation Committee to determine that annual cash incentive awards more closely to performance because performance units only vest if specified performance goals are achieved. Historically, our relativenot earned fully or absolute TSRin part where such employee has been a primary metric for determining the extent to which performance units may be earned, and currently, our outstanding performance units are earned exclusively based on our TSR relativeengaged in misconduct that causes serious financial or reputational damage to the TSRs of our peer group companies. We believe TSR is an important metric as it provides the greatest indication of stockholder alignment and ensures that compensation realized reflects our stock performance relative to our peer group. Our move in 2012 to 80% allocation of performance units further increases the emphasis of our compensation on performance for 2012 and beyond. As illustration, our performance unit payouts over the last three years resulted in below-target payouts at the following percentages of target grant values, due to the reduction in the units earned based primarily on our TSR multipliers in effect for these years.

Performance Period

  Absolute TSR  TSR Multiplier
Effect (% of
Earned Award
Paid)
  Multiplier
(Relative or
Absolute TSR)
  Payout as a %
of Target
 

2009-2011 performance period

   6.5  50  Relative    45.5

2008-2010 performance period

   3.7  73  Absolute    73.0

2007-2009 performance period

   (0.3)%   50  Absolute    47.4

Rebalanced our peer group to include Allergan, Inc. and Celgene Corporation for 2012 decisions, in addition to Gilead Sciences, Inc. which was previously added to our peer group for 2011 decisions. These three companies are among those in our industry with which we both most closely compete for executive talent and closely match in terms of market capitalization and revenue.Company.

 

Replaced EPS with adjusted net incomeWe do not provide tax gross-ups, except for business related payments such as onereimbursement of the two primary financial goalsin our 2012 annual cash incentive award program to align compensation with a measure that more directly correlates with the underlying performance of our operations.certain moving and relocation expenses.

 

Increased theWe have robust stock ownership guideline for our CEOfrom five times base salary toguidelines, with a six times base salary to further align the interests ofownership requirement for our CEO to our stockholders and mitigate potential compensation-related risk.Chief Executive Officer.

We have no defined benefit pension or supplemental executive retirement plan benefits or “above-market” interest on deferred compensation.

Board Recommends a Vote “FOR” Our Executive Compensation:Compensation

Our Board believes that our current executive compensation program aligns the interests of our executives with those of our stockholders.stockholders and is earned primarily based on the performance of our Company. We intend that our compensation programs reward actions and outcomes that are consistent with the sound operation of our Company and are aligned with the creation of long-term stockholder value.

For the reasons discussed above, the Board recommends that stockholders vote “FOR” the following resolution:

“Resolved, that the stockholders approve, on an advisory basis, the compensation paid to the Company’s Named Executive Officers, as disclosed pursuant to Securities and Exchange Commission rules in the Compensation Discussion and Analysis, the compensation tables and the accompanying narrative disclosure of this proxy statement.”

Although this vote is advisory and is not binding on the Board, our Compensation Committee values the opinions expressed by our stockholders and will consider the outcome of the vote when making future executive compensation decisions.

We currently conduct annual advisory votes on executive compensation, and we expect to conduct the next advisory vote on executive compensation at our 20132015 annual meeting of stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE ADVISORY RESOLUTION INDICATING THE APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS.

20    LOGOï 2014 Proxy Statement


 ITEM 4 — STOCKHOLDER PROPOSAL  

ITEMItem 4

APPROVAL OF AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATIONStockholder Proposal

TO AUTHORIZE STOCKHOLDER ACTION BY WRITTEN CONSENT

We received a stockholder proposal in each of the last two years requesting our Board of Directors, or Board, to take the steps necessary to permit stockholder action by written consent. At our 2010 annual meeting of stockholders, the stockholder written consent proposal was approved by 62.66% of the votes cast (representing 46.45% of our outstanding shares). In 2011, our Board decided to oppose the stockholder written consent proposal a second time as it believed that the support in 2010 was based largely on older investor written consent policies. While the 2011 stockholder proposal received far less support, it was nonetheless approved by 50.19% of the votes cast (representing 38.10% of our outstanding shares). The Board continues to be concerned that stockholder action by written consent without the appropriate safeguards is not in the best interests of our Company or our stockholders, particularly when it enables uninformed action, creates stockholder disenfranchisement, or is lacking in procedural requirements. We have also received feedback from our stockholders on this issue and many expressed concerns about stockholder rights to act by written consent without procedural safeguards. Thus, our Board has determined to recommend a proposal to authorize stockholder action by written consent that is designed to avoid many of the concerns presented by the prior stockholder proposals and expressed by our stockholders. Our Board has declared advisable and has submitted to our stockholders for their approval, the amendment to our Restated Certificate of Incorporation attached hereto asAppendix B (the “Amendment”) that would permit action by written consent of our stockholders, subject to certain procedural requirements designed to protect the best interests of the Company and all of our stockholders.

At present, our Restated Certificate of Incorporation does not permit any stockholder action by written consent. The General Corporation Law of the State of Delaware permits us to restrict stockholders’ ability to act by written consent in our Restated Certificate of Incorporation or eliminate it entirely. The Board is proposing the Amendment that, while enabling action by written consent, contains procedural safeguards to ensure a stockholder action by written consent does not occur without adequate notice, transparency, information or time. Without these procedural safeguards, stockholder action by written consent creates the potential for uninformed action and stockholder confusion and potentially disables the Company from pursuing superior alternatives in the face of an unsolicited takeover. The safeguards include the following:

 

To ensure that a stockholder who has little or no support for the action being proposed does not cause the Company to incur unnecessary expense or disruption caused by a consent solicitation, the proposed Amendment requires a minimum stock ownership threshold of 15% or more of the outstanding stock to request the Board to set a record date to determine stockholders entitled to consent, which is the same ownership threshold as is required for stockholders to call a special meeting.

 

To provide transparency, any stockholder seeking to act by written consent would be required to provide the same information as would be required to propose a matter to be acted upon at a stockholder meeting or to nominate a director.

To ensure that the written consent is in compliance with applicable laws and is not duplicative, the written consent process would not be available for a limited number of matters, specifically: (i) those matters that would not be a proper subject for stockholder action, (ii) if an identical or substantially similar item is included in the Company’s notice of meeting for a meeting that has been called but not yet held, and is within ninety (90) days of the request to set a record date, or (iii) if the request to set a record date involved a violation of the federal proxy rules or other applicable law.

To provide the Board with a reasonable timeframe to properly evaluate and respond to a stockholder request, the Amendment requires that the Board must act, with respect to a valid request, to set a record date by the later of (i) twenty (20) days after delivery of a valid request to set a record date and (ii) five (5) days after delivery by the stockholder of any information requested by the Company to determine the validity of the request for a record date or to determine whether the action to which the request relates may be effected by written consent. The record date must be no more than ten (10) days after

the Board action to set a record date. Should the Board fail to set a record date by the required date, the record date is the date the first signed stockholder written consent is delivered to the Company.

To ensure that stockholders have sufficient time to consider the proposal and any statements in opposition, as well as to provide the Board the opportunity to present its views regarding the proposal and, in appropriate cases, to pursue superior options in a proposed change of control of the Company, the proposed Amendment would put the timing of action by written consent on the same timetable as action at a special meeting called by stockholders and by prohibiting dating and delivering consents until ninety (90) days after the delivery of a valid request to set a record date.

To protect against stockholder disenfranchisement, consents must be solicited from all stockholders, giving each stockholder the right to consider and act on a proposal. This protection would eliminate the possibility that a small group of stockholders could act without a public and transparent discussion of the merits of any proposed action, and without the input from all of our stockholders.

Without the foregoing procedural safeguards, a group of stockholders could, among other actions, remove and replace the sitting Board without notice to the Company and without making publicly available information regarding thisA stockholder action by written consent. Further, in the most likely context in which written consent would be employed, involving a potential change of control of the Company, the uncertain timetable created by a written consent without this procedural structure would allow the action to be effective as soon as written consents representing the requisite number of votes are received, without giving the Board or our other stockholders adequate time to consider potential ramifications or suitable alternatives. This uncertainty could prevent the Board from receiving the highest value for the Company and our stockholders in a potential sale transaction, as potential bidders may not want to engage in the cost and effort of due diligence and negotiations given the possibility that at any time, without notice, the Board they were negotiating with might be replaced and a transaction agreed to with the party soliciting consents. These procedural safeguards also prevent duplicative proposals, where a similar proposal had been noticed for a meeting within ninety (90) days and require an independent inspector of elections to be able to establish the accuracy of the tabulation of the stockholder action by written consent, which is in all parties’ best interests.

If this proposal to approve the Amendment is adopted by the requisite vote of our stockholders, Article Tenth of our Restated Certificate of Incorporation will be amended as set forth in the Certificate of Amendment of Restated Certificate of Incorporation (Certificate of Amendment) attached hereto asAppendix B upon the filing of the Certificate of Amendment with the Secretary of the State of the State of Delaware and our Amended and Restated Bylaws will be correspondingly amended.

THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” APPROVAL OF THE AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION.

ITEM 5

STOCKHOLDER PROPOSALS

Certain stockholders havehas informed the Company that they intendhe intends to present the proposalsproposal set forth below at our 20122014 Annual Meeting of Stockholders, or Annual Meeting. If the stockholdersstockholder (or their respectiveits “qualified representatives”representative” as determined under our Amended and Restated Bylaws) areis present at the Annual Meeting and properly submit their respectivesubmits the proposal for a vote, then the stockholder proposalsproposal will be voted upon at the Annual Meeting.

In accordance with the Federal securities laws, the stockholder proposalsproposal and supporting statements arestatement is presented below as submitted by the stockholdersstockholder and areis quoted verbatim (including footnotes) and areis in italics. The Company disclaims all responsibility for the content of the proposalsproposal and the supporting statements,statement, including websites and other sources referenced in the supporting statements. Any references to websites are not intended to function as a hyperlink, and the information contained on any such websites are not intended to be part of this proxy statement.

FOR THE REASONS STATED IN THE BOARD’S RESPONSES,RESPONSE, WHICH FOLLOW EACH OFFOLLOWS THE STOCKHOLDER PROPOSALS,PROPOSAL, THE BOARD STRONGLY AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE “AGAINST” ALL STOCKHOLDER PROPOSALS #1, #2, #3 AND #4.PROPOSAL #1.

Stockholder Proposal #1

The UAW Retiree Medical Benefits Trust with an address of 301 North Main Street, Suite 100, Ann Arbor, MI 48104,Michael Burke Stansbury, owner of 1,679,924 shares of our Common Stock as of October 6, 2011, and the Illinois State Board of Investment with an address of 180 North LaSalle Street, Suite 2015, Chicago, Illinois 60601, owner of 202,33250 shares of our Common Stock as of December 1, 2011 have11, 2013, appointing Investor Voice, SPC as his representative, with an address of 10033 12th Avenue NW, Seattle, WA 98177, has notified the Company that they intendus of his intention to submit the following proposal at theour Annual Meeting:

RESOLVED: That stockholders Shareholders of Amgen, Inc. (“Amgen” or the “Company”) askhereby request the boardBoard of directorsDirectors to adoptamend the Company’s governing documents to provide that all matters presented to shareholders shall be decided by a policy thatsimple majority of the board’s Chairman beshares voted FOR and AGAINST an independent director according to the definition set forthitem (or, “withheld” in the Nasdaq Listing Rules, unless Amgen’s stock ceases being listed there and is listed on another exchange, at which point that exchange’s standardcase of independence should apply. If the board determines that a Chairman who was independent when he or she was selected is no longer independent, the board shall promptly select a new Chairman who satisfies this independence requirement. Compliance with this requirement may be excused if no director who qualifies as independent is elected by stockholders or if no independent director is willing to serve as Chairman.elections). This policy shall apply prospectively soto all matters unless shareholders have approved higher thresholds, or applicable laws or stock exchange regulations dictate otherwise.

SUPPORTING STATEMENT:

Amgen is regulated by the Securities and Exchange Commission (SEC). The SEC dictates a specific vote-counting standard for the purpose of establishing eligibility for resubmission of shareholder-sponsored proposals. This formula is the votes cast FOR, divided only by(a) the FOR, plus(b) the AGAINST votes.

Amgen does not follow thisSEC Standard, but instead determines results by the votes cast FOR a proposal, divided by(a) the FOR votes, plus(b) the AGAINST votes,plus(c) the ABSTAIN votes.

Amgen’s 2013 proxy indicates (for shareholder-sponsored proposals) that abstentions “will have the same effect as votes ‘against’ such proposal.”

Using ABSTAIN votes as Amgen does counters an accepted hallmark of fair voting – honoring voter intent. Thoughtful voters who choose to ABSTAIN should not have their choices arbitrarily and universally switched as if opposing a matter.

THREE CONSIDERATIONS:

[1] Abstaining voters consciously act to violate any contractual obligationABSTAIN – to have their vote noted, but not counted. Yet, Amgen unilaterally counts all abstentions as if AGAINST a shareholder-sponsored proposal (irrespective of the voter’s intent).

[2] Abstaining voters do not follow management’s recommendation AGAINST a shareholder-sponsored item. Ignoring this intent, Amgen arbitrarily counts all abstentions as if siding with management.

[3] Remarkably, Amgen embraces theSEC Standard that this Proposal requests andexcludes abstentions for Company-sponsored Proposal #1 (director elections, stating that abstentions will “have no effect”), while applying a more restrictive vote-counting formula thatincludes abstentions to all shareholder-sponsored proposals.

This advantages management’s slate of director nominees by artificially boosting the appearance of support on Proposal #1, and depresses (harms) the vote-count for every shareholder-sponsored proposal, regardless of topic.

LOGOï 2014 Proxy Statement21


 ITEM 4 — STOCKHOLDER PROPOSAL  

IN CLOSING:

These practices — counting votes using two different formulas — fail to respect voter intent, are arbitrary, and run counter to core principles of sound corporate governance.

A system that is internally inconsistent — like Amgen’s — is confusing, harms shareholder best-interest, and unfairly empowers management at the time it is adopted.expense of stockholders.

Amgen must recognize the inconsistency of applying theSEC Standard to the Company-sponsored proposal on board elections, while applying a different formula (that artificially lowers the vote) to shareholder-sponsored proposals.

SUPPORTING STATEMENTTherefore, please vote FOR this common-sense governance Proposal

Amgen’s CEO Kevin Sharer also serves as Chairmanthat calls for the use of the Company’s board. In our view, an independent board chair promotes greater board effectiveness. The primary duty of a board of directors is to oversee the management of a company on behalf of its stockholders,fair and we believe that the combined CEO and chair compromises this important oversight function. It also weakens the board’s ability to exercise strong and independent leadership.consistent

SEC StandardIn March 2009, the Chairman’s Forum, a group of over 50 current and former board chairman, directors, chief executives, investors and governance experts hosted by Yale’s Millstein Center, endorsed the voluntary adoption of independent, non-executive chairmen of the board, finding that “[t]he independent chair curbs conflicts of interest, promotes oversight of risk, manages the relationship between the board and CEO, serves as a conduit across-the-board, while allowing flexibility for regular communication with shareowners, and is a logical next step in the development of an independent board.” (Chairing the Board: The Case for Independent Leadership in Corporate North America, Yale Millstein Center, 2009).

We believe that independent board leadership would be particularly valuable at Amgen,different thresholds where CEO pay is disconnected from company performance. Despite a 3% loss of share value in 2010 and a 7% loss in share value over the previous five years, total compensation paid to Mr. Sharer increased by 37% from 2009 to 2010. (Peter Whoriskey, “Cozy Relationships and ‘Peer Benchmarking’ Send CEOs’ Pay Soaring.”The Washington Post, Oct. 3, 2011) The company’s 2011 proxy statement reports that the board benchmarks long term equity awards to the 75th percentile of its peer group, although the company is at or below the 25th percentile for annual revenues, net income and employee count. An October 2011 article inThe Washington Post detailed ties between Mr. Sharer and four of the six members of the board’s compensation committee. (Ibid.) Holders of only 56% of shares voted to approve Amgen’s management “say on pay” proposal in 2011, with proxy advisors ISS and Glass Lewis both recommending that clients vote against the proposal.required.

We urge support for this proposal.

Board Response to Stockholder Proposal #1

The Board of Directors recommends a vote “AGAINST” Stockholder Proposal #1 for the following reasons:

Our Board of Directors has considered this proposal and has concluded that it is not in the best interests of the Company or its stockholders.stockholders to adopt the proponent’s vote-counting methodology.

The Company is incorporated in the State of Delaware and, therefore, Delaware law governs the voting standards for action by the Company’s stockholders. The required vote for action by the Company’s stockholders follows the default approval standard for stockholder action under Delaware law. The Company’s Amended and Restated Bylaws provide that, except in the election of directors, as otherwise provided by the Company’s governing documents permitor required by applicable laws, rules and regulations, when a quorum is present, the rolesaffirmative vote of the Chairmanholders of a majority of the shares present (in person or by proxy) and CEOentitled to be filled byvote is required to approve any matter brought before a stockholder meeting. We believe the majority of Delaware corporations adhere to the same or different individuals.default voting standard.

Under Delaware law, abstention votes are considered shares “entitled to vote.” Accordingly, in the vote tabulation for matters that require the affirmative vote of the majority of the shares present and entitled to vote, abstentions are not included in the numerator (because they are not affirmative votes), but are included in the denominator as shares entitled to vote. Therefore, abstentions under this standard have the same practical effect as a vote “against” a proposal.

Further, in its supporting statement, the proponent focuses on the effect that counting abstentions has on stockholder proposals. As disclosed in this proxy statement, abstention votes are included in the vote count for each of these management-sponsored proposals and have the same

practical effect as a vote against them. This flexibility permitsvote count standard does not favor these management-sponsored proposals over the stockholder proposals. Both are treated equally.

Stockholders typically have three voting choices for a particular proposal: for; against and abstain. In the proxy statement for the annual meeting, the Company discloses the vote required to approve each proposal, and also describes how abstentions will be counted in the vote tabulation and the effect of abstentions on the outcome of a matter. The Company’s stockholders are informed that if they vote “abstain” on a proposal other than the election of directors, their vote will have the same practical effect as an “against” vote, and the Board to choose a leadership structurebelieves that can be tailored tocounting abstention votes effectively honors the strengthsintent of the Company’s officersstockholders. If a stockholder elects to abstain on a matter, the Board believes that the stockholder recognizes the impact of the vote and expects it to be included in the vote count.

The Board also believes that lowering the approval standard for proposals would be poor corporate governance. The proponent requests that abstentions be ignored for all matters presented to the Company’s stockholders. Ignoring abstention votes would lower the approval standard and effectively make approval easier. Except with respect to the election of directors and best addressesmatters that require, statutorily or otherwise, a different vote, the Board believes that a proposal—whether management-sponsored or stockholder-sponsored—should receive more “for” votes than the sum of “against” and “abstain” votes in order to constitute approval by the Company’s evolving and highly complex business. Each year,stockholders.

Moreover, the proponent’s argument of using the “SEC Standard” of excluding abstentions in vote tabulations is based on the SEC’s vote-counting rules for determining whether a stockholder may resubmit a proposal for inclusion

22    LOGOï 2014 Proxy Statement


 ITEM 4 — STOCKHOLDER PROPOSAL  

in a company’s proxy statement. These rules do not govern whether a stockholder proposal has been approved by stockholders. It may be that in this limited context the SEC wished to set a lower bar to enable stockholders to more easily resubmit proposals. However, in other contexts, the SEC promotes voting standards similar to ours. For instance, the SEC expressly requires a form of proxy to include an abstention option with respect to the advisory vote on the frequency of advisory vote on executive compensation. The Board reviews its leadership structure to determine whether combiningbelieves that it would not be effective corporate governance or separating the roles of Chairman and CEO is inserve the best interests of the CompanyCompany’s stockholders to take one voting standard that an organization applies to a specific context and its stockholders. As part of its December 2011 evaluation, the Board has determinedadopt that combining the roles of Chairman and CEO in Mr. Sharer at this time offers several distinct benefits to the Company and its stockholders. After considering Mr. Sharer’s unique insight, alongstandard universally.

The proposed vote-counting methodology would be inconsistent with the Company’s currentstandard followed by a majority of Delaware corporations, does not favor management-sponsored proposals over stockholder-sponsored proposals, would be poor corporate governance structure, including its strong emphasis on Board independence,and is not a strong independent presiding director and focus on Board and committee involvement, the Board concluded that the Company can more effectively execute its strategy and business plans to maximize stockholder value if Mr. Sharer continues to hold the positions of Chairman and CEO.

Independent oversight of management is a keystone of the Company’s corporate governance structure. The Board believes that the interests of the Company and its stockholders are best served when the Board’s independent members are fully involved in the Company’s operations. The Board does not consider the mandated separation of the Chairman and CEO to be necessary to accomplish this goal. The Company achieves independent oversight of executive management through the composition of the Board, through use of a presiding independent director and through the Company’s corporate governance policies and practices.

The Board remains committed to having both a substantial majority of independent directors and a strong committee system. 12 out of the 14 director nominees (over 85%) are independent as definedstandard used by the NASDAQ listing standards and the requirements of the SEC with Messrs. Sharer and Bradway representing the sole exceptions. All members of the Board’s key committees (Audit, Compensation and Management Development, Corporate Responsibility and Compliance and Governance and Nominating) are independent. This means that oversight of critical issues such as the integrity of the Company’s financial statements, the efficacy of the Company’s enterprise risk management program, executive compensation decisions (includingin determining whether a stockholder proposal has been approved for Mr. Sharer), and the development and implementation of the Company’s corporate governance policies and practices is entrusted to independent directors. The Company’s independent directors routinely meet without the presence of executive management, including at each regularly scheduled Board meeting, to review the Company’s performance, management effectiveness, proposed programs and transactions and the Board meeting agenda items, as needed. Mr. Sharer, our CEO, will be stepping down from his position as CEO effective as of the 2012 Annual Meeting of Stockholders and will continue as Chairman until December 31, 2012, at which time he will retire from that position. The independent members of the Board announced that Mr. Bradway will succeed

Mr. Sharer as CEO effective May 23, 2012. The Board announced their intention to elect Mr. Bradway as Chairman when Mr. Sharer retires from that position at the end of 2012 and the Board will elect a lead independent director at that time.

Additionally, Dr. Coffman, as Chair of the Governance and Nominating Committee, serves as the current presiding independent director. Dr. Coffman’s primary responsibilities include:

acting as the principal liaison to the Chairman regarding the views of, and any concerns or issues raised by, the independent directors;

setting the agenda for and presiding at all meetings of the independent directors and apprising the Chairman of the issues considered when necessary and appropriate;

calling meetings of the independent directors when necessary and appropriate;

presiding at all meetings of the Board at which the Chairman is not present; and

reviewing, in consultation with the Chairman, schedules, agendas, and materials for Board meetings when necessary and appropriate.

The Company’s governing documents also permit the Board to establish and, when appropriate, adjust the scope of the presiding independent director’s responsibilities. This flexibility gives the Board the ability to appoint a lead independent director if the Board determines that such structure is in the best interests of the Company and its stockholders.

Given the Company’s independent Board structure, role of the presiding independent director and other strong corporate governance practices, the Board believes that mandating a separation of the positions of Chairman and CEO would weaken the Company’s current leadership structure. Furthermore, the proposal would deprive the Board of the valuable flexibility to exercise its business judgment in selecting the individual best suited to serve as Chairman in the future.general matters. Accordingly, the Board does not believe that implementing the proposal would be in the best interests of the Company or its stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” STOCKHOLDER PROPOSAL # 1.

Stockholder Proposal #2

Ms. Jovita Carpenter, owner of 200 shares of our Common Stock as of December 1, 2011, naming Jared S. Goodman, counsel for the People for the Ethical Treatment of Animals Foundation, as her proxy with an address of 1536 16th Street NW, Washington, D.C. 20036, has notified the Company that she intends to submit the following proposal at the Annual Meeting:

TRANSPARENCY IN ANIMAL USE

RESOLVED, that the Board is requested to issue an annual report to shareholders detailing measures taken to ensure that Amgen’s animal experimentation oversight committee functions properly with regard to the use of animals in painful and lethal experiments, procedures to ensure appropriate animal care in-house and at contract laboratories, and specifics on how Amgen uses animals and plans to promote alternatives to animal use.

Supporting Statement:

Our Company posts a number of public policies on its website.1 Our environmental policy, for example, provides specific data on compliance issues, energy use,2 and conservation targets. Goals for fuel efficiency, recycling, and waste reduction are clearly articulated.3 Environmental notices of violations are reported.4

1

http://www.amgen.com/about/corporate_compliance html.

2

http://www.amgen.com/about/environment/performance html.

3

http://www.amgen.com/about/environment/targets html.

4

http://www.amgen.com/about/environment/compliance.html.

In contrast, our Company’s animal testing policy is composed solely of generic statements and provides no specific information.5 Unlike other international companies,6 it does not provide details such as animal use numbers or specific efforts to incorporate replacement methods.

Publicly available government documents show that our Company’s animal experimentation oversight committee—required by law to review experiments and ensure compliance with applicable laws—is not functioning properly. This committee is the animals’ last line of defense, yet it is not scrutinizing our Company’s animal use as required.

Of the thousands of animals used in the past four years by our Company, a staggering 64% were used in painful experiments, including those in which “appropriate anesthetic, analgestic, or tranquilizing drugs were used.” In 2011, our Company’s oversight committee was cited for failing to properly oversee painful and invasive experiments that involved exposing animals’ blood vessels and inserting tubes into them. It was also cited for failing to review significant changes to experimental protocols involving dogs.7

Our Company states that it “exercises diligent animal welfare oversight for sponsored work at contract research organizations.” Yet in one contract laboratory used by our Company, Covance, Inc., an undercover investigator videotaped workers striking primates and throwing them against cages. Primates circled frantically in their cages, pulled out their hair, and chewed at their own flesh.8

In another instance, a primate became trapped in his cage bars, unable to reach food or water for days, while others suffered frostbite from inadequate weather protection. The government has cited and fined Covance for improper care and failure to provide pain relief to suffering animals.

Given that 92% of drugs deemed safe and effective when tested on animals fail in human clinical trials and that, of the remaining 8%, half are later relabeled or withdrawn due to unanticipated, severe adverse effects, there is a also a clear scientific imperative for improving how our Company’s products are tested.

Our Company must incorporate recommendations from the National Academy of Sciences to use recent scientific advances to “transform toxicity testing from a system based on whole-animal testing to one founded primarily on in vitro [non-animal] methods.”9 These approaches will improve efficiency and predictivity to humans, and reduce animal use and suffering as well as cost.

We urge stockholders to voteFOR this proposal.

Board Response to Stockholder Proposal #2

The Board of Directors recommends a vote “AGAINST” Stockholder Proposal #2 for the following reasons:

Our Board of Directors has considered this proposal and has concluded that it is not in the best interests of the Company or its stockholders.

The Board believes the preparation of an additional report as requested by the proponent is an unnecessary use of Company resources. In the course of developing and delivering innovative medicines and treatments to patients, it is essential for the Company to assess the safety and efficacy of new drugs prior to their use in humans. The Company is dedicated to protecting the welfare of animals and diligently fulfills its ethical obligation to provide humane and responsible treatment for research animals. Furthermore, the Company is committed to the development and use of non-animal research methods wherever such methods are available and scientifically valid. The fundamental principles of the Company’s commitment to the ethical use of animals in research are publicly available for review at www.amgen.com/science/ethical_research.html.

5

http://www.amgen.com/science/ethical_research.html.

6

http://www.novonordisk.com/science/bioethics/animal_ethics.asp.

7

http://www.aphis.usda.gov/animal_welfare/efoia/index.shtml.

8

http://www.covancecruelty.com.

9

Toxicity Testing in the 21st Century: A Vision and a Strategy (NRC 2007).

The Company’s policies and standards on laboratory animal care abide by the principles known as the 3Rs of animal research:

Refine animal experiments by eliminating or minimizing impact to animals and reducing potentially painful or invasive procedures wherever possible;

Reduce the use of animals by including the absolute minimum number of animals needed to obtain valid results in each experiment; and

Replace animals in research by always looking for alternative, non-animal research methods that can provide the data needed to answer key scientific questions.

Furthermore, the Company’s Commitment to the Ethical Use of Animals in Research reflects the Company’s dedication to the humane treatment of animals used in research. In furtherance of this commitment, the Company ensures that:

The care and use of all laboratory animals meet or exceed relevant local, national and international regulations. The Company’s programs and facilities are subject to unannounced regulatory review and inspections. They also undergo regular peer review inspections to maintain our accreditation status by the Association for the Assessment and Accreditation of Laboratory Animal Care International (AAALAC), a private nonprofit organization that promotes the humane treatment of animals in science. AAALAC is recognized as the “gold standard” internationally for research animal programs.

 

All animal use is reviewed and approved by a panel of objective experts, which includes independent external representation from the local community.

Quality veterinary care is available at all times and all of the Company’s laboratory animals are consistently monitored for signs of ill health by veterinary professionals and other qualified staff members.

Staff members involved in the care of laboratory animals are properly trained to ensure they can competently care for these animals.

The Company enforces the same high standards at its contract research organizations, with regular on-site evaluations. Service providers that conduct animal research on the Company’s behalf must adhere to high standards in their animal care and welfare practices, must have robust plans in place to prevent any lapses in animal welfare, and are required to promptly address any issues that may arise.

The diligence that the Company brings to animal care and welfare has been recognized by AAALAC. This past year, AAALAC reviewed all four of the Company’s sites in theUnited States where animal research is conducted and reported that the animal welfare programs at each of these sites were “exemplary”—the highest designation that AAALAC confers. It is a significant achievement to have even one site receive this high distinction, and truly remarkable to have every site in the Company’s U.S. network receive this designation.

The Board believes that the annual report requested by this proposal would not provide greater transparency on the Company’s existing policies or enhance the Company’s exemplary practices regarding animal use. Accordingly, the Board believes that this proposal is unnecessary and that the resources required to prepare an additional report to stockholders, as requested by the proponent, would be better devoted to the Company’s core mission of delivering innovative therapies to patients with grievous illnesses. For the foregoing reasons, the Board believes that the proposal is not in the best interests of the Company or its stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” STOCKHOLDER PROPOSAL #2.

Stockholder Proposal #3

Pax World Mutual Funds with an address of 30 Penhallow Street, Suite 400, Portsmouth, NH 03801, owner of 302,371 shares of our Common Stock as of December 7, 2011, has notified the Company that it intends to submit the following proposal at the Annual Meeting:

Request for Disclosure of Lobbying Policies and Practices

Whereas, businesses, like individuals, have a recognized legal right to express opinions to legislators and regulators on public policy matters.

It is important that our company’s lobbying positions, as well as processes to influence public policy, are transparent. Public opinion is skeptical of corporate influence on Congress and public policy and questionable lobbying activity may pose risks to our company’s reputation when controversial positions are embraced. Hence, we believe full disclosure of Amgen’s policies, procedures and oversight mechanisms is warranted.

Resolved, the stockholders of Amgen request the Board authorize the preparation of a report, updated annually, disclosing:#1.

 

LOGOï 2014 Proxy Statement23


 1.

Company policy and procedures governing the lobbying of legislators and regulators, including that done on our company’s behalf by trade associations. The disclosure should include both direct and indirect lobbying and grassroots lobbying communications.

2.

A listing of payments (both direct and indirect, including payments to trade associations) used for direct lobbying as well as grassroots lobbying communications, including the amount of the payment and the recipient.

3.

Membership in and payments to any tax-exempt organization that writes model legislation or endorses legislation.

4.

Description of the decision making process and oversight by the management and Board for

a.

direct and indirect lobbying contribution or expenditure; and

b.

expenditures for grassroots lobbying.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation, (b) reflects a view on the legislation and (c) encourages the recipient of the communication to take action with respect to the legislation.

Both “direct and indirect lobbying” and “grassroots lobbying communication” include efforts at the local, state and federal levels.

The report shall be presented to the Audit Committee of the Board or other relevant oversight committees of the Board and posted on the company’s website.

Supporting Statement

As stockholders, we encourage transparency and accountability on the use of staff time and corporate funds to influence legislation and regulation both directly and indirectly as well as grassroots lobbying initiatives. We believe such disclosure is in stockholder’s best interests. Absent a system of accountability, company assets could be used for policy objectives contrary to a company’s long-term interests posing risks to the company and stockholders.

Amgen spent approximately $22.7 million in 2009 and 2010 on direct federal lobbying activities, according to disclosure reports (U.S. Senate Office of Public Records). This figure may not include grassroots lobbying to directly influence legislation by mobilizing public support or opposition. Also, not all states require disclosure of lobbying expenditures to influence legislation or regulation.

Such expenditures and contributions can potentially involve the company in controversies posing reputational risks.

We encourage our Board to require comprehensive disclosure related to direct, indirect and grassroots lobbying.

Board Response to Stockholder Proposal #3

The Board of Directors recommends a vote “AGAINST” Stockholder Proposal #3 for the following reasons:

Our Board of Directors has considered this proposal and has concluded that it is not in the best interests of the Company or its stockholders.

The Company recognizes the importance of sound public policy in achieving our goal of serving patients by providing therapies that restore health and save lives. Accordingly, it is in the best interests of the Company and its stockholders for the Company to participate in the political process. The Company is committed to transparency in this regard and its contributions and expenditures are well documented as required by existing disclosure requirements and internal policies. As such, the Board believes that producing the report requested by this proposal would be an unnecessary use of the Company’s resources without a commensurate benefit.

The Board is dedicated to the highest standard of legal compliance, ethical behavior and accurate disclosure to the public. The Corporate Responsibility and Compliance Committee of the Board annually reviews the Company’s policies, practices and philosophy regarding making political contributions. Contributions are made in accordance with Company policies approved by senior management and are audited on a regular basis. In addition, the Company strictly complies with the disclosure obligations imposed by the numerous federal, state and local laws that regulate the Company’s political contributions and expenditures at all levels. The Company publicly discloses and regularly updates information regarding its political contributions and lobbying expenditures at www.amgen.com/about/corporate_governance_political_contributions.html. The Company also discloses all of its U.S. lobbying activities to the U.S. House of Representatives and the Company’s corporate contributions and political action committee contributions made to candidates and organizations are publicly disclosed in compliance with the U.S. Congress’s Honest Leadership and Open Government Act.

The Board believes that a combination of the voluntary disclosure on our website and the ample, legally-mandated public disclosure is sufficient to address the concerns cited in this stockholder proposal. Any additional disclosure would impose an unnecessary administrative burden on the Company while providing little, if any, value to the Company’s stockholders. Furthermore, the disclosure of the decision making process behind the Company’s contributions and expenditures could place the Company at a competitive disadvantage by revealing our long-term business strategies and priorities. Accordingly, the Board does not believe that implementing the proposal is in the best interests of the Company or its stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” STOCKHOLDER PROPOSAL # 3.

Stockholder Proposal #4

Mr. William Steiner with an address of 112 Abbottsford Gate, Piermont, NY 10968, owner of at least 500 shares of our Common Stock as of December 12, 2011, has notified the Company that he intends to submit the following proposal at the Annual Meeting:

4 - CEO to Serve on a Maximum of One Other Board

RESOLVED, Shareholders request that our board of directors adopt a policy that allows our Chief Executive Officer to serve on no more than one outside board of directors of a public company that has a market capitalization of more than $200 million. This policy would address any possible need for any exception to this rule.

While our CEO Kevin Sharer was paid $21 million by Amgen he was overextended by directorships on the boards of Northrop Grumman (annual sales of $30 billion) and Chevron (annual sales of $233 billion). Mr. Sharer was also on the Chevron executive pay committee (and Chevron was rated high concern for executive pay by The Corporate Library). Plus Northrop Grumman is no longer headquartered in California.

The merit of this proposal should also be considered in the context of the opportunity for additional improvement in our company’s 2011 reported corporate governance in order to make our company more competitive:

The Corporate Library, an independent investment research firm, rated our company “D” with “High Governance Risk” and “High Concern” in Executive Pay – $21 million for Kevin Sharer, our CEO. Mr. Sharer was also potentially entitled to $24 million if there was a change in control.

Our company continued to give out discretionary bonuses – new CFO Jonathan Peacock received a $1 million sign-on bonus. Sign-on bonuses in the form of cash and not tied to performance are not in the best interests of shareholders. In addition, long-term incentive pay for executives continued to include time-vesting equities in the form of market-priced stock options and restricted stock units.

Vance Coffman, on our audit and nomination committees, was designated a “Flagged (Problem) Director” by The Corporate Library due his chairmanship of Bristol-Myers’ audit committee when Bristol-Myers settled an SEC suit alleging substantial accounting fraud. Two-thirds of our nomination committee individually received 17% in negative votes.

The proposal for shareholders to act by written consent received 51% and 63% votes in consecutive years and management did not move to adopt it. In fact management spent extra money to oppose the written consent proposal but could not stop our 51% vote. However, Andrea Robinson, assistant secretary, said it is important to understand Amgen’s shareholder base and how they feel about particular issues.

Mr. Sharer allowed no questions at our 2010 annual meeting when the election of directors and auditors were introduced for voting. Mr. Sharer boasted that he held 85% of proxies and would not even allow our audit firm to answer a question.

Please encourage our board to respond positively to this proposal to increase CEO focus on our company’s challenges – Yes on 4.

Board Response to Stockholder Proposal #4

The Board of Directors recommends a vote “AGAINST” Stockholder Proposal #4 for the following reasons:

Our Board of Directors has considered this proposal and has concluded that it is unnecessary and not in the best interests of the Company or its stockholders.

The Board understands that it is important that our Chief Executive Officer, or CEO, is not overcommitted due to his service on outside boards of directors. The Board also recognizes that the time our CEO spends as a director of outside companies provides him with insight and experience that enhances his value to the Company. To balance these interests, the Board has adopted corporate governance principles requiring our CEO to limit his service on outside boards of directors to ensure that such participation does not interfere with his ability to fulfill his duties to the Company. In furtherance of this policy, the corporate governance principles prohibit our CEO from serving on more than two outside public company boards of directors. In addition, the Governance and Nominating Committee must review and consent to each outside board membership that our CEO desires to accept. This process allows the Governance and Nominating Committee to assess whether our CEO’s commitments might interfere with his effective service to the Company.

The Board believes that the current policy strikes an appropriate balance between permitting our CEO to gather experience as a director on outside boards of directors and preventing him from becoming overcommitted. This proposal would arbitrarily restrict board service, thereby reducing the diversity of issues and insights to which our CEO is exposed and would not be in the best interests of the Company or its stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” STOCKHOLDER PROPOSAL #4.

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

Security Ownership of Directors and Executive Officers

The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of March 26, 201217, 2014 by: (i) each current director and nominee; (ii) our ChiefNamed Executive Officer, our Chief Financial Officer and each of our other three most highly compensated executive officers for the year ended December 31, 2011 (collectively, the NEOs)Officers, or NEOs (as specified on page 38) and (iii) all of our current directors and executive officers as a group. There were 782,409,949756,487,286 shares of our Common Stock outstanding as of March 26, 2012.17, 2014. None of our directors, nominees, NEOs or executive officers, individually or as a group, beneficially owns greater than 1% of our outstanding shares of Common Stock.

 

   Amgen Inc.
Common Stock
(1)(2)

Beneficial Owner

  Total
Common
Stock
Beneficially
Owned
   Shares
Acquirable
Within 60
Days
   Percent
of Total

Non-Employee Directors and Nominees

      

David Baltimore

   75,131     46,000    *

Frank J. Biondi, Jr.

   62,696     46,000    *

François de Carbonnel

   40,339     36,828    *

Vance D. Coffman

   50,123     40,000    *

Rebecca M. Henderson

   30,000     30,000    *

Frank C. Herringer(3)

   44,527     30,000    *

Tyler Jacks

   0     0    *

Gilbert S. Omenn

   225,497     46,000    *

Judith C. Pelham

   65,909     46,000    *

J. Paul Reason

   40,554     30,000    *

Leonard D. Schaeffer

   41,882     30,000    *

Ronald D. Sugar

   25,000     25,000    *

Named Executive Officers

      

Kevin W. Sharer(4)

   901,449     707,125    *

Robert A. Bradway

   367,892     326,000    *

Jonathan M. Peacock

   58,323     43,750    *

Roger M. Perlmutter(5)

   408,231     256,000    *

Anthony C. Hooper

   18,201     0    *

All current directors and executive officers as a group (21 individuals) (6)

   2,915,689     2,189,644    *

   Amgen Inc.
Common Stock(1)(2)
 
Beneficial Owner  Total
Common
Stock
Beneficially
Owned
   Shares
Acquirable
Within 60
Days
   Percent
of Total
 

Non-Employee Directors and Nominees

      

David Baltimore

   54,634     25,000     *  

Frank J. Biondi, Jr.

   31,696     15,000     *  

François de Carbonnel

   26,266     10,000     *  

Vance D. Coffman

   56,518     45,000     *  

Robert A. Eckert

   20,000     20,000     *  

Greg C. Garland

   429     0     *  

Rebecca M. Henderson

   8,000     8,000     *  

Frank C. Herringer(3)

   42,858     25,000     *  

Tyler Jacks

   21,890     20,000     *  

Gilbert S. Omenn(4)

   199,165     25,000     *  

Judith C. Pelham

   13,939     0     *  

Ronald D. Sugar

   30,000     30,000     *  

Named Executive Officers

      

Robert A. Bradway

   481,306     362,107     *  

Anthony C. Hooper

   90,234     2,961     *  

Jonathan M. Peacock(5)

   161,639     100,807     *  

Sean E. Harper

   60,671     35,951     *  

Madhavan Balachandran(6)

   54,547     14,416     *  

All current directors and executive officers as a group (22 individuals)(7)

   1,454,325     772,470     *  
*

Less than 1%.

 

(1)

Information in this table is based on our records and information provided by directors, NEOs, executive officers and in public filings. Unless otherwise indicated in the footnotes and subject to community property laws, where applicable, each of the directors and nominees, NEOs and executive officers has sole voting and/or investment power with respect to such shares, including shares held in trust.

24    LOGOï 2014 Proxy Statement


 SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS  

(2)

Includes shares which the individuals shown have the right to acquire (a) upon vesting of restricted stock units, or RSUs, and related dividend equivalents (excluding fractional shares), where the shares are issuable as of March 26, 201217, 2014 or within 60 days thereafter, and (b) upon exercise of stock options that are vested as of March 26, 201217, 2014 or within 60 days thereafter, as set forth in the table below. Such shares are deemed to be outstanding in calculating the percentage ownership of such individual (and the group), but are not deemed to be outstanding as to any other person. Excludes vested RSUs, and related dividend equivalents, for which receipt has been deferred (deferred RSUs) by certain of the non-employee directors to a date later than 60 days after March 26, 201217, 2014. Dividend equivalents credited on RSUs are deemed reinvested and any dividendsare paid onout with the deferredvested RSUs reinvestedin shares of our Common Stock. Excludes annual RSU grants to acquire additional deferred RSUs.directors expected to be made in April 2014 pursuant to the Amgen Inc. 2009 Director Equity Incentive Program, as such grant amounts were not available as of the date of the filing of this proxy statement.

 

Name

  RSUs
Included
   Stock  Options
Included
   RSUs
Excluded
 

David Baltimore

   0     46,000     0  

Frank J. Biondi, Jr.

   0     46,000     9,637  

François de Carbonnel

   1,828     35,000     2,012  

Vance D. Coffman

   0     40,000     6,158  

Rebecca M. Henderson

   0     30,000     3,565  

Frank C. Herringer

   0     30,000     10,992  

Tyler Jacks

   0     0     0  

Gilbert S. Omenn

   0     46,000     4,421  

Judith C. Pelham

   0     46,000     0  

J. Paul Reason

   0     30,000     6,158  

Leonard D. Schaeffer

   0     30,000     3,023  

Ronald D. Sugar

   0     25,000     1,828  

Kevin W. Sharer

   29,875     677,250     0  

Robert A. Bradway

   10,500     315,500     0  

Jonathan M. Peacock

   0     43,750     0  

Roger M. Perlmutter

   0     256,000     0  

Anthony C. Hooper

   0     0     0  

Name  RSUs and
Dividend
Equivalents
Included
   Stock Options
Included
   RSUs and
Dividend
Equivalents
Excluded
 

David Baltimore

   0     25,000     0  

Frank J. Biondi, Jr.

   0     15,000     13,323  

François de Carbonnel

   0     10,000     2,087  

Vance D. Coffman

   0     45,000     8,267  

Robert A. Eckert

   0     20,000     1,879  

Greg C. Garland

   0     0     0  

Rebecca M. Henderson

   0     8,000     5,577  

Frank C. Herringer

   0     25,000     14,729  

Tyler Jacks

   0     20,000     0  

Gilbert S. Omenn

   0     25,000     4,587  

Judith C. Pelham

   0     0     0  

Ronald D. Sugar

   0     30,000     5,222  

Robert A. Bradway

   18,597     343,510     0  

Anthony C. Hooper

   2,961     0     0  

Jonathan M. Peacock

   8,175     92,632     0  

Sean E. Harper

   6,091     29,860     0  

Madhavan Balachandran

   3,218     11,198     0  
(3)

Includes 10,82114,152 shares held by family trusts.

(4)

Dr. Omenn will not be standing for re-election to our Board of Directors at the 2014 Annual Meeting of Stockholders.

(5)

Mr. Peacock ceased service as an executive officer effective as of January 10, 2014. Data provided is based on information known as of January 10, 2014.

(6)

Includes 189,93240,131 shares held by a trust and 4,392 shares (excluding fractional shares) in Amgen’s Retirement and Savings Plan, or 401(k) Plan.family trusts.

(5)

The beneficial ownership reported is as of February 12, 2012. On February 12, 2012, Dr. Perlmutter retired from the Company. On February 29, 2012, the Company entered into a one-year consulting services agreement, effective as of February 13, 2012, among the Company, Perlmutter Consulting, Inc. and Dr. Perlmutter, with the option to extend the agreement for a second year by mutual agreement among the parties.

(6)(7)

Includes 868,166262,172 shares (excluding fractional shares) held by the six executive officers who are not NEOs and who have a right to acquire such shares upon the vesting of RSUs that have not been deferred to a date later than 60 days after March 26, 201217, 2014 or upon exercise of vested stock options as of March 26, 201217, 2014 or within 60 days thereafter. All current directors and executive officers as a group have the right to acquire a total of 79,82148,365 shares upon vesting of RSUs, and related dividend equivalents, where the shares are issuable as of March 26, 201217, 2014 or within 60 days thereafter and 2,109,823724,105 shares upon exercise of stock options that are vested as of March 26, 201217, 2014 or within 60 days thereafter.

LOGOï 2014 Proxy Statement25


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

Security Ownership of Certain Beneficial Owners

The following table shows the number of shares of our Common Stock owned by each person or entity known to the Company to be the beneficial owners of more than five percent5% of our Common Stock as of December 31, 2011,2013, except as noted, based on a review of publicly available statements of beneficial ownership filed with the Securities and Exchange Commission, or SEC, on Schedules 13D and 13G through March 30, 2012.17, 2014.

 

   Common Stock
Beneficially Owned
 

Name and Address of Beneficial Owner                                                                                      

  Number of
Shares
   Percent
of Total
(1)
 

PRIMECAP Management Company(2)

225 South Lake Avenue, #400

Pasadena, CA 91101

   50,703,563     6.48

BlackRock, Inc.(3)

40 East 52nd Street

New York, NY 10022

   47,867,806     6.12

FMR LLC(4)

82 Devonshire Street

Boston, MA 02109

   43,946,871     5.62

   Common Stock
Beneficially Owned
 
Name and Address of Beneficial Owner  Number of
Shares
   Percent
of Total(1)
 

Capital Research Global Investors(2)

333 South Hope Street

Los Angeles, CA 90071

   77,432,460     10.24%  

FMR LLC(3)

245 Summer Street

Boston, MA 02210

   51,017,182     6.74%  

BlackRock, Inc.(4)

40 East 52nd Street

New York, NY 10022

   46,723,749     6.18%  
(1)

The “Percent of Class”Total” reported in this column has been calculated based upon the numbers of shares of Common Stock outstanding as of March 26, 201217, 2014 and may differ from the “Percent of Class” reported in statements of beneficial ownership filed with the SEC.

(2)

The amounts shown and the following information was provided by PRIMECAP Management CompanyCapital Research Global Investors pursuant to a Schedule 13G filed with the SEC on January 10, 2014. Capital Research Global Investors reports that it has sole voting and dispositive power over all 77,432,460 shares.

(3)

The amounts shown and the following information was provided by FMR LLC pursuant to a Schedule 13G amendment filed with the SEC on February 13, 2012 indicating beneficial ownership as of December 31, 2011 of 50,703,563 shares of our Common Stock. PRIMECAP Management Company14, 2014. FMR LLC reports that it has sole voting power over 15,724,8343,721,880 of these shares and sole dispositive power over 50,703,563all 51,017,182 shares.

(3)(4)

The amounts shown and the following information was provided by BlackRock, Inc. pursuant to a Schedule 13G filed with the SEC on February 13, 2012 indicating beneficial ownership as of December 31, 2011 of 47,867,806 shares of our Common Stock.January 28, 2014. BlackRock, Inc. reports that it has sole voting and dispositive power over 47,867,806 shares.

(4)

The amounts shown and the following information was provided by FMR LLC pursuant to a Schedule 13G filed with the SEC on February 14, 2012 indicating beneficial ownership as of December 31, 2011 of 43,946,871 shares of our Common Stock. FMR LLC reports that it has sole voting power over 4,059,12037,223,943 of these shares and sole dispositive power over 43,946,871all 46,723,749 shares.

26    LOGOï 2014 Proxy Statement


 CORPORATE GOVERNANCE  

CORPORATE GOVERNANCECorporate Governance

Board of Directors Corporate Governance Highlights

Our Board of Directors, or Board, is governed by our corporate governance principles,Amgen Board of Directors Corporate Governance Principles, or Corporate Governance Principles, which are amended from time to time to incorporate certain current best practices in corporate governance. The corporate governance principlesOur Corporate Governance Principles may be found on our website atwww.amgen.comand are available in print upon written request to the Company’s Secretary. The Board’s corporate governance practices include the following:

 

 

Lead Independent Director. The independent members of the Board elect a lead independent director on an annual basis. The lead independent director has specific responsibilities and authorities as discussed below. Dr. Coffman currently serves as our lead independent director.

Executive Sessions of Independent DirectorsDirectors.Our independent directors meet privately on a regular basis. The chairman of the Governance and Nominating Committee, or Governance Committee, isDr. Coffman, as our presidinglead independent director, who presides at such meetings and has the additional responsibilities and authorities discussed below.meetings.

 

 

Majority Stockholder VotesApproval Required for Director ElectionsElections.If an incumbent director up for re-election at a meeting of stockholders fails to receive a majority of affirmative votes in an uncontested election, the Board will adhere to the director resignation policy as provided in ourthe Amended and Restated Bylaws.Bylaws of Amgen Inc.

 

 

Access to ManagementManagement.We afford our directors ready access to our management. Key members of management attend Board and committee meetings to present information concerning various aspects of the Company, its operations and results. The Corporate Responsibility and Compliance Committee, or Compliance Committee, members also have regular meetings in executive session with our Chief Compliance Officer, and the Audit Committee members have regular meetings in executive session with our internal auditors.auditors and separate meetings in executive session with our head of Corporate Audit.

 

 

Authority to Retain Outside AdvisorsAdvisors.—The Our Board vests its committees withhave the authority to retain outside advisors. The Audit Committee has the sole authority to hireappoint,

compensate, retain and terminateoversee the independent registered public accountants. The Compensation and Management Development Committee, or Compensation Committee, has the sole authority to hireappoint, compensate, retain and terminateoversee compensation advisors for senior management compensation review. The Governance and Nominating Committee, or Governance Committee, has the sole authority to hireappoint, retain and terminatereplace search firms to identify director candidates and compensation advisors for our directors’ compensation review.

 

 

Limitation on Number of BoardsBoards.A director who is currently serving as our Chief Executive Officer, or CEO, should not serve on more than two outside public company boards. No director should serve on more than five outside public company boards.

 

 

Retirement AgeAge.The Board has established a retirement age of 72. A director willis expected to retire from the Board on the day of the annual meeting of stockholders following his or her 72nd birthday. TheAfter due consideration, the Board has determined that it would be beneficial to have Dr. David Baltimore’s service transition with that of Dr. Tyler Jacks to facilitate such transition and has waived the retirement age with respect to Dr. Baltimore (who is currently 74 years old).based on its determination that it would be beneficial to have Dr. Baltimore will retire from the Boardcontinue to serve as a director due to his unique scientific knowledge and deep understanding of the 2013 annual meetingresearch and development activities and operations of stockholders.the Company.

 

 

Changes in Circumstances EvaluatedEvaluated.If a director has a substantial change in principal business or professional affiliation or responsibility, including a change in principal occupation, he or she shall offer his or her resignation to the chairman of the Governance Committee. The Governance Committee determines whether to accept the resignation based on what it believes to be in the best interests of the Company and itsour stockholders.

 

 

Outside Relationships Require Pre-ApprovalPre-Approval.Without the prior approval of disinterested members of the Board, directors should not enter into any transaction or relationship with the Company in which they will have a financial or a personal interest or any transaction that otherwise involves a conflict of interest.

LOGOï 2014 Proxy Statement27


 CORPORATE GOVERNANCE  

 

Conflicts of Interest—Interest.If an actual or potential conflict of interest arises for a director or a situation arises giving the appearance of an actual or potential conflict, the director must promptly inform the Chairman of the Board, or Chairman, or the chairman of the Governance Committee. All directors will recuse themselves from any discussion or decision found to affect their personal, business or professional interests.

 

 

Board and Committee EvaluationsEvaluations.The Board and the Audit, Compensation, Compliance and Governance Committees each have an annual evaluation process

which focuses on their role and effectiveness, as well as fulfillment of their fiduciary duties. In 2013, the evaluations were each completed anonymously to encourage candid feedback. The Board and Governance Committee completed their evaluationsits evaluation in December 2011,2013, while the Audit, Committee, Compensation, CommitteeCompliance and Compliance CommitteeGovernance Committees each completed its assessment in October 20112013 for further evaluation by the Governance Committee in December.December 2013. The results of the committee evaluations are reported to the full Board. Each committee and the Board was satisfied with its performance.

Director Qualifications and Review of Board Diversity

Our Governance Committee is responsible for determining Board membership qualifications and for selecting, evaluating and recommending to the Board nominees for the annual election to the Board and to fill vacancies as they arise. The Governance Committee reviews, periodically with the Board, the composition and size of the Board, reviews each committee’s performance and recommends, ifmakes recommendations, as necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise and diversity advisable for the Board as a whole and contains at least the minimum number of independent directors required by applicable laws and regulations.

The Governance Committee maintains guidelines for selecting nominees to serve on the Board and for considering stockholder recommendations for nominees. The Amgen Inc. Board of Directors Guidelines for Director Qualifications and Evaluations are included in this proxy statement as

Appendix AA.. Among other things, Board members should possess demonstrated breadth and depth of management and leadership experience, financial and/or business acumen or relevant industry or scientific experience, integrity and high ethical standards, sufficient time to devote to the Company’s business, the ability to oversee, as a director, the Company’s business and affairs for the benefit of our stockholders, the ability to comply with the Amgen Board of Directors’Directors Code of Conduct and a demonstrated ability to think independently and work collaboratively. In addition, although the Governance Committee does not maintain a diversity policy, the Governance Committee considers diversity in its determinations. Diversity includes race, ethnicity, age and gender and is also broadly construed to take into consideration many other factors, including industry knowledge, operational experience and scientific and academic expertise, geography and personal backgrounds.

Leadership Structure and Risk Oversight

Leadership Structure

Our current leadership structure and governing documents permit the roles of Chairman and CEO to be filled by the same or different individuals. The Board has currently determined that it is in the best interests of the Company and itsour stockholders to have Mr. Kevin W. Sharer,Bradway, our CEO and President, serve as Chairman, coupled with an active presidinglead independent director. As such, Mr. SharerBradway holds the position of Chairman, and CEO and President, and Dr. Vance D. Coffman the chairman of our Governance Committee serves as the presidinglead independent director. Mr. Sharer will be stepping down from his position as CEO effective as of the 2012 Annual Meeting of Stockholders, or Annual Meeting, and will continue on as Chairman until December 31, 2012, at which time he will retire from that position. Mr. Robert A. Bradway, our President and Chief Operating Officer, will succeed Mr. Sharer as CEO effective May 23, 2012 and the Board has announced their intention to elect Mr. Bradway as Chairman when Mr. Sharer retires from that position at the end of 2012. The Board has also announced their intention to elect a lead independent director at that time.

Corporate Governance Structure. The Board believes our corporate governance structure, with its strong emphasis on

Board independence, an active presidinglead independent director and strong Board and committee involvement, provides sound and robust oversight of management.

Board IndependenceIndependence.. At least annually, the Governance Committee reviews the independence of each non-employee director and makes recommendations regarding director independence to the Board and the Board affirmatively determines whether each director qualifies as independent. Each director must keep the Governance Committee fully and promptly informed as to any development that may affect the director’s independence.

Twelve

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11 out of the fourteen12 director nominees (over 85%91%) are independent as defined by The NASDAQ Stock Market, or NASDAQ, listing standards and the requirements of the Securities and Exchange Commission, or SEC, with the exceptionsexception being Messrs. Sharer andMr. Bradway. All of our directors are elected annually.

PresidingLead Independent Director.The lead independent director is elected by the independent members of the Board on an annual basis. Dr. Coffman the chairman of our Governance Committee, serveshas served as the presidinglead independent director.director since January 1, 2013. He was re-elected by the independent members of the Board in December 2013 to serve for an additional term. In such position, heDr. Coffman serves as a means for regular communication between the independent directors and Mr. Sharer,Bradway, keeping Mr. SharerBradway apprised of any concerns, issues or determinations made during the independent sessions, and consults with Mr. SharerBradway on other matters pertinent to the Company and the Board. The presidinglead independent director chairs the independent sessions of the Board, as well asdirector’s additional responsibilities include:

Presiding at meetings of the Board at which Mr. Sharerthe Chairman is not present.present, including executive sessions of the independent directors;

Serving as a liaison between the Chairman and the independent directors;

Previewing the information to be provided to the Board;

Approving meeting agendas for the Board;

Assuring that there is sufficient time for discussion of all meeting agenda items;

Organizing and leading the Board’s evaluation of the CEO;

Being responsible for leading the Board’s annual self-assessment;

Having the authority to call meetings of the independent directors; and

If requested by major stockholders, ensuring that he/she is available for consultation and direct communication.

In March 2013, the Amended and Restated Bylaws of Amgen Inc. were amended to reflect the lead independent director’s responsibility to preside over meetings of the Board and meetings of stockholders when the Chairman is absent.

Key Committees Comprised of Independent DirectorsDirectors.. The Audit, Committee, the Compensation, Committee, the Compliance Committee and the Governance CommitteeCommittees are each composed solely of independent directors and provide independent oversight of management. In addition, the Audit, Compensation and CompensationCompliance Committees meet in executive session at allon a regular meetingsbasis with no members of management present (unless otherwise requested by the committee). Each of our committees effectively manages theirits Board delegated duties and communicates regularly with the Chairman and members of management. In addition, the Compensation Committee has an effective process for monitoring and evaluating Mr. Sharer’sBradway’s compensation and performance. Each committee chair reports to the full Board at each regular meeting of the Board.

Independent Directors SessionsSessions.. At each regularly scheduled Board meeting, the independent directors generally meet in an executive session without Messrs. Sharer andMr. Bradway to review Company performance, management effectiveness, proposed programs and transactions and the Board meeting agenda items. These independent sessions are organized and chaired by our presidinglead independent director.

Annual AssessmentAssessment.. As part of the Board’s annual self-evaluation process, the Board reviews its leadership structure and whether combining or separating the roles of Chairman and CEO is in the best interests of the Company and itsour stockholders.

Benefits of Combined Leadership Structure.The Board believes that the Company and itsour stockholders hashave been best served by having Mr. SharerBradway in the role of Chairman and CEO through May 23, 2012 and will continue to be the best served by having Mr. Sharer continue in the role of Chairman for the remainder of 2012 to assist Mr. Bradway in his transition to his new role for the following reasons:

 

Mr. SharerBradway is most familiar with our highly complex and long-cycle business and the unique challenges we face. Mr. Sharer’sBradway’s day-to-day insight into our challenges facilitates a timely deliberation by the Board of important matters.

 

Mr. SharerBradway has and will continue to identify agenda items and lead effective discussions on the important matters affecting us. Mr. Sharer’s wealth ofBradway’s knowledge regarding Companyour operations and the industries and markets in which we compete positions him to identify and prioritize matters for Board review and deliberation.

 

As Chairman and CEO, Mr. Sharer has servedBradway serves as an important bridge between the Board and management and providedprovides critical leadership for carrying out our strategic initiatives and confronting our challenges. During the remainder of the time that Mr. Sharer serves as Chairman, the Board believes that Mr. Sharer will bring unique insight to assist the Company to most effectively execute its strategy and business plans to maximize stockholder value in this period of transition.

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strategic initiatives and confronting our challenges. The Board believes that Mr. Bradway brings unique insight to assist the Company to most effectively execute its strategy and business plans to maximize stockholder value.

 

The strength and effectiveness of the communications between Mr. SharerBradway as our Chairman and Dr. Coffman as our presidinglead independent director results in effective Board oversight of the issues, plans and prospects of our Company.

This leadership structure provides the Board with more complete and timely information about the Company, a unified structure and consistent leadership direction and provides a collaborative and collegial environment for Board decision making.

Flexibility of the Board. The Board is committed to high standards of corporate governance. Our Company and its management team is undergoing great changes as it evolves over time. The Board values its flexibility to select, from time to time, a leadership structure that is best able to serve the Company’s and stockholders’ best interests based on the qualifications of individuals available and circumstances existing at the time. As such, the Board regularly evaluates whether combining or separating the roles of Chairman and CEO is in the best interests of the Company and itsour stockholders. The Board believes that a policy limiting its flexibility to choose, consistent with its fiduciary duties, a leadership structure that will enable the Company to most effectively execute its strategy and business plans to maximize stockholder value would be detrimental to the Company and itsour stockholders.

The Board’s Role in Risk Oversight

Our Board oversees an enterprise-wide approach to risk management, which is designed to support the achievement of the Company’s objectives, including strategic objectives to improve long-term financial and operational performance and enhance stockholder value. Our Board believes that a fundamental part of risk management is not only understanding control and mitigation of the risks that we face, but also understanding what levelmonitoring these risks and adopting appropriate control and mitigation of risk is appropriate for our Company and how that level of risk may change over time or due to circumstances.these risks. We believe that the risk management areas that are fundamental to the success of our annual and strategic plans include certaintythe areas of supply, product safety, the resiliency of our business operations, the direction and productivity of our product development, efforts, legalsafety, supply, quality, value and regulatory complianceaccess, sales and the reliability of publicpromotion and private reimbursement systems,corporate development, as well as protecting our assets (financial, intellectual property and information), all of which are managed cross-functionally by senior executive management reporting directly to our CEO.

We have implemented an Enterprise Risk Management, or ERM, program, which is a Company-wide effort to identify, assess, manage, report and monitor enterprise risks and risk areas that may affect our ability to achieve our strategicthe Company’s objectives. The ERM program involves our Board, our management and other personnel and is overseen by one of our senior executive officers. Enterprise risks are identified and managed by management and the business functions and, as discussed below, are overseen by the Board or the appropriate Board committee. At least annually the

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The Board discusses enterprise risks with our senior management.

Our Board also engages in risk management discussions and considers risks to the Companyon a regular basis, including as a part of its annual strategic planning process, annual budget review and approval, capital plan review and approval and through reviews of compliance issues in the appropriate committees of our Board, as appropriate. While the Board has the ultimate oversight responsibility for the risk management process, various committees of the Board are structured to oversee specific risks, as follows:

 

Committee

 Primary Risk Oversight Responsibility

Audit Committee

 Ÿ 

Oversees financial risk, such as capital risk, financial compliance risk and internal controls over financial reporting.

Corporate Responsibility and Compliance Committee

 Ÿ 

Oversees non-financial compliance risk, such as regulatory risks (including the compliance risks associated with the requirements of the Federal health care program, Food and Drug Administration and Corporate Integrity Agreement). Oversees staff member compliance with the staff member Code of Conduct.

Compensation and Management Development Committee

 Ÿ 

Ensures thatEvaluates whether the right management talent is in place. Oversees our compensation policies and practices, including whether such policies and practices balance risk-taking and rewards in an appropriate manner as discussed further below.

Governance and Nominating Committee

 Ÿ 

Oversees the assessment of each member of the Board’s independence, as well as the effectiveness of our Board of Directors Corporate Governance Principles and Board of Directors’ Code of Conduct.

At each regular meeting, or more frequently as needed, the Board considers reports from each of the committees set forth above above, which reports oftenmay provide considerableadditional detail on risk management issues and management’s response.

Compensation Risk Management

In 2011,On an annual basis, management, working with the Compensation Committee’s independent compensation consultant, conductedconducts an assessment of the Company’s compensation policies and practices for all staff members generally, and for our staff members who participate in our sales incentive compensation program, for material risk to the Company. The results of this assessment wereare reviewed and discussed with the Compensation Committee. Based on this assessment, review and discussion, we believe that, through a combination of risk-mitigating features and incentives guided by relevant market practices and Company-wide goals, our compensation policies and practices do not present risks that are reasonably likely to have a material adverse effect on us.

In evaluating our compensation policies and practices, a number of factors were identified which the Company, the Compensation Committee and its independent consultant believe discourage excessive risk-taking, including the factors described below:

 

Our compensation programs consist of a mix of incentives that are tied to varying performance periods and are designed to balance our need to drive our current performance with the need to position the Company for longer-term success.

 

Of this mix of incentives, Company-wide results are the most important factor in determining the amount of an incentive award for each of our staff members. Additionally, we limitcap short-term incentives and make long-term incentive, or LTI, equity awards a component of compensation for nearly all of our full-time staff members. In particular, the CEO and the other executive officers participate in compensation plans that are designed so that the largest component of their compensation is in the form of LTI equity awards to ensure that a significant portion of their compensation is associated with long-term outcomes rather than short-term outcomes, which aligns these individuals’ interests with our stockholders.

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associated with long-term outcomes rather than short-term outcomes, which aligns these individuals’ interests with our stockholders.

 

We employ strong practices with respect to equity awards: we do not award mega-grants, discounted stock options or immediately vestingvested stock options to staff members; we have grant guidelines that generally limit the time period in which we can makegrant date for our equity grants to twothe third business daysday after our announcement of quarterly earnings and we prohibit staff members from hedging the economic risk of our Company’s Common Stock.

 

We have robust stock ownership guidelines for vice presidents and above that require significant investment by these individuals in our Company’s Common Stock.

 

Our Company values and leadership behaviors are an integral part of the performance assessments of our staff members and are particularly emphasized in our assessment tools at higher positions. These evaluations serve as an important information tool and basis for compensation decisions.

The Compensation Committee retains full discretion to reduce or eliminate annual cash incentive awards to our executive officers and can modify, and has modified awards downwards.

 

We have a clawback policy that requires our Board to consider recapturing past cash or equity compensation payouts awarded to our executive officers if it is subsequently determined that the amounts of such compensation were determined based on financial results that are later restated and the executive officer’s misconduct caused or partially caused such restatement.

We have recoupment provisions that expressly allow the Compensation Committee or management, as appropriate, to consider employee misconduct that caused serious financial or reputational damage to the Company when determining whether an employee has earned an annual cash incentive award or the amount of any such award.

Code of Ethics and Business Conduct

Our Board has adopted two codes of business conduct and ethics, one that applies to our directors and the second which applies to all of our staff members, including our executive officers. The CompanyWe also hashave a Code of Ethics for Senior Financial Officers.senior financial officers. To view our codes of conduct, please visit our website atwww.amgen.com.www.amgen.com. We intend to disclose any

future amendments to certain provisions of our codecodes of business conduct and ethics, or waivers of such provisions, applicable to our directors and executive officers, at the same location on our website identified above. There were no waivers of any of the codes of conduct or the code of ethics in 2011.2013.

Board Independence

At least annually, the Governance Committee reviews the independence of each non-employee director and makes recommendations to the Board and the Board affirmatively determines whether each director qualifies as independent. Each director must keep the Governance Committee fully and promptly informed as to any development that may affect the director’s independence.

The Board has determined that each of our non-employee directors is independent under the listing standards of NASDAQ and the requirements of the SEC. Mr. SharerBradway is not independent based on his service as our CEO and President. Mr. Bradway is not independent based on his services as our President and Chief Operating Officer. Messrs. Sharer and Bradway are the only directorsdirector who also serve serves

us in a management capacity. In making its independence determinations, the Board reviewed transactions and relationships between each director, or any member of his or her immediate family, and us or one of our subsidiaries or affiliates based on information provided by the director, our records and publicly available information. The Board’s independence determinations included reviewingAll of the followingreviewed transactions and arrangements:arrangements were entered into in the ordinary course of business and none of the business transactions, donations or grants involved an amount that (i) exceeded the greater of 5% of the recipient entity’s revenues or $200,000 with respect to transactions where director or any member of his or her immediate family or

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Drs. Coffman, Henderson, Omennspouse served in any capacity other than as a director of a publicly held-corporation or (ii) exceeded $10,000 with respect to professional or consulting services provided by entities at which our directors serve as professors or employees. The following types and Sugarcategories of transactions, relationships and Messrs. Biondi, de Carbonnel, Herringer and Schaeffer and Ms. Pelham are affiliated with and/or are members of the board of directors, scientific advisory board or board of trustees of companies (or healthcare institutions) with which we do business and/or to which The Amgen Foundation, Inc. makes grants or matching gifts.arrangements were considered by our Board in making its independence determinations:

 

Drs. Baltimore, Coffman, Henderson, Omenn and Sugar and Messrs. Biondi, Herringer and Schaeffer and Ms. Pelham have eachEach of our independent directors (or their immediate family members), currently serves or has previously served within the last three years as a professor, trustee, director, or member of the board of governors, board of overseers, board of fellows, board of visitors or other advisorya board, council or committee for one or more colleges, and universities or one or more non-profit, charitable organizations, and/orincluding research or scientific institutions. We have a variety of dealings with these institutions, and entities, including:

Research and development, including specialized lab services;

Consulting and promotional and advertising services;

Donations and grants, including for fellowship stipend support for graduate student research, independent medical education, healthcare sponsorships and programs, symposia and honoraria and membership fees; and

to which The Amgen Foundation, Inc. has made matching donations under our Amgen matching gift program that is available to all of our employees and directors, or has made grants.

Each of our independent directors (or their immediate family members), other than Mr. Biondi and Ms. Pelham, currently serves or has previously served within the last three years as a member of the board of directors or the board of trustees or an advisory board for an entity with

which Amgen has business transactions or to which Amgen makes donations or grants. The business transactions include, among other things, purchasing supplies, equipment and software licenses, healthcare sponsorships and programs, utilities, clinical trials, research and development lab expenses, executive education, conferences and limited consulting services.

Drs. Baltimore, Henderson, Jacks and Omenn currently serve as professors for universities, and Dr. Sugar serves as a senior advisor to corporations, to which Amgen has made payments for certain business transactions such as symposiums, conferences, clinical trials, training and research and development expenses, subscription, equipment repair and license fees, as well as for grants and charitable matching contributions.consulting services.

None of our directors directly or indirectly provides any professional or consulting services to us and none of our directors currently has or has had any direct or indirect material interest in any of thesethe above transactions and arrangements and thearrangements. The Board determined that these transactions and arrangements did not warrant a determination that the director was not independent.

Board Meetings

The Board held sevensix meetings in 20112013 and all of the directors attended at least 75% of the total number of meetings of the Board and committees on which they served. Mr. BradwayGarland was appointed to the Board in October 20112013 and attended all meetings of the Board and committees on which he served in 2013 after the date of his appointment. The independent directors generally meet in executive session without management, present, including Messrs. Sharer andMr. Bradway, present at all regularly scheduled

meetings of the Board. The chairman of the Governance Committee,Dr. Coffman, our presidinglead independent director, presidespresided at such meetings. We and the Board expect all current directors to attend our annual meetings of stockholders barring unforeseen circumstances or irresolvable conflicts. All of the then-current members of the Board were present at our 20112013 annual meeting of stockholders, except for Frederick W. Gluck who retired at the 2011 annual meeting of stockholders.

Board Committees and Charters

The Board’sBoard has six standing committees are:committees: Audit Committee,Committee; Compensation Committee,Committee; Compliance Committee,Committee; Equity Award Committee,Committee; Executive Committee and Governance Committee. The Board maintains charters for each of these standing committees. In addition, the Board has adopted a written set of corporate

governance principlesCorporate Governance Principles and a

Board of Directors’ code of conduct that generally formalize practices we have in place. To view the charters of theour standing Board committees, named above, the corporate governance principlesour Corporate Governance Principles and the Board of Directors’ code of conduct, please visit our website atwww.amgen.com.www.amgen.com.

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Audit Committee

The Audit Committee met nine times in 2011.2013. Throughout 2013 and currently, Mr. Biondi serves as chairman and Ms. Pelham, Mr. de Carbonnel and Drs. Baltimore and Omenn currentlyand Messrs. de Carbonnel and Eckert serve as members of the Audit Committee. Mr. Garland was appointed to the Audit Committee in October 2013. All members of the Audit Committee meet the NASDAQ composition requirements, including the requirements regarding financial literacy and financial sophistication, and the Board has determined that each member is independent under the listing standards of NASDAQ and the rules of the SEC, regarding audit committee membership. The Board has also determined that Messrs. Biondi, and de Carbonnel, Eckert and Garland are each an “audit committee financial expert” as defined by SEC rules.

The Audit Committee has sole authority for the appointment, compensation, retention and oversight of the work of the independent registered public accountants, and responsibility for reviewing and discussing, prior to filing or issuance, with management and the independent registered public accountants (when appropriate) our audited consolidated financial statements to be included in our Annual Report on Form 10-K and earnings press releases.

Compensation and Management Development Committee

The Compensation Committee met fivefour times in 2011.2013. Throughout 2013 and currently, Mr. Herringer serves as Chairmanchairman and Adm. Reason, Mr. SchaefferBiondi and Drs.Dr. Coffman and Sugar currently serve as members of the Compensation Committee. Ms. Pelham was appointed to the Compensation Committee eacheffective October 2013. Admiral J. Paul Reason served on the Compensation Committee until his retirement from the Board in May 2013 and Mr. Schaeffer served on the Compensation Committee until July 2013 when he resigned from our Board. Each member of whomthe Compensation Committee has been determined by the Board to be independent under the listing standards of NASDAQ and the requirements of the SEC.

The Compensation Committee assists the Board in fulfilling its fiduciary responsibilities with respect to the oversight of the Company’s compensation plans, policies and programs, especially those regarding executive compensation. The Compensation Committee is responsible for ensuring thatdesigning the Company’s compensation programs are designed tothat encourage high performance, promote accountability and adherence to

Company values and the staff member code of conduct and to align with the interests of the Company’s stockholders. The Compensation Committee is responsible for ensuring that the executive management development processes are designed to attract, develop and retain talented leadership to serve the long-term best interests of the Company. The Compensation Committee has authority for overseeing the Board’s relationship with stockholders on executive compensation matters, including stockholder outreach efforts, stockholder proposals, advisory votes, communications with proxy advisory firms and related matters.

The processes and procedures of the Compensation Committee for considering and determining compensation for 2013 for our executive officers arewere as follows:

 

Compensation for our executive officers, including our Named Executive Officers, or NEOs, is generally determined annually in March.March, except for annual LTI equity awards which are determined in December and are granted in January.

 

With respect to our CEO, duringby the first calendar quarter of each year the Compensation Committee reviews and approves Company performance goals and objectives for the current year and evaluates the CEO’s performance in light of the Company performance goals and objectives established for the prior year. The Compensation Committee evaluates the performance of the CEO within the context of the overallfinancial and operational performance of the Company, considers competitive market data and establishes the CEO’s compensation based on this evaluation. The values of each component of total compensation (base salary, target annual cash incentive awards and equity awards) for the current year, as well as total annual compensation for the prior year (including the value of equity holdings, potential change of control payments and vested benefits under our Retirement and Savings Plan, Supplemental Retirement Plan and Nonqualified Deferred Compensation Plan as of the end of the last fiscal year) are considered at this time. Final determinations regarding our CEO’s performance and compensation are made during an executive session of the Compensation Committee and are reported to and reviewed by the Board in an independent directors’ session.

During 2011,2013, the Compensation Committee engaged Frederic W. Cook & Co., Inc., or Cook & Co. or the consultant, an independent consultant, to provide advice regarding executive compensation, market data as requested, opinions on the appropriateness and competitiveness of our executive compensation programs relative to market practice, consult on various compensation matters and recommend compensation designs and practices. Cook & Co. reported directly to the Compensation Committee. Cook & Co. works with the cooperation of management to conduct an assessment of the risks arising from our compensation policies and practices. Management interacts with the consultant to provide information or the perspective of management as requested by the consultant or Compensation Committee, coordinates payment to the consultant out of the Board’s budget, notifies the consultant of upcoming agenda items or makes the consultant aware of regular or special meetings of the Compensation Committee. Cook & Co. attends regularly scheduled meetings of the Compensation Committee (including meeting in executive session with the Compensation Committee, as requested).

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consultant, an independent compensation consultant, to provide advice regarding executive compensation and executive compensation trends and developments, compensation designs and equity compensation practices, market data as requested, and opinions on the appropriateness and competitiveness of our executive compensation programs relative to market practice. Cook & Co. reported directly to the Compensation Committee and attended regularly scheduled meetings of the Compensation Committee (including meeting in executive session with the Compensation Committee, as requested). In cooperation with management, Cook & Co. conducts an assessment of the risks arising from our compensation policies and practices. Management interacts with the consultant to provide information or the perspective of management as requested by the consultant or Compensation Committee, coordinates payment to the consultant out of the Board’s budget, notifies the consultant of upcoming agenda items and makes the consultant aware of regular or special meetings of the Compensation Committee.

 

In setting executive compensation, the Compensation Committee compares the Company’s pay levels and programs to those of the Company’s competitors for executive talent and uses this comparative data as a guide in its review and determination of compensation. ForOur Compensation Committee considers and selects an appropriate peer group and, for each NEO, the Compensation Committee reviews the compensation levels and practices of aour peer group consisting of biotechnology and pharmaceutical companies.

 

Our Compensation Committee determines compensation for the executive officers (other than the CEO) based, in part, on the recommendations of our CEO regarding base salary, annual cash incentive awards and annual equity awards. In determining his compensation recommendations for each NEO, our CEO reviews comparative peer group data. The Compensation Committee has typically followed these recommendations.

 

The Compensation Committee generally holds executive sessions (with no members of management present, unless requested by the Compensation Committee) at each of its regular meetings.

The Compensation Committee has authority to delegate any of the functions described above to a subcommittee of its members. No delegation of this authority was made in 2011.2013.

Each year the Compensation Committee reviews the independence of its compensation consultants and other advisors. In performing its analysis, the Compensation Committee considers the factors set forth in the SEC rules and the NASDAQ listing requirements that recently became effective. After review and consultation with Cook & Co., the Compensation Committee has determined that Cook & Co. is independent and there is no conflict of interest resulting from retaining Cook & Co. currently or during the year ended December 31, 2013.

Equity Award Committee

The Equity Award Committee met four times in 2011.2013. Throughout 2013 and currently, Mr. Herringer serves as chairman and Dr. Coffman and Mr. Sharer currently serveBradway serves as members of the Equity Award Committee. Our Board has delegated to the Equity Award Committee the responsibility for determining annual equity-based awards to vice presidents and below who are not Section 16 officers and authority to make equity-based awards from time to time to such eligible staff members for purposes of compensation, retention, promotion and upon commencement of their employment consistent with the equity grant guidelines established by the Compensation Committee. In addition, the Equity Award Committee presents a report to the Compensation Committee detailing the equity-based awards made by the Equity Award Committee at least twice per year.

Governance and Nominating Committee

The Governance Committee met fourfive times in 2011.2013. Throughout 2013 and currently, Dr. Coffman serves as chairman and Drs. Baltimore, Henderson, Jacks and Sugar, and Messrs. de Carbonnel and Herringer currently serve as members of the Governance Committee, eachwith Mr. Garland joining the Governance Committee effective October 2013. Each of whomthe members of the Governance Committee has been determined by the Board to be independent under the listing standards of NASDAQ and the requirements of the SEC.

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The Governance Committee is responsible for developing and overseeing the Board’s corporate governance principlesCorporate Governance Principles and a code of conduct applicable to members of the Board and for monitoring the independence of the Board. The Governance Committee also determines Board membership qualifications, selects, evaluates and recommends to the Board nominees to fill vacancies as they arise, reviews the performance of the Board and its committees and is responsible for director education. The Governance Committee maintains, with the approval of the Board, guidelines for selecting nominees to serve on the Board and considering stockholder recommendations for nominees. Such guidelines are included in this proxy statement asAppendix A. Stockholders wishing to

communicate with the Governance Committee regarding recommendations for director nominees should follow the procedure described in “Communication with the Board” below. See “Other Matters—Stockholder Proposals” for a description of the information that a stockholder proposing to nominate a director for election must provide to the Company in their advance notice. Additionally, the Governance Committee recommends to the Board nominees for appointment as executive officers and certain other officers.

The Governance Committee also oversees the corporate governance and Board membership matters of the Company. The Governance Committee identifies and recommends to the Board qualified individuals for Board and committee membership and considers and recommends to the Board nominees to stand for election at the annual meeting of stockholders and to fill vacancies as they arise as more fully described in “Director Qualifications and Review of Board Diversity” above. Among the Governance Committee’s responsibilities, the Governance Committee evaluates and makes recommendations to our Board regarding compensation for non-employee Board members. Any Board member who is also an employee of the Company does not receive separate compensation for service on the Board.

The processes and procedures of the Governance Committee for considering and determining director compensation are as follows:

 

The Governance Committee has the authority to evaluate and make recommendations to our Board regarding director compensation. The Governance Committee conducts this evaluation periodically by reviewing our director compensation practices against the practices of an appropriate peer group and the Governance Committee may determine to make recommendations to our Board regarding possible changes to director compensation.

an appropriate peer group and the Governance Committee may determine to make recommendations to our Board regarding possible changes to director compensation.

 

The Governance Committee has the authority to retain consultants to advise on director compensation matters. No executive officer has any role in determining or recommending the form or amount of director compensation. In 2012, the Governance Committee retained Cook & Co. to advise on director compensation and determined to make a change to director compensation, the first increase to director cash compensation since 2003, effective January 1, 2013. No additional changes were made to director compensation in 2013.

 

The Governance Committee has authority to delegate any of these functions to a subcommittee of its members. No delegation of this authority was made in 2011.2013.

Corporate Responsibility and Compliance Committee

The Compliance Committee met five times in 2011. Mr. Schaeffer serves as chairman2013. Throughout 2013 and currently, Drs. Henderson, Jacks and Omenn Ms. Pelham and Adm. ReasonMr. Eckert serve as members of the Compliance Committee. Dr. Sugar joined the Compliance Committee and was appointed chairman effective October 2013. Mr. Schaeffer served as chairman of the Compliance Committee until July 2013 when he resigned from our Board. Admiral Reason served on the Compliance Committee until his retirement from the Board in May 2013 and Ms. Pelham served on the Compliance Committee through July 2013.

The Compliance Committee is responsible for overseeing our compliance program and reviewing our programs in a number of areas governing ethical conduct including: (i) Federal health care program requirements; (ii) Food and Drug Administration requirements and other regulatory agency requirements, including good manufacturing, clinical and laboratory practices;practices, drug safety and pharmacovigilance activities; (iii) interactions with members of the healthcare community; (iv) the Company’s Corporate Integrity Agreement; (v) environment, health and safety;safety and (iv) human resources and government affairs. Additionally, the Compliance Committee receives regular updates on political, social and environmental trends, and public policy issues that may affect our business or public image, and reviews our environmental sustainability, political and philanthropic activities.

Our compliance program is designed to promote ethical business conduct and ensure compliance with applicable

36    LOGOï 2014 Proxy Statement


 CORPORATE GOVERNANCE  

laws and regulations. We have codes of conduct for our officers, staff and suppliers that delineate standards for ethical business conduct and legal and regulatory compliance as well as a business conduct hotline through which anonymous reports of misconduct can be made to our Chief Compliance Officer. To view the codes of conduct, please visit our website atwww.amgen.com.

Our Chief Compliance Officer, who reports to the Compliance Committee, oversees the ongoing operations of the compliance program. The key objectives of our compliance program operations include developing policies and procedures, providing ongoing compliance training and education, auditing and monitoring of compliance risks, maintaining and promoting the business conduct hotline, conducting investigations, responding appropriately to any compliance violations and taking appropriate steps to detect and prevent recurrence.

Executive Committee

The Executive Committee did not meet in 2011.2013. Throughout 2013 and currently, Mr. SharerBradway serves as chairman and Messrs. Biondi Herringer and SchaefferHerringer and Dr. Coffman currently serveserved as members of the Executive Committee. Mr. Schaeffer left the Executive Committee when he resigned from the Board on July 8, 2013. Dr. Sugar joined the Executive Committee effective October 2013. The

Executive Committee has all the powers and authority of the Board in the management of our business and affairs, except with respect to certain enumerated matters, including Board composition and compensation, changes to ourthe Amgen Inc. Restated Certificate of Incorporation or any other matter expressly prohibited by law or ourthe Amgen Inc. Restated Certificate of Incorporation.

Communication with the Board

Our annual meeting of stockholders provides an opportunity each year for stockholders to ask questions of, or otherwise communicate directly with, members of the Board on appropriate matters. In addition, stockholders may communicate in writing with any particular director, any committee of the Board, or the directors as a group, by sending such written communication to our Secretary at our principal executive offices at One Amgen Center Drive, Thousand Oaks, California 91320-1799, Mail Stop 38-5-A. Copies of written communications received at such address will be provided to the Board or the relevant director unless such communications are considered, in the reasonable judgment of our Secretary, to be inappropriate for submission to the intended recipient(s). Examples of stockholder

communications that would be considered inappropriate for submission to the Board include, without limitation, customer complaints, solicitations, communications that do not relate directly or indirectly to our business or communications that relate to improper or irrelevant topics. The Secretary or his designee may analyze and prepare a response to the information contained in communications received and may deliver a copy of the communication to other Company staff members or agents who are responsible for analyzing or responding to complaints or requests. Communications concerning potential director nominees submitted by any of our stockholders will be forwarded to the chairman of the Governance Committee.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the following Compensation Discussion and Analysis with management, and based on the review and discussions, recommended to the Board of Directors that the

Compensation Discussion and Analysis be included in the Company’s 20122014 Annual Meeting proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K.

Compensation Committee

of the

Board of Directors

Frank C. Herringer, Chairman

Frank J. Biondi, Jr.

Vance D. Coffman

J. Paul ReasonJudith C. Pelham

Leonard D. Schaeffer

Ronald D. Sugar

LOGOï 2014 Proxy Statement37


 COMPENSATION DISCUSSION AND ANALYSIS  

EXECUTIVE COMPENSATIONExecutive Compensation

COMPENSATION DISCUSSION AND ANALYSISCompensation Discussion and Analysis

This Compensation Discussion and Analysis describes our compensation strategy, philosophy, policies, programs and practices, or compensation program, for our Named Executive Officers, or NEOs, identifiedand the positions they held in the “Summary Compensation Table” of our Executive Compensation Tables.

SELECTED 2011 BUSINESS HIGHLIGHTS2013:

 

NameRole in 2013

Robert A. Bradway

Chairman of the Board, Chief Executive Officer and President

Anthony C. Hooper

Executive Vice President, Global Commercial Operations

Jonathan M. Peacock

Executive Vice President and Chief Financial Officer(1)

Sean E. Harper

Executive Vice President, Research and Development

Madhavan Balachandran

Executive Vice President, Operations

Selected 2013 Business Highlights and Pay for Performance

Following extensive outreach to our stockholders over the past several years, our Compensation and Management Development Committee, or Compensation Committee, has implemented a number of compensation program changes to further reinforce the relationship between pay and performance. A significant majority of each NEO’s compensation is connected to our performance and our execution of our strategic priorities. Our 2013 performance highlights include:

 

Our solid performance in 2011 grew revenues by 4% over 2010 to $15.6 billion. Our strong balance sheet permitted us to initiate payment of quarterly dividends, with a dividend of $0.28 per share declared in JulyDelivering for Stockholders — Robust One-year and October 2011, and an increased dividend declared in December 2011 for stockholders of record in February 2012 of $0.36 per share. In 2011, we returned $500 million of cash to our stockholders through dividends and $8.3 billion through stock repurchases equal to approximately 15% of our Common Stock outstanding as of December 31, 2010.

Three-year Total Shareholder Return. Our stock price increased from $54.90$86.20 to $64.21$114.08 per share during 2011,2013, reflecting strong stock price appreciation of approximately 17%32% and a one-year total shareholder return, or TSR, of 18%35%, including our dividends. This compares to the impactStandard & Poor’s 500, or S&P 500, average one-year TSR of 32%. Our three-year TSR is 114% compared with our dividends under our new plan to return capital to stockholders.peer group average three-year TSR of 103%.

 

 

Consistent with this robust three-year TSR, the performance units earned in 2013 under our long-term incentive, or LTI, performance award program (for the 2011-2013 performance period) were 122.7% of target performance units based on our TSR for the

2011-2013 performance period compared with the average TSR of our 13-company peer group for this period.

 

Strong Financial Performance. Our strong operating performance resulted in above-target performance on our pre-established goals for 2013 revenues and adjusted net income that comprise 60% of the weighting under our 2013 annual cash incentive award program for 2011 resulted in payment of 181.9% of target opportunity based on our financial (revenue and adjusted earnings per share, or EPS) and operational objectives. This annual cash incentive award program payment was primarily driven by our strong revenue and EPS performance (which benefited from our strategic decision to expand our stock repurchase program reflecting our confidence in the long-term value of our Company) and, to a lesser degree, our execution and advancement of our pipeline. Going forward, we have determined to replace EPS with adjusted net income as one of the two primary financial goals in our annual cash incentive award program to align compensation with a measure that more directly correlates with the underlying performance of our operations.program.

 

  

However, givenOur solid performance in 2013 grew revenues by 8% over 2012 to $18.7 billion and grew adjusted net income by 14% to $5.8 billion.(2) In addition, our TSR for the longer-term 2009-2011 performance period under our performance award program, our performance award program payout for the 2009-2011 performance period was reduced to only 45.5% of target.year-over-year adjusted earnings per share, or EPS, grew 17%(2) in 2013.

 

 Ÿ

Our strong cash flows and balance sheet in 2013 permitted us to return $1.4 billion of cash to our stockholders through dividends. Since our first dividend in July 2011, we have raised the dividend three times over the previous quarterly amount by an average of 30% and returned a total of $3 billion of cash to our stockholders through dividends. In addition, we repurchased $0.8 billion of our stock in 2013 for a total return of capital of $2.2 billion to our stockholders.

(1)

Mr. Peacock ceased service as our Chief Financial Officer as of January 10, 2014 and is no longer an executive officer. Michael A. Kelly became our Acting Chief Financial Officer, effective January 10, 2014.

(2)

Adjusted net income and adjusted earnings per share are reported and reconciled in our Form 8-K dated as of January 28, 2014.

38    LOGOï 2014 Proxy Statement


 COMPENSATION DISCUSSION AND ANALYSIS  

 

In December 2011, we announced that Kevin W. Sharer, our ChairmanAdvancement of the Board and Chief Executive Officer, or CEO, notified usPipeline. We exceeded our pre-established goal of his plan to step down as CEO on May 23, 2012,“Deliver the date of the Company’s 2012 Annual Meeting of Stockholders, and as Chairman of the Board at the end of 2012. Prior toBest Pipeline” that time, the Board of Directors, or Board, had engaged in extensive succession planning efforts. Asrepresents a result, the independent members of the Board announced that Robert A. Bradway,20% weighting under our President and Chief Operating Officer, will succeed Mr. Sharer as CEO effective May 23, 2012. There is no separation agreement with Mr. Sharer and no employment agreement with Mr. Bradway.2013 annual cash incentive award program.

 

 

During 2013, we successfully advanced the pipeline through our own clinical trial activities (as well as through the Onyx Pharmaceuticals, Inc. acquisition and the ivabradine license) such that we had two phase 3 data read-outs in December 2013 and three phase 3 data read-outs in January 2014 on evolocumab (AMG 145), we expect additional Phase 3 data read-outs on seven more of our innovative clinical programs (Kyprolis®, talimogene laherparepvec, trebananib, brodalumab, velcalcetide (AMG 416), romosozumab and rilotumumab) and, with the ivabradine license, we have data to support a U.S. filing.

 

In March 2012,Execution on Key Strategic Priorities, including International Expansion. We exceeded our pre-established goals of “Deliver Strategic Priorities” comprising 20% of the Compensation and Management Development Committee, or Compensation Committee, targeted Mr. Bradway’s long-term incentive, or LTI, equity award compensation for CEO at the median ofweighting under our 2012 peer group, resulting in a 34% reduction in targeted LTI equity award value from the previous CEO award value in 2011. This reduction was primarily due to our change in compensation philosophy to target the median of our peer group to be responsive to our stockholders. In addition, Mr. Bradway’s base salary was set slightly above the 30th percentile of our peer group and his2013 annual cash incentive award target was set at the median of our 2012 peer group. In sum, Mr. Bradway’s total target compensation falls below the median of our 2012 peer group, resulting in target compensation that is 32% lower than Mr. Sharer’s 2011 total target compensation, reflective of Mr. Sharer’s service in this role in excess of ten years.program.

  

AlsoWe successfully acquired Onyx Pharmaceuticals, a global biopharmaceutical company engaged in December 2011, Dr. Roger M. Perlmutter, Executive Vice President, Researchthe development and Development, announced his plans to retire effective February 12, 2012. The Board appointed Dr. Sean E. Harper, our Senior Vice President, Global Development and Corporate Chief Medical Officer, who has a decadecommercialization of experience at our Company, as Dr. Perlmutter’s successor.innovative therapies for improving the lives of people with certain cancers.

 

  

We successfully recruited Anthony C. Hooper asalso advanced our new Executive Vice President, Global Commercial Operations. Mr. Hooper isefforts to develop a seasoned global business leader who has ledpresence in cardiovascular disease by licensing U.S. commercial operationsrights to ivabradine, an innovative product already approved in matureover 100 countries for heart failure and emerging pharmaceutical markets, and his experience is key to our global expansion objectives. Now, with Messrs. Bradway and Hooper and Jonathan M. Peacock, our Executive Vice President and Chief Financial Officer, we have significantly strengthened the international experience and expertise of our senior management team to help us navigate our entry into new markets worldwide.angina.

OUR 2011 SAY ON PAY VOTE AND ENGAGEMENT WITH OUR STOCKHOLDERS

2011 Compensation Decisions Were Made in March 2011 in Advance of Our 2011 Say on Pay Vote

Our annual compensation decisions for 2011 were made in March 2011, consistent with our historical practice and to ensure that our incentive compensation qualifies for favorable tax treatment under Section 162(m) of the Internal Revenue Code.

 

  

In May 2011, subsequent toWe commenced our annual compensation decisions,first pivotal studies for our stockholders voted onbiosimilar product candidates: in psoriasis and rheumatoid arthritis for our named executive officers’ 2010 compensationbiosimilar for Humira® (adalimumab); in non-small cell lung cancer for our biosimilar for Avastin® (bevacizumab) and while more than a majority ofin breast cancer for our stockholders voted in favor of the proposal, our vote was not as supportive as we would have liked.biosimilar for Herceptin® (trastuzumab).

 

 

In response, we reviewed our compensation philosophy, policies, programs and practices and engaged in substantial outreach and discussions with our stockholders.

Our Compensation Committee engaged in iterative consideration of our stockholder feedback, based on our outreach efforts discussed below, and engaged with the Compensation Committee’s independent compensation consultant to modify the design of our compensation philosophy, policies, programs and practices.

For 2012, the Compensation Committee revised our compensation philosophy, policies, programs and practices to address the core concerns of our stockholders and to better align our pay with our performance.

Our Stockholder Outreach Efforts

In connection with and since our May 2011 say on pay advisory vote, we engaged in extensive outreach efforts to our stockholders to discuss our compensation philosophy, policies, programs and practices and to understand the reasons for our vote.

 

We have reached outcontinued to stockholders comprising over 59%expand internationally, including the commencement of operations of our outstanding sharesalliances in Japan and have had fulsome discussions with stockholders comprising 48%China and our acquisition from F. Hoffmann-La Roche of rights to filgrastim and pegfilgrastim in key emerging growth markets around the world.

Our 2013 Say on Pay Vote and Engagement With Our Stockholders

In 2013, we received over 85% stockholder support on our say on pay advisory vote. We have engaged consistently in broad direct stockholder outreach over the past several years and have found these interactions highly valuable and informative and will continue to engage with our stockholders to further enhance our understanding of the perspectives of our investors. The feedback from our stockholders is reviewed by our Compensation Committee and, over the past several years, we have made a number of compensation changes in response to the discussions with our stockholders.

Since our 2013 annual meeting of stockholders, we have engaged in outreach activities with stockholders comprising approximately 45% of our outstanding shares and have had extensive discussions with stockholders owning approximately

40% of our outstanding shares. The reason most often cited by those investors who declined our invitation for extended discussion was that they had no outstanding concerns or questions. In 2013, our predominant feedback from investors was that they are satisfied with our compensation program. While we are pleased with our say on pay results and stockholder feedback, we will continue to reach out to understand and address the concerns of our stockholders. Therefore, our stockholder outreach efforts will continue after the filing of this proxy statement, as well as through our executive compensation website (accessible atwww.amgen.com/executivecompensation) that we initiated in 2008 and invites stockholders to provide feedback directly to the Compensation Committee regarding our executive compensation program.

LOGOï 2014 Proxy Statement39


 COMPENSATION DISCUSSION AND ANALYSIS  

Our Compensation Program Highlights

Our compensation practices include three elements (LTI Equity Awards, Annual Cash Incentive Awards and Base Salaries) presented below in order of magnitude and alignment with pay for performance.

73% of our CEO’s direct compensation, and 69% of direct compensation of our other NEOs, is earned based solely on our performance and is paid in the form of annual cash incentives and performance units.

LTI Equity Awards (the largest component of compensation for our NEOs)

Purposes
LOGO

   Provides a direct link to the creation of stockholder value and execution of our outstanding shares.strategy.

   Aligns NEOs’ interests with stockholders.

   Fosters long-term focus and retention.

Ourequity award grants are primarily performance-based with 80% of LTI equity awards granted in the form of performance units and the remaining 20% in restricted stock units, or RSUs.

Performance units are earned only if specified performance goals are achieved. For all performance periods commencing with 2011 and thereafter, performance units are earned based on our relative TSR performance over the three-year performance period. We believe relative TSR is an important metric as it aligns our payouts with the experiences of our stockholders. Our payout for the most recent 2011-2013 performance period was above-target because of our high TSR for this performance period (114%) compared with the average of the TSRs of our 13-company peer group for this period (103%).

Performance Period  

Relative

TSR Multiplier
(% of Earned
Award Paid)

   Absolute TSR   Payout as a %
of Target
 

2011-2013 performance period

   n/a     114.4%    122.7%  

2010-2012 performance period(1)

   133.7%     60.9%    144.1%  

2009-2011 performance period(1)

   50.0%     6.5%    45.5%  
(1)

Performance units for the performance periods beginning prior to 2011 were earned based upon our revenues and adjusted EPS (weighted equally) during the first year of the performance period as compared to target performance, and modified by a relative TSR multiplier based on our TSR ranking compared with companies in our peer group at the beginning of the period.

Certain changes were made to the design of the performance unit program in 2013 to improve the reliability of the program as a measure of our stock performance and to tie to stockholder interests. For the performance units granted in 2013, we measured our TSR compared with the TSR of the S&P 500, a more broad-based and realistic measure of our stockholders’ investment opportunities. We added a requirement that, if our absolute TSR is less than zero, the payout percentage shall not be greater than 100% to limit rewards in a performance period in which we perform in-line with, or better than, the S&P 500 companies, but investors do not recognize growth in their investments.

40    LOGOï 2014 Proxy Statement


 COMPENSATION DISCUSSION AND ANALYSIS  

Annual Cash Incentive Awards

Made under the Executive Incentive Plan, or EIP, and are determined by the Compensation Committee based on performance against pre-established Company performance goals and results measured under our Global Management Incentive Plan, or GMIP.

Purposes

LOGO

Motivates NEOs to meet or exceed our annual GMIP Company performance goals to drive annual performance and position us for longer-term success.

Measures NEOs’ performance against pre-established GMIP Company performance goals.

Aligns all staff members around the same Company performance goals as all such annual cash incentive awards are based on the same GMIP Company performance goals.

Our annual cash incentives are earned based on achieving our financial and operational growth objectives. In 2013, we paid annual cash incentives based on our performance against our measures of revenue growth (30%) and adjusted net income growth (30%) and a number of operational objectives designed to drive delivery of the best pipeline (20%) and delivery of strategic priorities (20%). For 2013, we implemented a higher level of required performance for our financial goals.

Base Salaries

Purposes

LOGO

Provides a degree of financial certainty and stability that helps us retain talent.

Recognizes competitive market conditions and/or rewards individual performance through periodic increases.

 

All pie charts above are calculated using (i) the “Salary” column from the “Summary Compensation Table” in our Executive Compensation Tables, (ii) the target annual cash incentive award in the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards – Target” column in the table in footnote 2 to the “Grants of Plan-Based Awards” table in our Executive Compensation Tables and (iii) the grant date fair value of annual grants of performance units and RSUs in the “Grant Date Fair Value of Stock and Option Awards” column of the “Grants of Plan-Based Awards” table in our Executive Compensation Tables.

LOGOï 2014 Proxy Statement41


 

In these discussions with our stockholders, we reviewed our compensation philosophy, policies, programs and practices and engaged in a candid exchange of ideas for improvement.

 

The feedback from our stockholders was reviewed and the Compensation Committee determined to make the meaningful compensation philosophy, policy, program and practice changes described below for 2012.

 

This intensive stockholder outreach effort supplements our executive compensation website accessible atwww.amgen.com/executivecompensation that we initiated in 2008 that invites all of our stockholders to fill out a survey to provide feedback directly to the Compensation Committee, regarding our executive compensation philosophy, policies, programs and practices.

  COMPENSATION DISCUSSION AND ANALYSIS  

OUR COMPENSATION PROGRAM CHANGES

In responseOur compensation practices are designed to discussions with our stockholdersbe competitive and to continue our process of improving the alignment of our NEO compensation design with the Company’s performance, we have made the following prospective compensation philosophy, policy, program and practice changes that were implemented in 2012:balanced.

 

 

Changed our compensation philosophy and significantly reducedWe target the grant value of regular annual LTI equity awardsby lowering the benchmarking target by 25 percentage points to the 50th percentile, or median, of our peer group to be responsive to our stockholders. When combined with changes infor all elements of compensation.

We target the 50th percentile of our peer group (as described below), this resulted in reductions in LTIfor our equity award budget. We are mindful of stockholder dilution and remain committed to the significant performance weighting of the equity awards we grant date targeted valuations for 2012to our senior management team. We provide broad-based grants to nearly all of 34% for Mr. Sharer, our current CEO, on an annual basisfull-time staff members and a 72% reduction based onour Board of Directors, or Board. The rates at which we grant awards of stock and its potential dilutive effect are consistent with our peer group levels and have decreased over the actual grant provided to Mr. Sharer in 2012 to reflect his partial year of service as CEO in 2012.last four years.

 

Replaced time-vested LTI equity awards with performance-based equity awardsby increasing the weighting of performance units from 50% to 80% of our regular annual LTI equity award grant values, resulting in 80% of units granted being in the form of performance units. To make this shift, we eliminated time-vested stock options and a portion of the value of time-vested restricted stock units, or RSUs, as illustrated in the following chart:

LTI Equity Awards 2010 Allocation 2011 Allocation 2012  Allocation

Performance Units

 40% 50% 80%

Stock Options

 40% 25% 0%

RSUs

 20% 25% 20%

Linked actual pay delivery from LTI equity awards more closely to performance because performance units only vest if specified performance goals are achieved. Historically, our relative or absolute TSR has been a primary metricWe have objective criteria for determining the extent to which performance units may be earned, and currently, our outstanding performance units are earned exclusively based on our TSR relative to the TSRsselection of our peer group companies. We believe TSR is an important metric as it provides the greatest indication of stockholder alignment and ensures that compensation realized reflects our stock performance relative to our peer group. Our move in 2012 to 80% allocation of performance units further increases the emphasis of our compensation on performance for 2012 and beyond. As illustration, our performance unit payouts over the last three years resulted in below-target payouts at the following percentages of target grant values, due to the reduction in the units earned based primarily on our TSR multipliers in effect for these years.

Performance Period

  Absolute TSR  TSR Multiplier
Effect (% of
Earned Award
Paid)
  Multiplier
(Relative or
Absolute TSR)
  Payout as a %
of Target
 

2009-2011 performance period

   6.5  50  Relative    45.5

2008-2010 performance period

   3.7  73  Absolute    73.0

2007-2009 performance period

   (0.3)%   50  Absolute    47.4

Rebalanced our peer group to include Allergan, Inc. and Celgene Corporation for 2012 decisions, in addition to Gilead Sciences, Inc. which was previously added toreview our peer group for 2011 decisions. These threeannually. We draw our peers from biotechnology and pharmaceuticals companies as we believe they are among those in our industry with which we both most closely competedirect competitors for executive talent and closely match in terms ofhave comparable complexity and pay practices. In 2013, we modified the selection criteria for our peer group to include revenues as a primary factor along with market capitalization valuations (each within a range of 0.25x to 4x of Amgen’s size), and revenue.limited the inclusion of non-U.S. companies to those commonly identified as “peer of peers.”

 

Replaced EPS with adjusted net income as one of the two primary financial goalsin our 2012 annual cash incentive award program to align compensation with a measure that more directly correlates with the underlying performance of our operations.

 

Increased the stock ownership guideline for our CEO42    LOGOfrom five times base salary to six times base salary to further align the interests of our CEO to our stockholders and mitigate potential compensation-related risk.ï 2014 Proxy Statement


 COMPENSATION DISCUSSION AND ANALYSIS  

The changes for 2012 build on other actions taken over the past three years to enhance the linkage between pay and performance. With these 2012 changes, our compensation philosophy, policies, programs and practices further demonstrate our ongoing commitment to effectively align pay with performance and reflect sound governance principles. The following chart depicts our current LTI equity award practices and our other compensation and governance practices for our NEOs:

 

Our Long-Term Incentive Equity AwardWe Maintain Other Compensation and Governance Best Practices Adopted in 2011

Clawback

•   We have lengtheneda clawback policy that requires our average vesting period so RSUBoard to consider the recapture of past cash or LTI equity award payouts to our NEOs if the amounts were determined based on financial results that are later restated and stock optionthe NEOs’ misconduct is determined by the Board to have caused the restatement.

Recoupment Provisions   

Our incentive compensation plans contain recoupment provisions applicable to all staff members that expressly allow the Compensation Committee to determine thatannual cash incentive awards doare not beginearned fully or in part where such employee has engaged in misconduct that causes serious financial or reputational damage to vest until the second anniversaryCompany.

Change of the grant date;

Control

•   We eliminatedhave no “single-trigger” equity vesting acceleration upon a change of control for our RSUs and stock options; beginning with our 2011 grants, inoptions. In the event of a change of control, a qualifying termination of employment, or “double-trigger,” is required for acceleration of RSU and stock option vesting unless such awards are cashed-out at the time of transaction closing; andvesting.

 

In the event of a change of control, double-trigger cash severance islimited to a multiple of two times target annual cash compensation.

Tax Gross-Ups   For NEOs,

We do not provide tax gross-ups, except for business-related payments such as reimbursement of certain moving and relocation expenses.

Equity Practices

We haverobust stock ownership guidelines, with asix times base salary ownership requirement for our CEO.

We havestrong LTI equity award plans and policies that prohibit re-pricing or backdating of equity awards.

Ourstaff members and Board are prohibited from engaging in short sales, purchasing Common Stock on margin, pledging Common Stock, or entering into any hedging, derivative or similar transactions with respect to our Common Stock.

LTI equity awards are granted based on a specific dollar valuation, rather than a set number of shares, to avoid the impact of fluctuations in the stock price between the date the Compensation Committee determines the grant amount and the actual grant date to ensure no more value is delivered than intended by the Compensation Committee.

date.

Limited Additional

Compensation

Our Other Compensation and Governance Practices

•   We do not provide tax gross-ups except for business-related payments such as reimbursement of certain moving and relocation expenses, not including loss on sale of a home;

•   In the event of a change of control, double-trigger cash severance is limited to a multiple of two times target annual pay;

•   Our perquisites are limited to those with a clear business-related rationale for security and/or convenience;

•   We have a clawback policy that recaptures past cash or LTI equity award payouts to our NEOs if the amounts were determined based on financial results that are later restated and the NEOs’ misconduct caused the restatement;

•   We have strong LTI equity award plans and policies that prohibit re-pricing or backdating of stock awards;

•   We have robust stock ownership guidelines, including a six times base salary requirement for the CEO;

•   Our insider trading policy prohibits engaging in short sales, purchasing or pledging Common Stock on margin (other than for “cashless exercise”) or entering into any derivative or similar transactions with respect to our Common Stock; and

•   We have no multi-year guaranteed bonuses.rationale.

 

2011 COMPENSATION ALIGNS WITH PERFORMANCE

We made important advances in our execution and advancement of our pipeline and growth opportunities. This, coupled with a 4% increase in our revenues and a 2% increase in our EPS, resulted in payouts under our annual cash incentive award program of 181.9% of target annual cash incentive award opportunity. Our EPS performance benefited from our strategic decision to expand our stock repurchase program to return significant capital to stockholders and take advantage of the attractive interest rate environment. Going forward, we have replaced EPS with adjusted net income as one of the two primary financial goals in our annual cash incentive award program.

However, the performance units that were earned under our performance award program in 2011 were reduced by more than half (45.5%) as a result of our relative three-year TSR performance.

The following table summarizes the total compensation realized by Mr. Sharer in 2011. The table is to supplement our “Summary Compensation Table” in our Executive Compensation Tables which requires us to use accounting-based grant date LTI equity award values that do not reflect the actual compensation delivered to the NEOs in a particular year. The total compensation below provides a more accurate representation of the compensation Mr. Sharer actually realized in 2011 and is representative of the results experienced by all of our NEOs who received performance units in 2011.

Name and Principal Position

  2011
Compensation Reported  in
Summary Compensation Table
($)
   2011
Total Realized
Compensation
($)(1)
 

Kevin W. Sharer

   18,850,311     11,282,846  

Chairman of the Board and Chief Executive Officer

    

  (1)

Total realizedWe haveno employment contracts or guaranteed bonuses.


We haveno defined benefit pension or supplemental executive retirement plan (SERP) benefitsor “above market” interest on deferred compensation represents total compensation as calculated under the Securities and Exchange Commission, or SEC, rules, minus the aggregate grant date fair value of LTI equity awards (as reflected in the “Stock Awards” and “Option Awards” columns of the “Summary Compensation Table” in our Executive Compensation Tables) plus the value realized from the exercise of stock options and the vesting of RSUs (as reflected in the “Options Exercised and Stock Vested” table in our Executive Compensation Tables) in 2011 and the value of the performance units earned for the 2009-2011 performance period (as reflected in the “Outstanding Equity Awards at Fiscal Year End” table in our Executive Compensation Tables).

LOGOEXECUTIVE COMPENSATION OBJECTIVESï 2014 Proxy Statement43

Our executive compensation program is designed to achieve the following objectives:


 COMPENSATION DISCUSSION AND ANALYSIS  

 

Pay for performance in a manner that strongly aligns with stockholder interests by rewarding performance on both a short- and long-term basis.How Compensation Decisions Are Made For Our executive cash incentive and equity incentive programs for 2011 depended primarily on achieving our business and financial goals, growth in the price of our Common Stock and our relative long-term TSR. The largest portion of LTI equity awards granted to our NEOs is based on the performance of our TSR relative to our peer group’s TSR over a three-year period. We generally do not offer defined benefit or traditional executive supplemental defined benefit pension plans to our NEOs.

Attract, motivate and retain the highest level of executive talent by providing competitive compensation, consistent with their roles and responsibilities, our success and their contributions to this success. To attract executive talent with proven skills and experience, we believe the inducements and compensation packages we offer need to provide a sufficient catalyst for executives to agree to join our management team, account for compensation lost in joining our team and compare favorably to compensation obtainable at companies where we compete for high caliber executive talent.

Mitigate compensation riskby maintaining pay practices that reward actions and outcomes consistent with the sound operation of our Company and with the creation of long-term stockholder value. Examples include our clawback policy, which applies to cash or equity compensation payouts awarded to executive officers, and our executive stock ownership guidelines, which by requiring executives to hold significant amounts of the Company’s equity, further aligns their interests with the interests of our stockholders and our long-term success.

Consider all Amgen staff members in the design of our executive compensation programs, to ensure a consistent approach that encourages and rewards all staff members who contribute to our success. As a result, there are no special plans for our NEOs.

PRIMARY ELEMENTS OF NAMED EXECUTIVE OFFICER COMPENSATIONNamed Executive Officers

Our executive compensation program is comprised of three primary elements presented below in order of magnitude and alignment with pay for performance.

 

Primary Elements of Named Executive Officer Compensation(1)

Purpose

LTI Equity Awards –LTI equity awards comprise the largest component of compensation for our NEOs. 2011 LTI equity awards for our NEOs consisted of 50% performance units, 25% stock options and 25% RSUs.

LOGO

•     Rewards stock price appreciation, the achievement of our financial objectives and focused execution of our long-term strategy.

•     Aligns each NEO’s interest with interests of all stockholders.

•     Fosters a long-term focus and retention.

•     Facilitates executive stock ownership.

Annual Cash Incentive Awards – Awards are made under the Executive Incentive Plan, or EIP, and are determined by the Compensation Committee generally using pre-established Company performance goals and results measured under our Global Management Incentive Plan, or GMIP.

LOGO

•     Motivates NEOs to meet or exceed our annual GMIP Company performance goals, driving current performance and positioning us for longer-term success.

•     Holds NEOs accountable for performance against pre-established GMIP Company performance goals.

•     Aligns and focuses all staff members around the same Company performance goals as all annual cash incentive awards are based on the same GMIP Company performance goals.

Base Salaries

LOGO

•     Provides a degree of financial certainty and stability.

•     Recognizes competitive market conditions and/or rewards individual performance through periodic increases.

(1)

Calculated using (i) the “Salary” column from the “Summary Compensation Table” in our Executive Compensation Tables, (ii) the target annual cash incentive award in the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards – Target” column in the table in footnote 3 to the “Grants of Plan-Based Awards” table in our Executive Compensation Tables and (iii) the grant date fair value of annual grants of performance units, stock options and RSUs, approved on March 2, 2011 in the “Grant Date Fair Value of Stock and Option Awards” column of the “Grants of Plan-Based Awards” table in our Executive Compensation Tables. Mr. Hooper is not included in the pie charts because Mr. Hooper commenced employment with our Company in October 2011.

HOW COMPENSATION DECISIONS ARE MADE FOR OUR NAMED EXECUTIVE OFFICERS

Responsible Party 

Primary Roles and Responsibilities

Compensation Committee

(Comprised solely of independent

directors and reports to the Board)

 

      •   Evaluates the performance of the CEO within the context of the overallfinancial and operational performance of the Company.

 

   Has sole authority to determine

Determines and approveapproves compensation packages for our CEO, other NEOs, Executive Vice Presidents, Senior Vice Presidents and other Section 16 officers.officers (collectively, “Senior Management”).

 

Reviews and approves all programs in which our NEOs participate.

 

Oversees the development of our CEO, other NEOs, Senior Vice Presidents and other Section 16 officers and effective succession planning.plan of the members of Senior Management.

 

Oversees the development and effective succession plan of the members of Senior Management.

Oversees the Board’s relationship with and response to stockholders on executive compensation matters.matters and the Compensation Discussion and Analysis.

Exercises the sole authority to select, retain, replace and/or obtain advice of compensation and benefits consultants, legal counsel and other outside advisors and oversees an analysis of the independence of each such advisor.

Consultant to the

Compensation
Committee

(Frederic W. Cook & Co., Inc.–

independent consultant

retained directly by the

Compensation Committee to assist
it in performing its responsibilities)Committee)

 

      •   Regularly attends Compensation Committee meetings, (includingincluding meeting in executive session with the Compensation Committee).Committee.

 

Assists management with presenting market data and reviews the appropriateness of market data compiled by the Human Resources Department.

 

Provides advice on the appropriateness and competitiveness of our compensation programsprogram relative to market practice, and attraction of the highest level of executive talent, including advising the Compensation Committee on the selection of our peer group companies.group.

 

   Upon request, consults

Consults on executive compensation trends and developments.

Consults on various compensation matters and recommends compensation program designs and practices to support our business strategy and objectives.

 

Works with management to conduct an assessment of the risks arising from our compensation policies and practices.

Chairman and 

CEO

(Assisted by the Senior Vice

President, Human Resources and

other Company staff members)

 

      •   Conducts performance reviews for the other NEOs and makes recommendations to the Compensation Committee with respect to thecompensation of Senior Management other NEOs’, Senior Vice Presidents’ and other Section 16 officers’ compensation.than himself.

 

   Oversees

Provides recommendations on the compilationdevelopment of market data by Human Resources, which is reviewed byand succession planning for the Compensation Committee.members of Senior Management other than himself.

44    LOGOï 2014 Proxy Statement


 COMPENSATION DISCUSSION AND ANALYSIS  

Use of Independent Compensation Committee Consultant

To assist the Compensation Committee in its review and determination of executive compensation, the Compensation Committee retained and sought advice from Frederic W. Cook & Co., Inc., or Cook & Co., an independent consultant, throughout 20112013 and to date in 2012.2014. George B. Paulin, athe Chairman and CEO of Cook & Co. consultant,, worked directly with the Compensation Committee in the roles and undertaking the responsibilities described in the table above. In 2013, Cook & Co. also provided consultation regarding regulatory updates, selection of our peer group, market practices and recommendations for CEO compensation.

On a periodic basis, the Company purchases proprietary executive compensation survey data from Cook & Co., to inform the Compensation Committee’s decisions, but does not engage Cook & Co. for any other services to the Company. The surveys purchased by the Company are not customized. During 2011,2013, the Compensation Committee, as in past years, had responsibility for engaging Cook & Co. and directed the nature of the communications and interchange of data between Cook & Co. and management.

Peer Group Company Market Information

The Compensation Committee believes that, givenrecognizes the unique demands of our industry, including its complex regulatory and reimbursement environment, and the challenges of running an enterprise focused on the discovery, development, commercializationmanufacture and manufacturecommercialization of novel treatments to address unmet medical needs, weserious illness. The Compensation Committee believes that these unique demands require executive talent with significant industry experience as well as, for certain key functions, unique scientific expertise to oversee research and development activities and the complex manufacturing requirements for biologicalbiologic products. TheseFurther, the Compensation Committee believes that these very specific skills and capabilities limit the pool of talent from which we can recruit and also cause our employees to be highly valued and sought after in our industry. This results inmakes it imperative that our peer group for compensation purposes include those companies being the companies thatwith which we primarily look tocompete for new executives given the similarities in experience and knowledge that are developed at these companies. Further, this also results in these companies being our most effective competitors for the attraction and retention of executive talent with the skills and capabilities that we seek and develop ourselves. For example, Messrs. Peacock and Hooper, our two most recently hired NEOs, each previously worked for companies in our peer group.

Moreover, as evidenced by the fact that nine13 of the 1115 companies in our peer group (ten U.S.-based companies) also list us as a peer, we believe that our peer group most accurately reflects those with whom we compete for executive talent. The Compensation Committee compares our pay levels and programs to those of thisthe peer group and uses this comparative data as a reference point in its review and determination of compensation. Our approach however, also considers our performance, and the individual’s performance and other relevant factors in setting pay as opposedpay.

In July 2013, Cook & Co. reviewed the executive compensation peer group with the Compensation Committee to simply establishing target levels of compensation at specific benchmark percentiles.

determine whether it remained appropriate. Based on recommendations from Cook & Co., the Compensation Committee usesused the following objective criteria in selecting its peer group from the universe of other pharmaceutical and biotechnology companies:

 

industry;GICS codes of biotechnology (352010) and pharmaceuticals (352020);

 

our 12-month average market capitalization between 0.25 and 4.0x that of Amgen’s average market capitalization for the same period;

trailing four-quarter revenue between 0.25 and 4.0x that of Amgen’s revenue;

non-U.S. peers limited to those commonly identified as a “peer of peers;”

competitors for executive talent;

 

companies with similar pay models;of comparable scope and complexity;

competitors for equity investor capital;

 

companies that identify us as their direct peer (nine of our 11 peer group companies include Amgen in their peer groups);

companies that compete directly with our products (nine of our 11 peer group companies have products that compete directly with our products);peer; and

 

companies that generally comparewith similar pay practices.

Abbott Laboratories, a member of our peer group in market-capitalization and/or revenue.2012, spun off its pharmaceutical business into a new company called AbbVie Inc. Subsequently, Abbott Laboratories no longer satisfied our established objective criteria and was replaced with AbbVie Inc. for 2013. Our peer group continues to have 15 companies and our relative size position was not impacted with the replacement of Abbott Laboratories with AbbVie Inc.

2011LOGOï 2014 Proxy Statement45


 COMPENSATION DISCUSSION AND ANALYSIS  

2013 Peer Group(1)

 

Abbott LaboratoriesLaboratories/AbbVie Inc.(1)

   Allergan, Inc.

AstraZeneca PLC

Biogen Idec Inc.

Bristol-Myers Squibb Company

   Celgene Corporation

Eli Lilly and Company

Gilead Sciences, Inc.

GlaxoSmithKline plc

 

   GlaxoSmithKline plc(2)

Johnson & Johnson

Merck & Co., Inc.

Novartis AG

Pfizer Inc.

Roche GroupHolding AG(2)

Sanofi S.A. (formerly Sanofi-Aventis)(2)

 

(1)

Allergan, Inc. and Celgene Corporation were added in 2011 for 2012 compensation decisions.

The market capitalization of our peer group ranged between $16$28.2 billion and $169.9$194.3 billion determined as of the last trading day of 20102012 as provided by Bloomberg L.P. The 2010 revenue2012 revenues of our peer group companies ranged between $4.7$5.5 billion and $67.8$67.2 billion based on filings with the SEC, except for Roche Group which was obtained from data disclosed on their website. Revenue for Roche Group and Sanofi S.A. were converted into U.S. dollars using the average of daily exchange rates for 2010 as provided by Bloomberg L.P. Revenue for GlaxoSmithKline plc was converted into U.S. dollars using the average exchange rate for 2010 disclosed within their SEC filing.public filings. Amgen’s 20102012 market capitalization and revenue was $51.9revenues were $66.1 billion and $15.1$17.3 billion,

respectively. The median 20102012 market capitalization and revenuerevenues of our peer group (not including Amgen) was $84.5$58.9 billion and $40.3$28.0 billion, respectively.

Although our revenues are below the median value for the peer group, our market capitalization is above the median values for the peer group and it is the Compensation Committee’s view that this peer group is the most appropriate for benchmarking executive compensation as these companies are generally those with which we most closely compete for executive talent.

Peer Group Data

Our primary data sources for evaluating all elements of compensation for our CEO and our other NEOs’ compensation against the peer group in March 20112013 were the 20102012 Towers Watson Pharmaceutical Human Resources Association, or PHRA, Executive Compensation Survey (the Towers Survey), and the available 2010 proxy data from 2011 filingsproxy statements filed in 2012 with the SEC for our peer group. The Towers Survey contains compensation information from pharmaceutical companies in

our peer group, but does not contain information on many biotechnology companies. Therefore, compensation information for the biotechnology companies within our peer group is compiled using proxy statement filings to provide additional data and to inform the Compensation Committee. The Towers Survey data and the peer group as compiledproxy data is presented by Equilar, Inc.

To address concerns of our stockholdersmanagement to the Compensation Committee both individually and in responsethe aggregate, including the ranking of each NEO against those in similar positions and an analysis of each element of direct compensation at the median and 75th percentile of the peer group for each NEO position, other than Mr. Bradway, as our CEO. For Mr. Bradway, Cook & Co. provides data to the reductionCompensation Committee of the median and a range between the 25th percentile and 75th percentile of the specific compensation elements paid to CEOs in our peer group.

In the numbertables below, in general, the “Market Median” is derived by averaging the values of the 2012 Towers Survey 50th percentile and the 2012 peer group companies resulting from merger activity, in 2011, we rebalancedproxy statement 50th percentile, except for Mr. Bradway, as our peer groupCEO. The Market Median shown for Mr. Bradway is the median of the specific compensation elements paid to include Allergan, Inc. and Celgene Corporation for 2012 compensation decisions. These companies were chosen because they are among those in our industry with which we both most closely compete for executive talent and provide greater balanceCEOs in our peer group, as reported by Cook & Co. from proxy statement filings and Form 8-K filings. No market comparable data is available for Mr. Balachandran because his position as Executive Vice President, Operations had no comparable position included in terms of market capitalization ($21.1 billion and $27.8 billion, respectively, as of December 31, 2010) and revenue ($4.9 billion and $3.6 billion, respectively, for 2010).the 2012 Towers Survey or peer group proxy statement

(1)

Abbott Laboratories was used for purposes of setting 2013 total cash compensation for our NEOs. For purposes of the 2011-2013 performance award program, Abbott Laboratories and a weighted TSR for Abbott Laboratories and AbbVie starting on January 1, 2013 was used. This is described under “Long-Term Incentive Equity Awards–Performance Award Program–Performance Units Earned for the Performance Period Ending in 2013.”

(2)

Revenues for GlaxoSmithKline plc, Roche Holding AG and Sanofi S.A. were converted into U.S. dollars using the average of daily exchange rates for 2012 as provided by Bloomberg L.P.

ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONS46    LOGOï 2014 Proxy Statement


 COMPENSATION DISCUSSION AND ANALYSIS  

filings. We believe Mr. Balachandran’s position is unique in that it includes global oversight of the Company’s manufacturing operations, quality, product and process engineering, and capital projects. As such, this position is not fully represented in either the 2012 Towers Survey or proxy statement data because our peer group companies do not have individuals in similar positions. In addition, Mr. Hooper’s

position is not well-represented in either the 2012 Towers Survey or proxy statements of each company in our peer group and, accordingly, based on his current position as Executive Vice President, Global Commercial Operations and pay ranking within our Company, Mr. Hooper is matched to the median of the second highest paid NEOs of each of the companies in our peer group.

Elements of Compensation and Specific Compensation Decisions

Described below are our three primary elements of executive compensation in order of magnitude and degree of alignment with pay for performance.performance: LTI equity awards; annual cash incentive awards and base salaries.

Long-Term Incentive Equity Awards

Our Largest Primary Elementcompensation program aims to achieve the appropriate balance of Executive Compensation

Long-Term Incentive Equity Award Grant Guidelines

Wecompensation relative to the responsibilities of our staff members, with the result that the largest proportion of the compensation plans for our CEO and the other executive officers is in the form of LTI equity awards. Equity-based compensation represents 70% of our CEO’s compensation and 66% of compensation for our other NEOs. In addition, we also grant LTI equity awards each year to nearly all of our over 17,000approximately 20,000 staff members worldwide to emphasize and provide incentives for long-term Company performance andworldwide.

The Compensation Committee sets an LTI budget that is at the 50th percentile, or median, of our peer group because, while the Compensation Committee supports a broad-based equity plan to align our staff members with our stockholders, it also strives to limit the interestsamount of every staff member with thosestockholder dilution to that which would be expected to be experienced by stockholders of our stockholders.peer group. LTI equity award grant guidelines for each job level within the Company are then set for each executive officer level, based on the size of the annual total LTI equity award budgetbudget. We believe that our capacity to grant equity-based compensation in this manner has been a significant factor in achieving our growth objectives by rewarding stock price appreciation and peer group market data. When determining each NEO’s grant level, the Compensation Committee considers the limited retirement benefits offered at our Company, the goal of tying more compensation to the interestsexecution of our strategy, aligning NEOs’ and our staff members’ interests with stockholders and fostering long-term focus and retention.

2013 Amendment and Restatement of Our Long-Term Incentive Equity Award Plan

To maintain the desire to be competitive among our peer group. In December 2011, we changed our methodology to grant shares based on a specific dollar valuation rather than a numberSection 162(m) of shares to avoid the impactInternal Revenue Code, or Section 162(m), qualification of fluctuations in the stock price between the date on which the Compensation Committee determines the grant amount and the actual grant date to ensure that value is delivered as intended.

Prior to our May 2011 say on pay vote, in March 2011, we set our LTI equity award budget at the 75th percentileplan to preserve federal tax deductibility of future awards through 2018, we asked our stockholders to approve an amendment and restatement of our peer groupLTI equity award plan at our 2013 annual meeting of stockholders. Given that we were seeking such approval and to be efficient in our plan

management, we also chose to use this opportunity to request stockholder approval of an increase in the number of shares authorized for grant under this plan as had beenwell as amendments to this plan to clarify certain areas including:

Ensuring that dividends and dividend equivalents payable in connection with performance-based awards will only be paid to the extent that the performance-based vesting conditions are satisfied and the underlying shares are earned and vest;

Narrowing performance criteria that may be used to award “performance-based compensation” under Section 162(m) to better target such criteria to our practice based on comparisonscurrent and future strategic priorities; and

Expanding the clawback rights of the existing plan to expressly include the future requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Our stockholders granted all approvals sought for our amended and restated LTI equity award plan.

Company Continues to Exercise Discipline in the Grant of Long-Term Incentive Equity Awards

The additional number of shares authorized for grant under our amended and restated LTI equity award plan has not resulted in a change in our compensation philosophy and has not changed our practices or approach to the grant of LTI equity awards to our employees. We have worked to appropriately balance the use of equity as an effective tool to align employees with our stockholders while being mindful of the level of dilution that our stockholders experience. The rates at which we grant LTI equity awards and its potential dilutive effect is consistent with our peer group companieslevels and to account for our lack of more traditional forms of long-term wealth creation or retention programs, such as a defined benefit pension plan or subsidized Company-provided retiree medical plans that are common to our peer group. Based on our conversations with our stockholders following our 2011 say on pay vote, in which stockholders acknowledgedhas decreased over the lack of such plans, but also recommended targeting a lower percentile,last four years. In making LTI equity award grants, the Compensation Committee reduced

LOGOï 2014 Proxy Statement47


 COMPENSATION DISCUSSION AND ANALYSIS  

considers our historical burn rates and the targeted benchmark measure fordilutive effect of our LTI equity award budget for 2012 by 25 percentage points to the 50th percentile, or median, ofpractices internally and as benchmarked against our peer group, which when combined with changes in our peer group, resulted in reductions in LTI equity award grant date valuations of 34% for Mr. Sharer as compared to 2011 on an annual basis (and a 72% reduction based on the actual grant provided to Mr. Sharer in 2012 to reflect his partial year of service as CEO in 2012). The Compensation Committee believes that the 50th percentile is an appropriate competitive target level for our 2012 LTI equity awards budget because it is responsive to our stockholders’ concerns about targeting a higher LTI equity award value.group.

Long-Term Incentive Equity Award MixComposition

In March 2011, annual LTI equity award grants were madeawards granted to our NEOs and consisted of three-yearin 2013 were 80% performance units time-vested RSUs and stock options (which vest in three approximately equal annual installments on the second through fourth anniversaries of the grant date). Previous grants of time-vested RSUs and stock options had vested in four equal installments, commencing on the first anniversary of the grant date. Performance units are earned at the end of the three-year performance period based on the extent to which the performance goals for the applicable period are met.

In October 2010, the Compensation Committee changed the LTI equity award mix for 2011. As previously described, further changes were made to the LTI equity award mix by the Compensation Committee in December 2011 for LTI equity awards in 2012. The chart below shows the changes to the LTI equity award mix over the last three years:20% RSUs.

 

LOGOLOGO

2011 Long-Term Incentive Equity Award Mix

The changesThis allocation results in the 2011 LTI equity award mix were made as part of a series of measures after a review of our peer group and broader market grant practice data. The increase in the weighting of the performance units in our overall LTI equity award mix provides a greater percentage of equity compensation that is at-risk and tied to the strength of our TSR performance as compared to that of our peer group and further aligns payouts with our stockholders’ interests.

The Compensation Committee believed that this incremental change in the mix of grant types, coupled with a new design for the 2011-2013 performance goals for performance unit awards based solely on our TSR results compared to the TSRs of the companies in the peer group (described above) struck an appropriate balance between pay for performance and the retention of talent necessary for the success of the Company over the longer-term.

2012 Long-Term Incentive Equity Award Mix

Based on conversations with our stockholders following our May 2011 say on pay vote, effective for LTI equity awards granted to NEOs in 2012, the Compensation Committee changed the LTI equity award mix to 80% performance units and 20% RSUs and eliminated stock options. This change was made in response to stockholder feedback and to provide a greater percentage of equity compensation that isbeing earned predominantly based on our performance.performance achieved. We believe it is important to retainmaintain a relatively small percentage of equity awards in the form of RSUs to provide retention incentives. This mixcomposition of LTI equity awards also facilitates a more efficient use of the shares available under our LTI equity award plan and minimizes dilution as fewer shares are used under our modeling when granting performance units and RSUs than when grantingin comparison to stock options. Performance units are generally earned at the end of the three-year performance period based on the extent to which the performance goals for the applicable period are met. Our

time-vested RSUs generally vest in three approximately equal annual installments, on the second, third and fourth anniversaries of the grant date. This delay in the commencement of RSU vesting further emphasizes the long-term performance focus of our LTI equity award program and enhances retention.

Value of Long-Term Incentive Equity Awards Granted to Named Executive Officers in 20112013

Based on 2010 peer group market survey data (which reflected 2010 annualTo determine 2013 executive LTI equity award grants),compensation, the Compensation Committee determined 2011compared the proposed value of the 2013 annual LTI equity awards within a range aroundfor each NEO to the 75th percentile

of our peer group, consistent with our annual LTI equity award grant practice at the time.Market Median (as more specifically described above under “Peer Group Data”). The Compensation Committee also took our anticipated grant values, our performancethe Company’s and the individual’s performance into account when determining theindividual grants. Our approach has been to provide annual grants based on a fixed number of shares. The number of shares was established using the 75th percentile of our peer group market survey data. At the executive vice president level, each position was benchmarked against the 75th percentile of the competitive market using the 2010 Towers Watson PHRA Executive Compensation Survey. We then calculated an average of the executive vice president positions to the extent available to determine a market rate for the value of the LTI equity awards. The Compensation Committee chose to provide an equal numberdetermined that, given the general proximity of sharescompetitive market values for each position, the same equity award grant value should be awarded to each NEO in their position at the timeExecutive Vice President level. The Compensation Committee believes that, given the grants were made, withchanges to the exception of Messrs. Sharerexecutive management team in 2012, internal parity among the NEO group at the same level is valuable to incent a united and cohesive team and prioritized such alignment over solely benchmarking to the Market Median. The Compensation Committee awarded Mr. Bradway to reflect the similar scope of their overall leadership responsibilities for each of these other NEO positions across our Company.

In determining the number of each type ofan equity award to be granted, performance units and RSUs aregrant valued relative to stock options using a ratio of 1 to 3.5 (meaning that each performance unit or RSU is considered equal in value to 3.5 stock options at the time of grant). This ratio reflects the higher value as measured at the time of grant of these awards asMarket Median compared to stock options. CEOs in our peer group.

2013 Long-Term Incentive Equity Awards

Given the design of eachour performance award type, however,program, there is no guarantee of any value realized from grants of performance units or stock options becauseas they are dependent on our financial and/or stock price performance. Based on this analysis, therelative TSR. The Compensation Committee granted the following LTI equity awards to our CEO and the other NEOs in March 2011:December 2012, effective January 2013. For more information regarding the determination of Market Median and the peer group data reviewed, see “Peer Group Data” above.

 

Named Executive Officer

 Performance
Units
(#)
  Stock
Options
(#)
  Restricted
Stock

Units
(#)
  LTI Equity
Award Value
Calculated by
Towers Watson
PHRA
  2010 Towers Watson
PHRA Value at
Market 75th
Percentile
  Difference vs.  75th
Percentile

Over/(Under)(%)
 

Kevin W. Sharer

  120,000    210,000    60,000   $13,647,000   $14,618,300    (7

Robert A. Bradway

  42,000    73,500    21,000   $4,776,450   $4,506,600    6  

Roger M. Perlmutter

  31,500    55,125    15,800   $3,584,833   $3,720,750    (4

Jonathan M. Peacock

  31,500    55,125    15,800   $3,584,833   $3,720,750    (4

Anthony C. Hooper(1)

  n/a    n/a    n/a    n/a    n/a    n/a  

Named Executive Officer  Performance
Units
($)
   Restricted
Stock
Units
($)
   Total Equity
Value
Granted
($)
   Market
Median
($)
   Difference vs.
Market Median
Over/ (Under)
(%)
 

Robert A. Bradway

   6,400,000     1,600,000     8,000,000     8,027,000     (0.3

Anthony C. Hooper(1)

   2,560,000     640,000     3,200,000     3,712,000     (13.8

Jonathan M. Peacock

   2,560,000     640,000     3,200,000     3,156,000     1.4  

Sean E. Harper

   2,560,000     640,000     3,200,000     3,236,000     (1.1

Madhavan Balachandran(2)

   2,560,000     640,000     3,200,000     n/a     n/a  
(1)

See “Peer Group Data” above for a discussion regarding the market data for Mr. Hooper commenced employment withHooper.

(2)

See “Peer Group Data” above for a discussion regarding the Company effective October 27, 2011 andmarket data for Mr. Balachandran. In light of the lack of comparable data, it was not an employeeconsidered appropriate to set Mr. Balachandran’s LTI equity award level at the time these LTI equity awards were determined. For a descriptionsame level as the other Executive Vice Presidents because of the new-hire LTI equity awards granted to Mr. Hooper in October 2011 in connection withsimilar scope of the commencement of his employment, see the subsection “New-Hire Equity Grants” below.Company’s Executive Vice Presidents’ leadership responsibilities.

Grants to each NEO in 2012 will be value-based and targeted at the 5048    LOGOthï percentile of our peer group market data. 2014 Proxy Statement


 COMPENSATION DISCUSSION AND ANALYSIS  

Performance Units

The Compensation Committee grants performance units to tie actual compensation earned from LTI equity awards directly to our long-term performance. Performance units are rights to receiveearn shares of our Common Stock, based on pre-established performance goals achieved over a performance period, generally three years. Each performance unit earned entitles the participant to one share of the Company’s Common Stock.

Performance Award Program – Performance Units Earned for the 2009-2011 Performance Period

Performance units for the 2009-2011 performance period were paidgranted to our NEOs in March 2012 based upon our 2009 revenue and 2009 EPS, weighted equally, and modified at the end2013 represented 80% in value of the three-year performance period bytheir total LTI equity awards, ensuring that a relative TSR multiplier measured over the 2009-2011 performance period.

The relative TSR multipliersignificant proportion of equity compensation is earned based on the ranking of our three-year TSR compared withperformance achieved by the three-year TSRs of the Comparator Group, comprised of the companies in our 2009 peer group. The relative TSR multiplier is expressed as a percentage and varies depending on our ranking within the Comparator Group companies, as shown below. The maximum TSR multiplier that could be achieved was 160%.

Company.

The performance results for our 2009-2011 performance period are as follows:

Performance Goals for the 2009-2011 Performance Period
Measures Threshold Target Maximum Actual
Performance
 Earned

2009 Revenue

 

$14.25 billion

earns 0%

 

$15.00 billion

earns 50%

 

$15.75 billion

earns 62.5%

 $14.642 billion 28.5%
  

2009 EPS

 $4.40 earns 0% $4.65 earns 50% $4.90 earns 62.5% $4.91 62.5%

Overall Percentage

 0% 100% 125.0%  91.0%
     
Relative TSR Multiplier for the 2009-2011 Performance Period

Measure

 Threshold Target Maximum Actual Multiplier
Relative TSR for 2009-2011 Performance Period 

50% for a

Company

ranking of 11th

or below

 100% for a Company ranking of 7th through 10th 160% for a Company ranking of 1st Ranking of 12th 50%

Payout Calculation:

Performance 

Units Granted

X

(Revenue Percentage (28.5%) + EPS Percentage (62.5%))

X (TSR Multiplier (50%))

= Performance Units Earned (45.5%)

The actual results for the 2009-2011 performance period resulted in the Common Stock amounts earned as follows:

Named Executive Officer

  Number of Units
Granted (Target)
   Performance
Multiplier  (%)
  Number of Shares
of our Common
Stock Earned
 

Kevin W. Sharer

   73,000     45.5    33,215  

Robert A. Bradway

   24,000     45.5    10,920  

Roger M. Perlmutter

   24,000     45.5    10,920  

Jonathan M. Peacock(1)

   n/a     n/a    n/a  

Anthony C. Hooper(1)

   n/a     n/a    n/a  

(1)

Messrs. Peacock and Hooper commenced employment with the Company after participants for the 2009-2011 performance period had been determined.

Performance Award Program—Performance Units Awarded in 20112013 for the 2011-20132013-2015 Performance Period

In March 2011, theThe Compensation Committee modifiedregularly reviews and updates the performance award goal design with input from management and Cook & Co. This is to ensure that the performance award program continues to align with the interests of our stockholders. In December 2012, after review of the recommendations by Cook & Co., the Compensation Committee approved a performance goal designcalculation for the 2011-20132013-2015 performance period based on the relative ranking of the Company’s three-year TSR results against the three-year TSR results of the companies listed in the S&P 500 as of the grant date to makeallow comparison to broader market performance and a more realistic depiction of our stockholders’ investment opportunities. For performance units granted in prior years, our relative TSR compared tohas been measured against the average TSR of the TSRs of our 13 company peera comparator group for such period the single performance measure to determine the number of shares earned at the end of the performance period. We believe TSR is an important metric as it provides the greatest indication of stockholder alignment and ensures that compensation realized reflects our stock performance relative to our peer group. The payout percentage equals 100% plus two times the TSR percentage difference of our TSR less the average of the TSRs ofgenerally based on our peer group companies as of the year of grant. We believe that the design change to use the S&P 500 as opposed to our comparator group:

Allows a comparison to broader market performance indicators which mayis a more realistic representation of our stockholders’ investment opportunities;

Addresses the challenges of using a single performance metric (TSR) against a small comparator group; and

Tests our performance against our competition for equity investor capital (versus our labor market competition).

The target payout of 100% of the units granted requires our TSR to rank at the 50th percentile, maximum payout of 150% is based on 75th percentile ranking or above, 50% payout is based

on 25th percentile ranking and 0% payout is based on bottom ranking, with linear interpolation between bottom ranking and 75th percentile ranking resulting in payouts ranging from 0% to 150% of the target units awards. Notwithstanding our ranking, however, in the event our absolute TSR is less than zero, the payout percentage shall not be greater than 100% to limit rewards in a positiveperformance period in which we perform in line with, or negative amount.better than, the S&P 500 companies but investors do not recognize growth in their investments.

For example, assume that on April 30, 2011, a participant in the 2011-20132013-2015 performance period is awardedgrant has 1,500 target performance units and that at the end of the 2011-2013 performance period, our TSR is 15%,at the average TSR66.67th percentile of our peer group companies is 9% and the TSR percentage difference is 6%.TSRs of the S&P 500. The resulting payout percentage, willapplying the linear interpolation provisions, would be 112% equal to 100% plus two times the TSR percentage difference.133.3% of target. The participant willwould thus earn 1,6801,999 performance units (or 1,999 shares of our Common Stock (equalStock), equal to multiplying 1,500 performance units by the 133.3% payout percentage).

percentage.

TheFor 2013, the Compensation Committee chosemoved up the grant date of LTI equity awards to eliminateour executive management (comprised of Senior Vice Presidents and above), including our NEOs, to the single-year revenuethird business day after the announcement of our annual results in January (from after announcement of our first quarter results in April) and EPS measures fromcommenced the goalperformance period on the grant date, instead of January 1. These changes reduce potential volatility of share price within the valuation model. Also, the stock price for TSR is determined using the 20 trading days starting on the grant date and the last 20 trading days of the performance period, which reduces the effect of random stock price volatility on a given day or over a shorter time period.

Performance Award Program—2014–2016 Performance Period

In December 2013, for the reasons discussed above, the Compensation Committee decided to retain the design of the performance goals for the performance units granted for the 2014-2016 performance period.

Performance Award Program—Performance Units Earned for the Performance Period Ending in 2013

Performance units for the 2011-2013 performance period were paid in March 2014, calculated using a payout percentage that is based upon our three-year TSR compared

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 COMPENSATION DISCUSSION AND ANALYSIS  

to focus exclusivelythe average of the three-year TSRs of the companies in the comparator group for this performance period. The comparator group was our peer group at the time the performance goals were set in 2011. However, as previously discussed, as a result of the Abbott Laboratories spin-off, in compliance with pre-established performance goals and

Section 162(m), AbbVie Inc. replaced Abbott Laboratories on longer-term measuresa go-forward basis. The Compensation Committee determined that are in full alignment with longer-term stockholder interests. we would use Abbott Laboratories TSR before the spin-off and a weighted TSR of 47.85% Abbott Laboratories and 52.15% AbbVie Inc. starting January 1, 2013, the effective date of the spin-off.

2011-2013 Performance Award Program Results

The maximum number ofperformance results and performance units earned for our 2011-2013 performance period are as follows:

Payout Percentage:

100%

+2 X(Amgen TSR (114.41%)  –  Peer Group Average TSR (103.05%)) = 122.7%

Payout Calculation for the 2011-2013 Performance Period:

Performance Units Earned

=Performance Units GrantedXPayout Percentage = 122.7%

2011-2013 Performance Award Program Payouts

Our actual performance results for the performance periods that may beended in 2013 resulted in the following Common Stock being earned under our performance award program:

Named Executive Officer  Number of Units
Granted (Target)
   Number of Shares
of our Common
Stock Earned(2)
 

Robert A. Bradway

   42,000     51,534  

Anthony C. Hooper(1)

   35,185     52,777  

Jonathan M. Peacock

   31,500     38,650  

Sean E. Harper

   12,000     14,724  

Madhavan Balachandran

   9,000     11,043  
(1)

Mr. Hooper commenced employment with the Company after the participants for the 2011-2013 performance period had been determined. Mr. Hooper’s performance units were based solely upon our TSR performance as compared with the average of the TSRs of our peer group during the performance period from Mr. Hooper’s hire date of October 27, 2011 through December 31, 2013. The goal design for these performance unit awards is identical to the 2011-2013 performance period awards, except that Allergan, Inc. and Celgene Corporation were added to the peer group used to calculate the payout, resulting in a 15-company peer group for these awards and a payout percentage of 150% of target for his performance award.

(2)

Performance units were paid in March 2014.

50    LOGOï 2014 Proxy Statement


 COMPENSATION DISCUSSION AND ANALYSIS  

Value of Long-Term Incentive Equity Awards Granted to Named Executive Officers in 2014

In December 2013, the Compensation Committee considered executive LTI equity award grants for 2014. To determine 2014 executive LTI equity award grant compensation, the Compensation Committee compared the value of the target2014 annual LTI equity awards for each NEO being recommended by management to the 50th and 75th percentile of the peer group for each NEO position (as more specifically described above under “Peer Group Data”). The Compensation Committee also took the Company’s and the individual’s performance units granted forinto account when determining individual grants. In reviewing the 2011-2013 performance period.peer group market data, the

Performance Award Program—2012–2014 Performance Period

In March 2012,Compensation Committee noted the difference in LTI equity award value between the equivalent of our Executive Vice President roles. As a result, the Compensation Committee approved a performance award goal designdifferent grant values for Mr. Hooper and calculationDr. Harper than granted to Mr. Balachandran because Mr. Hooper and Dr. Harper are viewed as having comparable jobs whereas, for the 2012-2014 performance periodMr. Balachandran, it was felt that is identicalhe was better benchmarked to the 2011-2013 performance period goal design discussed above, except thatChief Financial Officer data, which was lower than the average of the market data for Mr. Hooper and Dr. Harper. The Compensation Committee awarded Mr. Bradway a LTI equity award grant valued approximately at the Market Median compared to CEOs in our peer group.

2014 Long-Term Incentive Equity Award Grants

The Compensation Committee approved the following LTI equity awards to our CEO and the other NEOs in December 2013 for grant in January 2014. For more information regarding the determination of Market Median and the peer group has been updated to reflect our 2012 peer group. The maximum number of performance units that may be earned continues to be 150% of the target performance units granted for the 2012-2014 performance period. In addition, the Compensation Committee approved an amendment to our performance award program to grant dividend equivalents on all grants of performance units, commencing with the 2012–2014 performance units to the extent such performance units are earned, in response to our decision to grant dividends to our stockholders.data reviewed, see “Peer Group Data” above.

Named Executive Officer(1)  Performance
Units
($)
   Restricted
Stock
Units
($)
   Total Equity
Value
Granted
($)
   Market Median
($)
   Difference vs.
Market
Median
Over/
(Under)
(%)
 

Robert A. Bradway

   7,200,000     1,800,000     9,000,000     8,875,000     1.4  

Anthony C. Hooper(2)

   2,400,000     600,000     3,000,000     3,754,503     (20.1

Sean E. Harper

   2,400,000     600,000     3,000,000     2,756,373     8.8  

Madhavan Balachandran(3)

   2,240,000     560,000     2,800,000     n/a     n/a  
(1)

Mr. Peacock ceased service as our Chief Financial Officer as of January 10, 2014 and is no longer an executive officer. The approval of the LTI equity awards allocated to Mr. Peacock in December 2013 in consideration and in anticipation of his continuing service as Chief Financial Officer was nullified by Mr. Peacock’s resignation from that role on January 10, 2014 such that no grant was made to Mr. Peacock in 2014.

(2)

See “Peer Group Data” above for a discussion regarding the market data for Mr. Hooper.

(3)

See “Peer Group Data” above for a discussion regarding the market data for Mr. Balachandran. In light of the lack of comparable data, it was considered appropriate to set Mr. Balachandran’s LTI equity award level at the same level as that of the Chief Financial Officer role because of the similar scope of their leadership responsibilities. The Market Median for the Chief Financial Officer role was $2,839,588.

LOGOHistorical Payouts Under Our Performance Award Programï 2014 Proxy Statement51

Our Compensation Committee specifically designed our performance award program to closely tie actual long-term performance with long-term pay, and TSR has been, and is expected to continue to be, the key measurement of our performance under this program. Given our lower TSR performance during the past three performance periods, the performance units earned more recently under our performance award program have been significantly lower than the performance units granted. The payouts under our performance award program for our most recent performance periods for Mr. Sharer, our current CEO, are set forth in the table below and are representative of the results experienced by all of our NEOs:


 COMPENSATION DISCUSSION AND ANALYSIS  

 

LOGO

Stock Options and Restricted Stock Units

Time-vested RSUs comprise only 20% of our LTI equity award grants for NEOs. They result in aone share of Common Stock being delivered to the grantee on the vesting of each RSU and serve as an effectiveimportant and cost-effective retention tool within our mix of grant types because RSUs have intrinsic value on the date of grant and going forward.

The Compensation Committee has historically granted time-vested stock options to tie compensation to absolute increases in our stock price over multi-year periods. Stock options are rights to purchase our Common Stock on or after the vesting date at the closing price of our Common Stock on the date of grant. Unlike Our RSUs our stock price must increase over the exercise price set at the date of grant for stock options to have any value. Effective for 2012, the Compensation Committee determined to no longer grant stock options to our NEOs to provide greater emphasis on our performance units which for 2011 and 2012 are tied exclusively to our TSR as compared to the TSRs of the companies in our peer group.

Terms and Vesting

Beginning with the 2011 annual LTI equity award grants, the Compensation Committee revised the vesting period of RSUs and stock options from vesting in four equal annual installments commencing on the first anniversary of the grant date, to a delayed commencement of vesting,generally vest in three approximately equal annual installments on the second, third and fourth anniversaries of the grant date.date (instead of four equal annual installments commencing on the first anniversary of the grant date). This action was taken todelayed vesting schedule further emphasizeemphasizes the long-term performance focus of theour LTI equity award program on increasing our stock price over the longer-term and to enhanceenhances the retention of talented staff members by lengthening the average time from the date of grant over which shares are earned. For the 2011 annual grants, the term of our stock options is ten years to align our option grants with the competitive practicemembers.

Dividend Equivalents Added in place at our peer group companies, and in recognition of the fact that we are engaged in a long-cycle business, in which the Company performance that drives stockholder value is often realized over significant periods of time.2012

In March 2012, the Compensation Committee approved amendmentsresponse to the RSU form agreements to grant dividend equivalents on all grantsCompany’s payment of RSUs to the extent such RSUs vest, commencing with the 2012 annual grant of RSUs, in response to our decision to grantregular cash dividends to our stockholders.

New-Hire Equity Grants

To compensate Mr. Hooper for equity lost as a result of his leaving his previous employer, to induce him to join the Company and to provide long-term incentives that arestockholders, which commenced in alignment with stockholder interests, the Compensation Committee approved grants of an aggregate of 105,555 performance units (35,185 performance units in each of three varying performance periods) and 45,238 time-vested RSUs, with a total grant date fair value of $8,464,614, as described more fully below. Because the LTI equity awards were primarily for replacement, the award vehicles, grant values and vesting provisions were meant to be substantially similar to the values and structures of those awards at his previous employer.

With respect to the three performance unit awards of 35,185 units each, the number of units was computed using a value per award of $1,925,000 divided by the average daily closing price of our Common Stock for the 60 trading days immediately preceding the grant date of October 27, 2011. The performance units may only be earned and converted to shares based on the performance of our TSR as compared to the TSRs of our peer group companies during the applicable performance period, with a maximum payout of 150% of the performance units granted. The performance periods for the performance unit awards each commenced on the October 27, 2011 and shall end on December 31, 2012, December 31, 2013 and December 31, 2014, respectively. The goal design for these performance unit awards is identical to the awards for the 2011-2013 performance period awards, except that we added Allegan, Inc. and Celgene Corporation to the peer group used to calculate the payout. Mr. Hooper’s RSUs were granted on October 27, 2011 and 50% vested on March 2, 2012 with the remaining 50% to vest in approximately one-third increments on March 2, 2013, March 2, 2014 and March 2, 2015, contingent upon Mr. Hooper being actively employed with us through each vesting date.

In DecemberSeptember 2011, the Compensation Committee approved a time-vested RSU grant and, pursuantasked Cook & Co. to our equity grant guidelines,provide market data regarding dividend equivalent practices. Based on January 31, 2012 (the grant date), Mr. Hooper was granted 26,497 RSUs with a total grant date fair value of $1,753,836. This award was provided in addition to Mr. Hooper’s offer letter amount because (1) the value of equity grants forfeited by Mr. Hooper by leaving his previous position to take the position with us was higher than previously estimated as Mr. Hooper’s previous employer used an above-target multiplier, whereas we had used a target multiplier in our models, (2) the value of shares of Mr. Hooper’s previous employer, driven by the share price at the time of his departure, was higher than previously estimated in

our models and (3) Mr. Hooper’s previous employer had been more rigorous in pro-rating certain equity awards held by Mr. Hooper than we had previously modeled. Each of these RSUs will vest in three approximately equal installments on each of March 2, 2012, 2013 and 2014.

Approximately 76%, or $7,718,450, of the total equity awards granted to Mr. Hooper was not new compensation, but was granted to replace equity rights that Mr. Hooper forfeited due to joining us and terminating his employment with his previous employer.

Long-Term Incentive Equity Awards Granted to Named Executive Officers in 2012

As Mr. Sharer plans to step down as CEO on May 23, 2012,market prevalence, in March 2012, the Compensation Committee determined to grant him a pro-rata LTI equity award that approximates the five months of the year he will serve as our CEOadded dividend equivalent rights on RSUs and performance units commencing with grants in an amount targeted at the median of our peer group in accordance with our new compensation policy to target the median. In connection with Mr. Bradway’s promotion to CEO effective May 23, 2012, in March 2012 the Compensation Committee determined that they would not grant a special promotional grant to Mr. Bradway. Further, Mr. Bradway’s 2012 LTI equity award grant2012. Such dividend equivalents are payable only when and the LTI equity award grants for each of our other NEOS were also set at the median of our peer group.

Total Cash Compensation

Target Annual Cash Compensation

Target annual cash is the sum of the NEO’s base salary and target annual cash incentive award. The Compensation Committee believes that target annual cash compensation valued at the peer group median is an appropriate standard, absent unusual or special circumstances. The Compensation Committee compares target annual cash compensation for each NEO to the most recent peer group market dataextent such awards are earned. The dividend equivalents may be paid in stock (with cash paid for comparable positions available at that time.

In early 2011, other than Mr. Hooper (who was not yet an employee), the Compensation Committee approved target annual cash compensation for each NEO after reviewing and comparing it to the peer group median as follows:fractional shares) or in cash.

 

Named Executive Officer

  2011 Amgen Target
Annual Cash
($)
   Median
Target Annual Cash
($)(1)
   Difference vs. Median
Over/(Under)
(%)
 

Kevin W. Sharer

   4,497,500     4,500,000    (0.1

Robert A. Bradway(2)

   2,056,000     1,956,435    5.1  

Roger M. Perlmutter

   1,774,800     1,852,500    (4.2

Jonathan M. Peacock(3)

   1,512,000     1,798,730    (15.9

(1)

Peer group compensation data has been compiled from the 2010 Towers Watson PHRA Executive Compensation Survey.

(2)

In determining Mr. Bradway’s 2011 target annual cash compensation, the Compensation Committee reviewed data for the second highest paid employee from select companies as there was not enough data from our peer group. The information shown in the table above reflects Mr. Bradway’s cash compensation as compared to the pay levels of the second highest paid employee at these select companies.

(3)

Mr. Peacock commenced employment with our Company effective September 1, 2010 and his base salary was set to reflect his newly entering into the role of Chief Financial Officer of our Company.

Annual Cash Incentive Awards

Annual cash incentive awards to our NEOs are generally made under our EIP which employs a formula that generatesestablishes a maximum award for each participant. Actual awards are generally then determined usingOur EIP is an umbrella plan intended to satisfy the performance-based requirements of Section 162(m). The majority of our staff members participate in our GMIP or our Value Enhancement Program, or VEP, an annual cash incentive award program also based on our pre-established Company performance goals and results measured under our GMIP. During the first 90 days of the calendar year, the Compensation Committee determines the EIP participants, the definition of adjusted net income, the maximum award payable to each participant under the EIP, the GMIP Company performance goals and weightingsresults. This year and in the target bonus opportunities as a percentage of salary. For 2011, the maximum award for each participantpast, actual awards under the EIP is

are determined by the Compensation Committee using their negative discretion under the EIP, generally based on a percentage (0.125% for our CEO and 0.075% for each of the other NEOs) of our adjusted net income, as defined in the EIP(1). The Compensation Committee’s practice has been to exercise negative discretion from the calculated EIP maximum award payable to each individual by using the GMIPpre-established Company performance goals score and the participant’s target annual cash incentive award opportunity in making its determination of the actual award amount paid.under our GMIP. This approach is not purely formulaic, as the Compensation Committee also considers the contributions of each participant to our success during the performance period. Historically, and in 2013, the Compensation Committee has paid well below the maximum award permitted under the EIP, consistent with the results warranted by our performance under our GMIP goals.

No later than the first 90 days of the calendar year, the Compensation Committee determines the EIP participants, the EIP definition of adjusted net income, the maximum award payable to each participant under the EIP, the target annual cash incentive award opportunities under the EIP as a percentage of base salary, the GMIP Company performance goals and weightings and the percentages payable for threshold, target and maximum performance under the GMIP. For 2013, each of our NEOs was a participant in the EIP and the maximum award for each participant under the EIP continued to be based on a percentage of our adjusted net income, as defined in the EIP(1) (0.125% for our CEO and 0.075% for each of the Executive Vice President NEOs). Annual cash incentive awards are paid in March of the year following the EIP and GMIP annual performance periods. TheIn 2013, the Compensation Committee cannot increasecontinued its practice to exercise negative discretion from the calculated EIP maximum award payable and can only reduce it.to each individual by using the GMIP Company performance goals score as applied to the participant’s target annual cash incentive award opportunity in making its determination of the actual award amount paid.

The 2011Consistent with last year, Mr. Bradway’s target annual cash incentive award opportunity for Mr. Sharer, our current CEO, remained at 150% of base salary, for Mr. Bradway remained at 100% of base salary2013 was 130% and for the other NEOs remained at 80% of base salary. These target annual cash incentive award opportunities were calibrated to support total cash compensation at the median of our peer group. Mr. Hooper was not a participant under the EIP because Mr. Hooper had not commenced employment with the Company at the time participants were determined for 2011. Upon Mr. Hooper’s appointment as Executive Vice President, Global Commercial Operations in October 2011, he became eligible to participate in our GMIP and his target annual cash incentive award was set at 80% of base salary under the GMIP (pro-rated from his start date), consistent with the target annual cash incentive award opportunity for all of our othereach Executive Vice Presidents.

2011 GMIP Company Performance Goals

President for 2013 was 90% of base salary. The GMIP Company performance goals approved by the Compensation Committee for 2011 were “Deliver Financially” (60% weighting), “Deliver the Best Pipeline” (25% weighting), and “Growth Opportunities” (15% weighting). These Company performance goals were selected to retain the emphasis on financial performance of revenue and EPS, while focusing the remaining goals on other factors critical to our near- and longer-term clinical and commercialization success that are embedded in our operating plans, budgets and forecasts. While all of these goals measure single-year performance, taken as a whole, they are intended to positively position us for both short- and long-term success:

The 2011 “Deliver Financially” goals (Revenue and EPS) are equally focused on top- and bottom-line growth, and were assigned the largest weighting of any goal category, consistent with the fundamental importance of financial performance to us and our stockholders over the longer-term. EPS was replaced with adjusted net income as one of the two primary financial goals for our 2012target annual cash incentive award program.opportunity aligns us competitively with our peer group and, on average, falls slightly below the median of our peer group.

“Deliver the Best Pipeline” goals measured progress on both early- and later-stage product candidates to focus us on executing key clinical studies and delivering a robust product pipeline at all stages of the development continuum, which we believe is critical to our continued success over the near- and longer-term.

 

(1)

For 2011,2013, adjusted net income for purposes of the EIP was defined as net income determined under U.S. generally accepted accounting principles, adjusted for the following:following, net of tax: the adverse impact of changes in accounting principles; expenses and related costs incurred in connection with business combinations; non-cash interest expense on our convertible debt; stock option expense; losses and related costs incurred with respect to legal and contractual settlements; losses on disputes with tax authorities; expenses incurred in connection with restructurings and related actions; asset impairment charges, inventory write-offs; adverse impact of changes in tax law and losses incurred onthe impact of discontinued operations. Adjusted net income for purposes of the EIP is adjusted net income we reported in our Form 8-K dated as of January 28, 2014.

52    LOGOï 2014 Proxy Statement


 COMPENSATION DISCUSSION AND ANALYSIS  

2013 GMIP Company Performance Goals

The GMIP Company performance goals approved by the Compensation Committee for 2013 were “Deliver Financially” (60% weighting), “Deliver the Best Pipeline” (20% weighting), and “Deliver Strategic Priorities” (20% weighting). These goals were selected to retain the emphasis on financial performance, while focusing the remaining goals on other factors that are relevant to the Company’s strategy and critical to our near- and longer-term clinical and commercialization success. While all of these goals measure single-year performance, taken as a whole, they are intended to positively position us for both short- and longer-term success:

The 2013 “Deliver Financially” goals (Revenues and Adjusted Net Income) are equally focused on top- and bottom-line growth and were assigned the largest weighting of 30% each, consistent with the fundamental importance of financial performance to us and our stockholders over the longer-term. The use of adjusted net income instead of adjusted EPS, used in prior years, avoids the potential impact of any Company stock repurchases on adjusted EPS.

Growth Opportunities”Deliver the Best Pipeline” goals measured progress on both early- and later-stage product candidates to focus us on executing key clinical studies and delivering a robust product pipeline at all stages of the development continuum, which we believe is critical to our continued success over both the short- and longer-term.

“Deliver Strategic Priorities” was chosen as a 20112013 goal category to highlight the importance of accomplishing a series of current-year objectives to acquire innovative products or make financially accretive acquisitions, prepare to enter into the biosimilars market and expand our business into additional countries.internationally, seize biosimilars opportunities, develop devices and capture external innovation.

All of these goal categories are intended to create stockholder value in the near-short- and longer-term. Threshold performance for the non-financial primary metrics, which are often expressed in milestones, are more subjective in nature than are the financial metrics and could result in a very small payout percentage (1%(less than 1% of annual cash compensation). There are no payouts for below-threshold performance on the two financial metrics. Maximum performance under each measuremetric results in earning 225% of target annual cash incentive award opportunity for that measure. metric.

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 COMPENSATION DISCUSSION AND ANALYSIS  

2013 GMIP Company Performance Goals and Results

The table below illustrates the weighting of each goal, the goals established and our actual performance for 2011:2013:

Deliver Financially (60%)—Achieved 173.4%
   Threshold    Target    Maximum    Achieved

Revenue (30%)

 $14,550 million   $15,300 million   $16,050 million    $15,582 million

Achieved135.7%

GMIP EPS(1)(30%)

  $4.85    $5.10    $5.35    $5.33

Achieved211.0%

 

Deliver Financially (60%)—Achieved 193.2%
ThresholdTargetMaximumAchieved
Revenues (30%)$17,125 million$18,000 million$19,075 million

$18,676 million

Achieved169.1%


Adjusted Net Income(1) (30%)$5,225 million$5,500 million$5,825 million

$5,814 million

Achieved217.3%


(1)

For 2011,Adjusted net income for purposes of the GMIP EPS reflects adjustments for (i) any changes in tax law or accounting principles, the discontinuation or operations or the recording of any extraordinary items or (ii) any (a) merger, acquisition, and investment or asset related expenses, gains and losses, (b) asset impairment charges, (c) restructuring charges, (d) gains or losses from litigation, arbitration and contractual settlements, (e) non-cash interest expense on our convertible debt or (f) stock option expense, eachis adjusted net of tax. EPS is the same measurement discussed in detailincome as we reported in our Form 8-K dated as of January 26, 2012.28, 2014.

 

Deliver the Best Pipeline (25%(20%)—Achieved 207.0%157.5% 
   Results Achieved 

Execute Key Clinical Programs Including Filings, Obtain ApprovalsStudies (15%)

Executed key clinical programs, including filings and obtaining approvals.175.0%
Advance the Early Pipeline (5%)

Generated new product strategy teams.103.0%

Initiated first-in-human studies. 

 

 

 

Executed 13 of 13 key clinical studies.

Achieved 35% of filings or approvals out of possible 50%.

210.0%

Early Pipeline Advancement (10%)

 

Advanced 8 new product strategy teams.

202.5%

     

Initiated 3 first-in-human studies.

Advanced programs through the early-to-late portal.
  
Deliver Strategic Priorities (20%)—Achieved 197.5%
ResultsAchieved
Devices (5%)     Advanced devices to support lifecycle management and new product development.

4 programs moved through

145.0%
Capture External Innovation (3%)Completed preclinical and clinical-stage inbound deals.225.0%
Completed out-license of preclinical programs.
Completed acquisition of Onyx Pharmaceuticals, Inc.
Japan (3%)Completed clinical trial application submissions to support product registration.225.0%
Signed deals, including for alliance.
Recruited leadership team with agreed governance oversight.
China and Emerging Markets (3%)Commenced research and development investment in China.225.0%
Commenced manufacturing investment in China.
Built Amgen’s organizational presence in China.
Advanced Amgen’s pipeline portfolio.
Signed deal to acquire rights to filgrastim and pegfilgrastim from distributor.
Advance Manufacturing of the early-to-late portal.

Future (MoF)(3%)
Integrated manufacturing of the future strategic plan submitted for review and approved.200.0%
Completed analytical drug substance comparability and agreement with health authorities.
Advanced manufacturing of the future commercial facility (engineering and construction).
Biosimilars (3%)Completed the necessary clinical and other activities required to launch target products at the desired time.191.7%
Developed and advanced ex-U.S. and ex-European Union biosimilars strategy.    

2013 GMIP Company Performance Goals Composite Score186.9%

54    LOGOï 2014 Proxy Statement


Growth Opportunities (15%)—Achieved 173.4%
ResultsAchieved    
  

External Opportunities (5%)

      •    Achieved 4 bids or deals in target markets.

      •    Achieved 3 deals for innovative products or financially attractive acquisitions.

197.0%
  

Biosimilars (5%)

 

      •    Advanced a regulated environment that is science-based, patient safety oriented and provides incentives for innovation.

      •    Completed the necessary pre-clinical, clinical, manufacturing, regulatory and commercial activities required to occur in 2011 to support the launch of targeted products.

      •    Developed a business plan that meets market/partnering needs and secured meaningful interest from prospective partners.

199.3%

Country Expansion (5%) COMPENSATION DISCUSSION AND ANALYSIS  

      •    Achieved 2011 revenue of $144.0 million.

      •    Achieved 31 new filings.

      •    Entered 6 new countries.

123.8%

Our performance against the 2011 GMIP Company performance goals (as

2013 Annual Cash Incentive Awards

As shown in the table above)above, our performance against the 2013 GMIP Company performance goals yielded a composite score of approximately 181.9%. The186.9% and the Compensation Committee awarded actual annual cash incentive awards under the EIP to theour NEOs based on this composite score.

The following actual annual cash incentive awards were paid to our NEOs under the EIP and the GMIP at approximately 181.9% of target:score:

 

Named Executive Officer

  Target 2011
Award
($)
   Actual 2011
Award
($)
   Target 2013
Award($)(1)
   Actual 2013
Award($)
 

Kevin W. Sharer

   2,684,365     4,882,000  

Robert A. Bradway

   1,022,615     1,860,000     1,925,000     3,598,000  

Roger M. Perlmutter

   784,646     1,427,000  

Anthony C. Hooper

   897,241     1,677,000  

Jonathan M. Peacock

   665,846     1,211,000     810,447     1,515,000  

Anthony C. Hooper(1)

   108,154     196,000  

Sean E. Harper

   802,921     1,501,000  

Madhavan Balachandran

   680,885     1,273,000  

 

(1)

Because Mr. Hooper commenced employmentCalculated in accordance with us in October 2011, he received a pro-rata share of his 2011 eligible GMIP award.GMIP.

In March 2012,2014, the Compensation Committee approved GMIP Company goal categories for 20122014 performance that are substantially consistent with the 20112013 Company goal categories, except itthat “Deliver Strategic Priorities” was replaced “Growth Opportunities” with “Reach More Patients Through Growth Opportunities.” “Deliver Annual Priorities” (15%). The sub-goal under “Deliver the Best Pipeline” to execute key clinical studies and regulatory filings was raised 5% more than the similar goal in 2013 to 25% because of the increasing importance of various late-stage trials and regulatory filings to successfully execute in 2014. “Deliver Financially” remains at 60%.

Special Retention Award

In addition,March 2011, while Mr. Balachandran served as our Senior Vice President, Manufacturing, the Compensation Committee replaced EPS with adjusted net incomeapproved a $1,000,000 special cash retention award to Mr. Balachandran, payable in installments of $330,000 on March 2, 2012 and 2013 and $170,000 on March 2, 2014 and 2015, subject to his continued employment through such dates (excluding terminations due to death or disability and involuntary termination by us not for cause). This special retention award was made in light of Mr. Balachandran’s valued performance in his then-current role and the Company’s desire to retain him as onea succession candidate for the role of the two primary financial goals in our 2012 annual cash incentive award program to align compensation with a measure that more directly correlates with the underlying performance of our operations.

In March 2012, the Compensation Committee increased the target annual cash incentive award opportunity for Executive Vice Presidents, including Messrs. Peacock and Hooper, from 80% of base salary to 90% of base salary for 2012 compensation. This increase was made based on peer group market data, which suggested that we were significantly below the median of our peer group and this increase in our target annual cash incentive award opportunity to 90% would cause us to be competitive with our peer group and still fall slightly below the median of our peer group.President, Operations. In addition, in connection with Mr. Bradway’s promotion to CEO on May 23, 2012, the

Compensation Committee increased the target annual cash incentive award opportunity for Mr. Bradway to 130% of base salary for 2012 compensation. This percentage targets the median of our peer group and is lower than the target annual cash incentive award opportunity of 150% for Mr. Sharer because the peer group median has decreased since Mr. Sharer’s annual cash incentive award opportunity was set.

New-Hire Bonus

We paid Mr. Hooper a sign-on bonus totaling $2,700,000, consisting of an initial payment of $1,000,000 and an additional payment of $1,700,000 to induce Mr. Hooper to join our Company and to attract him to our Company and California. In addition, in MarchAugust 2012, Mr. Hooper received $350,045 as a make-whole bonusBalachandran was promoted to compensate him for the loss of his 2011 bonus amounts from his then-current employer as the result of his departure. Mr. Hooper brings broad global commercial operations experience crucial in implementing a strategic vision for the Company’s growth and international expansion. Mr. Hooper’s new-hire bonus reflects his experience and an inducement amount necessary to attract him to our Company. Mr. Hooper’s sign-on bonus must be repaid in full if Mr. Hooper voluntarily resigns his employment for any reason or if we terminate Mr. Hooper’s employment due to cause, in either event, prior to the two year anniversary of his start date of October 27, 2011.Executive Vice President, Operations.

Base Salaries — Our Smallest Primary Element of Executive Compensation

The base salary for each staff member, including NEOs, is managed within the range of base salaries set for that staff member’s level. Generally, in March of each year, the specific base salaries for the NEOs are set based upon the Compensation Committee’s review of the peer group base salary data available for each NEO position. Data reviewed typically includescompared with the 25th, 50th and 75th percentile data.Market Median as more specifically described under “Peer Group Data” above. In addition, the Compensation Committee considers our performance, market conditions and such other factors the Compensation Committee deemsdeemed relevant. Additionally,Further, our CEO engages in a discussion with the Compensation Committee concerning his assessment of the performance of each of the other NEOs and his recommendations regarding any base salary adjustments for them. The Compensation Committee uses our CEO’s evaluation of the performance of the NEOs that report to the CEO, each other NEO’s performance, information with respect to each person’sNEO’s experience and other qualifications, peer groupthe Market Median and any base salary market data and the base salary adjustment recommendation madeadjustments recommended by the CEO in determining each NEO’s base salary. NEOs have no expectation or guarantee of

In March 2013, each NEO received a base salary increase and no pre-established formulaic base salary increases are granted.

In March 2011, the Compensation Committee engaged in extensive discussions regarding executive compensation and assessed the market competitivenessthat was effective as of each of the then-NEO’s base salary and such officer’s performance as well as, but to a lesser degree, the Company’s overall performance. After these discussions, the Compensation Committee determined that each NEO’s base salary should generally be increased by 2.8%, which was consistent with the increases granted to our U.S.-based staff members. The Compensation Committee approved a 5% base salary increase for Mr. Peacock, increasing his salary to $840,000, to make his salary more competitive with the peer group median for his position of approximately $947,000.

The base salary adjustments approved and implemented in March 2011 are shown in the table below:

Named Executive Officer

  2010 Base
Salary
($)
   Increase(%)   2011 Base
Salary
($)
 

Kevin W. Sharer

   1,750,000     2.8     1,799,000  

Robert A. Bradway

   1,000,000     2.8     1,028,000  

Roger M. Perlmutter

   959,000     2.8     986,000  

Jonathan M. Peacock

   800,000     5.0     840,000  

The Board appointed Mr. Hooper to serve as the Company’s Executive Vice President, Global Commercial Operations effective October 27, 2011. The Compensation Committee set Mr. Hooper’s initial base salary at $950,000, a level sufficient to attract him from his then-current employer, yet less than the base salary of his predecessor in the same role.

In March 2012, each NEO, with the exception of Mr. Sharer who will retire from the position of CEO effective May 23, 2012, received a base salary increase.February 25, 2013. Mr. Bradway received a base salary increase of approximately 36%7.1% to $1,400,000$1,500,000 annually, in connection with his promotion to CEO on May 23, 2012. Hiswhich brought Mr. Bradway’s base salary is targeted slightly abovetowards the 30th percentileMarket Median. Each of our peer group because the Compensation Committee wanted to provideother NEOs, other than Mr. Bradway with a sizeable increase to reflect his new responsibilities as CEO. Mr. PeacockBalachandran, received a base salary increase of 5% to bring him closer to (although still below) the median of our peer group. Mr. Hooper received a base salary increase of approximately 2.8%2.6%, which was generally intended to generally maintain histheir relative positioning as compared to the peer group medianMarket Median and was consistent with the increases granted to our U.S.-based staff members generally. Mr. Balachandran received a base salary increase of 10% to bring his base salary compensation closer to the other Executive Vice Presidents and provide increased internal parity among the Executive Vice Presidents.

PerquisitesLOGOï 2014 Proxy Statement55


 COMPENSATION DISCUSSION AND ANALYSIS  

2013 Base Salary Adjustments

The base salary adjustments approved and implemented in March 2013 are shown in the table below:

Named Executive Officer  2012 Base
Salary
($)
   Increase
(%)
   2013 Base
Salary
($)
   Market
Median
($)
   Difference vs.
Market Median
Over/(Under)
(%)
 

Robert A. Bradway

   1,400,000     7.1     1,500,000     1,510,000     (0.7

Anthony C. Hooper(1)

   976,500     2.6     1,001,800     1,054,180     (5.0

Jonathan M. Peacock

   882,000     2.6     904,900     994,913     (9.0

Sean E. Harper

   873,800     2.6     896,500     1,015,064     (11.7

Madhavan Balachandran(2)

   700,000     10.0     770,000     n/a     n/a  
(1)

See “Peer Group Data” above for a discussion regarding the market data for Mr. Hooper.

(2)

See “Peer Group Data” above for a discussion regarding the market data for Mr. Balachandran.

In March 2014, the Compensation Committee determined that base salaries for each NEO would not be increased as no base salary increases were awarded to other senior managerial level staff members and above to attain better alignment with the peer group for such levels.

Total Annual Cash Compensation

Target annual cash is the sum of the NEO’s base salary and target annual cash incentive award. The Compensation Committee believes that reviewing our NEO’s target annual cash compensation as compared to the Market Median provides a useful check.

In March 2013, the Compensation Committee reviewed target annual cash compensation for each NEO comparing it to the

Market Median as set forth below. For more information regarding the determination of Market Median and the peer group data reviewed, see “Peer Group Data” above. No material adjustments were made to target annual cash compensation for any of our NEOs as a result of this review by the Compensation Committee as the comparisons demonstrated appropriate internal pay equity among the NEOs, other than the CEO, given the similar scope of the overall leadership responsibilities for each Executive Vice President.

2013 Target Annual Cash Compensation

Named Executive Officer  2013 Amgen Target
Annual Cash
($)
   Market Median
($)
   Difference vs.
Market Median
Over/(Under)
(%)
 

Robert A. Bradway

   3,450,000     3,605,000     (4.3

Anthony C. Hooper(1)

   1,903,420     2,042,000     (6.8

Jonathan M. Peacock

   1,719,310     1,949,000     (11.8

Sean E. Harper

   1,703,350     1,948,000     (12.6

Madhavan Balachandran(2)

   1,463,000     n/a     n/a  

(1)

See “Peer Group Data” above for a discussion regarding the market data for Mr. Hooper. Mr. Hooper’s position is not well-represented in either the 2012 Towers Survey or proxy statements of each company in our peer group and, accordingly, based on his current position in pay ranking at our Company, he is matched to the median of the second highest paid NEO of each of the companies in our peer group.

(2)

See “Peer Group Data” above for a discussion regarding the market data for Mr. Balachandran.

56    LOGOï 2014 Proxy Statement


 COMPENSATION DISCUSSION AND ANALYSIS  

Perquisites

Perquisites are intended to be limited in both in type and in monetary value. We do believe,The Compensation Committee believes, however, that offering our NEOs certain perquisites facilitatesfacilitate the efficient operation of our business, allowing theseour NEOs to better focus their time, attention and capabilities on our Company, permits our NEOspermit them to be accessible to the business as required, alleviatesalleviate safety and security concerns and assistsassist us in recruiting and retaining these key executives. The perquisites provided to our NEOs generally include an allowance for personal financial planning andservices, including tax preparation services (not to exceed $15,000 annually combined)in aggregate), annual physical examinations, Company-paid moving and relocation expenses when theyour NEOs are required by us to move to a new location and, in limited instances, personal expenses when on business travel. Certain of our NEOs also have access to the personal use of a Company car and driver and, subject to the useapproval of our CEO, the Company aircraft to facilitate efficient use of time and alleviate security concerns.for personal use. Our CEO is encouraged to use our privateCompany aircraft for all of his travel (business and personal) because the Compensation Committee believes that the value to us of making the aircraft available to our CEO, in terms of safety, security, accessibility and efficiency, is greater than the incremental cost that we incur to make the aircraft available.incur.

It is the Compensation Committee’s intention to continually assess business needs and evolving practices to ensure that perquisite offerings are competitive and in the best interests of our stockholders. No tax gross-up reimbursements for NEOs are provided to NEOs, except in connection with reimbursement of moving and relocation expenses (excludingconsistent with our other staff members

and our general relocation policy. We do not provide tax gross-ups for assistance with loss on sale of a home), consistent with our other staff members.home. We believe that providing tax gross-up reimbursements on the applicable moving and relocation expenses paid on behalf of newly-hired executives who agree to relocate on the Company’s behalf and current executives who agree to expatriate to another country to work on the Company’s behalf is appropriate because it treats these executives in a similar manner as non-executive newly-hired employees and current employeesnon-executives under our Company-wide policy and assists in the attraction and retention of the executive talent necessary to compete successfully in the market.successfully.

In March 2011, the Compensation Committee limited theWe have caps on moving and relocation benefits for the top executives of the Company. Specifically,expenses and on home sale loss assistance for Senior Vice Presidents and above, the Company has:

capped moving and relocation expenses;

capped assistance on loss on sale of a home; and

clarified that relocation tax gross-ups do not apply to assistance on loss on sale of a home.

above. Our Company-wide policy includes a repayment provision applicable to all staff members which requires an employeea staff member hired from outside the Company to repay us for moving and relocation expenses incurred by us in the event that the employeestaff member does not complete the move, resigns or is discharged for cause from the Company within two years of the employee’s employment start date (with a pro-rata refund in the second year). For employeesstaff members (including our NEOs) who accept an expatriate assignment, the repayment provision ishas been one year from the assignment date and, starting in 2013, was extended to apply to anyone who does not complete the move, resigns or is discharged for cause within two years from the assignment date.

Mr. Peacock, our Executive Vice President

Compensation Policies and Chief Financial Officer, who relocated from Switzerland to California upon his hiring, and Mr. Hooper, our Executive Vice President, Global Commercial Operations, who relocated from New Jersey to California, incurred moving and relocation expenses during 2011 in accordance with our relocation policies. Specifically, the material relocation benefits provided to Messrs. Peacock and Hooper in 2011 included reimbursement for closing expenses and other costs related to the sale of a prior

residence, housing and living expenses, reimbursement of miscellaneous other relocation expenses (including for Mr. Hooper, costs for use of our aircraft for relocation-related trips), and tax gross-up payments on the taxable portion of such benefits provided. See “Summary Compensation Table—All Other Compensation—Perquisites and Other Compensation” in our Executive Compensation Tables for more information on these benefits.Practices

COMPENSATION POLICIES AND PRACTICES

Clawback Policy

We have a clawback policy that requires our Board to consider recapturing past cash or equity compensation payouts awarded to our executive officers, including our NEOs, if it is subsequently determined that the amounts of such compensation were determined based on financial results that are later restated and the executive officer’s misconduct caused or partially caused such restatement.

Recoupment Provisions

In December 2012, the Compensation Committee approved amendments to our cash incentive compensation plans (EIP, GMIP and VEP) to expressly allow the Compensation Committee, or management, as appropriate, to consider employee misconduct that caused serious financial or reputational damage to the Company when determining whether an employee has earned an annual cash incentive award or the amount of any such award. This provision is not intended to limit any other action that the Company could take against an employee, including other disciplinary actions (up to termination), ordinary course performance considerations, disclosure of wrongdoing to the government and pursuit of any other legal claims against such employees.

LOGOï 2014 Proxy Statement57


 COMPENSATION DISCUSSION AND ANALYSIS  

Stock Ownership Guidelines

Our stock ownership guidelines require our executives to hold a meaningful amount of our Common Stock, promote a long-term perspective in managing the company,Company, further align the interests of our executives and stockholders and mitigate potential compensation-related risk. In March 2012, the stock ownership requirement for our CEO was increased from five times base salary to six times base salary. Executives are generally given five years following their hireplacement into their current job level to comply with these guidelines. Executives who are promoted to a status with a

stock ownership level one level higher than the executive was previously required to satisfy, shall have three years to comply with the new ownership level if the executive has been subject to the stock ownership guidelines with compliance measured based on holdings and stock price as of December 31st.for five or more years. Once these ownership guidelines are met, executives are expected to maintain such ownership until they change job levels or are no longer employed by the Company. As of November 8, 2011,5, 2013, the date of our executive certification, all executive officers, including our NEOs, thatwho were requiredexpected to meet such guidelines, were in compliance. NEOs promoted to a new position within the last five years have the following compliance dates for their applicable ownership guidelines did so. Messrs. Bradway, Peacock and Hooper are not required to meet their guidelines until 2014, 2015 and 2016, respectively.new position.

The current stock ownership guidelines are as follows, with the ownership requirement for the CEO having increased from five times base salary to six times base salary recommended by the Compensation Committee and approved by the Board in March 2012 and effective March 15, 2012:Stock Ownership Guidelines Compliance Dates

 

NamePrior Position

Compliance Date

for New Position

PositionRobert A. Bradway

  President and Chief Operating OfficerDecember 31, 2017

Sean E. Harper

Senior Vice President, Global Development & Corporate Chief Medical OfficerDecember 31, 2016

Madhavan Balachandran

Senior Vice President, ManufacturingDecember 31, 2015

Stock Ownership Guidelines Requirements

Messrs. Bradway and Balachandran and Dr. Harper meet the stock ownership requirements applicable to their prior positions. The stock ownership guidelines for 2013(1) were as follows:

PositionStock Ownership Requirement

Chief Executive Officer

 Six times base salary

President andor Chief Operating Officer

 Three times base salary

Executive Vice President

 Three times base salary

Senior Vice President

 13,500 shares

Vice President

 4,500 shares

The following holdings count towards satisfying these stock ownership requirements, each as of the certification date:requirements:

 

shares of our Common Stock that are not subject to forfeiture restrictions and are beneficially held;

 

shares of our Common Stock held through a 401(k) plan or other qualified pension or profit-sharing plan; and

 

funds allocated under our Employee Stock Purchase Plan.

Insider Trading Policy and Practices

Our insider trading policy prohibits allAll staff members fromand our Board are prohibited from: (i) buying or selling our Common Stock while aware of any material nonpublic information orinformation; (ii) engaging in short sales with respect to our Common Stock, fromStock; (iii) pledging or purchasing or pledgingour Common Stock on margin (with the exception of(except the use of a margin account to purchase our Common Stock in connection with the exercise of company-grantedCompany-granted stock options), or (iv) entering into any derivative, hedging or similar transactions with respect to our Common Stock. We do not have any executive 10b5-1 plans.

(1)

Effective March 5, 2014, the officer stock ownership guidelines were amended to require that Senior Vice Presidents hold two times their base salary and Vice Presidents hold one time their base salary.

58    LOGOï 2014 Proxy Statement


 COMPENSATION DISCUSSION AND ANALYSIS  

Policies for Grants of Long-Term Incentive Equity Awards

In accordance with our Equity Awards Policy, our regular annual grants of LTI equity awardsaward grants are typically approved at an in-person or telephonic meeting of the Compensation Committee (for grants of equity awards to executive officers, including our NEOs) or the Equity Award Committee (for grants to all other staff members). In unusual and compelling circumstances, LTI equity awards may be approved by the Compensation Committee or Equity Award Committee by unanimous written consent.

The Compensation Committee typically approves theBeginning in 2013, regular grants of annual LTI equity awards made to our executive officers,management (comprised of Senior Vice Presidents and above), including our NEOs, during its March meeting. Theare approved in December with a grant date for annual awards of stock options and RSUsthat is the third business day after the release of our first fiscalfourth quarter earnings. For stock options, the exercise price is equal to the closing priceearnings, in January of the Company’s Common Stock onfollowing year, to align the grant date.date with the start of the performance period. Our executive officersNEOs may also receive special awards of stock options or RSUs on an ad hoc basis as determined by the Compensation Committee as new hires or for recognition and retention, promotionalpromotions or other purposes, but generally only on the third business day after the release of our quarterly or annual earnings after the date of determination by our Compensation Committee. The grant date for annual awards of stock options and RSUs to staff members other than our executive management is the third business day after the release of our first fiscal quarter earnings.

Tally Sheets

As part of its executive compensation review conducted annually, theThe Compensation Committee annually reviews a tally sheetsheets for each NEO, setting forth all components of compensation,

including compensation paidpayable at termination, retirement or at the time of a change of control. TheThese tally sheet also includes a summary of bothsheets summarize the number of shares and the value at a given price of the LTI equity awards held by each NEO, as well as each NEO’s individual cumulative account balances in our benefit plans. These tools are employed by the Compensation Committee as a useful check on total annual compensation and the cumulative impact of our long-term programs and are considered important to understand the overall impact of compensation decisions.

Based on its review of the tally sheets, the Compensation Committee may increase or decrease certain individual elements of compensation to align total compensation with peer group market data and to promote internal equity among our NEOs, other than the CEO. No material adjustments to total compensation for any of our NEOs were made in 2011 as a result of the review of these tally sheets by the Compensation Committee.Committee in 2013.

Executive Compensation Website

We have implemented a website, accessible atwww.amgen.com/executivecompensation, which provides a link to this proxy statement and invites our stockholders to fill out a survey to provide input and feedback to the Compensation Committee regarding our executive compensation policies and practices. All input from our stockholders is valuable and the Compensation Committee appreciates your time and effort in completing the survey.

NON-DIRECT COMPENSATION AND PAYOUTS IN CERTAIN CIRCUMSTANCESNon-Direct Compensation and Payouts in Certain Circumstances

Retirement Arrangement,

Offer Letters, ConsultingLetter, Severance Arrangement and Change of Control Benefits

Our CEO and other NEOs are generally not covered by contractual arrangements that provide for severance or other payments in the event of termination, but all are participants in our Change of Control Severance Plan discussed below. In addition, we typically enter into offer letters with new hires detailing their compensation and requirements to pay back certain elements of compensation and any limited severance arrangements to mitigate the candidate’s risk in changing jobs.compensation.

To attract talented executives from outside the Company, our offer letters generally include severance terms that apply to terminations that are initiated by the Company and occur for reasons “other than cause” within a limited period of timethree years from the date of hire. Benefits of this typeThese benefits are sometimes provided to officer-level candidates to provide an incentive tofor them to join the Companyus by reducing the risk ofrisks associated with making such a job change.

LOGOKevin W. Sharerï 2014 Proxy Statement59

On December 14, 2011, Mr. Sharer notified us of his plan to step down as CEO effective May 23, 2012 and as Chairman of the Board and an employee of the Company at the end of 2012. When Mr. Sharer steps down as CEO in May 2012, he will assist in the transition of our new CEO and provide leadership to the Board. Through the end of Mr. Sharer’s employment with the Company on December 31, 2012, we will continue to pay Mr. Sharer a regular salary at his current base salary rate and he will be eligible for a pro-rata portion (or approximately five/twelfths) of his annual cash incentive award for 2012 for the service provided as our CEO. During 2012, he will also continue to participate in the normal benefits and perquisites as currently provided by the Company to Mr. Sharer.


 COMPENSATION DISCUSSION AND ANALYSIS  

Mr. Sharer was granted a reduced amount (or approximately five/twelfths) of his LTI equity awards for 2012 for the service provided as CEO through May 2012. The provisions of the performance award program and our RSU grant agreement requiring pro-ration of the performance units earned or RSUs vesting, as applicable, upon the occurrence of certain events, including death, disability or retirement shall not apply to Mr. Sharer’s grant of performance units under the 2012-2014 performance program or 2012 annual grant of RSUs. Like our other retirement-eligible employees, following Mr. Sharer’s retirement in December 2012, he will continue to vest in his outstanding RSUs and stock options in accordance with their original vesting schedules and he will continue to be entitled to a full payout from his outstanding performance units (for the 2010-2012, 2011-2013 and 2012-2014 performance periods). There will be no severance paid to Mr. Sharer. The Compensation Committee has approved providing Mr. Sharer with office space and administrative and technical support until December 31, 2017, but no decisions have been made regarding the specific support levels to be provided.

Jonathan M. Peacock

Mr. Peacock, who commenced employment effective September 1, 2010, is currently subject to an offer letter approved by the Compensation Committee. Mr. Peacock’s offer letter provides for standard severance protection for three years following his hire date at a benefit multiple of two times annual base salary and target annual cash incentive award opportunity plus up to 18 months of Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, medical coverage paid by us. These severance benefits will expire on September 1, 2013. To facilitate Mr. Peacock’s relocation from Switzerland to the U.S., he received our relocation package for international relocations. Mr. Peacock will repay his moving and relocation expenses incurred by the Company in the event Mr. Peacock resigns or is discharged for cause from the Company within two years (with pro-rata refund in the second year of his hire date).

Offer Letter—Anthony C. Hooper

Mr. Hooper, who commenced employment effective October 27, 2011, is currently subject to an offer letter that was negotiated with Mr. Hooper in connection with his hiring and approved by the Compensation Committee. Mr. Hooper’s compensation and benefits for 2011 are described in this Compensation Discussion and Analysis. Mr. Hooper’s offer letter also provides Mr. Hooper withincluded our standard relocation assistance and our standard severance protection for new executives. In addition, we agreed to compensate Mr. Hooper for cancellations or forfeitures of previously earned or vested compensation from his former employer (or the denial of vesting of such compensation) arising out of his employment with us and to indemnify him against claims relating to recoupment of such compensation. We agreed to provide Mr. Hooper with thesesuch compensation and benefits because Mr. Hooper’s broad commercial operations experience and his leadership roles in developing the pharmaceutical business in Latin America, the Middle East, Africa, Canada, Japan and several countries in the Pacific Rim are important to implementing our strategic vision for growth and international expansion and to attract him to our Company and California. Mr. Hooper’s compensation and benefits were designed and negotiated to facilitate a prompt, effective and fair process.

Mr. Hooper’s offer letter provides for cash severance protection for three years following Mr. Hooper’shis hire date at a benefit multiple of two times annual base salary and a target annual cash incentive award of 80% of his annual base salary plus up to 18 months of Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, medical and dental coverage paid by us. As with Mr. Peacock, benefitsBenefits of this type are sometimes provided to officer-level candidates to provide an incentive to them to join the Company by reducing the risk of making such a job change. These severance benefits will expire on October 27, 2014.

Severance Arrangement—Jonathan M. Peacock

Mr. Peacock resigned as our Chief Financial Officer effective January 10, 2014, at which time he continued to be employed in a non-executive officer capacity to assist in the transition of Mr. Kelly, our Acting Chief Financial Officer, which transition period is currently expected to extend until May 2014. Upon his termination from the Company, Mr. Peacock will be entitled to the following severance benefits: (1) lump sum payment that is approximately equal to 1.5 times base pay salary plus target annual cash incentive award opportunity; (2) reimbursement for COBRA

medical coverage for up to 18 months; (3) senior executive career transition services for up to 12 months; (4) a payment in an amount that is approximately equal to the pro-rata value of the last unvested tranche of his new hire equity awards (stock options and RSUs) that would have vested in October 2014, based on the total period of time that he is expected to be employed over the total vesting period of such tranche (48 months) calculated on the date of his termination of employment with the Company, and using a stock price equal to $113 per share and (5) payment at an hourly rate of $1,200 for any authorized time that he spends following the termination of his employment in further transitioning his responsibilities and with matters that arose during his tenure with the Company. In addition, we have agreeddetermining these benefits, the Compensation Committee considered that, until September 2013, Mr. Peacock was eligible for severance protection at a higher benefit multiple of two times annual base salary and target annual cash incentive award opportunity plus up to 18 months of COBRA protection, that the pro-rata value of the last unvested tranche of his new hire equity awards was made in part to compensate Mr. HooperPeacock for cancellations or forfeitures of previously earned or vested compensation (or the denial of vesting of such compensation) arising out of his employment with us and to indemnify him against claims relating to recoupment of such compensation. Approximately 76% of the LTI equity awards granted to Mr. Hooper was intended to compensate him for the forfeitures and cancellations of outstanding equity awardsvalue that resulted from his departure fromhe left behind at his former employer.

To facilitateemployer and that Mr. Hooper’s relocation from New Jersey to California, he received our relocation package whichPeacock will have served (including by providing important transition services) nearly the full vesting period. The agreement between the Company and Mr. Peacock includes a repaymentgeneral release of all claims by Mr. Peacock and that Mr. Peacock forfeit and repay substantial benefits of this agreement that says he will repay the moving and relocation expenses incurred by the Companyif Mr. Peacock materially breaches any covenants or conditions in the event thatagreement or the previously signed Proprietary Information and Inventions Agreement, including if Mr. Hooper does not completePeacock fails to fulfill his post-termination obligations to cooperate, to maintain the move, resigns or is discharged for cause from the Company within two years (with a pro-rata refund in the second year). Reimbursementconfidentiality of relocation expenses is essential to ensure the executive is able to move in a timely mannerour information and able to more quickly take on his responsibilities.

Roger M. Perlmutter

Dr. Perlmutter announced his retirement effective February 12, 2012. He is entitled to the standard retirement benefits provided to our retirement-eligible employees under our LTI equity award agreements. In sum, Dr. Perlmutter will continue to vest in his outstanding RSUs and stock options in accordance with their original vesting schedules and he will continue to be entitled to a full payout from his outstanding performance units (for the 2010-2012 and 2011-2013 performance periods). Dr. Perlmutter was not granted any LTI equity awards in 2012.

In light of Dr. Perlmutter’s expertise in research and development, commercialization of the research and development product pipeline and related areas, the Compensation Committee approved a one-year consulting services agreement with Dr. Perlmutter and Perlmutter Consulting, Inc., effective February 13, 2012, with the option to extend the consulting agreement for a second year by mutual agreement. Pursuant to the consulting agreement, Dr. Perlmutter will advise us on issues related to his areas of expertise. We will pay Perlmutter Consulting $100,000 quarterly in arrears as compensation for 80 hours of Dr. Perlmutter’s services in a calendar quarter, plus an additional $1,200 per hour for any additional hours of services performed in any calendar quarter. The maximum total hours of services in any calendar quarter is 160 hours unless previously authorized. In addition, we will reimburse Perlmutter Consulting for all reasonable and normal travel-related expenses incurred in connection with the performance of Dr. Perlmutter’s services. Perlmutter Consulting and Dr. Perlmutter will each be responsible for the income and self-employment taxes due on all taxable income arising under the consulting agreement. Pursuant to the consulting agreement, Perlmutter Consulting and Dr. Perlmutter agree not to enter into any other agreement that conflicts with, or will conflict with, Perlmutter Consulting’s or Dr. Perlmutter’s obligations underdisparage the consulting agreement and to give written notice at least ten business days in advanceCompany.

Change of commencing services for any other employer or client. If Perlmutter Consulting or Dr. Perlmutter accepts employment or an engagement which we determine, in our sole discretion, is not appropriate, such acceptance shall constitute a material breach of the consulting agreement and authorize us to terminate the consulting agreement immediately. Each party to the consulting agreement can terminate the Consulting Agreement for any reason with 30 days’ prior written notice.Control Benefits

Change of Control Severance Plan

In the event of a change of control and a qualifying termination, our Change of Control Severance Plan provides severance payments to 1,6631,950 staff members (as of December 31, 2011)2013), including each NEO. There are no tax gross-up payments provided under the plan. The plan was structured so that payments and benefits are provided only if there is both a change of control and a termination of employment, either by us other than for “cause” or “disability”

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 COMPENSATION DISCUSSION AND ANALYSIS  

“disability” or by the participant for “good reason” (as each is defined in the plan)—sometimes referred to as a “double-trigger”—because the intent of the plan is to provide appropriate severance benefits in the event of a termination following a change of control, rather than to provide a change of control bonus.

The cash severance multiple for the CEO and all other NEOs is two times annual cash compensation. There are no tax gross-up payments provided under the plan. The payments and benefit levels under the Change of Control Severance Plan do not influence and were not influenced by other elements of compensation. The Change of Control Severance Plan was adopted, and is continued by the Compensation Committee, to reinforce and encourage the continued attention and dedication of members of management to their assigned duties without the distraction arising from the possibility of a change of control, to enable and encourage management to focus their attention on obtaining the best possible deal for our stockholders and making an independent evaluation of all possible transactions, without being influenced by their personal concerns regarding the possible impact of various transactions on the security of their jobs and benefits, and to provide severance benefits to any participant who incurs a termination of employment under the circumstances described within a certain period following a change of control in recognition of their contributions to the Company.

Change of Control Treatment of Long-Term Incentive Equity Awards

Stock Options, Restricted Stock, and Restricted Stock Units and Stock Options

To ensure that our LTI equity award practices remain aligned with current governance best practices and are competitive with the practices of the companies in our peer group, on March 2, 2011, the Compensation Committee eliminated the single trigger full acceleration of vesting upon a change in control for futureAll LTI equity award grants and replaced it with amade on or after March 2, 2011 have “double-trigger” acceleration of vesting that requires a qualifying termination in connection with a change of control. As a result, annual grants of LTI equityAssuming the awards made onare continued or after March 2, 2011 provide thatassumed, all unvested stock options and RSUs vest in full only if the grantee’s employment is involuntarily terminated other than for “cause” or “disability,” or, in the case of staff members subject to the Change of Control Severance Plan, voluntarily terminated with “good reason” within two years following a change of control.

Performance Units

The Compensation Committee has maintained change of control features for each of the performance periods under our performance award programs to ensure that these

programs reward participants for our performance up until the time that the change of control occurs. Payment calculation methods differ according to the terms of the award for each performance period and depending upon whether a change of control occurs in the first six or 12 months of the period or thereafter. For additional information on the levels of payout, see “Potential Payments Upon Termination or Change of Control—Long-Term Incentive Equity Awards—Performance Units” in our Executive Compensation Tables.

Limited Retirement Benefits and Deferred Compensation Plan

Our health, retirement and other benefits programs are available to all of our U.S.-based staff members and are typically targeted to align in value with our peer group on a total company basis. The primary survey used to make this total company comparison is the Hewitt’sAon Hewitt Benefit Index®, last updated as of May 2010,2012, using a sample group of 1514 companies, chosen so as to have the greatest representation from our peer group. The data generated from this survey is used by the Compensation Committee and management in evaluating the competitive positioning and program design of our health, retirement and other benefit programs that pertain to all U.S.-based staff members, including our NEOs.

Retirement and Savings Plan, Supplemental Retirement Plan and Nonqualified Deferred Compensation Plan

Our Retirement and Savings Plan, or 401(k) Plan, is available to all regular U.S.-based staff members of the Company and participating subsidiaries. All 401(k) Plan participants are eligible to receive the same proportionate level of matching and core contributions from us.

We credit to our Supplemental Retirement Plan, or SRP, which is available to all 401(k) Plan participants, Company core and matching contributions on eligible compensation that cannot be made to the 401(k) Plan because they relate to compensation that is in excess of the maximum amount of recognizable compensation allowed under the Internal Revenue Code’s qualified plan rules. We also credit staff members in the SRP for lost 401(k) Plan Company match and core contributions resulting from making a deferral into the Nonqualified Deferred Compensation Plan, or NDCP. Earnings under the SRP are market-based—market-based — there are no “above

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 COMPENSATION DISCUSSION AND ANALYSIS  

market” or guaranteed rates of returns offered in this plan and this plan enables us to provide the same percentage of base salary and annual cash incentive award as a retirement contribution to U.S.-based staff members at all levels. Unlike a traditional pension plan, which provides a lifetime annuity that replaces a significant portion of a participant’s final pay, retirement benefits from our 401(k) and SRP are based on the investment return on the staff member’s own investment (with the exception of the Company’s match),elections, with the participant bearing boththe investment and longevity risk. We also credit staff members in the SRP for lost 401(k) Plan Company match and core contributions resulting from making a deferral into the Nonqualified Deferred Compensation Plan, or NDCP.

The NDCP offers all U.S.- and Puerto Rico-basedU.S.-based staff members at director level and above the opportunity to defer eligible base salary and bonus,annual cash incentive awards, up to maximum amounts typical at our peer group companies.group. We also have the discretion to make contributions to this plan, whichbut we do not domake such contributions on a regular basis. We did not make

any contributions in the NDCP to our NEOs in 2011. We believe that offering the NDCP is appropriate because it provides executives the opportunity to save for retirement in a tax-effective fashion that is not readily available without our sponsorship.

Executive Nonqualified Retirement Plan

As part of his initial employment offer in 2001, we agreed to provide Dr. Perlmutter with supplemental retirement benefits based on his length of employment with us as a replacement for pension benefits foregone from his previous employer. The benefits are provided through our Executive Nonqualified Retirement Plan, in which Dr. Perlmutter is the only participant. In accordance with the terms of the plan, we credited a special retirement account with $10 million for Dr. Perlmutter’s benefit on September 16, 2007. Because Dr. Perlmutter was employed by us through January 2011, which was when he attained 10 years of service and was at least age 55, the terms of the plan require us to credit interest on his account balance at a rate equal to 125% of the 10-year moving average yield on 10-year U.S. Treasury notes, adjusted annually and compounded annually, from September 16, 2007 until his account balance is distributed to him.

Dr. Perlmutter retired from our Company on February 12, 2012. In connection with his retirement, Dr. Perlmutter is entitled to payment in January 2013 of his vested account under our Executive Nonqualified Retirement Plan which totaled $12,759,768 as of February 12, 2012 and which continues to accrue interest at a rate equal to 125% of the 10-year moving average yield on 10-year U.S. Treasury Notes, adjusted and compounded annually until distributed to him in 2013.

Retiree Medical Savings Account Plan and Retiree Health Access Plan for all U.S.-based Staff membersMembers

In 2009, we implementedWe maintain a Retiree Medical Savings Account Plan and a high deductible health plan, referred to as the Retiree Health Access Plan available to all U.S.-based staff members. The Retiree Medical Savings Account Plan allows all staff members to make after-tax deferrals to be used post-termination to reimburse them for eligible medical expenses. The Company

credits all eligible staff members with an annual contribution ($1,000) and makes a matching contribution equal to 50% of a staff member’s deferrals (up to a match of $1,500 per year). Company credits can be accessed to reimburse eligible medical expenses toof staff members who terminate having fulfilled the Company’s retirement criteria. The permissible uses of such credits were expanded to include COBRA, individual and health insurance exchange-related premiums. We do not offer a traditional Company-paid retiree medical plan to our NEOs or other U.S.-based staff members. The Retiree Health Access Plan is available to U.S.-based staff members who retire after attaining age 55 and ten years of service and who are not eligible for Medicare. The Retiree Health Access Plan is designed to be paid for entirely by employee contributions. Our Retiree Health Access Plan is paid for entirely by a retiree’s contributions, whereasunlike a traditional retiree medical plan that provides a company subsidy based on retirement status or years of service. Our intent is to terminate the Retiree Health Access Plan when the health insurance exchange system becomes a viable health insurance option for our retirees.

TAXES AND ACCOUNTING STANDARDSTaxes and Accounting Standards

Tax Deductibility Under Section 162(m) of the Internal Revenue Code

We intend to develop compensation programs that are intended to provide for compensation that is tax deductible to us, but we recognize that the best interests of our stockholders may at times be better served by compensation arrangements that are not tax deductible. Section 162(m) of the Internal Revenue Code places a $1,000,000 limit on the amount of compensation that we may deduct for tax purposes for any year with respect to the executive who serves as our CEO at year-end, and any of our three other most highly compensated employees who serve as executive officers at year-end, other than our Chief Financial Officer. The $1,000,000 limit does not apply to performance-based compensation, as defined under Section 162(m). Our executive compensation program is designed with the intent to maximize

the deductibility of compensation. However, whenWhen warranted, however, due to competitive or other factors, the Compensation Committee may decide in certain circumstances to exceed the deductibility limit under Section 162(m) or to otherwise pay non-deductible compensation. These circumstances have included the following:

 

To maintain a competitive base salary for the CEO and President and Chief Operating Officer positions,position, the base salariessalary provided to our CEO and President and Chief Operating OfficerMr. Bradway in 20112013 exceeded the tax-deductible limit.

As previously referenced, the introduction in 2008The use of RSUs as part (20%) of the annual LTI equity award mix for executives and officers is focused primarily on the attraction and retention of the talent needed to drive our long-term success. While this component of the LTI equity award programThis compensation, however, is not performance-based compensation under Section 162(m) of the Internal Revenue Code, for 2011, 75% of the annual LTI equity award grant mix and 100% of the annual cash incentive award payments remain deductible as performance-based compensation.. The fiscal impact for 20112013 of the RSUs not being performance-based is approximately $1,025,000, assuming the Company’s U.S. combined effective tax rate for 2011.

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 COMPENSATION DISCUSSION AND ANALYSIS  

performance-based is approximately $975,000, assuming the Company’s U.S. combined effective tax rate for 2013.

 

To attract highly qualified executives to join us and to promote their retention, we may offer other compensation elements that are not performance-based compensation under Internal Revenue Code Section 162(m), such as retention bonuses or sign-on bonuses, as part of their initial employment offers.

Section 409A of the Internal Revenue Code

Internal Revenue Code Section 409A requires programs that allow executives to defer a portion of their current income, such as our deferred compensation plans, to meet certain requirements regarding risk of forfeiture and election and distribution timing, among other considerations. With respect to our compensation and benefit plans that are subject to Section 409A, in accordance with Section 409A and regulatory guidance issued by the Internal Revenue Service, we are currently operating such plans in compliance with Section 409A of the Internal Revenue Code. Pursuant to that regulatory guidance, we have amended our plans and arrangements to either make them exempt from or have them comply with Section 409A.

Accounting Standards

Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718 requires us to recognize an expense for the fair value of equity-based compensation awards. Grants of stock options, RSUs and performance units under our LTI equity incentive award plans are

accounted for under FASB ASC Topic 718. The Compensation Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our LTI equity incentive award plans and programs. For example, the Compensation Committee took these accounting standards into account when discontinuing grants of incentive stock options. In addition, we modified our Employee Stock Purchase Plan to make it non-compensatory under the “safe harbor” provisions of the accounting rules and therefore no longer recognize compensation expense under this plan. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.

LOGOExecutive Compensation Websiteï 2014 Proxy Statement63

We have implemented a website, accessible atwww.amgen.com/executivecompensation, which provides a link to this proxy statement and invites our stockholders to fill out a survey to provide input and feedback to the Compensation Committee regarding our executive compensation policies and practices. All input from our stockholders is valuable and the Compensation Committee appreciates your time and effort in completing the survey.


 EXECUTIVE COMPENSATION TABLES  

EXECUTIVE COMPENSATION TABLESExecutive Compensation Tables

Summary Compensation Table

The following table sets forth summary information concerning the compensation awarded to, paid to, or earned by each of our Named Executive Officers, or NEOs.

 

Name and Principal Position

   Year  Salary
($)(1)
  Bonus
($)(2)
  Stock Awards
($)(3)
  Option
Awards
($)(4)
  Non-Equity
Incentive Plan
Compensation
($)(5)
  Nonqualified
Deferred
Compensation
Earnings
($)(6)
  All Other
Compensation
($)(7)
  Total
($)
 
             Performance
Units and
Restricted
Stock Units
  Stock
Options
  EIP/GMIP          

Kevin W. Sharer

   2011    1,791,462    0    8,994,000    2,382,429    4,882,000    0    800,420    18,850,311  

Chairman of the Board and

Chief Executive Officer

   

 

2010

2009

  

  

  

 

1,748,846

1,682,308

  

  

  

 

0

0

  

  

  

 

8,306,025

4,418,324

  

  

  

 

6,691,367

4,663,347

  

  

  

 

3,635,000

3,790,000

  

  

  

 

0

0

  

  

  

 

756,895

791,738

  

  

  

 

21,138,133

15,345,717

  

  

Robert A. Bradway

   2011    1,023,692    0    3,147,900    833,850    1,860,000    0    259,522    7,124,964  

President and Chief

Operating Officer

   

 

2010

2009

  

  

  

 

971,204

883,096

  

  

  

 

0

0

  

  

  

 

2,541,180

1,444,308

  

  

  

 

2,668,143

1,530,161

  

  

  

 

1,340,000

1,060,000

  

  

  

 

0

0

  

  

  

 

251,216

224,940

  

  

  

 

7,771,743

5,142,505

  

  

Roger M. Perlmutter

   2011    981,846    0    2,363,499    625,388    1,427,000    101,360    268,510    5,767,603  

Executive Vice President,

Research and Development

   

 

2010

2009

  

  

  

 

958,904

934,235

  

  

  

 

0

0

  

  

  

 

2,190,600

1,444,308

  

  

  

 

1,764,756

1,530,161

  

  

  

 

1,065,000

1,125,000

  

  

  

 

61,251

41,879

  

  

  

 

270,827

266,986

  

  

  

 

6,311,338

5,342,569

  

  

Jonathan M. Peacock(8)

   2011    833,846    0    2,363,499    625,388    1,211,000    0    245,158    5,278,891  

Executive Vice President

and Chief Financial Officer

   2010    270,769    1,000,000    5,727,000    3,314,483    267,000    0    371,942    10,951,194  

Anthony C. Hooper(9)

   2011    171,731    3,050,045    8,464,614    0    196,000    0    174,822    12,057,212  

Executive Vice President,

Global Commercial Operations

          
Name and Principal Position Year  Salary
($)(1)
  Bonus
($)
  Stock
Awards
($)(2)
  Option
Awards
($)
  Non-Equity
Incentive Plan
Compensation
($)(3)
  All Other
Compensation
($)(4)
  Total
($)
 
           Performance
Units and
Restricted
Stock Units
  Stock
Options
  EIP       

Robert A. Bradway

    Chairman of the Board, Chief Executive Officer and President

  

 

 

2013

2012

2011

  

  

  

  

 

 

1,490,769

1,262,308

1,023,692

  

  

  

  

 

 

0

0

0

  

  

  

  

 

 

7,999,917

8,571,724

3,147,900

  

  

  

  

 

 

0

0

833,850

  

  

  

  

 

 

3,598,000

3,316,000

1,860,000

  

  

  

  

 

 

561,121

420,059

259,522

  

  

  

  
 
 
13,649,807
13,570,091
7,124,964
  
  
  

Anthony C. Hooper

    Executive Vice President, Global Commercial Operations

  
 
 
2013
2012
2011
  
  
  
  
 
 
1,001,858
976,179
171,731
  
  
  
  

 
 

0

0
3,050,045

  

  
  

  
 
 
3,199,895
5,296,747
8,464,614
  
  
  
  

 

 

0

0

0

  

  

  

  
 
 
1,677,000
1,795,000
196,000
  
  
  
  
 
 
300,750
518,068
174,822
  
  
  
  
 
 
6,179,503
8,585,994
12,057,212
  
  
  

Jonathan M. Peacock(5)

    Executive Vice President and Chief Financial Officer

  
 
 
2013
2012
2011
  
  
  
  
 
 
904,945
878,931
833,846
  
  
  
  

 

 

0

0

0

  

  

  

  
 
 
3,199,895
3,542,911
2,363,499
  
  
  
  

 

 

0

0

625,388

  

  

  

  
 
 
1,515,000
1,615,000
1,211,000
  
  
  
  
 
 
266,967
240,588
245,158
  
  
  
  
 
 
5,886,807
6,277,430
5,278,891
  
  
  

Sean E. Harper(6)

    Executive Vice President, Research and Development

  
 
2013
2012
  
  
  
 
896,543
835,038
  
  
  

 

0

0

  

  

  
 
3,199,895
3,542,911
  
  
  

 

0

0

  

  

  
 
1,501,000
1,535,000
  
  
  
 
265,228
176,814
  
  
  
 
5,862,666
6,089,763
  
  

Madhavan Balachandran(7)

    Executive Vice President, Operations

  2013    762,461    330,000    3,199,895    0    1,273,000    203,354    5,768,710  

 

(1)

Reflects base salary earned in each bi-weekly pay period (or portion thereof) during each fiscal year before pre-tax contributions and, therefore, includes compensation deferred under our qualified and nonqualified deferred compensation plans. Under payroll practices for salaried staff members of our U.S. entities, including our NEOs, base salary earned in a pay period is computed by dividing the annual base salary then in effect by 26, which is the number of full bi-weekly pay periods in a year.

(2)

For 2011, reflects the following bonuses paid to Mr. Hooper: (1) a sign-on bonus of $2,700,000 in connection with the commencement of his employment, and (ii) a $350,045 “make whole” bonus to compensate Mr. Hooper for the loss of his 2011 bonus from his then-current employer as the result of his departure from that company in October 2011.

(3)

For 2011,2013, reflects the grant date fair values of performance units and restricted stock units, or RSUs, granted during 20112013 (see footnotes 6, 7, 9, 10,5 and 11 to the “Grants of Plan-Based Awards” table for information on how these amounts were determined).

The single measure that determines the number of units to be earned for the performance unit awards granted during 2011 is our total shareholder return, or TSR, compared with the average of TSRs of companies in our peer group, all computed over the performance period applicable to each award, which is a market condition as defined under Financial Accounting Standards Board principles regarding the measurement of stock-based compensation (ASC 718). Since these awards do not have performance conditions as defined under ASC 718, such awards have no maximum grant date fair values that differ from the fair values presented in the table above.

(4)

For 2011, reflects the grant date fair values of nonqualified stock options granted during 2011 (see footnote 86 to the “Grants of Plan-Based Awards” table for information on how these amounts were determined).

 

(5)

The single measure that determines the number of units to be earned for the performance unit awards granted during 2013 is our total shareholder return, or TSR, compared with the average of the TSRs of companies in the Standard & Poor’s 500, or S&P 500, all computed over the performance period, which is a market condition as defined under Financial Accounting Standards Board principles regarding the measurement of stock-based compensation (ASC 718). Since these awards do not have performance conditions as defined under ASC 718, such awards have no maximum grant date fair values that differ from the fair values presented in the table above.

(3)

Reflects amounts that were earned under our Executive Incentive Plan, or EIP, and Global Management Incentive Plan, or GMIP, for 20112013 performance which were determined and paid in March 2012. All NEOs participated in the EIP in 2011 except for Mr. Hooper, who participated in the GMIP, because Mr. Hooper had not commenced employment with

the Company at the time EIP participants were determined for 2011.2014. For a description of our EIP, and GMIP, see “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONS—Annual Cash Incentive Awards” in our Compensation Discussion and Analysis.

(6)(4)

For 2011, reflects interest (calculated at the rate of 125% of the 10-year moving average yield on 10-year U.S. Treasury notes, adjusted annually and compounded annually) accrued for Dr. Perlmutter under our Executive Nonqualified Retirement Plan in excess of 120% of the applicable long-term federal rate. For a description of this plan, see “Nonqualified Deferred Compensation—Executive Nonqualified Retirement Plan” below.

(7)

See the subsection All“All Other Compensation—Perquisites and Other CompensationCompensation” immediately following these footnotes.

(8)(5)

Mr. Peacock commenced employment with the Company effective September 1, 2010ceased service as our Chief Financial Officer as of January 10, 2014 and is no longer an executive officer.

(6)

Dr. Harper was not an NEO in 2011. Dr. Harper was appointed to serve as Executive Vice President, Research and Chief Financial Officer, or CFO, andDevelopment effective February 13, 2012, but this table reflects his compensation earned beginning on that date.for all of Fiscal 2012.

(9)(7)

Mr. Hooper commenced employment with the Company effective October 27, 2011Balachandran was not an NEO in 2012 or 2011. Mr. Balachandran was appointed to serve as Executive Vice President, Global Commercial Operations effective August 13, 2012. The amount shown in the bonus column reflects the 2013 installment of the special retention bonus award to Mr. Balachandran in March 2011, with installments payable on March 2 of 2012, 2013, 2014 and this table reflects2015, subject to his compensation earned beginning on that date.continued employment through such dates (except for certain terminations of employment — see “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONS—Annual Cash Incentive Award—Special Retention Award” in our Compensation Discussion and Analysis).

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 EXECUTIVE COMPENSATION TABLES  

All Other Compensation—Compensation — Perquisites and Other Compensation

Perquisites. The amounts reported reflect the aggregate incremental cost of perquisites and other personal benefits provided to our NEOs.NEOs and are included in the “All Other Compensation” column of the “Summary Compensation Table.” The following table sets forth the perquisites provided and all of the associated tax gross-up reimbursements made to our NEOs in 2011. Tax gross-ups are only provided with respect to moving and relocation expenses. For a description of our principles regarding moving and relocation benefits, see the discussion in “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONSPerquisites” in our Compensation Discussion and Analysis.2013.

 

  Personal Use
of Company
Aircraft
(1)
  Personal Use
of Company
Car and
Driver
(2)
  Personal
Financial
Planning
Services
  Moving and
Relocation
Expenses(3)(4)
  Expenses
Related to
Guests
Accompanying
Officers on
Business
Travel
  Other(5)    

Name

 Aggregate
Incremental
Cost
($)
  Aggregate
Incremental
Cost
($)
  Aggregate
Incremental
Cost
($)
  Aggregate
Incremental
Cost
($)
  Tax Gross-
Up
($)
  Aggregate
Incremental
Cost
($)
  Aggregate
Incremental
Cost
($)
  Total($) 

Kevin W. Sharer

  198,177    40,186    15,000    0    0    2,618    1,981    257,962  

Robert A. Bradway

  0    2,638    15,000    0    0    4,514    1,109    23,261  

Roger M. Perlmutter

  0    63,929    0    0    0    0    0    63,929  

Jonathan M. Peacock

  0    75    15,000    61,316    54,746    2,040    2,050    135,227  

Anthony C. Hooper

  0    0    12,570    115,195    25,191    3,600    535    157,091  

   Personal Use
of Company
Aircraft(1)
   Personal Use
of Company
Car and
Driver(2)
   Personal
Financial
Planning
Services
   Other(3)     
Name  Aggregate
Incremental
Cost($)
   Aggregate
Incremental
Cost($)
   Aggregate
Incremental
Cost($)
   Aggregate
Incremental
Cost($)
   Total($) 

Robert A. Bradway

   52,653     6,357     15,000     7,434     81,444  

Anthony C. Hooper

   0     1,449     15,000     5,108     21,557  

Jonathan M. Peacock

   35     1,897     11,579     1,906     15,417  

Sean E. Harper

   0     2,451     15,000     5,063     22,514  

Madhavan Balachandran

   0     0     15,000     6,700     21,700  
(1)

The aggregate incremental cost of use of our aircraft for personal travel by our NEOs is allocated entirely to the highest ranking NEO present on the flight. The aggregate incremental cost for personal use of our aircraft is calculated based on our variable operating costs, which include the cost of crew travel expenses, on-board catering, landing fees, trip-related hangar/parking costs, fuel, trip specific maintenance and other smaller variable costs. In determining the incremental cost relating to fuel and trip-related maintenance, we applied our actual average costs. We believe that the use of this methodology for 20112013 is a reasonably accurate method for calculating fuel and trip-related maintenance costs. Because our aircraft are used primarily for business travel, we do not include the fixed costs that do not change based on usage, such as pilots’ salaries, our aircraft purchase costs and the cost of maintenance not related to trips.

(2)

The aggregate incremental cost for personal use of a car and driver provided by us is calculated by allocating the costs of operating the car and compensating the driver between personal and business use. The

cost of operating the car is allocated to personal use on the basis of miles driven for personal use to total miles driven. The cost of compensating the driver is allocated to personal use on the basis of driver hours related to personal use to the total number of driver hours.

(3)

Other expenses include Company contributions to non-profit charities designated by the executive in the amount of $4,800 for Mr. Peacock agreed to relocate from Switzerland to Thousand Oaks, California to serve as our Executive Vice President and CFO. Certain relocation benefits were provided to Mr. Peacock in 2011 in connection with this relocation in accordance with our relocation policies, including:

(a)

$57,705Bradway, $4,992 for closing expenses and other costs related to the sale of his prior residence;

(b)

$3,611 for miscellaneous other relocation expenses; and

(c)

$54,746 of tax gross-up payments on the moving and relocation benefits provided.

(4)

Mr. Hooper agreed to relocate from New Jersey to Thousand Oaks, California to serve as our Executive Vice President, Global Commercial Operations. Certain relocation benefits were provided toand $5,000 for Dr. Harper and Mr. Hooper in 2011 in connection with this relocation in accordance with our relocation policies, including:

(a)

$60,560 for use of our aircraft for relocation-related trips, calculated based on our variable costs and in the manner specified above in footnote 1 to this table.

(b)

$35,865 for housing and living expenses;

(c)

$8,655 for closingBalachandran, respectively. Other expenses and other costs related to the sale of his prior residence;

(d)

$10,115 for miscellaneous other relocation expenses; and

(e)

$25,191 of tax gross-up payments on moving and relocation benefits provided.

(5)

Other expensesalso include the cost of gifts, executive physical examinations and personalphysicals, expenses whilerelated to guests accompanying the NEOs on business travel.travel and gifts.

Other CompensationCompensation.. The following table sets forth compensation for our NEOs in 20112013 incurred in connection with our 401(k) Retirement and Savings Plan, or 401(k) Plan, and our Supplemental Retirement Plan, or SRP. These amounts are included in the “All Other Compensation” column of the “Summary Compensation Table.” See “Nonqualified Deferred Compensation” below for a description of these plans.

 

Name

  Company
Contributions
to 401(k)
Retirement
and Savings
Plan
($)
   Company
Credits to
Supplemental
Retirement
Plan
($)
   Total($)   Company
Contributions
to 401(k)
Retirement
and Savings
Plan($)
   Company
Credits to
Supplemental
Retirement
Plan($)
   Total($) 

Kevin W. Sharer

   24,500     517,958     542,458  

Robert A. Bradway

   24,500     211,761     236,261     25,500     454,177     479,677  

Roger M. Perlmutter

   24,500     180,081     204,581  

Anthony C. Hooper

   25,500     253,693     279,193  

Jonathan M. Peacock

   24,500     85,431     109,931     25,500     226,050     251,550  

Anthony C. Hooper

   17,731     0     17,731  

Sean E. Harper

   25,500     217,214     242,714  

Madhavan Balachandran

   25,500     156,154     181,654  

LOGOï 2014 Proxy Statement65


 EXECUTIVE COMPENSATION TABLES  

Narrative Description to the Compensation Tables—Performance Units

Performance

Long-term performance units are granted to our NEOs annually during the first year of a three-year performance period and are paid out at the end of the performance period based on our level of achievement of the applicable pre-established performance goals establishedover the performance period, as determined by our Compensation and Management Development Committee, or Compensation Committee, for such performance period for each grant. Our performance periods are typically three years in duration. The performance goals for the relevant performance periods are set forth below.

The number of performance units earned is determined by the Compensation Committee at the end of the performance period based on our performance against the pre-established formula for such performance period, and isare paid out in shares of our Common Stock at a ratio of one share of Common Stock for each performance unit earned.

Performance units are generally forfeited unless a participant is continuously employed through the last business day of the performance period. The underlying principle is that the participant needs to have been an active employee during the entire performance period in order to have contributed to the results on which the earned awards are based. Exceptions to this treatment are a termination of employment in connection with a change of control or the death, disability or retirement of a participant as discussed under “Potential Payments Upon Termination or Change of Control” below.

Performance Units Paid for the 2009-2011 Performance Period Just EndedGoals and Performance Units for the 2011-2013 Performance Period Just GrantedFormulas

For a description of the performance units for the 2009-2011 performance period that began on January 1, 2009 and ended on December 31, 2011 and for the 2011-2013 performance period that began on January 1, 2011 and will endended on December 31, 2013 and for the 2013-2015 performance period that began on January 28, 2013 and will end on January 28, 2016, see “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONSLong-Term Incentive Equity Awards” in our Compensation Discussion and Analysis.

Performance Units for the 2010-2012 Performance Period

Performance goals for the 2010-20122012-2014 performance period that began on January 1, 20102012 and will end on December 31, 20122014 are based upon our 2010 revenue and 2010 adjusted earnings per share, or EPS, weighted equally, in alignment with our 2010 GMIP Company goals, and modified (up or down) atTSR for the end of the three-year2012-2014 performance period by a relative TSR multiplier based on(or Amgen TSR) compared with the rankings

average of our TSR results compared to the TSRs of our 15-company peer group for such period (Peer Group Average TSR). As discussed under “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONSLong-Term Incentive Equity Awards” in our Compensation Discussion and Analysis, as a result of the companies in the comparator group, or Comparator Group, for the 2010-2012 performance period.

Abbott Laboratories spin-off, AbbVie Inc. replaced Abbott Laboratories, effective January 1, 2013. The maximum number of performance units that may be earned at the endis 150% of the performance period will range from 0% to 200% of the number oftarget performance units granted for the 2012-2014 performance period. The payout percentage is derived in part from the difference between the Amgen TSR and the Peer Group Average, which can be a positive or negative number, and is determined in accordance with the following formula:formula (subject to the 150% cap):

 

Payout Percentage:
100%+2 X(Amgen TSR – Peer Group Average TSR)

Performance Units for Mr. Hooper

To compensate Mr. Hooper for equity lost as a result of his leaving his previous employer, to induce him to join us and to provide long-term incentives that are in alignment with stockholder interests, he was granted three performance-based performance unit awards. The three performance periods for the performance unit awards each commenced on his hire date of October 27, 2011 and ended or will end on December 31, 2012, December 31, 2013 and December 31, 2014, respectively. The goal design for these performance unit awards is identical to the 2011-2013 performance period awards described under “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONSLong-Term Incentive Equity Awards” in our Compensation Discussion and Analysis, except that Allergan, Inc. and Celgene Corporation were added to the peer group used to calculate the payout, resulting in a 15-company peer group for each of his awards.

66    LOGOï 2014 Proxy Statement


Performance
Units Earned

 = [

(performance

units granted)

×(2010 revenue performance
percentage + 2010 EPS
performance percentage)
×

(relative TSR multiplier
over the 2010-2012

performance period)

] EXECUTIVE COMPENSATION TABLES  

The relative TSR multiplier is based on the ranking of our three-year TSR compared with the three-year TSRs of the 13 companies in the Comparator Group. Each Comparator Group company’s TSR is determined in a similar manner to that used to determine our TSR. The relative TSR multiplier is expressed as a percentage and varies depending on our ranking within the Comparator Group companies, as shown below. The maximum TSR multiplier that can be achieved is 160%.

The 2010-2012 performance period performance goals include Company revenue and EPS results for 2010. The performance results for these measures in 2010 and the resulting percentages earned are as follows:

 

Performance Goals for the 2010-2012 Performance Period
Measures 

Threshold

(earns 0%)

 

Target

(earns 50%)

 

Maximum

(earns 62.5%)

 

Earned

(%)

2010 Revenue, as adjusted(1)

 $14.352 billion $15.102 billion $15.852 billion $15.053 billion
      46.7%
 

2010 EPS(2)

 $4.74 $4.99 $5.24 $5.21

      61.1%

Overall Percentage

 0% 100% 125.0%     107.8%

(1)

The 2010 revenue performance measure reflects adjustments for any changes in accounting principle, the discontinuation of operations or the recording of an extraordinary item.

(2)

The 2010 EPS performance measure reflects adjustments for (i) any changes in tax law or accounting principles, the discontinuation of operations or the recording of any extraordinary item or (ii) any (a) merger, acquisition, and investment or asset related expenses, gains and losses, (b) asset impairment

charges, (c) restructuring charges, (d) gains or losses from litigation, arbitration and contractual settlements, (e) non-cash interest expense on our convertible debt or (f) stock option expense, each net of tax.

The percentage earned (107.8%) resulting from our 2010 revenue and 2010 EPS performance will then be modified (up or down) based on the ranking of our TSR results compared to the TSRs of the Comparator Group for the 2010-2012 performance period. The table below describes how this relative TSR multiplier is determined:

Relative TSR Multiplier for 2010-2012 Performance Period
MeasureThresholdTargetMaximum

Relative TSR

Among the Company and Comparator Group

Companies

50% for a Company ranking of 10th through 14th100% for a Company ranking of 6th through 9th

160% for a

Company ranking of 1st

If our three-year TSR is ranked within the top five among the Company and the Comparator Group companies, the relative TSR multiplier will be determined by interpolating between target (100%) and maximum (160%). No interpolation is performed if the Company’s TSR ranks 6th or lower among the Company and the Comparator Group companies. The relative TSR multiplier shall not exceed 100% regardless of our ranking among the Comparator Group companies if our ending Common Stock price (plus any dividends, as if reinvested) for the performance period is at or below a pre-established minimum dollar amount.

Given that our actual performance during 2010 under the performance measures of revenue and EPS resulted in a performance percentage earned of 107.8%, the number of units that may be earned after giving effect to the relative TSR multiplier for the 2010-2012 performance period may range from 53.9% to 172.5% of the performance units granted. This presumes that our ending Common Stock price (plus any dividends, as if reinvested) used to calculate TSR for the 2010-2012 performance period exceeds the pre-established minimum dollar amount.

Grants of Plan-Based Awards

The following table sets forth summary information regarding all grants of plan-based awards made to our NEOs for the year ended December 31, 2011.2013.

 

     

Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards($)(2)

 Estimated Future
Payouts Under Equity
Incentive Plan
Awards(# of units)(3)
 All Other
Stock
Awards:
Number of
Shares of
Stock or
Units(#)(4)
  Grant Date
Fair Value
of Stock
and
Option
Awards($)
 

Name

 Grant
Date
  Approval
Date
(1)
  Estimated Future Payouts
Under Non-Equity
Incentive Plan Awards
(3)
 Estimated Future
Payouts Under Equity
Incentive Plan
Awards
(4)(# of units)
 All  Other
Stock

Awards:
Number of
Shares of
Stock or
Units
(#)(5)
  All Other
Option

Awards:
Number of
Securities
Underlying
Options
(#)
  Exercise
or Base
Price of
Option
Awards
($/Sh)
  Grant Date
Fair Value
of Stock and
Option
Awards
($)
 Grant
Date
 Approval
Date(1)
 Threshold Target Maximum Threshold Target Maximum 
 Thres-
hold
 Target Maxi-
mum
($)
 Thres-
hold
 Target Maxi-
mum
 
     

EIP/GMIP

 Performance Units RSUs Stock Options 

Kevin W. Sharer

  3/2/11    3/2/11   (3) (3)  6,087,500         
  3/2/11    3/2/11      (4)  120,000   180,000     5,905,200(6)
  4/25/11    3/2/11          60,000     3,088,800(7)
  4/25/11    3/2/11           210,000    54.69   2,382,429(8)
     EIP   Performance Units RSUs   

Robert A. Bradway

  3/2/11    3/2/11   (3) (3)  3,652,500          3/6/13    3/6/13   (2) (2) 7,267,500       
  3/2/11    3/2/11      (4)  42,000   63,000     2,066,820(6) 1/28/13   12/13/12      (3) 71,309   106,963     6,399,983(5) 
  4/25/11    3/2/11          21,000     1,081,080(7) 1/28/13   12/13/12         18,693    1,599,934(6) 
  4/25/11    3/2/11           73,500    54.69      833,850(8)

Roger M. Perlmutter

  3/2/11    3/2/11   (3) (3)  3,652,500         
  3/2/11    3/2/11      (4)  31,500   47,250     1,550,115(6)
  4/25/11    3/2/11          15,800        813,384(7)

Anthony C. Hooper

 3/6/13    3/6/13   (2) (2) 4,360,500       
  4/25/11    3/2/11           55,125    54.69      625,388(8) 1/28/13   12/13/12      (3) 28,523   42,784     2,559,939(5) 
 1/28/13   12/13/12         7,477    639,956(6) 

Jonathan M. Peacock

  3/2/11    3/2/11   (3) (3)  3,652,500          3/6/13    3/6/13   (2) (2) 4,360,500       
  3/2/11    3/2/11      (4)  31,500    47,250      1,550,115(6) 1/28/13   12/13/12      (3) 28,523   42,784     2,559,939(5) 
  4/25/11    3/2/11          15,800        813,384(7) 1/28/13   12/13/12         7,477    639,956(6) 

Sean E. Harper

 3/6/13    3/6/13   (2) (2) 4,360,500       
  4/25/11    3/2/11           55,125    54.69      625,388(8) 1/28/13   12/13/12      (3) 28,523   42,784     2,559,939(5) 
 1/28/13   12/13/12         7,477    639,956(6) 

Anthony C. Hooper

  10/27/11(2)   10/27/11(2)  (3) 108,154  243,347         

Madhavan Balachandran

 3/6/13    3/6/13   (2) (2) 4,360,500       
  10/27/11    10/12/11      (4)  35,185    52,777      2,002,378(9) 1/28/13   12/13/12      (3) 28,523   42,784     2,559,939(5) 
  10/27/11    10/12/11      (4)  35,185    52,777      1,973,175(10) 1/28/13   12/13/12         7,477    639,956(6) 
  10/27/11    10/12/11      (4)  35,185    52,777      1,934,471(11)
  10/27/11    10/12/11          45,238     2,554,590(7)

 

(1)

Reflects the date on which the grants were approved by the Compensation Committee. See “COMPENSATION POLICIES AND PRACTICESPolicies for Grants of Long-Term Incentive Equity Awards” in our Compensation Discussion and Analysis for a description of the timing of our annual equity award grants.

(2)

Mr. Hooper became eligible to participate in our GMIP upon commencement of his employment with the Company on October 27, 2011. His payout under our GMIP for 2011 was pro-rated based on this date.

(3)

Represents awards to our NEOs made under our EIP, except for the award to Mr. Hooper, which was made under our GMIP since Mr. Hooper had not yet commenced employment with the Company at the time EIP participants were determined.EIP. The “maximum” amounts shown in the table above (except for Mr. Hooper) reflect the largest possible payments under our EIP for the 20112013 performance period, based on our EIP adjusted net income, as defined.defined for the EIP. There are no thresholds or targets under the EIP. The EIP provides that the Compensation Committee may use “negative discretion” to award any amount that does not exceed the maximum. Consistent with its practice since the EIP was approved by our stockholders in 2002, the Compensation Committee employed the goals established under our Global Management Incentive Plan, or GMIP, as illustrated in the table below, as well as each NEO’s contributions in determining the actual amounts awarded under the EIP in 2011.2013. Our GMIP for 20112013 was based on our performance against three primary Company performance goals, weighted as follows: (1) Deliver Financially (60%); (2) Deliver the Best Pipeline (25%(20%) and (3) Growth Opportunities (15%Deliver Strategic Priorities (20%). Threshold goals of 50% of target performance have been established only for the non-financial metrics. There are no threshold goals for the financial metrics. These non-financial metrics are often expressed in milestones or are more subjective in nature than are the financial metrics. If only one of the minor non-financial goals is accomplished, the payout percentage would be very small (1%(less than 1% of a target annual cash incentive award) and thus no threshold amount is shown in the table below. The 2013 GMIP-derived target and maximum payout levels, for the 2011 performance periodwhich are based on a multiple of salary, are shown in the table below. Mr. Hooper’s target and maximum payout under the GMIP has been pro-rated to reflect his October 27, 2011 commencement of employment. The actual amounts awarded under our EIP andare based on achieving 186.9% performance against target under the 2013 GMIP areand reported as “Non-Equity Incentive Plan Compensation” in our “Summary

Compensation Table” and are shown in the table below. For a description of our Company corporateperformance goals and the use of the GMIP in the Compensation Committee’s exercise of negative discretion see “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONSAnnual Cash Incentive Awards” in our Compensation Discussion and Analysis.

 

   GMIP     
    Estimated Possible Payouts Under Non-
Equity Incentive Plan Awards
($)
   Non-Equity
Incentive Plan
Compensation
($)
 

Name

  Threshold   Target   Maximum   Actual 

Kevin W. Sharer

   —       2,684,365     6,039,821     4,882,000  

Robert A. Bradway

   —       1,022,615     2,300,884     1,860,000  

Roger M. Perlmutter

   —       784,646     1,765,454     1,427,000  

Jonathan M. Peacock

   —       665,846     1,498,154     1,211,000  

Anthony C. Hooper

   —       108,154     243,347     196,000  

LOGOï 2014 Proxy Statement67


 EXECUTIVE COMPENSATION TABLES  

   GMIP   Non-Equity
Incentive Plan
Compensation($)
 
    Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards($)
   
Name  Threshold   Target   Maximum   Actual 

Robert A. Bradway

       1,925,000     4,331,250     3,598,000  

Anthony C. Hooper

       897,241     2,018,792     1,677,000  

Jonathan M. Peacock

       810,447     1,823,506     1,515,000  

Sean E. Harper

       802,921     1,806,572     1,501,000  

Madhavan Balachandran

       680,885     1,531,991     1,273,000  

 

(4)(3)

Reflects informationestimated payouts regarding performance units granted during 20112013 for the 2011-20132013-2015 performance period for NEOs other than Mr. Hooper and the three separate grants of performance units to Mr. Hooper in connection with his hiring.NEOs. The number of units granted (which equals the target number of units of the award) iswill be multiplied by a payout percentage, which can range from 0% to 150%, to determine the number of units earned by the participant.participant at the end of the performance period. Shares of our Common Stock will be issued on a one-for-one basis for each performance unit earned. The payout percentage for the 2011–20132013-2015 performance units is calculated as 100% plus two times the TSR percentage difference. The TSR percentage difference is calculated asearned based on how the TSR of our Common Stock less the average ofranks relative to the TSRs of companies that are listed in the peer group companies, eachS&P 500 Index, as defined (the Reference Group), over the three-year performance period, and may result in a positiveperiod. If the rank of the TSR of our Common Stock is the 0th, 25th, 50th or negative amount. The number of units Mr. Hooper can earn under each of his performance unit grants are determined75th percentile relative to companies in the same manner, except that: (i)Reference Group, the performance periods for his grants start on his hire date of October 27, 2011 and end on December 31, 2012, December 31, 2013 and December 31, 2014,percentage payout will be 0%, 50%, 100% or 150%, respectively, and (ii) consistent with the performance units granted for the 2012–2014 performance period, Allergan, Inc. and Celgene Corporation were added to the peer grouplinear interpolation used to determine the averagepayout percentage if the rank of the TSRsTSR of our Common Stock falls between these percentiles, as applicable. If the rank of the TSR of our Common Stock is above the 75th percentile, the percentage payout will be 150%. These performance units accrue dividend equivalents deemed reinvested in shares and that are payable in shares only to which our TSR is compared.the extent and when the underlying performance units are earned. For more information, see “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONSLong-Term Incentive Equity Awards”in our Compensation Discussion and Analysis.

(5)(4)

Reflects RSUs granted during 2011, including the 2013 annual grant of RSUs to our NEOsNEOs. RSUs accrue dividend equivalents that are deemed reinvested in shares and payable only to the extent and when the underlying RSUs grantedvest and are issued to Mr. Hooper in connection with the commencement of his employment.recipient.

(6)(5)

Reflects the grant date fair values of the performance units granted during 20112013 for the 2011-20132013-2015 performance period determined in accordance with ASC 718 based on the number of performance units granted multiplied by the grant date fair value per unit of $49.21.$89.75. The grant date fair value per unit was determined using a payout simulation model with the following key assumptions: risk-free interest rate of 1.2%0.4%; volatility of the price of our Common Stock of 33%; dividend yield on our Common Stock of 0%20.7%; the closing price of our Common Stock on the grant date of $51.39$85.59 per share; volatilities of the prices of the stocks of the peer group companiesReference Group and the correlations of returns of our Common Stock and the stockstocks of the peer group companiesReference Group to simulate TSRs and their resulting impact on the payout percentage based on the contractual terms.terms of the performance units.

(7)(6)

Reflects the grant date fair values of RSUs granted during 2011 determined in accordance with ASC 718 based on the number of RSUs granted multiplied by the grant date fair value per unit of $51.48 for$85.59. Because these RSUs granted on April 25, 2011 and $56.47 for RSUs granted on October 27, 2011. Theaccrue dividend equivalents during the vesting period, the grant date fair value per unit of RSUs granted on April 25, 2011 was based onequals the closing price of our Common Stock on that date of $54.69 reduced by an expected dividend yield of 2% over the weighted average vesting period of the award which was discounted at a risk-free interest rate of 1.1%. The fair value per unit of RSUs granted on October 27, 2011 was based on the closing price of our Common Stock on that date of $58.06 reduced by an expected dividend yield of 2% over the weighted average vesting period of the award which was discounted at a risk-free interest rate of 0.3%.

(8)

Reflects the grant date fair values of stock options granted during 2011 determined in accordance with ASC 718 based on the number of stock options granted multiplied by the grant date fair value per stock option of approximately $11.34. The grant date fair value per stock option was determined using a stock option valuation model with the following assumptions: risk-free interest rate of 2.4%; expected life of 5.8 years; expected volatility of 23%; expected dividend yield of 2% and exercise price of $54.69.date.

 

68    LOGOï 2014 Proxy Statement


(9)

Reflects the grant date fair value of the performance unit awards granted to Mr. Hooper with the performance period beginning on the grant date and ending on December 31, 2012, determined in accordance with ASC 718 based on the number of performance units granted multiplied by the grant date fair value per unit of $56.91 which reflects the impact of the payout percentage as described in footnote 4 to this “Grants of Plan-Based Awards” table above.

 EXECUTIVE COMPENSATION TABLES  

The grant date fair value per unit for this award and for the other two performance unit awards granted to Mr. Hooper for the performance periods beginning on the grant date and ending on December 31, 2013 and December 31, 2014, respectively, (see footnotes 10 and 11 to this “Grants of Plan-Based Awards” table below) were calculated using payout simulation models with the following key assumptions: risk-free interest rates of 0.2%, 0.4% and 0.6% for the performance periods ending on December 31, 2012, 2013 and 2014, respectively; volatilities of the price of our Common Stock of 20%, 22% and 32% for the performance periods ending on December 31, 2012, 2013 and 2014, respectively; dividend yield on our Common Stock of 2.1%; the closing price of our Common Stock on the grant date of $58.06 per share; volatilities of the prices of the stocks of the peer group companies and the correlations of returns of our Common Stock and the stock of the peer group companies to simulate TSRs and their resulting impact on the payout percentage based on contractual terms.

 

(10)

Reflects the grant date fair value of the performance unit awards granted to Mr. Hooper for the performance period beginning on the grant date and ending on December 31, 2013 determined in accordance with ASC 718 based on the number of performance units granted multiplied by the grant date fair value per unit of $56.08 which reflects the impact of the payout percentage as described in footnote 4 to this “Grants of Plan-Based Awards” table above. See footnote 9 to this “Grants of Plan-Based Awards” table above for a description of how the grant date fair value of this award was determined.

(11)

Reflects the grant date fair value of the performance unit awards granted to Mr. Hooper for the performance period beginning on the grant date and ending on December 31, 2014 determined in accordance with ASC 718 based on the number of performance units granted multiplied by the grant date fair value per unit of $54.98 which reflects the impact of the payout percentage as described in footnote 4 to this “Grants of Plan-Based Awards” table above. See footnote 9 to this “Grants of Plan-Based Awards” table above for a description of how the grant date fair value of this award was determined.

Outstanding Equity Awards at Fiscal Year End

The following table sets forth summary information regarding the outstanding equity awards at December 31, 20112013 granted to each of our NEOs.

 

  Option Awards   Stock Awards 

Name

 Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
  Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
  Option
Exercise
Price
($/Option)
  Option
Expiration
Date
(1)
   Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(4)
  Market Value
of Shares or
Units of Stock
That Have Not
Vested
($)(5)
  Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)
  Equity Incentive
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)(5)
 
  Stock Options   Restricted Stock Units  Performance Units 

Kevin W. Sharer

  0    210,000    54.69    4/25/21(2)     121,875    7,825,594    97,560(6)   6,264,328  
  79,625    238,875    58.43    4/26/20(3)       98,098(7)   6,298,873  
  128,000    128,000    50.44    4/28/16(3)       33,215(8)   2,132,735  
  192,000    64,000    42.13    4/29/15(3)       
  195,000    0    62.55    4/26/14          
  195,000    0    71.88    4/3/13          
  225,000    0    58.61    3/15/12          

Robert A. Bradway

  0    73,500    54.69    4/25/21(2)     43,500    2,793,135    34,146(6)   2,192,515  
  31,750    95,250    58.43    4/26/20(3)       25,872(7)   1,661,241  
  42,000    42,000    50.44    4/28/16(3)       10,920(8)   701,173  
  63,000    21,000    42.13    4/29/15(3)       
  65,000    0    62.55    4/26/14          
  40,000    0    64.56    7/17/13          

Roger M. Perlmutter

  0    55,125    54.69    4/25/21(2)     33,800    2,170,298    25,609(6)   1,644,354  
  21,000    63,000    58.43    4/26/20(3)       25,872(7)   1,661,241  
  42,000    42,000    50.44    4/28/16(3)       10,920(8)   701,173  
  63,000    21,000    42.13    4/29/15(3)       
  65,000    0    62.55    4/26/14          
  65,000    0    71.88    4/3/13          
  75,000    0    58.61    3/15/12          

Jonathan M. Peacock

  0    55,125    54.69    4/25/21(2)     90,800    5,830,268    25,609(6)   1,644,354  
  43,750    131,250    57.27    10/28/20(3)       

Anthony C. Hooper

  0    0    n/a    n/a     45,238    2,904,732    35,325(9)   2,268,218  
         35,325(9)   2,268,218  
         35,325(9)   2,268,218  

  Option Awards  Stock Awards 
Name Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
  Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
  Option
Exercise
Price
($/
Option)
  Option
Expiration
Date(1)
  Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)(4)
  Market Value
of Shares or
Units of Stock
That Have Not
Vested
($)(5)
  

Equity Incentive

Plan Awards:

Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)

  

Equity Incentive

Plan Awards:

Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)(5)

 
  Stock Options  Restricted Stock Units and
Dividend Equivalents
  Performance Units and Dividend
Equivalents
 

Robert A. Bradway

  
 
 
 
 
24,255
95,250
84,000
84,000
65,000
  
  
  
  
  
  
 
 

 

 

49,245
31,750
0

0

0

  
  
  

  

  

  
 
 
 
 
54.69
58.43
50.44
42.13
62.55
  
  
  
  
  
  

 

 

 

 

4/25/21

4/26/20

4/28/16

4/29/15

4/26/14

(2) 

(3) 

  

  

  

  
59,215
  
  6,755,247    

 

 

106,886

129,669

51,534

(6) 

(7) 

(8) 

  

 

 

12,193,555

14,792,640

5,878,999

  

  

  

Anthony C. Hooper

  0    0    n/a    n/a    40,483    4,618,301    

 

 

 

42,753

53,596

52,777

52,777

(6) 

(7) 

(9) 

(10) 

  
 
 
 
4,877,262
6,114,232
6,020,800
6,020,800
  
  
  
  

Jonathan M. Peacock

  
 
18,191
131,250
  
  
  
 
36,934
43,750
  
  
  
 
54.69
57.27
  
  
  

 

4/25/21

10/28/20

(2) 

(3) 

  

 

52,131

 

  

 

  

 

5,947,104

 

  

 

  

 

 

42,753

53,596

38,650

(6) 

(7) 

(8) 

  
 
 
4,877,262
6,114,232
4,409,192
  
  
  

Sean E. Harper

  
 
6,930
8,000
  
  
  
 
14,070
8,000
  
  
  
 
54.69
58.43
  
  
  

 

4/25/21

4/26/20

(2) 

(3) 

  46,715    5,329,247    

 

 

42,753

53,596

14,724

(6) 

(7) 

(8) 

  
 
 
4,877,262
6,114,232
1,679,714
  
  
  

Madhavan Balachandran

  

 

5,197

0

  

  

  
 
10,553
6,000
  
  
  
 
54.69
58.43
  
  
  

 

4/25/21

4/26/20

(2) 

(3) 

  41,443    4,727,817    

 

 

42,753

15,560

11,043

(6) 

(7) 

(8) 

  
 
 
4,877,262
1,775,085
1,259,785
  
  
  
(1)

Stock options granted prior to April 26, 2010 expire on the seventh anniversary of their grant date. Stock options granted on or after April 26, 2010 expire on the tenth anniversary of their grant date. No stock options were granted to NEOs in 2012 and 2013.

(2)

Stock options vest at a rate of 33%, 33% and 34% on the second, third and fourth anniversaries of the April 25, 2011 grant date, respectively. Thus, of the remaining unvested options, approximately half are scheduled to vest in each of 2014 and 2015.

(3)

Stock options vest in equal installments of 25% on the first, second, third and fourth anniversaryanniversaries of the grant date.date of April 26, 2010 for all NEOs other than Mr. Peacock whose grant date in 2010 occurred on October 28, 2010. Thus, the remaining unvested stock options with an expiration date: (i) in 2020 vest one third per year in 2012, 2013 and 2014; (ii) in 2016 vest 50% per year in 2012 and 2013 and (iii) in 2015were scheduled to vest in full in 2012.2014.

(4)

The following table shows the vesting of RSUs and any related accrued dividend equivalents (rounded down to the nearest whole number of units) outstanding as of December 31, 2011:2013. Commencing with grants made after March 2012, RSUs accrue dividends that are deemed reinvested in shares and payable only when and to the extent the underlying RSUs vest and are issued to the participant.

 

Name

 Units
Granted on
October 27, 2011

(a)
  Units
Granted on

April  25, 2011
(b)
  Units
Granted on
October 28, 2010

(c)
  Units
Granted on
April 26, 2010

(c)
  Units
Granted on
April 28, 2009

(d)
  Units
Granted on
April 29, 2008

(e)
 

Kevin W. Sharer

  0    60,000    0    34,125    18,500    9,250  

Robert A. Bradway

  0    21,000    0    13,500    6,000    3,000  

Roger M. Perlmutter

  0    15,800    0    9,000    6,000    3,000  

Jonathan M. Peacock

  0    15,800    75,000    0    0    0  

Anthony C. Hooper

  45,238    0    0    0    0    0  

LOGOï 2014 Proxy Statement69


 EXECUTIVE COMPENSATION TABLES  

 

Name Granted on
January 28,
2013(a)
  Granted on
July 31,
2012(a)
  Granted on
April 27,
2012(a)
  Granted on
January 31,
2012(b)
  Granted on
October 27,
2011(c)
  Granted on
April 25,
2011(d)
  Granted on
October 28,
2010(e)
  Granted on
April 26,
2010(e)
 

Robert A. Bradway

  19,034    0    21,611    0    0    14,070    0    4,500  

Anthony C. Hooper

  7,613    0    8,932    9,009    14,929    0    0    0  

Jonathan M. Peacock

  7,613    0    8,932    0    0    10,586    25,000    0  

Sean E. Harper

  7,613    0    8,932    0    0    4,020    0    26,150  

Madhavan Balachandran

  7,613    27,348    2,592    0    0    3,015    0    875  
 (a)

Reflects total RSUs granted which are scheduled to vest as follows: 22,619 units on March 2, 2012, 7,690 units on March 2,and related dividend equivalents accrued through December 31, 2013, 7,690 units on March 2, 2014 and 7,239 units on March 2, 2015.

(b)

Reflects total RSUs granted, which are scheduled to vest at a rate of approximately 33%, 33% and 34% of the amounts shown on the second, third and fourth anniversaries of the grant date, respectively.

 (c)(b)

Reflects RSUs granted to Mr. Hooper which vested in full on March 2, 2014.

(c)

Reflects remaining unvested RSUs granted to Mr. Hooper, of which 7,690 units vested on March 2, 2014 and the remaining 7,239 units are scheduled to vest on March 2, 2015.

(d)

Reflects the remaining unvested RSUs which are scheduled to vest in approximately equal installments of one-third of the amounts shown on the second, third and fourth anniversaries of the grant date.

(d)

Reflects remaining unvested RSUs, which are scheduled to vest in equal installments of one-half of the amounts shown on the third and fourth anniversaries of the grant date.

 (e)

Reflects remaining unvested RSUs which are scheduled to vest on April 29, 2012.the fourth anniversary of the grant date, except with respect to 25,000 units outstanding for Dr. Harper which are scheduled to vest on December 31, 2014.

(5)

The market values of RSUs and performance units (and related dividend equivalents) were calculated by multiplying the number of RSUs outstanding or the number of performance units (as determined in accordance with Securities and Exchange Commission, or SEC, rules and footnotes 6 through 910 below), as applicable, by the closing price of our Common Stock on December 31, 20112013 ($64.21)114.08).

(6)

Reflects the sum of the number of performance units granted for the 2013–2015 performance period and the related dividend equivalents accrued through December 31, 2013 multiplied by the payout percentage of 147.2%, which is the relative TSR percentage multiplier based on Amgen’s TSR percentile rank relative to the TSRs of the companies in the Reference Group for the period from the January 28, 2013 grant date to December 31, 2013. The number of dividend equivalents multiplied by the 147.2% payout percentage noted above (rounded down to the nearest whole number of units) included in the table above are as follows: 1,919 units for Mr. Bradway; and 767 units for Messrs. Hooper, Peacock and Balachandran and Dr. Harper.

(7)

Reflects the number of performance units granted for the 2011–20132012-2014 performance period and related dividend equivalents through December 31, 2013 multiplied by the maximum payout percentage of 81.3% which equals150%. Because a payout percentage equal to 100% plus two times the TSR percentage difference. The TSR percentage difference which is a negative amount, equals our TSR for the one-yeartwo-year period ended December 31, 2011 less2013 exceeded the averagemaximum payout percentage for the award, the maximum payout percentage was used for purposes of TSRsthis table. (The determination of the peer group companies for that same period. For information on the actualTSR percentage difference is discussed below.) The number of dividend equivalents multiplied by the 150% payout percentage noted above (rounded down to the nearest whole number of units) included in the table above are as follows: 4,041 units to be earned for these performance unit grants, see “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONSLong-Term Incentive Equity Awards” in our Compensation DiscussionMr. Bradway; 1,670 units for Messrs. Hooper and Analysis.Peacock and Dr. Harper and 485 units for Mr. Balachandran.

(7)(8)

Reflects the number of performance units granted for the 2010-2012 performance period multiplied by: (i) 107.8% which is the sum of the revenue and EPS performance percentages based on the actual results achieved with regard to the 2010 financial performance measures and (ii) a relative TSR multiplier of 100% for the two-year period that ended on December 31, 2011. For information on the actual number of units to be earned for these performance unit grants, see “Summary Compensation Table—Narrative Description to the Compensation Tables – Performance Units” above.

(8)

Reflects the actual number of performance units earned for the 2009-20112011-2013 performance period which equals the number of performance units granted multiplied by: (i) 91%by the actual payout percentage of 122.7%, which isequals 100% plus two times the sumTSR percentage difference of approximately 11.36% over the revenue and EPSthree-year performance percentages basedperiod (the TSR percentage difference equals the Amgen TSR of approximately 114.41% less the Peer Group Average TSR of approximately 103.05%). No dividend equivalents were earned on these performance units.

(9)

Reflects the actual results achieved with regard to the 2009 revenue and EPSnumber of performance measures, and (ii) a relative TSR multiplier of 50%units earned by Mr. Hooper for the three-yearperformance period that began on October 27, 2011 and ended on December 31, 2011.2013, based on the number of units granted multiplied by the maximum payout percentage of 150%. Had the payout percentage not been limited to the maximum percentage that may be earned for the award, the payout percentage would have equaled 159.6%, based on 100% plus two times the TSR percentage difference of approximately 29.79% for the performance period (the TSR percentage difference equals the Amgen TSR of approximately 116.74% less the Peer Group Average TSR of approximately 86.95%). No dividend equivalents were earned on these performance units.

(9)(10)

Reflects the number of performance units for each of the threeremaining performance unit awardsaward granted to Mr. Hooper with a performance periodsperiod beginning on the October 27, 2011 grant date and ending on December 31, 2012, December 31, 2013 and December 31, 2014 respectively, multiplied by the maximum payout percentage of 100.4% which equals150%. Because a payout percentage equal to 100% plus two times the TSR percentage difference. The TSR percentage difference equals our TSR for the period from the grant date tothrough December 31, 2011, less2013 exceeded the average of TSRs ofmaximum payout percentage for the peer group companies for these awards (which areaward, the companiesmaximum payout percentage was used for the performance unit awards for the 2012–2014 performance period) for the same period. See “ELEMENTS OFCOMPENSATION AND SPECIFIC COMPENSATION DECISIONSLong-Term Incentive Equity Awards” in our Compensation Discussion and Analysis for more information.purposes of this table.

The estimated payouts of the performance units described above are disclosed in the limited context of our executive compensation program and should not be understood to be statements of our expectations of our stock price or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.

70    LOGOï 2014 Proxy Statement


 EXECUTIVE COMPENSATION TABLES  

Option Exercises and Stock Vested

The following table summarizes the option exercises and vesting of stock awards for each of our NEOs for the year ended December 31, 2011. No stock options were exercised by our NEOs in 2011.2013. For a description of the performance units for the 2009-2011and associated payout values of performance periodperiods that ended on December 31, 2013 and that were earned as of December 31, 2011, and the associated payout values,that date, see the “Outstanding Equity Awards at Fiscal Year End” table and footnotefootnotes 8 and 9 to the table.

 

   Stock Awards 

Name

  Number of
Shares
Acquired
on Vesting
(#)
   Value
Realized on
Vesting
($)(1)
 

Kevin W. Sharer

   29,875     1,676,229  

Robert A. Bradway

   10,500     587,985  

Roger M. Perlmutter

   9,000     505,950  

Jonathan M. Peacock

   25,000     1,451,500  

Anthony C. Hooper

   0     0  

   Option Awards   Stock Awards 
Name  Number of
Securities
Acquired
on Exercise(#)
   Value
Realized on
Exercise($)(1)
   Number of
Shares
Acquired
on Vesting(#)
   Value
Realized on
Vesting($)(2)
 

Robert A. Bradway

   0     0     14,430     1,541,275  

Anthony C. Hooper

   0     0     16,434     1,521,460  

Jonathan M. Peacock

   0     0     30,214     3,455,105  

Sean E. Harper

   8,000     447,070     4,255     454,648  

Madhavan Balachandran

   24,000     1,295,069     3,210     343,022  
(1)

The value realized upon exercise of stock options reflects the price at which shares acquired upon exercise of the stock options were sold, net of the exercise price for acquiring shares.

(2)

The value realized on vesting of RSUs was calculated as the product of the closing price of a share of our Common Stock on the business day immediately prior to the vesting date, multiplied by the number of units vested.

Nonqualified Deferred Compensation

The following table sets forth summary information regarding aggregate contributions to and account balances under our SRP and Nonqualified Deferred Compensation Plan, or NDCP and Executive Nonqualified Retirement Plan for and as of the year ended December 31, 2011.2013. There were no withdrawals by any of the NEOs in 2013.

 

Name

 Executive
Contributions in
2011
($)
  Company
Contributions in
2011
($)(1)
  Aggregate
Earnings (Losses)
in 2011
($)(2)
  Withdrawals in
2011
($)
  Aggregate Balance
at December 31,
2011
($)(3)
 

Kevin W. Sharer

  0    517,958    128,247    0    22,451,396  

Robert A. Bradway

  0    211,761    (24,149  0    1,603,046  

Roger M. Perlmutter

  0    180,081    685,712    0    14,913,700  

Jonathan M. Peacock

  0    85,431    (471  0    84,960  

Anthony C. Hooper

  0    0    0    0    0  

Name  2013
Employee
Contributions
($)(1)
   2013
Company
Contributions 
($)(2)
   
2013
Earnings
($)(3)
   


Balance as of

12/31/13($)(4)

 

Robert A. Bradway

   1,658,000     454,177     380,034     5,599,765  

Anthony C. Hooper

   48,549     253,693     35,161     433,330  

Jonathan M. Peacock

   0     226,050     62,294     577,892  

Sean E. Harper

   0     217,214     206,370     1,863,174  

Madhavan Balachandran

   0     156,154     53,505     3,273,058  
(1)

Reflects the portion of the annual cash incentive award deferred and contributed to the NDCP by Mr. Bradway that is included in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” in 2012, the year it was earned. Also reflects the portion of Mr. Hooper’s base salary deferred and contributed to the NDCP that is included in the “Salary” column of the “Summary Compensation Table” in 2013, the year it was earned.

(2)

Reflects credits to the SRP which are included in the “All Other Compensation” column of the “Summary Compensation Table.”

(2)(3)

Reflects earnings in the NDCP and SRP and Executive Nonqualified Retirement Plan for 2011. Earnings on accounts in the Executive Nonqualified Retirement Plan consists of interest accrued on Dr. Perlmutter’s vested account balance calculated at a rate equal to 125% of the 10-year moving average yield of 10-year U.S. Treasury Notes, adjusted annually and compounded annually. Interest credited to Dr. Perlmutter for 2011 totaled $629,033, which includes $101,360 that exceeds 120% of the applicable long-term Applicable Federal Rate, and accordingly, is included in the “Nonqualified Deferred Compensation Earnings” column of the “Summary Compensation Table.”2013.

(3)(4)

Reflects balances in the NDCP and SRP and Executive Nonqualified Retirement Plan aton December 31, 2011.2013. A total of $379,627 of Mr. Peacock’sHooper’s SRP balance is composed of his SRP account which is unvested and is scheduled to vest on September 1, 2013,October 27, 2014, the third anniversary of Mr. Peacock’sHooper’s hire date. These balances include the following aggregate amounts that are reported as compensation in this proxy statement in the “Summary

Compensation Table” in 2011, 20102013, 2012 and 2009: $3,471,611 for Mr. Sharer; $572,8062011: $3,542,527 for Mr. Bradway; $758,490$393,982 for Dr. Perlmutter; $85,431Mr. Hooper; $494,973 for Mr. Peacock; $350,291 for Dr. Harper and none$156,154 for Mr. Hooper.Balachandran.

LOGOï 2014 Proxy Statement71


 EXECUTIVE COMPENSATION TABLES  

General Provisions of the Supplemental Retirement Plan and Nonqualified Deferred Compensation Plan

The SRP is designed to provide a “make-whole” benefit to 401(k) Plan participants who have eligible compensation in excess of the Internal Revenue Code’s qualified plan compensation limit. The Company credits to the SRP a 10% contribution on such compensation to represent the equivalent percentage of Company contributions that would have been made to the 401(k) Plan if the compensation had been eligible for deferral into the 401(k) Plan. For the same reason, the Company also credits to the SRP a 10% contribution on amounts deferred into the NDCP. No “above market” crediting rates are offered.

The SRP and the NDCP are unfunded plans for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended. Deferred amounts are our general unsecured obligations and are subject to our on-going financial solvency. We have established a grantor trust (a so-called “rabbi” trust) for the purpose of accumulating funds to assist us in satisfying our obligations under the NDCP. Earnings on amounts contributed to our SRP and NDCP, like our 401(k) Plan, are based on participant

selections among the investment options selected by a committee of our executives. This committee has the sole discretion to discontinue, substitute or add investment options at any time. Participants can select from among these investment options for purposes of determining the earnings or losses that we will credit to their plan accounts, but they do not have an ownership interest in the investment options they select. Unlike our 401(k) Plan, we do not offer the opportunity to invest through a brokerage window or in our Common Stock under our NDCP or SRP. The investment options in the NDCP and the SRP also differ in that they include six portfolios based on different target retirement dates, referred to as “Target Retirement Portfolios,” that have been created for use as default investment options. The investment options during 20112013 are described in the subsection “Investment Options Under the Supplemental Retirement Plan and Nonqualified Deferred Compensation Plan” below. Invested amounts can be transferred among available plan investment options on any business day and effective at the close of business on that day (subject to the time of the request and the market being open).

Retirement and Savings Plan and Supplemental Retirement Plan

Our 401(k) Plan is a qualified plan that is available to regular staff members of the Company and participating subsidiaries. All 401(k) Plan participants, including our NEOs, are eligible to receive the same level of matching and nonelective or “core” contributions from us. Company contributions on eligible compensation earned above the Internal Revenue Code qualified plan compensation limit and on amounts that were deferred to the NDCP are credited to our SRP, a nonqualified plan that is available to all 401(k) Plan eligible staff members.

ContributionsContributions.. We make a core contribution of 5% of eligible compensation to all regular staff members under the 401(k) Plan, regardless of whether the staff members elect to defer any of their compensation to the 401(k) Plan. In addition, under the 401(k) Plan, participants are eligible to receive matching contributions of up to 5% of their eligible compensation. Under our SRP, we credit 10% of each participant’s eligible compensation in excess of the maximum recognizable compensation limit for qualified

plans, which equals the combined percentage of our core contributions and maximum matching contributions under our 401(k) Plan. We also credit 10% of each participant’s compensation that is not eligible for deferral into our 401(k) Plan because the participant deferred it to the NDCP.

Distributions. Participants receive distributions from the SRP following their termination of employment. Distributions for most participants are made in a lump sum payment in the first or second year following termination of employment, or, for balances in excess of a de minimis amount, in installments that commence in the year following termination. For our NEOs, Section 409A of the Internal Revenue Code generally requires that their distributions may not occur earlier than six months following our NEO’s termination of employment.

VestingVesting.. Participants in the 401(k) Plan are immediately vested in participant and Company contributions and related earnings and losses on such amounts. Participants in the

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SRP are immediately vested in contributions

that are made with respect to amounts the participants deferred under the NDCP and related earnings and losses on such amounts, and are fully vested in the remainder of their accounts upon the earlier of: (i) three continuous years of their service to us; (ii) termination of their employment on or after their normal

retirement date (as defined in the 401(k) Plan); (iii) their disability (as defined in the 401(k) Plan); (iv) their death or (v) a change of control and termination of their employment as described below in “Potential Payments Upon Termination or Change of Control—Amended and Restated Change of Control Severance Plan.”

Nonqualified Deferred Compensation Plan

Our NDCP allows participants to defer receipt of a portion of their eligible compensation to a future date, with an opportunity to earn tax-deferred returns on the deferrals. Members of our Board of Directors, or Board, and our U.S.- and Puerto Rico-based staff members at the director level or above, whichwho include our NEOs, are eligible to participate in this plan. Our NEOs may participate in this plan on the same basis as the other participants in the plan.

ContributionsContributions.. Participants who are staff members may elect to defer up to a maximum of 50% of their eligible base salary, up to a maximum of 100% of their annual cash incentive bonusaward and up to 100% of sales commissions. Non-employee members of our Board may defer all or a portion of their fees, including committee chair retainers and meeting fees. In addition, we may, in our sole discretion, contribute additional amounts to any participant’s account at any time, such as contributing sign-on bonuses to the accounts of newly-hired staff members or for retention purposes.

Distributions.

Distributions. Participants may elect to receive distributions as a lump sum or, for balances in excess of a de minimis amount, in annual installments for up to ten years. For most participants, distributions commence in the first or second year following the participant’s termination of employment. For our NEOs, Section 409A of the Internal Revenue Code generally requires that distributions may not occur earlier than six months following our NEO’s termination of employment. Participants may also elect to receive an in-service distribution of an elective deferral (called a short-term deferral) that is paid no earlier than three full years after the end of the plan year in which the deferral was made. Participants can also petition for a distribution due to an unforeseeable financial hardship.

Vesting.Participants are at all times 100% vested in the amounts that they elect to defer and related earnings and losses on such amounts.

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Investment Options Under the Supplemental Retirement Plan and Nonqualified Deferred Compensation Plan

The investment options under the SRP and the NDCP and their annual rates of return for 20112013 are contained in the tables below. The 401(k) Plan offers the same investment options as the SRP and the NDCP except: (i) the 401(k) Plan also allows investments in our Common Stock and offers a brokerage window and (ii) the 401(k) Plan does not offer the six portfolios based on different target retirement dates, referred to as “Target Retirement Portfolios” below. The

Target Retirement Portfolios are designed to provide an all-in-one investment option for creating a diversified portfolio. Each portfolio is an asset allocation strategy built around a combination of investments from the plan’s investment options (provided below) and is adjusted over time to gradually become more conservative as the target maturity date of the portfolio approaches. We retain the right to change, at our discretion, the available investment options.

Name of Investment Option  

Rate of Return

for 2013

   Name of Investment Option  Rate of Return
for 2013
 

Amgen Target Retirement Portfolio Income

   9.82%    Capital Preservation   1.69%  

Amgen Target Retirement Portfolio 2010

   12.13%    Fixed Income   (2.05)%  

Amgen Target Retirement Portfolio 2020

   15.21%    Large Cap Value   36.71%  

Amgen Target Retirement Portfolio 2030

   21.63%    Large Cap Index   32.41%  

Amgen Target Retirement Portfolio 2040

   25.41%    Large Cap Growth   35.42%  

Amgen Target Retirement Portfolio 2050

   28.20%    Small-Mid Cap Value   41.71%  
    Small-Mid Cap Index   38.00%  
    Small-Mid Cap Growth   38.76%  
    International Value   24.09%  
    International Growth   22.32%  
    High Yield   8.03%  
    Inflation-Protection   (8.67)%  
    Emerging Markets   (2.09)%  
    REIT Index   2.39%  

Name of Investment Option

 Rate of Return
for 2011
  

Name of Investment Option

 Rate of Return
for 2011
 

Amgen Target Retirement Portfolio Income

  4.23 Capital Preservation  2.70

Amgen Target Retirement Portfolio 2010

  3.08 Fixed Income  7.71

Amgen Target Retirement Portfolio 2020

  0.53 Large Cap Value  (2.38%) 

Amgen Target Retirement Portfolio 2030

  (2.72%)  Large Cap Index  4.80

Amgen Target Retirement Portfolio 2040

  (4.94%)  Large Cap Growth  (2.32%) 

Amgen Target Retirement Portfolio 2050

  (5.70%)  Small-Mid Cap Value  (5.67%) 
  Small-Mid Cap Index  (3.48%) 
  Small-Mid Cap Growth  (3.33%) 
  International Value  (15.66%) 
  International Growth  (15.10%) 
  High Yield  2.99
  Inflation-Protection  13.33
  Emerging Markets  (17.65%) 
  REIT Index  8.61

Executive Nonqualified Retirement Plan

As part of his initial offer of employment in 2001, we agreed to provide Dr. Perlmutter supplemental retirement benefits based on his length of employment with us as a replacement for pension benefits foregone from his previous employer. The benefits are provided through his participation in our Executive Nonqualified Retirement Plan. Dr. Perlmutter is currently the only participant in this plan.

Contributions. We were obligated to credit a special retirement account under the plan with $10,000,000 for Dr. Perlmutter because he was actively employed by us on September 16, 2007 (the crediting date).

Earnings. Dr. Perlmutter’s account began earning interest on September 16, 2007. Since Dr. Perlmutter was employed with us through the date he attained 10 years of service and was at least age 55, which occurred in January 2011, under the terms of the Executive Nonqualified Retirement Plan, we credit interest on his account balance at a rate equal to 125% of the 10-year moving average yield on 10-year U.S. Treasury notes, adjusted annually and compounded annually, from his crediting date until his account balance is distributed to him.

Distributions. Because Dr. Perlmutter terminated his employment and retired on February 12, 2012, which is prior to attaining age 60 and 10 years of service with us (which would have occurred on September 16, 2012), the plan provides for his account balance to be distributed in a lump sum in January 2013.

Potential Payments Upon Termination or Change of Control

Amended and Restated Change of Control Severance Plan

Our Change of Control Severance Plan provides a lump sum payment and certain other benefits for each participant in the plan who separates from employment with us in connection with a change of control. Market practices generally andOur Compensation Committee periodically reviews the practicesterms of the companies in our peer group have evolved since our Change of Control Severance Plan was originally adopted. To ensure that the Change of Control Severance Plan, continueswhich was originally adopted in 1998, to beensure it is aligned with current governance best practices, on December 9, 2010, at the suggestion of the Compensation Committee’s independent consultant and with the input and direction of the Compensation Committee, the Board amended and restated the Change of Control Severance Plan.practices.

If a change of control occurs and a participant’s employment is terminated by us other than for cause or disability or by the

participant for good reason within two years after the change of control, a participant under the participant willChange of Control Severance Plan would be entitled to:

 

a lump sum cash payment in an amount equal to:

 

the product of:

Ÿ

a benefits multiple of one or two based on the participant’s position (each of our NEOs has a benefits multiple of two); and

 

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a benefits multiple of 1 or 2 based on the participant’s position (each of our NEOs have a benefits multiple of 2); and
 EXECUTIVE COMPENSATION TABLES  

 

the sum of (i) the participant’s annual base salary immediately prior to termination or, if higher, immediately prior to the change of control, plus (ii) the participant’s targeted annual cash incentive award for the year in which the termination occurs;

Ÿ

the sum of (i) the participant’s annual base salary immediately prior to termination or, if higher, immediately prior to the change of control, plus (ii) the participant’s targeted annual cash incentive award for the year in which the termination occurs;

 

if, as a result of the participant’s termination of employment, the participant becomes entitled to, and timely elects to continue, healthcare (including any applicable vision benefits) and/or dental coverage under the Consolidated Omnibus Reconciliation Act of 1985, or COBRA, Company-paid group health and dental insurance continuation coverage for the participant and his or her dependents under COBRA until the earlier of (i) the expiration of a participant’s eligibility for coverage under COBRA or (ii) the expiration of the 18-month period immediately following the participant’s termination (whichever occurs earlier);

 

fully-vested benefits accrued under our 401(k) Plan and our SRP;

 

either a lump-sum cash payment or a contribution to our SRP, as determined by us in our sole discretion, in an amount equal to the sum of (1) the product of $2,500 and the participant’s benefits multiple and (2) the product of (x) 10%, (y) the sum of (i) the participant’s annual base salary as in effect immediately prior to the participant’s termination or, if higher, as in effect immediately prior to the change of control, plus (ii) the participant’s targeted annual bonuscash incentive award for the year in which the termination occurs (which equals the participant’s annual base salary multiplied by the participant’s target annual bonuscash incentive award percentage, each as in effect immediately prior to the termination or, if higher, as in effect immediately prior to the change of control) and (z) the benefits multiple; and

 

indemnification and, if applicable, directors’ and officers’ liability insurance provided by us for four years following the participant’s termination (each of our NEOs would receive such liability insurance benefits, which resultswould result in no additional cost to us).

The plan provides that, ifNo tax gross-up payments are provided under the Change of Control Severance Plan. If all payments or benefits received under the Change of Control Severance Plan or any other plan, arrangement or agreement would cause the participant to be subject to excise tax, then the payments will be

reduced to the extent necessary to avoid the excise tax, provided that the reduced payments, net of federal, state and local income taxes, isare greater than the payments without such reduction, net of federal, state and local income taxes and excise tax.

The plan provides that the benefits described above would be provided in lieu of any other severance benefits that may be payable by us (other than accrued vacation and similar benefits otherwise payable to all staff members upon a termination). However, other than with respect to Messrs. Peacock and Hooper, we currently have no standing severance arrangement that provides severance benefits to any of our NEOs. For a description of Messrs. Peacock’s and Hooper’s severance benefits, see the subsection “Messrs. Peacock’s and Hooper’s Offer Letters” below. The plan also provides that the benefits described above may be forfeited if the participant discloses our confidential information or solicits or offers employment to any of our staff members during a period of years equal to the participant’s benefits multiple following the participant’s termination.

The plan expires on December 31, 2014 and is subject to automatic one-year extensions unless we notify participants no later than November 30 of the year prior to the expiration date that the term will not be extended. If a change of control occurs prior to the plan’s expiration, the plan will continue in effect for at least 24 months

following the change of control. Prior to a change of control, we can terminate or amend the plan at any time. After a change of control, the plan may not be terminated or amended in any way that adversely affects a participant’s interests under the plan, unless the participant consents in writing.

“Change of Control” is defined in the plan as the occurrence of any of the following:

 

any person, entity or group has acquired beneficial ownership of 50% or more of (i) our then outstanding common shares or (ii) the combined voting power of our then outstanding securities entitled to vote in the election of directors;

 

individuals making up the incumbent Board (as defined in the plan) cease for any reason to constitute at least a majority of our Board;

 

immediately prior to our consummation of a reorganization, merger or consolidation with respect to which persons who were the stockholders of the Company immediately prior to such transaction do not, immediately thereafter, own more than 50% of the then outstanding shares of the reorganized, merged or consolidated company entitled to vote generally in the election of directors;

 

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a liquidation or dissolution of the Company or the sale of all or substantially all of the assets of the Company; or

 

any other event which the incumbent Board (as defined in the plan), in its sole discretion, determines is a change of control.

“Cause” is defined in the plan as (i) conviction of a felony or (ii) engaging in conduct that constitutes willful gross neglect or willful gross misconduct in carrying out the participant’s duties, resulting in material economic harm to us, unless the participant believed in good faith that the conduct was in, or not contrary to, our best interests.

“Disability” under the plan is determined based on our long-term disability plan as is in effect immediately prior to a change of control.

“Good reason” is defined in the plan as (i) an adverse and material diminution of a participant’s authority, duties or responsibilities, (ii) a material reduction in a participant’s base salary, (iii) an increase in a participant’s daily commute by more than 100 miles roundtrip or (iv) any other action or inaction by the Company that constitutes a material breach of the agreement under which the participant provides services. In order to terminate with “good reason,” a participant must provide written notice to the Company of the existence of the condition within the required period, the Company must fail to remedy the condition within the required time period and the participant must then terminate employment within the required time period.

Long-Term Incentive Equity Awards

Stock Options Restricted Stock and Restricted Stock Units

Our stock plans (or the related grant agreements approved for use under such stock plans) provide for accelerated vesting or continued vesting of unvested stock options restricted stock and RSUs in the circumstances described below.

Change of Control/Qualifying Termination in Connection with a Change of ControlControl.. With respect to stock options and RSUs made prior to March 2, 2011, all such unvested awards will vest in full upon a Change of Control (as defined in the stock plans or the related grant agreements approved for use under such stock plans), irrespective of the scheduled vesting dates for these awards. With respect to stock options and RSUs made on or after March 2, 2011, all such awards

will vest in full only if, within 24 months following the change of control, the grantee’s employment is involuntarily terminated other than for “cause” or “disability,” and, in the case of staff members subject to the Change of Control Severance Plan, voluntarily terminated with “good reason” (as each is defined in the grant agreements).

With respect to stock options and RSUs made on or after March 6, 2013, Change of Control no longer includes any other event which the incumbent Board (as defined in the related grant agreements), in its sole discretion, determines is a change of control.

Death or DisabilityDisability.. In general, unvested stock options and RSUs granted in calendar years prior to the year death or disability occurs vest in full upon the occurrence of such event. For unvested stock options and RSUs granted in the calendar year death or disability occurs, a pro-rata amount of these stock options and RSUs immediately vests based on the number of completed months of employment during the calendar year such event occurs. Under our stock plans, a disability has the same meaning as under Section 22(e)(3) of the Internal Revenue Code and occurs where the disability has been certified by either the Social Security Administration, the comparable government authority in another country with respect to non-U.S. staff members or an independent medical advisor appointed by us.

RetirementRetirement.. In general, unvested stock options and RSUs granted in calendar years prior to the year in which an employee retires continue to vest on their original vesting schedule following the retirement of the holder if the holder has been continuously employed for at least 10ten years and is age 55 or older or is age 65 or older, regardless of service (a retirement-eligible participant). If a retirement-eligible participant receives a grant of stock options or RSUs in the calendar year such retirement occurs, the participant will vest in a pro-rata amount of the award he or she would be otherwise entitled to based upon the number of complete months of employment during the calendar year such retirement occurs. Holders have the lesser of five years from the date of retirement or the remaining period before expiration to exercise any vested stock options. Mr. SharerBalachandran was retirement eligible as of December 31, 2013 and Dr. Perlmutterhe would have received this benefit, other than with respect to RSUs granted to him on July 31, 2012, had theyhe retired on December 31, 2011.2013. No other NEOs would have received this benefit because they did not meet the above-notedabove-mentioned retirement requirements.

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Performance Units

Our performance award program provides for a potential payout of outstanding performance units upon a changeChange of controlControl (as defined in our Change of Control Severance Plan) or upon a termination of employment due to death, disability or retirement.

Change of Control. With respect to grants of performance units formade on or after March 6, 2013, Change of Control no longer includes any other event which the 2010-2012 performance period,incumbent Board (as defined in the event ofperformance award program), in its sole discretion, determines is a change of control that occurs during the first yearcontrol.

Change of the performance period, the performance period terminates as of the last business day of the last completed quarter before the change of control and the participant is entitled to a payment equal to the amount the participant would have received for the performance period using the assumption that the target levels of all performance measures (including TSR multipliers) have been satisfied. If a change of control occurs during the second or third years of the performance period, the performance period terminates as of the last business day of the last completed quarter before the change of control and the participant is entitled to a payment based upon the actual performance with respect to the one-year performance measures for revenue and EPS goals, multiplied by the relative TSR multiplier based on the ranking of the greater of (i) our actual TSR performance for such shortened period or (ii) our TSR performance using the assumption that the ending Common Stock price for such shortened period is equal to the value of consideration paid for a share of our Common Stock (whether such consideration is paid in cash, stock or other property, or any combination thereof) relative to the TSRs of the Comparator Group for the shortened performance period.Control.

With respect to grants of outstanding performance units, for the 2011-2013 performance period and the 2012-2014 performance period and the grants of performance units made to Mr. Hooper, in the event of a change of control that occurs after the sixth calendar month of the performance period and before the end of the performance period, the performance period terminates as of the last business day of the last completed quarter before the change of control (or, with respect to the 2013-2015 performance period only, the last business day before the change of control) and the participant is entitled to a payment equal to the amount the participant would have received for the performance period basingbased on (A) our TSR performance for which our ending Common Stock price is computed on the greater of (i) the average daily closing price of our Common Stock for the last sixty (60) trading days (or, with respect to the 2013-2015 performance period only, the last twenty (20) trading days) of such shortened period or (ii) the value of consideration paid for a share of our Common Stock in the change of control (whether such consideration is paid in cash, stock or other property, or any combination thereof) and (B) the average of TSRsTSR performance of the companies in our Comparator Groupthe applicable comparator or reference group based on such companies’ average daily closing stock price for the last sixty (60) trading days (or, with respect to the 2013-2015 performance period only, the last twenty (20) trading days) of such shortened performance period. In the event of a change of control that occurs during the first six calendar months of the performance period, the performance period terminates as of the last

business day of the last completed quarter before the change of control and the participant is entitled to a payment equal to an amount calculated in the manner described in the preceding sentence pro-rated for the number of complete calendar months elapsed during the shortened performance period.

Death or DisabilityDisability.. For all performance unit grants made in calendar years prior to the year death or disability occurs, the participant will be paid the full amount of the award he or she would be otherwise entitled to, if any, as determined at the end of the performance period. For a performance unit

grant made in the calendar year in which death or disability occurs, a participant will be paid a pro-rata amount of the award he or she would otherwise be entitled to, if any, as determined at the end of the performance period, based upon the number of complete months of employment during the performance period in the calendar year such event occurs.

RetirementRetirement.. In the event of retirement of a participant who has been continuously employed with us for at least 10ten years and is age 55 or older or is age 65 or older, regardless of service (a retirement-eligible participant), for performance unit grants made in calendar years prior to the year in which retirement occurs, the participant will be paid the full amount of the award he or she would be otherwise entitled to, if any, as determined at the end of the performance period. If a retirement-eligible participant receives a performance unit grant in the calendar year such retirement occurs, the participant will be paid a pro-rata amount of the award he or she would be otherwise entitled to, if any, as determined at the end of the performance period, based upon the number of complete months of employment during the performance period in the calendar year such retirement occurs. Mr. Sharer and Dr. PerlmutterBalachandran would have received these benefitsthis benefit had theyhe retired on December 31, 2011; none of the2013. No other NEOs would have received this benefit if they had retired on December 31, 2011 because they did not meet the above-notedabove-mentioned retirement requirements.

Messrs. Peacock’s andMr. Hooper’s Offer LettersLetter

We entered into an offer lettersletter with Messrs. Peacock andMr. Hooper in connection with theirhis initial hiring in September 2010 and October 2011 respectively, which provideprovides limited severance benefits in the event of terminationstermination of employment by us, other than for cause. EachThe offer letter provides for severance protection for three years following the hire date at a benefit multiple of two times salary and target bonus, as defined, plus up to 18 months of COBRA medical and dental coverage paid by us. Benefits of this type are sometimes provided to officer-level candidates in order to provide an incentive to them to join the Company by reducing the risk of making such a job change. These severance benefits will expire on September 1, 2013 for Mr. Peacock and on October 27, 2014, for Mr. Hooper, the third anniversary of the commencement of Messrs. Peacock’s and Hooper’shis employment with the Company, respectively.Company.

For purposes of the offer letters, “cause” is defined as: (i) unfitness for service, inattention to or neglect of duties, or incompetence; (ii) dishonesty; (iii) disregard or violation of the policies or procedures of the Company; (iv) refusal or failure to follow lawful directions of the Company; (v) illegal, unethical or immoral conduct; (vi) breach of our Proprietary

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Information and Inventions Agreement or (vii) any other reason set forth in California Labor Code Section 2924, in all cases, as determined by us.

Mr. Balachandran’s Special Retention Award

We entered into an arrangement with Mr. Balachandran in March 2011 which provided for specified annual cash installment payments commencing in March 2012 in order to promote his continued employment with us. Payments made under this arrangement are subject to Mr. Balachandran’s continued employment until each installment date, except in the event of his death, disability or involuntary termination of employment not for “Cause”. For purposes of this arrangement, “cause” is defined in the same manner as it is in Mr. Hooper’s offer letter described above. Pursuant to this arrangement Mr. Balachandran received a cash payment of $330,000 on each of March 2, 2012 and 2013, a payment of $170,000 on March 2, 2014, and he is scheduled to receive a final installment payment of $170,000 on March 2, 2015, for a total of $1,000,000.

Mr. Peacock’s Severance Arrangement

Mr. Peacock resigned as our Chief Financial Officer effective January 10, 2014, at which time he continued to be employed in a non-executive officer capacity to assist in the transition of Michael A. Kelly, our Acting Chief Financial Officer, which transition period is currently expected to extend until May 2014. Upon his termination from the Company, Mr. Peacock will be entitled to the following severance benefits: (1) lump sum payment that is approximately equal to 1.5 times base pay salary plus target annual cash incentive award opportunity; (2) reimbursement for COBRA medical coverage for up to 18 months; (3) senior executive career transition services for up to 12 months; (4) a payment in an amount that is approximately equal to the pro-rata value of the last unvested tranche of his new hire equity awards (stock options and RSUs) that would have vested in October 2014, based on the total period of time that he is expected to be employed over the total vesting period of such tranche (48 months) calculated on the date of his termination of employment with the Company, and using a stock price equal to $113 per share and (5) payment at an hourly rate of $1,200 for any authorized time that he spends following the termination of his employment in further transitioning his responsibilities and with matters that arose during his tenure with the Company. In determining these benefits, the

Compensation Committee considered that, until September 2013, Mr. Peacock was eligible for severance protection at a higher benefit multiple of two times annual base salary and target annual cash incentive award opportunity plus up to 18 months of COBRA protection, that the pro-rata value of the last unvested tranche of his new hire equity awards was made in part to compensate Mr. Peacock for value that he left behind at his former employer and that Mr. Peacock will have served (including by providing important transition services) nearly the full vesting period. The agreement between the Company and Mr. Peacock includes a general release of all claims by Mr. Peacock and that Mr. Peacock forfeit and repay substantial benefits of this agreement if Mr. Peacock materially breaches any covenants or conditions in the agreement or the previously signed Proprietary Information and Inventions Agreement, including if Mr. Peacock fails to fulfill his post-termination obligations to cooperate, to maintain the confidentiality of our information and not to disparage the Company.

Estimated Potential Payments

The tables below set forth the estimated current value of payments and benefitsbenefits: (i) to each of our NEOs, upon a change of control, upon a qualifying termination within two years following a change of control, retirement, theor upon death or disability, of our NEOs, and with respect(ii) to Messrs. PeacockHooper and Hooper,Balachandran, upon termination without cause.cause; (iii) to Mr. Balachandran, upon his retirement (Mr. Balachandran is the only retirement-eligible NEO) and (iv) to Mr. Peacock upon his termination of employment. The amounts shown payable to Mr. Peacock upon his termination of employment are based on the terms set forth in his Agreement and General Release of Claims dated January 9, 2014. All other amounts shown in the tables below assume that the triggering events occurred on December 31, 20112013 and do not include: (i) the 2009-20112011-2013 performance unit awards and the 2013 EIP and GMIP payouts, which were earned as of December 31, 2011;2013; (ii) other benefits earned during the term of our NEO’s employment that are available to all salaried staff members, such as accrued vacation; (iii) benefits paid by insurance providers under life and disability policies and (iv) benefits previously accrued and vested under the Executive Nonqualified Retirement Plan, the SRP and the NDCP. For information on the accrued amounts payable under these plans, see the “Nonqualified Deferred Compensation” table above. The actual amounts of payments and benefits that would be provided can only be determined at the time of a change of control and/or the NEO’s separation from the Company. In

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 EXECUTIVE COMPENSATION TABLES  

accordance with SEC rules, the value of accelerated equity awards (and the value of equity awards that would continue to vest after Mr. Sharer and Dr. Perlmutter retire)retirement) shown in the tables below was calculated using the closing price of our Common Stock on December 31, 20112013 ($64.21) in accordance with SEC rules.114.08). The value of stock options is

the aggregate spread between $64.21the applicable closing price and the exercise prices of the stock options, if less than $64.21, while $64.21 is the value per unit of RSUs and performance units, including the 2011-2013 and 2010-2012 performance unit grants as well as Mr. Hooper’s performance unit grants.related accrued dividend equivalents (rounded down to the nearest whole number of units), equals the applicable closing price.

Estimated Payments to Mr. SharerRobert A. Bradway

 

   Triggering Event 

Estimated Potential Payment or Benefit

  Change of
Control
($)
   Change of
Control and
Termination
($)
   Retirement($)   Death or
Disability
($)
 

Lump sum cash severance payment

   0         8,995,000(1)     0         0      

Intrinsic value of accelerated unvested stock options

   4,556,378         6,555,578         6,555,578         6,555,578      

Intrinsic value of accelerated unvested RSUs

   3,972,994         7,825,594         7,825,594         7,825,594      

Value of 2011-2013 performance units

   6,218,096(2)     6,218,096(2)     6,264,328(3)     6,264,328(3)  

Value of 2010-2012 performance units

   6,298,873(2)     6,298,873(2)     6,298,873(3)     6,298,873(3)  

Continuing health benefits for 18 months(4)

   0         11,492         0         0      

Retirement plan contributions for two years(5)

   0         904,500         0         0      
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   21,046,341         36,809,133         26,944,373         26,944,373      
   Triggering Event 
Estimated Potential Payment or Benefit  Change in
Control($)
  Change in
Control and
Termination($)
  Death or
Disability($)
 

Lump sum cash severance payment

   0    6,900,000    0  

Intrinsic value of accelerated unvested options

   1,766,888    4,691,548    4,691,548  

Intrinsic value of accelerated unvested RSUs

   513,360    6,755,247    6,755,247  

Value of 2013-2015 performance units

   12,334,444(1)   12,334,444(1)   12,193,555(2) 

Value of 2012-2014 performance units

   14,792,640(1)   14,792,640(1)   14,792,640(2) 

Continuing health care benefits for 18 months(3)

   0    37,969    0  

Continuing retirement plan contributions for two years(4)

   0    695,000    0  

    Total

   29,407,332    46,206,848    38,432,990  

Estimated Payments to Mr. BradwayAnthony C. Hooper

   Triggering Event 
Estimated Potential Payment or Benefit  Change in
Control($)
  Change in
Control and
Termination($)
  Termination
Without
Cause($)(5)
   Death or
Disability($)
 

Lump sum cash severance payment

   0    3,806,840    3,606,480     0  

Intrinsic value of accelerated unvested options

   0    0    0     0  

Intrinsic value of accelerated unvested RSUs

   0    4,618,301    0     4,618,301  

Value of 2013-2015 performance units

   4,933,618(1)   4,933,618(1)   0     4,877,262(2) 

Value of 2012-2014 performance units

   6,114,232(1)   6,114,232(1)   0     6,114,232(2) 

Value of 2011-2014 performance units

   6,020,800(1)   6,020,800(1)   0     6,020,800(2) 

Continuing health care benefits for 18 months(3)

   0    25,738    25,738     0  

Continuing retirement plan contributions for two years(4)

   0    385,684    0     0  

Acceleration of unvested balance of SRP

   0    379,627    0     379,627  

    Total

   17,068,650    26,284,840    3,632,218     22,010,222  

LOGOï 2014 Proxy Statement79

   Triggering Event 

Estimated Potential Payment or Benefit

  Change of
Control
($)
   Change of
Control and
Termination
($)
   Retirement($)   Death or
Disability
($)
 

Lump sum cash severance payment

   0         4,112,000(1)                 0         0      

Intrinsic value of accelerated unvested stock options

   1,592,565         2,292,285         0         2,292,285      

Intrinsic value of accelerated unvested RSUs

   1,444,725         2,793,135         0         2,793,135      

Value of 2011-2013 performance units

   2,176,334(2)     2,176,334(2)     0         2,192,515(3)  

Value of 2010-2012 performance units

   1,661,241(2)     1,661,241(2)     0         1,661,241(3)  

Continuing health benefits for 18 months(4)

   0         35,514         0         0      

Retirement plan contributions for two years(5)

   0         416,200         0         0      
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

   6,874,865         13,486,709         0         8,939,176      

Estimated Payments to Dr. Perlmutter(7)


Estimated Potential Payment or Benefit

 Retirement($) EXECUTIVE COMPENSATION TABLES  

Estimated Payments to Jonathan M. Peacock

   Triggering Event 
Estimated Potential Payment or Benefit  Change in
Control($)
  Change in
Control and
Termination($)
  Termination($)(6)   Death or
Disability($)
 

Lump sum cash severance payment

   0    3,438,620    7,200,000     0  

Intrinsic value of accelerated unvested options

   2,485,438    4,678,948    0     4,678,948  

Intrinsic value of accelerated unvested RSUs

   2,852,000    5,947,104    0     5,947,104  

Value of 2013-2015 performance units

   4,933,618(1)   4,933,618(1)   0     4,877,262(2) 

Value of 2012-2014 performance units

   6,114,232(1)   6,114,232(1)   0     6,114,232(2) 

Continuing health care benefits for 18 months(3)

   0    37,969    37,969     0  

Continuing retirement plan contributions for two years(4)

   0    348,862    0     0  

Career transition services

   0    0    20,000     0  

  Total

   16,385,288    25,499,353    7,257,969     21,617,546  

Estimated Payments to Sean E. Harper

   Triggering Event 
Estimated Potential Payment or Benefit  Change in
Control($)
  Change in
Control and
Termination($)
  Death or
Disability($)
 

Lump sum cash severance payment

   0    3,406,700    0  

Intrinsic value of accelerated unvested options

   445,200    1,280,817    1,280,817  

Intrinsic value of accelerated unvested RSUs

   2,983,192    5,329,247    5,329,247  

Value of 2013-2015 performance units

   4,933,618(1)   4,933,618(1)   4,877,262(2) 

Value of 2012-2014 performance units

   6,114,232(1)   6,114,232(1)   6,114,232(2) 

Continuing health care benefits for 18 months(3)

   0    37,969    0  

Continuing retirement plan contributions for two years(4)

   0    345,670    0  

    Total

   14,476,242    21,448,253    17,601,558  

80    LOGOï 2014 Proxy Statement


Intrinsic value of unvested stock options

1,930,950

Intrinsic value of unvested RSUs

2,170,298

Value of 2011-2013 performance units

1,644,354

Value of 2010-2012 performance units

1,661,241
 

Total

 7,406,843  EXECUTIVE COMPENSATION TABLES  

Estimated Payments to Mr. PeacockMadhavan Balachandran

 

   Triggering Event 

Estimated Potential Payment or Benefit

  Change of
Control
($)
   Change of
Control and
Termination
($)
   Termination
Without
Cause
($)(8)
   Retirement($)   Death or
Disability
($)
 

Lump sum cash severance payment

   0         2,101,676(6)     3,024,000                  0          0      

Intrinsic value of accelerated unvested stock options

   910,875         1,435,665         0     0          1,435,665      

Intrinsic value of accelerated unvested RSUs

   4,815,750         5,830,268         0     0          5,830,268      

Value of 2011-2013 performance units

   1,632,218(2)     1,632,218(2)     0     0          1,644,354(3)  

Value of 2010-2012 performance units

   0         0         0     0          0      

Continuing health benefits for 18 months(4)

   0         35,514         35,514     0          0      

Retirement plan contributions for two years(5)

   0         307,400         0     0          0      

Acceleration of unvested balance of SRP

   0         84,960         0     0          84,960      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   7,358,843         11,427,701         3,059,514     0          8,995,247      

Estimated Payments to Mr. Hooper

   Triggering Event 

Estimated Potential Payment or Benefit

  Change of
Control
($)
   Change of
Control and
Termination
($)
   Termination
Without
Cause
($)(8)
   Retirement($)   Death or
Disability
($)
 

Lump sum cash severance payment

               0         3,420,000(1)     3,420,000                  0          0      

Intrinsic value of accelerated unvested stock options

   0         0         0     0          0      

Intrinsic value of accelerated unvested RSUs

   0         2,904,732         0     0          484,079(9)  

Value of 2011-2014 performance units

   0(2)     0(2)     0     0          385,581(3)  

Value of 2011-2013 performance units

   0(2)     0(2)     0     0          385,581(3)  

Value of 2011-2012 performance units

   0(2)     0(2)     0     0          385,581(3)  

Continuing health benefits for 18 months(4)

   0         24,075         24,075     0          0      

Retirement plan contributions for two years(5)

   0         347,000         0     0          0      
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   0         6,695,807         3,444,075     0          1,640,822      
  Triggering Event 
Estimated Potential Payment or Benefit Change in
Control($)
  Change in
Control and
Termination($)
  Termination
Without
Cause($)
  Retirement($)  Death or
Disability($)
 

Lump sum cash severance payment

  0    2,926,000    0    0    0  

Intrinsic value of accelerated unvested options

  333,900    960,643    0    960,643    960,643  

Intrinsic value of accelerated unvested RSUs

  99,820    4,727,817    0    1,607,958(8)   4,727,817  

Value of 2013-2015 performance units

  4,933,618(1)   4,933,618(1)   0    4,877,262(2)   4,877,262(2) 

Value of 2012-2014 performance units

  1,775,085(1)   1,775,085(1)   0    1,775,085(2)   1,775,085(2) 

Continuing health care benefits for 18 months(3)

  0    37,969    0    0    0  

Continuing retirement plan contributions for two years(4)

  0    297,600    0    0    0  

Special retention award(7)

  0    340,000    340,000    0    340,000  

    Total

  7,142,423    15,998,732    340,000    9,220,948    12,680,807  

 

(1)

These amounts represent the cash severance payments pursuant to our Change of Control Severance Plan described above.

(2)

In the event of a change of control occurring after the first six months of the 2011-20132013-2015 performance period, the number of performance units that would have been earned is the sum of the number of performance units granted and related dividend equivalents accrued through December 31, 2013 multiplied by a payout percentage of 148.9%, which is the relative TSR percentage multiplier based on our TSR percentile rank relative to the TSRs of the companies in the Reference Group for the period from the January 28, 2013 grant date through December 30, 2013, the last business day before the change in control.

In the event of a change of control during the second year of the 2012-2014 performance period, the number of performance units that would have been earned is the sum of the number of performance units granted and related dividend equivalents accrued through December 31, 2013 multiplied by the maximum payout percentage of 150% because the payout percentage equal to 100% plus two times the TSR percentage difference for the period from January 1, 2012 through September 30, 2013 exceeded the maximum payout percentage for the award.

In the event of a change of control with respect to the performance unit award granted to Mr. Hooper for the performance period that began on the October 27, 2011 grant date, the number of performance units that would have been earned is the number of performance units granted multiplied by a payout percentage of 80.7%, which equals150% because the payout percentage equal to 100% plus two times the TSR percentage difference for the period from October 27, 2011 through September 30, 2013 exceeded the maximum payout percentage for the award.

  

difference. The TSR percentage difference, which is a negative amount, equals our TSR over the shortened performance period ended September 30, 2011 less the average of theOur TSRs of the peer group companies for the same period. Our TSR for purposes of determining the TSR percentage differencepayout percentages of these awards would be based on the higher ofof: (i) the average closing price of our Common Stock for a 60 day averaging period that ended on September 30, 20112013, or, with respect to the 2013-2015 performance period only, the last 20 trading days of the shortened performance period ended on December 30, 2013, and (ii) the value of consideration the acquirer paid for a share of our Common Stock in the change of control. For purposes of the payout values shown in the table,tables, the TSRTSRs for our Common Stock waswere based on the 60 dayrespective actual TSRs over the respective averaging period.periods. The resulting number of units that would have been earned was multiplied by $64.21,$114.08, the closing price of our Common Stock on December 31, 2011.2013.

In the event of a change of control during the second year of the 2010-2012 performance period, the number of performance units that would have been earned is the number of performance units granted multiplied by: (i) 107.8% which is the sum of the revenue and EPS performance percentages based on the actual results achieved with regard to the 2010 financial performance measures (see footnote 7 to the “Outstanding Equity Awards at Fiscal Year End” table) and (ii) a relative TSR multiplier of 100% for the shortened performance period ended on September 30, 2011. Our TSR for purposes of determining the relative TSR multiplier would be based on the higher of the average closing price of our Common Stock for a 20 day averaging period that ended immediately preceding September 30, 2011 or the value of consideration the acquirer paid for a share of our Common Stock in the change of control. For purposes of the payout values shown in the table, the TSR for our Common Stock was based on the 20 day averaging period. The resulting number of units that would have been earned was multiplied by $64.21, the closing price of our Common Stock on December 31, 2011.

In the event of a change of control with respect to Mr. Hooper’s performance unit awards on December 31, 2011, he would not receive a payout because the performance period with respect to his awards did not commence prior to September 30, 2011, the date at which the performance periods end for purposes of calculating a payout.

For information on the actual number of units to be earned for these performance unit grants, see “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONSLong-Term Incentive Equity Awards” in our Compensation Discussion and Analysis, and “Summary Compensation Table—Narrative Description to the Compensation Tables—Performance Units” above.

 

(3)

For information on the actual number of units to be earned for these performance unit grants, see “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONSLong-Term Incentive Equity Awards” in our Compensation Discussion and Analysis, and “Summary Compensation Table—Narrative Description to the Compensation Tables—Performance Units” above.

(2)

In the event death or disability occurs, the participant is entitled to the number of performance units that would have been earned by the NEO if he had remained employed for the entire performance period. The number of performance units estimated to bethat would have been earned and the resulting payouts are calculated in the same manner and using the same assumptions as the values shown for these awards in the “Outstanding Equity Awards At Fiscal Year End” table (see footnotes 5, 6, 7 and 910 to that table), except that for Mr. Hooper, the value and discussed above in the table above reflects a pro-rata reduction based on the complete months of service provided by Mr. Hooper in 2011 (roundedfootnote 1 to two decimal places) since death or disability is assumed to have occurred in the year these awards were granted.this table. In the event of actual death or disability, payout of shares in satisfaction of amounts earned for grants for the 2011-20132013-2015 and 2010-20122012-2014 performance periods and the grants of performance units granted to Mr. Hooper on October 27, 2011 would not occur until after the end of the performance periods. For more information, see “ELEMENTS OF COMPENSATION AND SPECIFIC COMPENSATION DECISIONSLong-Term Incentive Equity Awards” in our Compensation Discussion and Analysis, and “Summary Compensation Table—Narrative Description to the Compensation Tables—Performance Units” above.

As Mr. Sharer was retirement-eligible as of December 31, 2011, the retirement payout amounts for the performance units for the 2011-2013 and 2010-2012 performance periods were calculated in the same manner as the respective death and disability payout amounts.

 

(4)

As Mr. Balachandran was retirement-eligible as of December 31, 2013, the retirement payout amounts for the performance units for the 2013-2015 and 2012-2014 performance periods were calculated in the same manner as the respective death and disability payout amounts.

(3)

Reflects the estimated cost of medical and dental insurance coverage based on rates charged to our staff members for post-employment coverage provided in accordance with COBRA for the first 18 months following termination, adjusted for the last six months of this period by a 10% inflation factor for medical coverage and a 6% inflation factor for dental coverage.

LOGOï 2014 Proxy Statement81


(5)
 EXECUTIVE COMPENSATION TABLES  

(4)

Reflects the value of retirement plan contributions for two years calculated as two times the sum of: (i) $2,500 and (ii) the product of: (a) 10% and (b) the sum of the NEO’s annual base salary as of December 31, 20112013 and the NEO’s targeted annual bonuscash incentive award for 20112013 (which equals the NEO’s annual base salary as of December 31, 20112013 multiplied by the NEO’s target annual bonuscash incentive award percentage).

(6)(5)

Reflects the cash severance payment pursuant to our Change of Control Severance Plan described above. Mr. Peacock’s cash severance payment was reduced by $922,324 from the amount otherwise due to him to avoid excise tax he would be liable for if all benefits pursuant to the Change of Control Severance Plan were paid to Mr. Peacock. For purposes of determining whether this cash severance payment reduction should be made, we applied the highest applicable federal and state income tax rates to the benefits subject to income taxes that would be payable to Mr. Peacock pursuant to the Change of Control Severance Plan in the table above.

(7)

Dr. Perlmutter terminated his employment and retired from the Company on February 12, 2012. Since Dr. Perlmutter became retirement-eligible prior to this date, his unvested stock options, RSUs and performance units will continue to vest on their original schedules subsequent to his termination date. For presentation purposes in the table above, these awards are valued as if they were fully vested on December 31, 2011. The value for stock options is the aggregate spread between the closing price of our stock on December 31, 2011 ($64.21) and the exercise prices of the unvested stock options outstanding as of that date, if less than $64.21, and the value of RSUs is $64.21 multiplied by the number of RSUs outstanding on December 31, 2011. The values of performance units for the 2011-2013 and 2010-2012 performance periods were calculated in the same manner and using the same assumptions as the values shown for these awards in the “Outstanding Equity Awards At Fiscal Year End” table (see footnotes 5, 6 and 7 to that table). The payout of shares in satisfaction of amounts earned for grants for the 2011-2013 and 2010-2012 performance periods will not occur until after the end of the performance periods. For information on the actual number of performance units to be earned for these performance periods, see above under “Summary Compensation Table—Narrative Description to the Compensation Tables—Performance Units.”

In addition, Dr. Perlmutter will receive a distribution of his account in the Executive Nonqualified Retirement Plan, which had a balance of $12,759,768 as of February 12, 2012. His account under this plan will continue to accrue interest at a rate of 125% of the 10-year moving average of 10-year U.S. Treasury Notes adjusted and compounded annually until it is distributed to him in a lump sum in January 2013. He will also continue to accrue earnings and losses and receive distributions of his account in the SRP, which had a balance of $2,234,517 as of February 12, 2012, as provided under the terms of this plan. For information on the Executive Nonqualified Retirement Plan and the SRP, see “Nonqualified Deferred Compensation” above.

(8)

Reflects amounts that would be paid to Messrs. Peacock andMr. Hooper pursuant to their respectivehis offer lettersletter in the event Messrs. Peacock orMr. Hooper was terminated without “cause,” including two years of annual salary and annual target incentive bonus, as defined, and the cost of providing continuing medical and dental insurance coverage for 18 months in accordance with COBRA calculated in the same manner as described in footnote 43 above. The terms of Messrs. Peacock’s andMr. Hooper’s offer lettersletter relating to these benefits expire at the end of the third year of their employment.his employment in October 2014.

(6)

Reflects amounts payable to Mr. Peacock pursuant to his Agreement and General Release of Claims, entered into as of January 9, 2014, as follows: (i) lump sum payment that is approximately equal to 1.5 times base pay salary plus target annual cash incentive award opportunity, totaling $2,600,000, plus a $4,600,000 lump sum payment that is approximately equal to the pro-rata value of the last unvested tranche of Mr. Peacock’s new hire equity awards (stock options and RSUs) that vest in October 2014 based on the total period of time that he has been employed over the total vesting period of such tranche (48 months) calculated on the expected date of his termination of employment with the Company in May 2014, and using a stock price equal to $113 per share; (ii) reimbursement for COBRA medical coverage for up to 18 months, totaling $37,969 and (iii) senior executive career transition services for up to 12 months, totaling $20,000.

(7)

Reflects cash installment payments that are payable to Mr. Balachandran in 2014 and 2015 pursuant to a retention bonus arrangement entered into in March 2011 to promote his continued employment with us. The payments are accelerated in the event of involuntary termination not for “Cause,” death and disability.

(8)

Excludes the value of 27,348 RSUs (including related accrued dividend equivalents rounded down to the nearest whole number of units) granted to Mr. Balachandran on July 31, 2012 that he would forfeit were he to voluntarily retire.

 

82    LOGOï 2014 Proxy Statement


(9)

Reflects a pro-rata reduction of the RSUs granted to Mr. Hooper in connection with the commencement of his employment based on the number of complete calendar months of service provided by Mr. Hooper in 2011 since death or disability is assumed to have occurred in the year these awards were granted.

 DIRECTOR COMPENSATION  

DIRECTOR COMPENSATIONDirector Compensation

The compensation program for our non-employee directors is intended to be competitive and fair so that we can attract the best talent to our Board of Directors, or Board, and recognize the time and effort required of a director given the size and complexity of our operations. In addition to cash compensation, we provide equity grants and have stock ownership guidelines to align the directors’ interests with all of our stockholders’ interests and to motivate our directors to focus on our long-term growth and success. Directors who are our staff membersemployees are not paid any fees for serving on our Board or for attending Board meetings.

In December 2012, based on recommendations made by the Governance and Nominating Committee and Frederic W. Cook & Co., Inc. and to implement certain prevailing market practices in U.S. director compensation, the Board approved

the following changes to non-employee director compensation to be effective as of January 1, 2013:

Eliminate Board meeting fees and increase the Board retainer and committee meeting fees;

Increase retainers for certain committee chairs;

Implement a lead director retainer;

Eliminate the inaugural full grant of equity awards for new directors;

Eliminate stock options in the annual equity grant and replace with restricted stock units, or RSUs; and

Change the stock ownership guidelines from a fixed share amount to a multiple of the annual cash retainer.

2013 Director Compensation

Cash Compensation.Each non-employee director receives an annual cash retainer of $55,000.$100,000. In addition, chairs receive additional annual retainers, as follows: (i) Audit Committee, $20,000; (ii) Compensation and Management Development Committee, $10,000;$20,000; (iii) Corporate Responsibility and Compliance Committee, $6,000$20,000 and (iv) Governance and Nominating Committee, $6,000.$20,000. The lead independent director receives an additional $35,000 annual retainer. Directors are not additionally compensated for Board meeting attendance. Directors are compensated $3,000 for each Board meeting they attend ($1,500 for telephonic attendance) and $1,500$2,000 for each committee meeting they attend ($7501,000 for telephonic attendance). Directors are also compensated for attending meetings of committees of which they are not members or special meetings if they are invited to do soattend by the Chairman of the Board or the committee chair. Directors are entitled to reimbursement of their expenses, in accordance with our policy, incurred in connection with attendance at Board and committee meetings and conferences with our senior management. We also make tax gross-up payments to our directors to reimburse them for additional income taxes imposed when we are required to impute income on perquisites that we providedprovide.

Equity Incentives. Under the provisions of our revised Director Equity Incentive Program, each non-employee director

receives an automatic annual grant of restricted stock units, or RSUs on the third business day after the release of our first fiscal quarter earnings, with a grant date fair market value of $100,000,$200,000, based on the closing price of our Common Stock on the date of grant (rounded down to the nearest whole number). Each non-employeeThe RSUs vest immediately and earn dividend equivalents, including if the director also receives an automatic annual grant of stock options on the same day the RSUs are grantedchooses to purchase 5,000 shares of our Common Stock. The exercise pricedefer receipt of the stock options is 100% of the closing price of our Common Stock on the grant date, and the stock options expire seven years after the grant date for those issued from March 15, 2004 through April 29, 2009 and ten years after the grant date for those issued prior to March 15, 2004 and those issued on and after May 6, 2009.award.

The stock options and RSUs vest (i) on the date of grant if the non-employee director has had three years of prior continuous service as a non-employee director of the Company or (ii) on the first anniversary of the date of grant if the non-employee director has had less than three years of prior continuous service as a non-employee director of the Company. Upon the death or disability (as defined in the stock plans) of a non-employee director, the vesting of unvested stock options is accelerated by one year for each full year of service as a non-employee director and the vesting of RSUs is accelerated by one month for each full month of service as a non-employee director. In March 2012, our Board approved an amendment to the Director Equity Incentive Program to grant dividend equivalents on grants of RSUs to non-employee directors, to the extent such RSUs vest, commencing with the 2012 annual grant of RSUs.

Deferred Compensation and Other Benefits. Non-employee directors are eligible to participate in the Nonqualified Deferred Compensation Plan, or NDCP, that we maintain for our staff members (see “Nonqualified Deferred Compensation” in our Executive Compensation Tables above for more information). Earnings under this plan are market-based—market-based — there areis no “above market” or guaranteed rates of returns.

Through The Amgen Foundation, Inc., the Company maintains a charitable contributions matching gift program for all eligible staff members and non-employee directors a charitable contributions matching gift program.directors. Our directors participate in the program on the same terms as our staff members. The Amgen Foundation, Inc. matches, on a dollar-for-dollar basis, qualifying donations made by directors and staff members to eligible organizations, up to $20,000 per person, per year.

LOGOï 2014 Proxy Statement83


 DIRECTOR COMPENSATION  

Guests of our Board members are occasionally invited to Board events, and we may pay or reimburse travel expenses and may provide transportation on our aircraft for both the director and his or her guest.

Director Stock Ownership Guidelines.Under the Board’s stock ownership guidelines that were originally adopted in December 2002 and amended in October 2009, all All non-employee directors are expected to hold 8,000 sharesthe equivalent of five times the Board annual cash retainer (currently $500,000) in our Common Stock while serving as a non-employee director. Subsequent to joining the Board, Board members are prohibited from engaging in short sales with respect to the Company’s securities, purchasing or pledging the Company’s stock on margin (with the exception of the use of a margin account to purchase the Company’s Common Stock in connection with the exercise of Company granted stock

options) or entering into any derivative or similar transactions with respect to the Company’s securities.

All non-employee directors are expected to comply with the stock ownership guidelines on or before December 31st of the calendar year in which the fifth anniversary of their date of election by stockholders or the Board falls. For purposes of the Board stock ownership guidelines, issued and outstanding shares of our Common Stock held beneficially or of record by the non-employee director, issued and outstanding shares of our Common Stock held in a qualifying trust (as defined in the guidelines) and vested RSUs that are deferred will count towards satisfying the stock ownership guidelines.

Director Stock Ownership Guidelines Compliance Dates

All directors with compliance dates that were on or prior to December 31, 2013 met the stock ownership guidelines as applicable, as of December 31, 2011. Compliance dates for directors elected to the Board more than five years ago have passed.2013. Directors elected to the Board within the last five years have the following compliance dates:

 

Director

  Compliance Date

François de Carbonnel

  December 31, 2014

Vance D. CoffmanRobert A. Eckert

  December 31, 20132018

Greg C. Garland

  December 31, 2019

Rebecca M. Henderson

  December 31, 2015

Tyler Jacks

  December 31, 20152017

Ronald D. Sugar

  December 31, 2016

84    LOGOï 2014 Proxy Statement


  DIRECTOR COMPENSATION  

Director Compensation Table

The following table shows compensation of the non-employee members of our Board for 2011. Mr. Sharer,2013. Robert A. Bradway, our Chairman of the Board, and Chief Executive Officer and Mr. Bradway, our President and Chief Operating Officer, areis not included in thisthe table as they are employeeshe is an employee and thus receivereceives no compensation for theirhis service as directors.a director.

 

Director

  Fees Earned
or Paid in
Cash
($)(2)
   Stock
Awards
($)(4)(6)
   Option
Awards
($)(5)(6)
   All Other
Compensation
($)(7)
   Total($) 

David Baltimore

   89,500         99,973     69,448     28,793     287,714  

Frank J. Biondi, Jr.

   102,000         99,973     69,448     26,722     298,143  

François de Carbonnel

   89,500         97,981     69,448     11,113     268,042  

Jerry D. Choate(1)

   42,500         99,973     69,448     20,000     231,921  

Vance D. Coffman

   91,750         99,973     69,448     31,412     292,583  

Frederick W. Gluck(1)

   40,750         99,973     69,448     20,016     230,187  

Rebecca M. Henderson

   82,750         97,981     69,448     21,038     271,217  

Frank C. Herringer

   96,750(3)     99,973     69,448     26,528     292,699  

Gilbert S. Omenn

   91,000         99,973     69,448     23,715     284,136  

Judith C. Pelham

   88,000         99,973     69,448     21,204     278,625  

J. Paul Reason

   88,000         99,973     69,448     5,341     262,762  

Leonard D. Schaeffer

   89,500         99,973     69,448     21,672     280,593  

Ronald D. Sugar

   86,500         97,981     69,448     22,511     276,440  

Director  Fees Earned
or Paid in
Cash($)(3)
   Stock
Awards($)(4)(6)
   Option
Awards($)(5)(6)
   All Other
Compensation($)(7)
   Total($) 

David Baltimore

   124,000     199,961     0     20,242     344,203  

Frank J. Biondi, Jr.

   142,000     199,961     0     38,061     380,022  

François de Carbonnel

   124,000     199,961     0     13,863     337,824  

Vance D. Coffman

   177,000     199,961     0     31,822     408,783  

Robert A. Eckert(1)

   124,000     199,961     348,502     735     673,198  

Greg C. Garland(2)

   30,000     49,901     0     0     79,901  

Rebecca M. Henderson

   118,000     199,961     0     17,438     335,399  

Frank C. Herringer(1)

   144,000     199,961     0     37,538     381,499  

Tyler Jacks

   120,000     199,961     0     12,100     332,061  

Gilbert S. Omenn

   124,000     199,961     0     31,192     355,153  

Judith C. Pelham

   124,000     199,961     0     21,313     345,274  

J. Paul Reason(2)

   56,000     199,961     0     12,281     268,242  

Leonard D. Schaeffer(2)

   63,000     199,961     0     26,260     289,221  

Ronald D. Sugar

   123,000     199,961     0     22,368     345,329  
(1)

All cash fees were deferred by Messrs. ChoateEckert and Gluck retired fromHerringer under our NDCP.

(2)

Mr. Garland was appointed to our Board on October 16, 2013, and Admiral Reason and Mr. Schaeffer left our Board on May 20, 2011.22 and July 8, 2013, respectively. Accordingly, fees earned by Messrs. ChoateGarland and GluckSchaeffer and Admiral Reason in 20112013 consist of a pro-rata amount of the annual retainer fee (pro-rated on a quarterly basis) and fees for Board and committee meetings attended in 2011.2013.

(2)(3)

Reflects all fees paid to members of our Board for participation in regular, telephonic and special meetings of the Board and its committees, retainer fees and fees paid for services provided to our management by certain members of the Board in connection with special meetings, as applicable.

(3)(4)

All of these fees were deferred by Mr. Herringer under our NDCP.

(4)

Reflects the grant date fair valuevalues of 1,828RSUs granted during 2013 determined in accordance with ASC 718 consisting of 1,845 RSUs granted on April 25, 201126, 2013 to each director named above, determined in accordanceexcept for Mr. Garland who was not yet a member of our Board. Mr. Garland was granted 429 RSUs on October 25, 2013 based on a pro-rated value consistent with ASC 718. Thethe length of service on the Board during 2013. Because these RSUs accrue dividend equivalents during the vesting period, as applicable, the grant date fair valuevalues of all these awards except with respect to Mr. de Carbonnel and Drs. Henderson and Sugar, isare based on the closing priceprices of our Common Stock on the grant datedates of $54.69,$108.38 and $116.32 on April 26 and October 25, 2013, respectively, multiplied by the number of RSUs granted. The grant date fair value per unit of $53.60 for RSUs granted to Mr. de Carbonnel and Drs. Henderson and Sugar is based on the closing price of our Common Stock on the grant date reduced by an expected dividend yield of 2% over the one year vesting period for these awards which was discounted at a risk-free rate of 0.2%.

(5)

Reflects the grant date fair value of stock options granted during 20112013 determined in accordance with ASC 718. On April 25, 2011, each director named above was grantedIn connection with his appointment to our Board on December 13, 2012, Mr. Eckert received an inaugural stock optionsoption grant to purchase 5,00020,000 shares of our Common Stock on January 28, 2013, with a grant date fair value of approximately $13.89$17.43 per stock option. The grant date fair value of theseper stock option grants were calculatedwas determined using a stock option valuation model with the following assumptions: risk-free interest rate

Grant Date  Risk-Free Interest
Rate(%)
   Expected Life   Expected
Volatility(%)
   Dividend Yield(%)   Exercise Price($) 

January 28, 2013

   1.7     8.1 years     23.1     2.2     85.59  

LOGOï 2014 Proxy Statement85


 DIRECTOR COMPENSATION  

(6)

All of 3.2%; expected lifethe RSUs granted to directors in 2013 were fully vested upon grant. The stock options granted to Mr. Eckert vested on January 28, 2014, the first anniversary of 8.1 years; expected volatility of 23%; expected dividend yield of 2% and exercise price of $54.69.the grant date.

 

(6)

AllThe table below shows the aggregate numbers of stock awards and stock option awards outstanding for each non-employee director as of December 31, 2013. Stock awards consist of vested RSUs for which receipt of the underlying shares of our Common Stock has been deferred (vested/deferred RSUs) and dividends paid on vested/deferred RSUs reinvested to acquire additional vested/deferred RSUs (rounded down to the nearest whole number of units). Upon vesting and stock options granted to directors in 2011 were fully vested upon grant, exceptthe passage of any applicable deferral period, the RSUs are paid in shares of our Common Stock on a one-for-one basis. Directors may elect to defer payment until a later date, which would result in a deferral of taxable income to the director. Option awards consist of exercisable and unexercisable stock options granted to Mr. de Carbonnel and Drs. Henderson and Sugar which are scheduled to vest on April 25, 2012, subject to continued service on the Board through that date.options.

The table below shows the aggregate numbers of stock awards and stock option awards outstanding for each non-employee director as of December 31, 2011. Stock awards consist of unvested RSUs, vested RSUs for which receipt of the underlying shares of our Common Stock has been deferred (vested/deferred RSUs) and dividends paid on vested/deferred RSUs reinvested to acquire additional vested/deferred RSUs (rounded down to the nearest whole number of units). Upon vesting and the passage of any applicable deferral period, the RSUs are paid in shares of our Common Stock on a one-for-one basis. Directors may elect to defer payment until a later date, which would result in a deferral of taxable income to the director. Option awards consist of exercisable and unexercisable stock options.

Director  Aggregate Stock Awards
Outstanding as of December 31, 2013(#)
   Aggregate Option Awards
Outstanding as of December 31, 2013(#)
 
   

Restricted Stock Units and

Dividend Equivalents

   Stock Options 

David Baltimore

   0    30,000 

Frank J. Biondi, Jr.

   13,256    15,000 

François de Carbonnel

   2,077    20,000 

Vance D. Coffman

   8,226    45,000 

Robert A. Eckert

   1,869    20,000 

Greg C. Garland

   0    0 

Rebecca M. Henderson

   5,549    28,000 

Frank C. Herringer

   14,655    30,000 

Tyler Jacks

   0    20,000 

Gilbert S. Omenn

   4,563    25,000 

Judith C. Pelham

   0    0 

J. Paul Reason

   6,357    0 

Leonard D. Schaeffer

   3,120    0 

Ronald D. Sugar

   5,195    30,000 

 

Director

  Aggregate Stock Awards
Outstanding as of December 31,  2011
(#)
   Aggregate Option Awards
Outstanding as of December 31,  2011
(#)
 
   

 

Restricted Stock Units and

Dividend Equivalent Units

  

  

   Stock Options  

David Baltimore

   0                 51,000      

Frank J. Biondi. Jr.

   9,585                 67,000      

François de Carbonnel

   3,829                 35,000      

Jerry D. Choate

   0                 67,000      

Vance D. Coffman

   6,125                 40,000      

Frederick W. Gluck

   0                 67,000      

Rebecca M. Henderson

   3,555                 30,000      

Frank C. Herringer

   10,933                 35,000      

Gilbert S. Omenn

   4,398                 51,000      

Judith C. Pelham

   0                 51,000      

J. Paul Reason

   6,125                 35,000      

Leonard D. Schaeffer

   3,007                 35,000      

Ronald D. Sugar

   1,828                 25,000      

86    LOGOï 2014 Proxy Statement


 DIRECTOR COMPENSATION  

(7)

The table below provides a summary of amounts paid by the Company for perquisites and other special benefits.benefits.

 

      Personal Use of
Company Aircraft
(b)
  Expenses in Connection
with Guests Accompanying
Directors on Business
Travel
(c)
  Other(d)       

Director

 Matching of
Charitable
Contributions
($)
(a)
  Aggregate
Incremental
Amounts
($)
  Tax Gross-
Up
($)
  Aggregate
Incremental
Amounts
 ($)
  Tax Gross-
Up
($)
  Tax Gross-
Up($)
  Dividends
Paid on
Vested/
Deferred
RSUs
($)(e)
  Total($) 

David Baltimore

  20,000    8,412    381    0    0    0    0    28,793  

Frank J. Biondi, Jr.

  20,000    745    1,674    0    0    0    4,303    26,722  

François de Carbonnel

  10,000    0    0    0    0    0    1,113    11,113  

Jerry D. Choate

  20,000    0    0    0    0    0    0    20,000  

Vance D. Coffman

  20,000    6,965    1,041    0    0    0    3,406    31,412  

Frederick W. Gluck

  20,000    0    0    0    0    16    0    20,016  

Rebecca M. Henderson

  20,000    72    5    0    0    0    961    21,038  

Frank C. Herringer

  20,000    0    1,476    0    0    0    5,052    26,528  

Gilbert S. Omenn

  20,000    0    179    771    320    0    2,445    23,715  

Judith C. Pelham

  20,000    0    1,204    0    0    0    0    21,204  

J. Paul Reason

  0    788    1,147    0    0    0    3,406    5,341  

Leonard D. Schaeffer

  20,000    0    0    0    0    0    1,672    21,672  

Ronald D. Sugar

  20,000    1,636    875    0    0    0    0    22,511  

  Matching of
Charitable
Contributions
($)(a)
  Personal Use of
Company Aircraft(b)
  Personal Expenses While
on Business Travel and
Expenses in Connection
with Guests
Accompanying
Directors on Business
Travel(c)
  Other(d)  Dividends
Accrued  on
Vested/
Deferred
RSUs($)(e)
  Total($) 
Director  Aggregate
Incremental
Amounts($)
  Tax
Gross-
Up($)
  Aggregate
Incremental
Amounts ($)
  Tax
Gross-
Up($)
  Aggregate
Incremental
Amounts ($)
  Tax
Gross-
Up($)
   

David Baltimore

  20,000    73    169    0    0    0    0    0    20,242  

Frank J. Biondi, Jr.

  20,000    0    3,125    0    0    0    0    14,936    38,061  

François de Carbonnel

  10,000    0    0    0    0    0    0    3,863    13,863  

Vance D. Coffman

  20,000    0    0    0    0    0    0    11,822    31,822  

Robert A. Eckert

  0    0    0    503    232    0    0    0    735  

Greg C. Garland

  0    0    0    0    0    0    0    0    0  

Rebecca M. Henderson

  13,500    0    0    0    604    0    0    3,334    17,438  

Frank C. Herringer

  20,000    0    0    0    0    0    0    17,538    37,538  

Tyler Jacks

  12,100    0    0    0    0    0    0    0    12,100  

Gilbert S. Omenn

  20,000    354    1,470    623    258    0    0    8,487    31,192  

Judith C. Pelham

  20,000    0    1,313    0    0    0    0    0    21,313  

J. Paul Reason

  0    0    0    0    0    314    145    11,822    12,281  

Leonard D. Schaeffer

  20,000    0    0    0    0    312    144    5,804    26,260  

Ronald D. Sugar

  20,000    154    1,758    312    144    0    0    0    22,368  
 (a)

These are charitable contributions of The Amgen Foundation, Inc. that matched the directors’ charitable contributions made in 2011.2013.

 (b)

Where we have invited guests to accompany directors on our aircraft or where the director, for non-business purposes, accompanies executives using our aircraft for business purposes, we typically incur no incremental cost for transporting the guest, but we are required to impute income to the director for his or her income tax purposes. We reimburse the director for the additional income taxes imposed on the director in these circumstances. The aggregate incremental cost of use of our aircraft is calculated based on our variable operating costs, which include the cost of crew travel expenses, on-board catering, landing fees, trip-related hangar/parking costs, fuel, trip specific maintenance and other smaller variable costs. In determining the incremental cost relating to fuel and trip-related maintenance, we applied our actual average costs. We believe that the use of this methodology is a reasonably accurate method for calculating fuel and trip-related maintenance costs. Because our aircraft are used primarily for business travel, we do not include the fixed costs that do not change based on usage, such as pilots’ salaries, our aircraft purchase costs and the cost of maintenance not related to trips.

 (c)

These amounts reflect the incremental costs of personal expenses incurred while on business travel and related imputed income to the director for his or her income tax purposes. We reimburse the director for the additional income taxes imposed on the director in these circumstances. Where we have invited guests accompanying directors for business purposes, we may incur incremental costs for the guest and may be required to impute income to the director for his or her income tax purposes. We reimburse the director for the additional income taxes imposed on the director in these circumstances.

 (d)

Mr. Gluck incurred personalAmounts reflect the cost of other expenses while on business travel in 2010 for which we were required to imputeand related imputed income to himthe director for his or her income tax purposes. The amount reflectsWe reimburse the tax gross-up payment we reimbursed Mr. Gluck in 2011director for the additional income taxes imposed on himthe director in connection with these expenses.circumstances.

 (e)

Amounts reflect dividends paidaccrued on vested/deferred RSUs granted prior to 2011 as the impact of dividends was not considered in determining the grant date fair values of these awards for purposes of reporting compensation in the “Stock Awards” column in the “Director Compensation Table” in the Company’s proxy statements in prior years.

LOGOï 2014 Proxy Statement87


 AUDIT MATTERS  

AUDIT MATTERSAudit Matters

Audit Committee Report

The Audit Committee has reviewed and discussed with management the Company’s audited consolidated financial statements as of and for the year ended December 31, 2011.2013.

The Audit Committee has also discussed with Ernst & Young LLP, or Ernst & Young, the matters required to be discussed by Statement of Auditing Standards No. 61, Communication with Audit Committees, as amended, and as adopted by the Public Company Accounting Oversight Board (PCAOB) in Rule 3200T.Auditing Standard No. 16,Communications with Audit Committees.

The Audit Committee has received and reviewed the written disclosures and the letter from Ernst & Young required by

the applicable requirements of the PCAOB regarding Ernst & Young’s communication with the Audit Committee concerning independence and has discussed with Ernst & Young their independence.

Based on the reviews and discussions referred to above, the Audit Committee has recommended to the Board of Directors that the audited consolidated financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20112013 for filing with the Securities and Exchange Commission, or SEC.

Audit Committee of the Board of Directors

Frank J. Biondi, Jr., Chairman

David Baltimore

François de Carbonnel

Robert A. Eckert

Greg C. Garland

Gilbert S. Omenn

Judith C. Pelham

88    LOGOï 2014 Proxy Statement


 AUDIT MATTERS  

Independent Registered Public Accountants

The following table presents fees for professional services provided or to be provided by Ernst & Young for audits of the years ended December 31, 20112013 and December 31, 2010,2012, and fees for other services rendered by Ernst & Young during these periods.

 

  2011   2010   2013   2012 

Audit

  $5,931,000    $5,285,000    $6,425,000    $5,926,000  

Audit-Related

   529,000     368,000     371,000     342,000  

Tax

   133,000     52,000     367,000     205,000  

All Other Fees

   0     38,000     0     0  
  

 

   

 

 

Total Fees

  $6,593,000    $5,743,000    $7,163,000    $6,473,000  
  

 

   

 

 

Included in Audit fees above are professional services associated with the integrated audit of our consolidated financial statements and our internal control over financial reporting and the statutory audits of various subsidiaries of the Company. Audit-Related fees are primarily attributable to audits of our affiliated companies and our retirement plans and amounts for certain agreed upon procedures with respect to partner billings for a co-promotion arrangement and third party royalties owed to us.plans. Tax fees are primarily attributable to various U.S. and Internationalinternational tax compliance and planning services. All Other Fees for 2010 relate to Ernst & Young’s assistance with our Enterprise Risk Management assessment and planning. Commencing in 2011, the Company excludes value added taxes, or VAT, from the fees for professional services provided by Ernst & Young reflected in the table above as these amounts are ultimately recovered by the Company from the taxing authorities. To conform to the current year presentation, the Audit and Total Fees line items included in the table above for 2010 have been reduced by $210,000 from the amount previously reported, as a result of the exclusion of VAT. Ernst & Young did not perform any professional services with respect to information systems design and implementation for the years ended December 31, 2011 and 2010. The Audit Committee has considered whether the Audit-Related and Tax services provided by Ernst & Young are compatible with maintaining that firm’s independence.

From and after the effective date of the SEC rule requiring Audit Committee pre-approval of all audit and permissible non-audit services provided by independent registered public accountants, the Audit Committee has approved all audit and permissible non-audit services prior to such services being provided by Ernst & Young. The Audit Committee, or one or more of its designated members that have been granted authority by the Audit Committee, meets to approve each audit or non-audit service prior to the engagement of Ernst & Young for such service. Each such service approved by one or more of the authorized and designated members of the Audit Committee is presented to the entire Audit Committee at a subsequent meeting.

LOGOï 2014 Proxy Statement89


 ANNUAL REPORT AND FORM 10-K   

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSAnnual Report and Form 10-K

The Company’s Annual Report for fiscal 2013, which contains the consolidated financial statements of the Company for fiscal 2013, accompanies this proxy statement but is not a part of the Company’s soliciting materials.

Stockholders may obtain, without charge, a copy of the Company’s Annual Report on Form 10-K for fiscal 2013, filed with the Securities and Exchange Commission, including the financial statements and schedules thereto, without the accompanying exhibits, by writing

to: Investor Relations, Amgen Inc., One Amgen Center Drive, Thousand Oaks, CA 91320-1799, Mail Stop 28-1-C, or contact Investor Relations by telephone at (805) 447-1060 or email at investor.relations@amgen.com. The Company’s Annual Report on Form 10-K is also available online at the Company’s website atwww.amgen.com. A list of exhibits is included in the Form 10-K and exhibits are available from the Company upon the payment to the Company of the cost of furnishing them.

  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS   

Certain Relationships and Related Transactions

Under our written Approval of Related Party Transactions policy, a related party transaction (as defined below) may be consummated or may continue only if the Audit Committee approves or ratifies the transaction in accordance with the guidelines set forth in the policy. The policy applies to: (1) any person who is, or at any time since the beginning of our last fiscal year was, a member of our Board of Directors, or Board, one of our executive officers or a nominee to become a member of our Board; (2) any person who is known to be the beneficial owner of more than five percent5% of any class of our voting securities; (3) any immediate family member, as defined in the policy, of, or sharing a household with, any of the foregoing persons and (4) any firm, corporation or other entity in which any of the foregoing persons is employed, or is a partner or principal or in a similar position or in which such person has a more than five percent5% or greater beneficial ownership interest. “Related

All potential related party transaction” is defined intransactions are presented to the policy as a transaction, arrangement or relationship, or series of similar transactions, arrangements or relationships (including but not limited to any indebtedness or guarantee of indebtedness), between usAudit Committee for its consideration and, any ofif the foregoing persons, other than: (1) any matters related to compensation or benefits; (2) transactions involving less than $120,000 when aggregated with all similar transactions or (3) transactions approved by another independent committee of our Board.

Audit Committee deems it appropriate, approval. The Audit Committee considers all relevant facts and circumstances available to it, including the recommendation of management. No member of the Audit Committee participates in any review, consideration or approval of any related party transaction involving such member or any of his or her immediate family members, except that such member is required to provide all material information concerning the related party transaction to the Audit Committee.

Related party transactions may be preliminarily entered into by management subject to ratification by the Audit Committee; provided that if ratification shall not be forthcoming, management shall make all reasonable efforts to cancel or annul such transaction. At each scheduled meeting of the Audit Committee, management shall update the Audit Committee as to any material changes to any approved or ratified related party transaction. A “Related Party Transaction” is defined in the policy as a transaction, arrangement or relationship, or series of similar transactions, arrangements or relationships (including but not limited to any indebtedness or guarantee of indebtedness), between us and any of the persons listed in the first paragraph of this section. A related party transaction also includes any material amendment or modification to an existing related party transaction.

The Audit Committee has excluded each of the following related party transactions under the terms of our Approval of Related Party Transactions policy:

 

1.

any matters related to compensation or benefits;benefits to the extent such compensation or benefits would not be required to be disclosed under Item 404 of Regulation S-K under the Securities Act of 1933;

 

2.

transactions involving less than $120,000 (or such different amount as may require disclosure or approval under any future amendment to the rules and regulations of the Securities and Exchange Commission, including

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Item 404 of Regulation S-K, or the listing requirements of The NASDAQ Stock Market LLC, including Rule 5630) when aggregated with all similar transactions; or

 

3.

transactions approved by another independent committee of the Board.

In deciding whether to approve or ratify a related party transaction, the Audit Committee will consider the following factors:

 

whether the terms of the transaction are (i) fair to the Company and (ii) at least as favorable to the Company as would apply if the transaction did not involve a related party;

 

whether there are demonstrable business reasons for the Company to enter into the transaction;

 

whether the transaction would impair the independence of an outside director; and

whether the transaction would present an improper conflict of interest for any director or executive officer, taking into account the size of the transaction, the overall financial position of the related party, the direct or indirect nature of the related party’s interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the Audit Committee deems relevant.

Transactions with Related Persons

Keith Jones, who is the brother-in-law of Brian M. McNamee, our Senior Vice President, Human Resources and an executive officer of the Company, is employed by the Company as a Senior Biopharmaceutical Representative, Oncology.Manager District Sales. Mr. Jones’ compensation earned in 20112013 consisted of $77,677$118,839 in base salary, $46,464$36,288 in annual cash incentivesincentive awards and

bonuses and a grant of 120113 restricted stock units.units and 113 performance units, each valued at $12,247, respectively, on the date of grant. This transaction did not require the review or approval of the Audit Committee pursuant to the Company’s Approval of Related Party Transactions policy.

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 OTHER MATTERS  

ANNUAL REPORT AND FORM 10-K

The Annual Report to Stockholders, containing the Company’s Annual Report on Form 10-K for fiscal 2011, which contains the consolidated financial statements of the Company for fiscal 2011, accompanies this proxy statement but is not a part of the Company’s soliciting materials.

Stockholders may obtain, without charge, a copy of the Company’s Annual Report on Form 10-K for Fiscal 2011, filed with the Securities and Exchange Commission, including the financial statements and schedules thereto, without the accompanying exhibits, by writing to: Investor Relations, Amgen Inc., One Amgen Center Drive, Thousand Oaks, CA 91320-1799, Mail Stop 28-1-C, or contact Investor Relations by telephone at (805) 447-1060 or email at investor.relations@amgen.com. The Company’s Form 10-K is also available online at the Company’s website atwww.amgen.com. A list of exhibits is included in the Form 10-K and exhibits are available from the Company upon the payment to the Company of the cost of furnishing them.

OTHER MATTERSOther Matters

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, or Exchange Act, requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities (collectively, Reporting Persons), to file reports of ownership and changes in ownership with the Securities and Exchange Commission, or SEC, and with The NASDAQ Stock Market LLC.SEC. Copies of the Section 16 reports are also required to be supplied to the Company and such reports are available on our website atwww.amgen.com.www.amgen.com.

Based solely on our review of the reports filed by Reporting Persons and written representations from certain Reporting Persons that no other reports were required for those persons, during the year ended December 31, 2011,2013, the Reporting Persons met all applicable Section 16(a) filing requirements, other than (i) Frank J. Biondi, Jr., our director, filed a late form reporting two exempt transactions and (ii) Thomas J.W. Dittrich, our Vice President, Finance and Chief Accounting Officer, amended his Form 3 to reflect additional holdings.requirements.

Stockholder Proposals

Proposals Pursuant to Rule 14a-8. Pursuant to Rule 14a-8 under the Exchange Act, stockholders may present proper proposals for inclusion in our proxy statement and for consideration at our 20132015 annual meeting of stockholders. To be eligible for inclusion in our 20132015 proxy statement, your proposal must be received by us no later than December 13, 2012,4, 2014, and must otherwise comply with Rule 14a-8. While the Board of Directors, or Board, will consider stockholder proposals, we reserve the right to omit from our proxy statement stockholder proposals that we are not required to include under the Exchange Act, including Rule 14a-8.

Business Proposals and Nominations Pursuant to our Bylaws. Under ourthe Amended and Restated Bylaws of Amgen Inc., or Bylaws, to nominate a director or bring any other business before the stockholders at the 20132015 annual meeting of stockholders that will not be included in our proxy statement pursuant to Rule 14a-8, you must comply with the procedures set forth in our Bylaws, including those summarized below. In addition, assuming the date of the 20132015 annual meeting of stockholders is not more than 30thirty days before and not more than 70seventy days after the anniversary date of the 20122014 Annual Meeting of Stockholders, or Annual Meeting, you must notify us in writing and such notice must be delivered to our Secretary no earlier than January 23, 201215, 2015 and no later than February 22, 2012.14, 2015. Moreover, as further described below, certain information required to be included in such notice must be updated as of the record date of the meeting at which the nomination or other proposal is to be presented

not later than 10ten days after such record date. In addition, our Bylaws provide that if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders to present a nomination or other business proposal, the nomination will be disregarded and the proposed business will not be transacted, notwithstanding that proxies in respect of the vote on the nomination or other business proposal may have been received by the Company.

Our Bylaws provide that a stockholder’s advance notice of a nomination must contain the following as to each person whowhom the stockholder proposes to nominate for election as a director: (1) the information relating to the nominee that is required by paragraphs (a), (e) and (f) of Item 402 of Regulation S-K adopted by the SEC (or the corresponding provisions of any rule or regulation subsequently adopted by the SEC applicable to the Company); (2) such nominee’s written consent to being named in the proxy statement as a nominee and serving as a director if elected; (3) whether such nominee, the stockholder or the beneficial owner, if any, on whose behalf the nomination is being made has received any financial assistance, funding or other consideration from any other person (Stockholder Associated Person) in respect of the nomination and the details thereof and (4) whether any nominee is eligible for consideration as an independent director under the relevant standards contemplated by Item 407(a) of Regulation S-K adopted by the SEC (or any corresponding provisions subsequently adopted by the SEC and applicable to the Company). Our

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Bylaws provide that a stockholder’s advance notice of a proposed business item (other than a nomination) must include: (1) a brief description of the business desired to be brought before the meeting; (2) the text of the proposal or business (including the text of

any resolutions proposed for consideration and, in the event that such business includes a proposal to amend our Bylaws, the language of the proposed amendments); (3) the reasons why the stockholder favors the proposal and (4) whether the stockholder or the beneficial owner, if any, on whose behalf the proposal is being made has received any financial assistance, funding or other consideration from any other person (also a Stockholder Associated Person) in respect of the proposal (and the details thereof) and any material interest in such business of the stockholder, such beneficial owner or any Stockholder Associated Person.

In addition, our Bylaws provide that a stockholder giving advance notice of a nomination or a proposed business item must include the following information, as to such stockholder and the beneficial owner, if any, on whose behalf the nomination or proposal is made, in the notice: (1) the name and address of the stockholder, as they appear on the Company’s books, and of such beneficial owner, if any; (2) a representation setting forth the class or series and number of shares of our capital stock which are owned beneficially and of record by the stockholder, and any such beneficial owner, nominee or Stockholder Associated Person; (3) a description of any agreement, arrangement or understanding with respect to the nomination or proposal between or among such stockholder and any such beneficial owner, nominee and Stockholder Associated Person, any of their respective affiliates or associates, and any others acting in concert with any of the foregoing; (4) a representation whether and the extent to which any hedging, derivative or other transaction or agreement is in place or has been entered into with respect to the Company or its securities (whether or not such transaction shall be subject to settlement in underlying shares of capital stock of the Company), bank debt or credit ratings, within the past six months by, or for the benefit of, such stockholder and any such beneficial owner, nominee or Stockholder Associated Person, the effect or intent of which

is to give rise to gain or loss as a result of changes in the trading price of the Company’s securities or bank debt or changes in the credit ratings for the Company, its securities or bank debt (or, more generally, changes in the perceived creditworthiness of the Company) or to increase or decrease the voting power of such stockholder and any such beneficial owner, nominee or Stockholder Associated Person, and if so, a summary of the material terms thereof; (5) a representation that the stockholder is a holder of record of our stock entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination or other business item; (6) a representation whether the stockholder or beneficial owner, if any, intends or is part of a group which intends (a) to deliver a proxy statement and/or form of proxy to stockholders of at least the percentage of our outstanding capital stock required to approve or adopt the proposal or elect the nominee, and/or (b) otherwise to solicit proxies from stockholders in support of such nomination or proposed business item and (7) any other information relating to such stockholder and beneficial owner, if any, that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder. Moreover, the information described in subsections (2), (3) and (4) of this paragraph that is required to be included in the notice must be updated by the stockholder and beneficial owner, if any, presenting the nomination or other business proposal not later than 10 days after the record date of the meeting at which the nomination or other business proposal is to be presented to disclose such information as of such record date.

You may write to our Secretary at our principal executive offices at One Amgen Center Drive, Thousand Oaks, California 91320-1799, Mail Stop 38-5-A, to deliver the notices discussed above and for a copy of the relevant Bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates pursuant to our Bylaws.

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 OTHER MATTERS  

Householding of Proxy Materials

The SEC has adopted rules that permit companies and intermediaries (such as banksbrokers and brokers)banks) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process, which is commonly referred to as “householding,” is also permissible under the General Corporation Law of the State of Delaware and potentially means extra convenience for stockholders and cost savings for companies.

This year, a number of banks and brokers with account holders who are our stockholders will be householding our proxy materials. A single Notice of Annual Meeting of

Stockholders or proxy statement will be

delivered to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your bankbroker or brokerbank that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement and annual report, please notify your broker or bank. Direct your written request to Investor Relations, Amgen Inc., One Amgen Center Drive, Thousand Oaks, CA 91320-1799, Mail Stop 28-1-C, or contact Investor Relations by telephone at (805) 447-1060 or email at investor.relations@amgen.com. Stockholders who currently receive multiple copies of the proxy statement at their address and would like to request householding of their communications should contact their broker or bank.

No Incorporation by Reference

To the extent that this proxy statement is incorporated by reference into any other filing by us under the Securities Act of 1933 or the Exchange Act, the sections of this proxy statement entitled “Audit Committee Report” or “Compensation Committee Report” to the extent permitted by the rules of the SEC will not be deemed incorporated, unless specifically provided otherwise in such filing.

In addition, references to our website are not intended to function as a hyperlink and the information contained on our website is not intended to be part of this proxy statement. Information on our website, other than our proxy statement, Notice of Annual Meeting of Stockholders and form of proxy, is not part of the proxy soliciting material and is not incorporated herein by reference.

Disclaimer

This proxy statement contains statements regarding future individual and Company performance targets and Company performance goals. These targets and Company performance goals are disclosed in the limited context of our compensation

programs and should not be understood to be statements of management’s expectations or estimates of results or other guidance. We specifically caution investors not to apply these statements to other contexts.

Forward-Looking Statements

This proxy statement contains “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995). Theseforward-looking statements that are based on ourmanagement’s current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those set forth in the statements.described. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. The forward-looking statements, may include statements regarding actions to be taken by us. We undertake no obligation to publicly update any forward-looking statement, whether as a resultincluding estimates of new information, future eventsrevenues, operating margins, other financial metrics, expected regulatory or otherwise.clinical results or practices and other such estimates and results. Forward-looking statements involve significant risks and uncertainties, including those mentioneddiscussed below and more fully described in the risk factors in Item 1A of our Annual ReportSEC reports

filed by Amgen, including Amgen’s annual report on Form 10-K for the year ended December 31, 20112013 and in our most recentany subsequent periodic reports on Form 10-Q and Form 8-K. Please refer to the Form 10-K and any subsequent Forms 10-Q and 8-K filed withfor additional information on the SEC,uncertainties and risk factors related to our business. Unless otherwise noted, Amgen is providing this information as of March 17, 2014 and expressly disclaims any duty to update information contained in this proxy statement. No forward-looking statement can be guaranteed and actual results may vary materially.differ materially from those we project. Our results may be affected by our ability to successfully market both new and existing

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products domestically and internationally, clinical and regulatory developments (domestic or foreign) involving current and future products, sales growth of recently launched products, competition from other products (domestic or foreign) and difficulties or delays in manufacturing our products. Discovery or identification of new product candidates cannot be guaranteed and movement from concept to product is uncertain; consequently, there can be no guarantee that any particular product candidate will be successful and become a commercial product. Further, preclinical results do not guarantee safe and effective performance of product candidates in humans. The length of time that it takes for us to complete clinical trials and obtain regulatory approval for product marketing has in the past varied and we expect similar variability in the future. We develop product candidates internally and through licensing collaborations, partnerships, joint ventures and acquisitions. Product candidates that are derived from relationships or acquisitions may be subject to disputes between the parties or may prove to be not as effective or as safe as we may have believed at the time of entering into such relationship. In addition, sales of our products are affected by reimbursement policies imposed by third-party payers, including governments, private insurance plans and managed care providers and may be affected by regulatory, clinical and guideline developments and domestic and international trends toward managed care and healthcare cost containment as well as U.S. legislation affecting pharmaceutical pricing and reimbursement. Government and others’ regulations and reimbursement policies may affect the development, usage

and pricing of our products. Furthermore, our research, testing, pricing, marketing and other operations are subject to extensive regulation by domestic and foreign government regulatory authorities. We or others could identify safety, side effects or manufacturing problems with our products after they are on the market. Our business may be impacted by government investigations, litigation and products liability claims. If we fail to meet the compliance obligations in the corporate integrity agreement between us and the U.S. government, we could become subject to significant sanctions. Further, while we routinely obtain patents for our products and technology, the protection offered by our patents and patent applications may be challenged, invalidated or circumvented by our competitors. We depend on third parties for a significant portion of our manufacturing capacity for the supply of certain of our current and future products and limits on supply may constrain sales of certain of our current products and product candidate development. In addition, we compete with other companies with respect to some of our marketed products as well as for the discovery and development of new products. Our products may compete against products that have lower prices, established reimbursement, superior performance, are easier to administer, or that are otherwise competitive with our products. Further, some raw materials, medical devices and component parts for our products are supplied by sole third-party suppliers. Our efforts to integrate the operations of companies we have acquired may not be successful. Our business performance could affect or limit the ability of our Board to declare a dividend or our ability to pay a dividend or repurchase our Common Stock.

Other Matters

The Board knows of no matters other than those listed in the attached Notice of Annual Meeting of Stockholders that are likely to be brought before the Annual Meeting. However, if any other matter properly comes before the Annual Meeting, the persons named on the enclosed proxy card will vote the proxy in accordance with their best judgment on such matter.

By Order of the Board of Directors

 

LOGO

David J. Scott

Secretary

April 12, 2012

3, 2014

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 APPENDIX A  

Appendix A

AMGEN INC. BOARD OF DIRECTORSAmgen Inc. Board of Directors

GUIDELINES FOR DIRECTOR QUALIFICATIONS AND EVALUATIONSGuidelines for Director Qualifications and Evaluations

These guidelines set forth (1) the minimum qualifications that the Governance and Nominating Committee of the Board of Directors (the “Committee”) of Amgen Inc. (“Amgen”) believes are important for directors to possess, and (2) a description of the Committee’s process for identifying and evaluating nominees for director, including nominees recommended by stockholders. These guidelines are only guidelines and may be waived and/or changed by the Committee and/or the Board of Directors as appropriate.

1. Candidate Qualifications

1.

Candidate Qualifications

In seeking individuals to join the Board of Directors or to fill director vacancies on the Board of Directors, the Committee considers the following to be minimum qualifications that a candidate must possess:

 

Demonstrated breadth and depth of management and leadership experience, preferably in a senior leadership role in a large or recognized organization;

 

Financial and/or business acumen or relevant industry or scientific experience;

 

Integrity and high ethical standards;

 

Sufficient time to devote to Amgen’s business as a member of the Board;

 

Ability to oversee, as a director, Amgen’s business and affairs for the benefit of Amgen’s stockholders;

 

Ability to comply with the Board’s Code of Conduct; and

 

Demonstrated ability to think independently and work collaboratively.

In addition, the Committee may consider the following where necessary and appropriate:

 

A candidate’s independence, as defined by The NASDAQ Stock Market, Inc.;

 

A candidate’s ability to satisfy the composition requirements for the Audit Committee and the Compensation and Management Development Committee;

 

Maintaining a Board that reflects diversity; and

 

The Board’s overall size, structure and composition.

2. Candidate Identification and Evaluation Process

2.

Candidate Identification and Evaluation Process

(a) For purposes of identifying nominees for the Board of Directors, the Committee relies on professional and personal contacts of the Committee, other members of the Board of Directors and senior management, as well as candidates recommended by independent search firms retained by the Committee from time to time. The Committee also will consider candidates recommended by stockholders. Any director nominations submitted by stockholders will be evaluated in the same manner that nominees suggested by Board members, management or other parties are evaluated.

(b) In evaluating potential candidates, the Committee will determine whether the candidate is qualified for service on the Board of Directors by evaluating the candidate under the guidelines set forth above and by determining if any individual candidate suits the Committee’s and the Board of Director’s overall objectives at the time the candidate is being evaluated.

Appendix BLOGOï 2014 Proxy StatementA-1

PROPOSED AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION


The following amendment is contingent upon receipt of the requisite affirmative vote of the Company’s stockholders and the filing of a Certificate of Amendment to the Company’s Restated Certificate of Incorporation with the Secretary of State of the State of Delaware by the Company.

CERTIFICATE OF AMENDMENT

OF

RESTATED CERTIFICATE OF INCORPORATION

OF

AMGEN INC.

a Delaware corporation

Amgen Inc., a corporation duly organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify:

1. The Restated Certificate of Incorporation of Amgen Inc. shall be amended by changing Article TENTH so that, as amended, Article TENTH shall read in its entirety as follows:

TENTH:             All actions required or permitted to be taken by stockholders at an annual or special meeting of stockholders of this corporation may be effected by the written consent of the holders of capital stock of this corporation entitled to vote; provided that no such action may be effected except in accordance with the provisions of this Article TENTH and applicable law.

 (a)         Request for Record Date. The record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be as fixed by the Board of Directors or as otherwise established under this Article TENTH. Any stockholder seeking to have the stockholders authorize or take corporate action by written consent without a meeting shall, by written notice addressed to the secretary of this corporation and delivered to this corporation and signed by holders of record of at least fifteen percent (15%) in voting power of the then outstanding shares of capital stock of this corporation entitled to vote on the matter, request that a record date be fixed for such purpose. The written notice must contain the information set forth in paragraph (b) of this Article TENTH. Following delivery of the notice, the Board of Directors shall, by the later of (i) twenty (20) days after delivery of a valid request to set a record date and (ii) five (5) days after delivery of any information requested by this corporation to determine the validity of the request for a record date or to determine whether the action to which the request relates may be effected by written consent, determine the validity of the request and whether the request relates to an action that may be taken by written consent pursuant to this Article TENTH and, if appropriate, adopt a resolution fixing the record date for such purpose. The record date for such purpose shall be no more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors and shall not precede the date such resolution is adopted. If the request has been determined to be valid and to relate to an action that may be effected by written consent pursuant to this Article TENTH or if no such determination shall have been made by the date required by this Article TENTH, and in either event no record date has been fixed by the Board of Directors, the record date shall be the first date on which a signed written consent relating to the action taken or proposed to be taken by written consent is delivered to this corporation in the manner described in paragraph (f) of this Article TENTH; provided that, if prior action by the Board of Directors is required under the provisions of Delaware law, the record date shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

(b)        Notice Requirements. Any notice required by paragraph (a) of this Article TENTH must be delivered by the holders of record of at least fifteen percent (15%) in voting power of the then outstanding shares of capital stock of this corporation entitled to vote on the matter (with evidence of such ownership attached to the notice), must describe the action proposed to be taken by written consent of stockholders and must contain (i) such information and representations, to the extent applicable, then required by this corporation’s bylaws as though such stockholder was intending to make a nomination or to bring any other matter before a meeting of stockholders, other than as permitted to be included in this corporation’s proxy statement pursuant to applicable rules and regulations promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) and (ii) the text of the proposal(s) (including the text of any resolutions to be adopted by written consent of stockholders and the language of any proposed amendment to the bylaws of this corporation). This corporation may require the stockholder(s) submitting such notice to furnish such other information as may be requested by this corporation to determine the validity of the request for a record date and to determine whether the request relates to an action that may be effected by written consent under this Article TENTH. In connection with an action or actions proposed to be taken by written consent in accordance with this Article TENTH, the stockholders seeking such action or actions shall further update and supplement the information previously provided to this corporation in connection therewith, if necessary, as required by Section 15 of this corporation’s bylaws.

(c)        Actions Which May Be Taken by Written Consent. Stockholders are not entitled to act by written consent if (i) the action relates to an item of business that is not a proper subject for stockholder action under applicable law, (ii) an identical or substantially similar item (a “Similar Item”) is included in this corporation’s notice as an item of business to be brought before a meeting of the stockholders that has been called but not yet held, and the date of which is within ninety (90) days of the delivery of a request to set a record date (and, for purposes of this clause (ii) the election of directors shall be deemed a “Similar Item” with respect to all items of business involving the election of directors but the removal of directors without the election of any replacements shall not be deemed a “Similar Item” with respect to the election of directors) or (iii) such record date request was made in a manner that involved a violation of Regulation 14A under the Exchange Act or other applicable law.

(d)        Manner of Consent Solicitation. Stockholders may take action by written consent only if consents are solicited by the stockholder or group of stockholders seeking to take action by written consent of stockholders from all holders of capital stock of this corporation entitled to vote on the matter pursuant to and in accordance with this Article TENTH and applicable law.

(e)        Date of Consent. Every written consent purporting to take or authorize the taking of corporate action (each such written consent is referred to in this paragraph and in paragraph (f) as a “Consent”) must bear the date of signature of each stockholder who signs the Consent, and no Consent shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated Consent delivered in the manner required by paragraph (f) of this Article TENTH, Consents signed by a sufficient number of stockholders to take such action are so delivered to this corporation.

(f)        Delivery of Consents. No Consents may be dated or delivered to this corporation or its registered office in the State of Delaware until 90 days after the delivery of a valid request to set a record date. Consents must be delivered to this corporation by delivery to its registered office in the State of Delaware or its principal place of business. Delivery must be made by hand or by certified or registered mail, return receipt requested. In the event of the delivery to this corporation of Consents, the secretary of this corporation, or such other officer of this corporation as the Board of Directors may designate, shall provide for the safe-keeping of such Consents and any related revocations and shall promptly conduct such ministerial review of the sufficiency of all Consents and any related revocations and of the validity of the action to be taken by written consent as the secretary of this corporation, or such other officer of this corporation as the Board of Directors may designate, as the case may be, deems necessary or appropriate, including, without limitation, whether the stockholders of a number of shares having the requisite voting power to authorize or take the action specified in Consents have given consent; provided, however, that if the action to which the Consents relate is the removal or replacement of one or more members of the Board

of Directors, the secretary of this corporation, or such other officer of this corporation as the Board of Directors may designate, as the case may be, shall promptly designate two persons, who shall not be members of the Board of Directors, to serve as inspectors (“Inspectors”) with respect to such Consent and such Inspectors shall discharge the functions of the secretary of this corporation, or such other officer of this corporation as the Board of Directors may designate, as the case may be, under this Article TENTH. If after such investigation the secretary of this corporation, such other officer of this corporation as the Board of Directors may designate or the Inspectors, as the case may be, shall determine that the action purported to have been taken is duly authorized by the Consents, that fact shall be certified on the records of this corporation kept for the purpose of recording the proceedings of meetings of stockholders and the Consents shall be filed in such records. In conducting the investigation required by this section, the secretary of this corporation, such other officer of this corporation as the Board of Directors may designate or the Inspectors, as the case may be, may, at the expense of this corporation, retain special legal counsel and any other necessary or appropriate professional advisors as such person or persons may deem necessary or appropriate and, to the fullest extent permitted by law, shall be fully protected in relying in good faith upon the opinion of such counsel or advisors.

(g)         Effectiveness of Consent. Notwithstanding anything in this Certificate to the contrary, no action may be taken by the stockholders by written consent except in accordance with this Article TENTH. If the Board of Directors shall determine that any request to fix a record date or to take stockholder action by written consent was not properly made in accordance with, or relates to an action that may not be effected by written consent pursuant to, this Article TENTH, or the stockholder or stockholders seeking to take such action do not otherwise comply with this Article TENTH, then the Board of Directors shall not be required to fix a record date and any such purported action by written consent shall be null and void to the fullest extent permitted by applicable law. No action by written consent without a meeting shall be effective until such date as the secretary of this corporation, such other officer of this corporation as the Board of Directors may designate, or the Inspectors, as applicable, certify to this corporation that the Consents delivered to this corporation in accordance with paragraph (f) of this section, represent at least the minimum number of votes that would be necessary to take the corporate action at a meeting at which all shares entitled to vote thereon were present and voted, in accordance with Delaware law and this Certificate of Incorporation.

(h)         Challenge to Validity of Consent. Nothing contained in this Article TENTH shall in any way be construed to suggest or imply that the Board of Directors of this corporation or any stockholder shall not be entitled to contest the validity of any Consent or related revocations, whether before or after such certification by the secretary of this corporation, such other officer of this corporation as the Board of Directors may designate or the Inspectors, as the case may be, or to take any other action (including, without limitation, the commencement, prosecution, or defense of any litigation with respect thereto, and the seeking of injunctive relief in such litigation).

(i)         Board-solicited Stockholder Action by Written Consent. Notwithstanding anything to the contrary set forth above, (x) none of the foregoing provisions of this Article TENTH shall apply to any solicitation of stockholder action by written consent by or at the direction of the Board of Directors and (y) the Board of Directors shall be entitled to solicit stockholder action by written consent in accordance with applicable law.

2. The foregoing amendment was duly adopted in accordance with Section 242 of the DGCL.

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NO POSTAGE

NECESSARY

IF MAILED

IN THE

UNITED STATES

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BUSINESS REPLY MAIL

FIRST-CLASS MAIL   PERMIT NO. 67   THOUSAND OAKS  CA

POSTAGE WILL BE PAID BY ADDRESSEE

ANNUAL MEETING

AMGEN

PO BOX 2605

SEAL BEACH CA 90740-9906


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Only Amgen Inc. stockholders with admittance tickets will be admitted to the 20122014 Annual Meeting of Stockholders. Each stockholder is entitled to one admittance ticket. If you come to the meeting and do not have an admittance ticket, you will be admitted only upon presentation of proper identification and evidence of stock ownership as of March 26, 2012.17, 2014.

 

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Please send me an admittance ticket for the Amgen Inc. 20122014 Annual Meeting of Stockholders to be held on Wednesday,Thursday, May 23, 201215, 2014 in Westlake Village, California.

 

 

 

Name

 (Please print)

 

Address 
 

(      )

 

City                State

 

State                

Zip                Email                                         Telephone No. (Please
(Please provide)

YOU DO NOT NEED TO RETURN THIS CARD IF YOU DO NOT PLAN TO ATTEND

THE 20122014 ANNUAL MEETING OF STOCKHOLDERS.

 

 

 

 

 


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ANNUAL MEETING OF STOCKHOLDERS OF

AMGEN INC.

May 23, 2012

15, 2014 GO GREEN e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 23, 2012:15, 2014: The Notice of 20122014 Annual Meeting of Stockholders, Proxy Statement, Form Proxy Card and 20112013 Annual Report to Stockholders are available at http://www.amstock.com/ProxyServices/www.astproxyportal.com/ast/Amgen.

If you wish to attend the Annual Meeting, please log onvisit https://starcite.smarteventscloud.com/AnnualMeeting2014 to http://www.seeuthere.com/AnnualMeeting2012/Attendee to register.

Please sign, date and mail your proxy card in the envelope provided as soon as possible.

Please detach along perforated line and mail in the envelope provided.

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x

The Board of Directors recommends a vote “FOR” each of items #1, #2, #3 and #4.

listed nominee in item #1. 1. To elect fourteentwelve directors to the Board of Directors of Amgen Inc. for a term of office expiring at the 20132015 annual meeting of stockholders. The nominees for election to the Board are: FOR AGAINST ABSTAIN

Dr. David Baltimore

Mr. Frank J. Biondi, Jr.

Mr. Robert A. Bradway

Mr. FrancoisFrançois de Carbonnel

Dr. Vance D. Coffman

Mr. Robert A. Eckert Mr. Greg C. Garland FOR AGAINST ABSTAIN Dr. Rebecca M. Henderson

Mr. Frank C. Herringer

Dr. Tyler Jacks

FOR AGAINST ABSTAIN

Dr. Gilbert S. Omenn

Ms. Judith C. Pelham

Adm. J. Paul Reason, USN (Retired) Mr. Leonard D. Schaeffer Mr. Kevin W. Sharer Dr. Ronald D. Sugar

The Board of Directors recommends a vote “FOR” each of items #2 and #3. 2. To ratify the selection of Ernst & Young LLP as our independent registered public accountants for the fiscal year ending December 31, 2012.

2014. 3. Advisory vote to approve our executive compensation.

4. To approve an amendment to our Restated Certificate of Incorporation to authorize stockholder action by written consent.

The Board of Directors recommends a vote “AGAINST” Stockholder ProposalsProposal #1 through #4 in Item #5.

5. STOCKHOLDER PROPOSALS:

item #4. 4. Stockholder Proposal #1 (Independent Chairman of the Board)

Stockholder Proposal #2 (Transparency in Animal Use)

Stockholder Proposal #3 (Request for Disclosure of Lobbying Policies and Practices)

Stockholder Proposal #4 (CEO to Serve on a Maximum of One Other Board)

(Vote Tabulation) To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.

Signature of Stockholder Date: Signature of Stockholder Date:

Note: Please sign exactly as your name or names appear on this Proxy Card. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney-in-fact, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.


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This Proxy Card will be voted as specified or, if no choice is specified, will be voted FOR the election of the named director nominees, FOR ratification of the selection of Ernst & Young LLP, FOR the advisory vote to approve our executive compensation FOR the amendment to our Restated Certificate of Incorporation to authorize stockholder action by written consent and AGAINST Stockholder Proposals #1 through #4.

Proposal #1. As of the date hereof, the undersigned hereby acknowledges receipt of the 20122014 Proxy Statement and accompanying Notice of 20122014 Annual Meeting of Stockholders to be held on May 23, 2012,15, 2014, Form Proxy Card and the 20112013 Annual Report to Stockholders.

Report. In their discretion, the Proxy Holders (as defined below) are authorized to vote upon such other matters as may properly come before the 20122014 Annual Meeting of Stockholders and at any continuation, postponement or adjournment thereof. The Board of Directors, at present, knows of no other business to be presented at the 20122014 Annual Meeting of Stockholders.

By signing this proxy you revoke all prior proxies. This proxy will be governed by the laws of the State of Delaware and federal securities laws.

AMGEN INC.

ONE AMGEN CENTER DRIVE, THOUSAND OAKS, CA 91320-1799

PROXY SOLICITED BY THE BOARD OF DIRECTORS

FOR THE 20122014 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 23, 2012

Kevin W. Sharer,15, 2014 Robert A. Bradway, Jonathan M. PeacockMichael A. Kelly and David J. Scott (the “Proxy Holders”), or any of them, each with the power of substitution, hereby are authorized to represent the undersigned, with all powers which the undersigned would possess if personally present, to vote the shares of Amgen Inc. Common Stock of the undersigned at the 20122014 Annual Meeting of Stockholders of Amgen Inc., to be held on Wednesday,Thursday, May 23, 2012,15, 2014, at 11:00 A.M., local time, at the Four Seasons Hotel Westlake Village, Two Dole Drive, Westlake Village, CA 91362, and at any continuation, postponement or adjournment of that meeting, upon and in respect of the following matters and in accordance with the following instructions, with discretionary authority as to any and all other business that may properly come before the meeting.

You are encouraged to specify your choices by marking the appropriate boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations. PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE.

(Continued (Continued and to be signed on the reverse side)

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ANNUAL MEETING OF STOCKHOLDERS OF AMGEN INC. May 15, 2014 PROXY VOTING INSTRUCTIONS INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. Vote online/phone until 11:59 PM EST the day before the meeting. MAIL - Sign, date and mail your proxy card in the envelope provided as soon as possible. IN PERSON - You may vote your shares in person by attending the Annual Meeting. GO GREEN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access. If you wish to attend the Annual Meeting, please visit https://starcite.smarteventscloud.com/AnnualMeeting2014 to register. COMPANY NUMBER ACCOUNT NUMBER IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 15, 2014: The Notice of 2014 Annual Meeting of Stockholders, Proxy Statement, Form Proxy Card and 2013 Annual Report are available at http://www.astproxyportal.com/ast/Amgen. Please detach along perforated line and mail in the envelope provided IF you are not voting by telephone or the Internet. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x The Board of Directors recommends a vote “FOR” each listed nominee in item #1. 1. To elect twelve directors to the Board of Directors of Amgen Inc. for a term of office expiring at the 2015 annual meeting of stockholders. The nominees for election to the Board are: FOR AGAINST ABSTAIN Dr. David Baltimore Mr. Frank J. Biondi, Jr. Mr. Robert A. Bradway Mr. François de Carbonnel Dr. Vance D. Coffman Mr. Robert A. Eckert Mr. Greg C. Garland FOR AGAINST ABSTAIN Dr. Rebecca M. Henderson Mr. Frank C. Herringer Dr. Tyler Jacks Ms. Judith C. Pelham Dr. Ronald D. Sugar The Board of Directors recommends a vote “FOR” each of items #2 and #3. 2. To ratify the selection of Ernst & Young LLP as our independent registered public accountants for the fiscal year ending December 31, 2014. 3. Advisory vote to approve our executive compensation. The Board of Directors recommends a vote “AGAINST” Stockholder Proposal #1 in item #4. 4. Stockholder Proposal #1 (Vote Tabulation) To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. Signature of Stockholder Date: Signature of Stockholder Date: Note: Please sign exactly as your name or names appear on this Proxy Card. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney-in-fact, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.


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This Proxy Card will be voted as specified or, if no choice is specified, will be voted FOR the election of the named director nominees, FOR ratification of the selection of Ernst & Young LLP, FOR the advisory vote to approve our executive compensation and AGAINST Stockholder Proposal #1. As of the date hereof, the undersigned hereby acknowledges receipt of the 2014 Proxy Statement and accompanying Notice of 2014 Annual Meeting of Stockholders to be held on May 15, 2014, Form Proxy Card and the 2013 Annual Report. In their discretion, the Proxy Holders (as defined below) are authorized to vote upon such other matters as may properly come before the 2014 Annual Meeting of Stockholders and at any continuation, postponement or adjournment thereof. The Board of Directors, at present, knows of no other business to be presented at the 2014 Annual Meeting of Stockholders. By signing this proxy you revoke all prior proxies. This proxy will be governed by the laws of the State of Delaware and federal securities laws. AMGEN INC. ONE AMGEN CENTER DRIVE, THOUSAND OAKS, CA 91320-1799 PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE 2014 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 15, 2014 Robert A. Bradway, Michael A. Kelly and David J. Scott (the “Proxy Holders”), or any of them, each with the power of substitution, hereby are authorized to represent the undersigned, with all powers which the undersigned would possess if personally present, to vote the shares of Amgen Inc. Common Stock of the undersigned at the 2014 Annual Meeting of Stockholders of Amgen Inc., to be held on Thursday, May 15, 2014, at 11:00 A.M., local time, at the Four Seasons Hotel Westlake Village, Two Dole Drive, Westlake Village, CA 91362, and at any continuation, postponement or adjournment of that meeting, upon and in respect of the following matters and in accordance with the following instructions, with discretionary authority as to any and all other business that may properly come before the meeting. You are encouraged to specify your choices by marking the appropriate boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance with the Board of Directors’ recommendations. PLEASE MARK, SIGN, DATE AND RETURN PROMPTLY USING THE ENCLOSED ENVELOPE. (Continued and to be signed on the reverse side)